Supreme Court Sets Aside TDSAT Ruling That Barred TRAI From Adjudicating Contractual Disputes Between Service Providers
The Supreme Court on Friday allowed the Telecom Regulatory Authority of India's (TRAI) appeal and set aside the Telecom Disputes Settlement and Appellate Tribunal's (TDSAT) judgment.
TDSAT had held that TRAI lacked jurisdiction to adjudicate disputes between service providers arising out of their contractual relationship, even where the dispute involved alleged breaches of TRAI regulations.
It had consequently quashed TRAI's direction requiring Polimer Cable Network to restore television signals to four Local Cable Operators (LCOs).
A bench of Justices S.V.N. Bhatti and N.V. Anjaria pronounced,
"The impugned judgment is set aside and the civil appeal is allowed."
Background
The dispute arose between Polimer Cable Network, a Multi System Operator (MSO), and four affiliated Local Cable Operators (LCOs) in Salem regarding subscription dues.
After the civil court declined jurisdiction, TRAI initially advised the LCOs to approach the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). The LCOs then approached the Madras High Court, which directed TRAI to consider their representation.
Acting under Sections 11 and 13 of the TRAI Act, TRAI directed Polimer to restore signals and later issued a show cause notice for non-compliance. Polimer challenged both actions before TDSAT.
Allowing the appeal, TDSAT held that TRAI lacked jurisdiction to adjudicate contractual disputes between service providers, as such disputes fall exclusively within the Tribunal's jurisdiction under Section 14 of the TRAI Act. While TRAI could issue regulatory directions to secure compliance with its regulations, it could not determine contractual rights or grant consequential relief arising from breaches of contract.
Holding that Parliament intended TDSAT to exclusively adjudicate such disputes, the Tribunal declared TRAI's direction restoring signals and the consequential show cause notice without jurisdiction, void ab initio, and set them aside.