Telecom Disputes back to Consumer Commissions: SC

This judgment is not the result of incorporating the word telecom in the Consumer Protection Act 2019. It is in fact a revisit by the apex court three judges bench on the merit of the case as it stands under the earlier Consumer Protection Act 1986. The apex court reversed the order, finding it erroneous in view of the applicability of the then prevailing law.

                                                                                      Dr Prem Lata, Legal Head VOICE

It was a historic day when the Hon’ble Apex Court after long thirteen years declared on 16th Feb 2022 in Civil Appeal No 923, Vodafone Idea Cellular Ltd. Versus Ajay Kumar Agarwal that Consumer Protection Act is a specific and not a general act. The bench comprising Justices DY Chandrachud, Surya Kant and Vikram Nath further observed that the existence of an arbitral clause under the Indian Telegraph Act, 1885, will not oust the jurisdiction of the consumer forum. The above order was in appeal arising out of judgment dated 26 May 2016 of the National Consumer Disputes Redressal Commission.

Facts of the Case

A dispute between a consumer and Vodafone Idea Cellular Ltd started on 25 May 2014, at Ahmedabad District consumer forum with allegation of deficiency in services. The telecom company raised an objection to the maintainability of the complaint by placing reliance on a Supreme Court judgment in General Manager, Telecom v. M Krishnan and Another. This objection was dismissed at District Forum, State Commission and also National Commission, holding that a private service provider is not a ‘telegraph authority’ for the purposes of Section 7B of the Indian Telegraph Act 1885. The matter came to Supreme Court referring to Section 7B, of the act which provides disputes concerning a telegraph line, appliance or apparatus, between the telegraph authority and the person, for whose benefit the line has to be determined by arbitration.

Background of the Dispute

In 1992, a case came before the National Commission for adjudication to decide on the issue as to whether existence of a remedy by way of arbitration in the Indian Telegraph Act preclude an aggrieved consumer to seek remedy under the Consumer Protection Act. While deciding this matter between the Telecom Dist. Manager, Patna and Bihar State Warehousing Corporation, the national commission held that consumer can seek remedy under the Consumer Protection Act.

Yet again, on another occasion in the case of District Manager, Telephones, Patna V Dr Tarun Barthvar, the question before the commission was as to whether the consumer forum had the jurisdiction to decide a dispute involving meter reading or excess billing which are covered under section 7B of the Indian Telegraph Act 1885. The commission gave a positive response to it. Further, in a case of Mahanagar Telephone Nigam Ltd V Ghevar Chand Seasmal Sonigara, 1992, the question was more specific as to whether it was not mandatory for the complainant to invoke the arbitration clause under the Telegraph Act. The National Commission held that it was not.

 A similar issue was raised in case of Union of India V Dr B S Sidhu 1992, in a case of Govt of India, Secretary, department of Telecom V Satya Narayan Lal, and also in case of Union of India through Rajkot Telephone V Dhanji Bai, National Commission. In all the above cases, it was held that consumer court has the jurisdiction to deal all such cases inspite of arbitration clause in the telegraph act. In yet another case of Divisional Engg. Telecom Moradabad V Virender Kumar, the National Commission confirmed the jurisdiction of consumer forum.

Supreme Court also held in a number of cases while deciding the various issues under Consumer Protection Act, that since the inception of the act that section three of the consumer protection act gives additional remedy to the consumer apart from the other provisions available to him. Till the latest judgement pronounced by the Honorable  Supreme Court on 1.9.2009, the Consumer forum had been dealing with all telecom matters filed by consumers.

The Supreme Court, in civil appeal no 7687 of 2004 in the case of GM Telecom V M Krishanan, barred the jurisdiction of consumer forum and held that such disputes will be decided by arbitrator under section 7B of the Indian Telegraph Act. The arbitrator shall be appointed by the Central Govt either specifically for determination of referred dispute or generally for the determination of disputes under this section. The apex court has further remarked that it is a well settled law that overrides the general law. In that context, a two judge bench of this Court said, “In our opinion when there is a special remedy provided in Section 7B of the Telegraph Act regarding disputes in respect of telephone bills, then the remedy under the Consumer Protection Act is by implication barred”.

After this judgment, questions arose as to whether this bar applied to private players also. These private companies came into the field of telecommunication through the notification allotting license to these companies. Ministry of Communication, Department of telecommunications, licensing group, and basic service cell issued notification on 24th may 1999. Through this notification, exercising the provisions of sec 19B of part 111 of the Indian telegraph act 1885, the Central Govt conferred the power upon the duly authorized licensee /private basic telephone services operators to provide services to any persons, public corporations, and autonomous bodies, State Govt or Central Govt. It is said at clause 1(b) that these licensee(s) are to always comply with the provisions of the act or any other law for the time being in force meaning thereby that these private licensee are to adhere with section 7B of the Indian Telegraph Act. The question was would the central govt. make arrangement of arbitrators for all private players also when consumers are left with no remedy but the arbitration provision which is final for them. Not only that, it is quite possible that no arbitrator was appointed on the request of aggrieved consumers. Even the provisions under the Arbitration and Conciliation Act 1996 for appointment of arbitrator through civil court is a full fledge case in itself, not easily reachable to consumers.

Subsequently, a letter from the Department of Telecommunication dated 24 January 2014 was issued and stated that the judgment in M Krishnan on Section 7B of the Act of 1885 would not be applicable to a private service provider since it is not a ‘Telegraph Authority”.

Further, with the SC remark that special act prevails over general law, huge number of cases related to banks, railways, societies and other specific acts started pouring into consumer forums which issues were already settled by Supreme Court through various orders that consumer protection act is an additional remedy to consumers under section 3 of act 1986.

Ministry of Consumer Affairs then issued notification and circulated among all Consumer forums and commissions to accept telecom cases for adjudicating but consumer courts could not accept cases because article 141 bound them to follow apex court precedence .Due to this reason, parliament had to incorporate telecom word in Consumer Protection Act 2019.

Supreme Court finally held on 16 Feb 2022 in Civil Appeal No 923 of 2017, Vodafone Idea Cellular Ltd. Versus Ajay Kumar Agarwal that

  • Consumer Protection Act is a specific law.
  • Services of telecom nature are services under consumer protection act as an additional remedy to the consumers, not limited to specific words in the act.
  • Arbitration clause does not bar consumers to file their telecom cases before consumer commissions.
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