A three-judge bench of the Hon'ble Supreme Court in Vodafone Idea Cellular Ltd v. Ajay Kumar Agarwal, overruling its previous decision, held that consumer complaints against telecom companies are maintainable under the Consumer Protection Act. The main question before the Supreme Court was whether Section 7B of the Indian Telegraph Act 1885 precludes the Consumer Protection Act of 1986 from having jurisdiction over a dispute between a telecom company and a consumer.
In the instant case titled Vodafone Idea Cellular Ltd. v. Ajay Kumar Agarwal, the issue raised before the Apex Court for clarification was
Whether Section 7B of the Indian Telegraph Act 1885 eliminates the consumer forum's jurisdiction in resolving a dispute between a telecom company and a consumer?
With regard to this issue, the Supreme Court held that the existence of an arbitral remedy will not, therefore, obviate the consumer forum's jurisdiction in this matter. A customer may choose arbitration as a remedy, but there is no legal requirement to do so, and a consumer may instead seek recourse to the remedies given in the Act of 1986, which has been replaced by the Act of 2019. For the reasons stated, the addition of the term "telecom services" to the definition in Section 2(42) of the Act of 2019 cannot be interpreted to signify that telecom services were removed from the jurisdiction of the consumer forum under the Act of 1986.
The Court ruled that the arbitration clause found in Section 7B of the Telegraph Act of 1885 does not preclude the consumer court from having jurisdiction. The telecom business argued that as it is a private provider of telecom services, any disputes between subscribers and it are subject to the arbitration provisions of Section 7B of the Telegraph Act of 1885. Any disagreement involving a telegraph line, appliance, or equipment must be resolved by arbitration under Section 7B between the telegraph authority and the person for whose benefit the line, appliance, or apparatus is or has been provided.
The Court categorically held that:
"Though the present case relates to the period before the enactment of the Consumer Protection Act 201910, an important aspect of the matter is that the definition of the expression 'service' in Section 2(42) of the later Act specifically incorporates telecom services".