India: Supreme Court Upholds Trai's Jurisdiction In Telecom Operators Case

Last Updated: 11 December 2018
Article by Rahul Singh, Anisha Chand and Sakshi Agarwal

On 5 December 2018, the Supreme Court dismissed an appeal by the Competition Commission of India (CCI) challenging a Bombay High Court order in a matter alleging cartelisation by telecom companies Airtel, Vodafone and Idea (collectively, the IDOs). The central issue before the Supreme Court was the jurisdiction of the CCI to probe allegations of cartelisation by IDOs and the Cellular Operators Association of India (COAI).

Brief Background

Reliance Jio Infocomm Limited (Reliance Jio) and two others filed a complaint with the Competition Commission of India (CCI) alleging cartelisation and abuse of dominance by the IDOs and the industry association COAI in violation of Sections 3 and 4 of the Competition Act, 2002 (Competition Act). The CCI found a prima facie case of cartelisation by the IDOs and the COAI, and directed the Director General (DG) to cause an investigation into the matter (Prima Facie Order). Thereafter, investigation commenced, and the DG issued notices to the parties.

The IDOs and the COAI filed writ petitions before the Bombay High Court, praying for quashing of the Prima Facie order and the DG notices, on the grounds that the CCI did not have jurisdiction considering that the Telecom Regulatory Authority of India (TRAI) was already seized of the matter. The Bombay High Court set aside the Prima Facie Order and the DG notices vide its judgment dated 21 September 2017 (Impugned Order) observing that the TRAI, being the sectoral regulator, has the technical expertise to deal with and decide the issues in the telecom sector. It was also held that the Prima Facie Order is not an administrative order, and the CCI ought to have waited for the final decision of the TRAI, before arriving at a prima facie finding of anti-competitive conduct.

The Impugned Order was challenged by way of a special leave petition before the Supreme Court, by the CCI and Reliance Jio. The Supreme Court has now dismissed these appeals while largely affirming the findings of the Impugned Order.

Key Issues and Observations

  • Jurisdiction of the CCI

The central issue before the Supreme Court dealt with the jurisdiction of the CCI to probe into the allegations of cartelisation by IDOs and COAI. While the Supreme Court noted that the CCI has exclusive jurisdiction to adjudicate upon issues governed by the Competition Act. However, the issue of denial of points of inter-connects is a technical issue pending before the TRAI and that the TRAI is the more appropriate authority and best suited to consider these issues.

The Supreme Court affirmed the findings in the Impugned Order and held that only when the jurisdictional facts are determined by the TRAI against the IDOs, would the issue of any concerted agreement between the IDOs and COAI arise. It further observed that it is the mandate of the TRAI to ensure technical compatibility and effective interrelationship between different service providers; ensuring compliance of licence conditions by all service providers; and settlement of disputes between service providers. Further, the Supreme Court noted that permitting the CCI to intervene at this stage would result in it having to decide issues which were best left to TRAI, the sectoral regulator.

Separately, the Supreme Court also held that the Competition Act is a special statute and if there is anti-competitive conduct it is within the exclusive domain of the CCI to examine and rule upon it. Even if TRAI finds anti-competitive conduct, its powers would be limited to the action under the TRAI Act alone. In the context of the present matter, it further stated that once the TRAI prima facie finds that the IDOs indulged in anti-competitive practices, the CCI can investigate the matter under the Competition Act. Thus, the jurisdiction of the CCI is not barred, but simply pushed to a later stage.

  • Maintainability of writ before High Court

The CCI had argued that the Bombay High Court could not have entertained the writ petitions against an order passed under Section 26(1) of the Competition Act, because it is an administrative order and only forms a Prima Facie view. However, the Supreme Court held that even if the order is administrative in nature, the question pertaining to the very jurisdiction of the CCI would be clearly maintainable in a writ petition under Article 226 of the Constitution. The Supreme Court however agreed with the CCI's contention that the High Court was not competent to adjudge the validity of Prima Facie Order on merits.

Comments:

The turf wars between the CCI and sector-specific regulators have been rife in the recent past and therefore, this decision will likely have far reaching consequences for the CCI vis-à-vis sectoral regulators.  It would be interesting to see how this decision impacts ongoing proceedings in cases where a sectoral regulator is present. One could also argue that the decision provides some clarity on the stage at which the CCI would now get involved, in cases involving expert bodies /sectoral regulators.     

Further, it is unclear how the decision and its aftermath would align with Sections 21, 21A (dealing with cross-referencing matters between CCI and other statutory regulators) of the Competition Act.

On a separate note, the judgment clears the air on jurisdictional challenge and maintainability of writ petitions against prima facie orders passed by the CCI, both of which have been highly contentious issues until now.

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions