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  • Mr. Mukul Rohtagi, Sr. Advocate with Mr. Milan Sethi, Mr. Atul Dayal, Mr. R. Sasi Pribhu, Ms. Shalini Gupta & Mr. Ashwin Dave, Advocates for the Petitioner.
  • Mr. Rajiv Nayyar, Sr. Advocate with Mr. Maninder Singh, Ms. Pratibha M. Singh & Mr. Ankur Talwar, Advocates for the Respondent.
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  • Vikramajit Sen, J.
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  • Mr. Mukul Rohtagi, Sr. Advocate with Mr. Milan Sethi, Mr. Atul Dayal, Mr. R. Sasi Pribhu, Ms. Shalini Gupta & Mr. Ashwin Dave, Advocates for the Petitioner.
  • Mr. Rajiv Nayyar, Sr. Advocate with Mr. Maninder Singh, Ms. Pratibha M. Singh & Mr. Ankur Talwar, Advocates for the Respondent.
Judges
  • Vikramajit Sen, J.
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Smart Summary

Structured Summary of the Opinion — Vikramajit Sen, J.

Factual and Procedural Background

Reliance Infocomm Limited (RIL) filed the Petition seeking directions that Bharat Sanchar Nigam Limited (BSNL) continue to provide interconnect facilities at all Points of Interconnection (POIs) pursuant to the Inter-Connection Agreement (for ILD, NLD and UAS services) and that BSNL be restrained from disconnecting RIL's POIs or otherwise acting on the threats of disconnection contained in BSNL's letter dated 29 October 2004 (Annexure P20).

BSNL's letter dated 29 October 2004 alleged violation of the NLD Interconnect Agreement by RIL by "unauthorised routing" and "tampering of CLI" (Calling Line Identification), described bills and disconnection notices raised by BSNL field units, recorded that BSNL had adjusted a deposit of Rs. 53.71 crores against some bills, and warned that field units could disconnect POIs if pending dues were not paid by 5 November 2004. The letter also declined to form a corporate-level committee to adjudicate individual field-unit bills.

The matter was argued at length by counsel for both parties. BSNL raised a preliminary objection that the petition ought to have been brought before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) under the TRAI Act. RIL relied upon an arbitration clause between the parties and sought interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. The Court considered the rival contentions, addressed the merits to a prima facie extent, and dismissed the Petition. Parties were directed to bear their respective costs and a dasti copy of the judgment was to be provided to counsel.

Legal Issues Presented

  1. Whether this Court should grant interim relief (an injunction under Section 9 of the Arbitration & Conciliation Act, 1996) restraining BSNL from disconnecting RIL's POIs and directing continued provision of interconnect facilities pending resolution of disputes.
  2. Whether the Court has jurisdiction to entertain the Petition given the statutory regime under the Telecom Regulatory Authority of India Act, 1997 (TRAI Act) and the existence of TDSAT (including the consequences of Sections 14 and 15 as amended).
  3. Whether, on the merits and on a prima facie view, RIL's "Home Country Direct (HCD) Service" and the change in CLI amounted to a breach of the Interconnect Agreement (including alleged unauthorized routing and tampering with CLI), thereby justifying BSNL's billing, penalty demands and threatened disconnections.

Arguments of the Parties

Respondent (BSNL) — Main Contentions

  • BSNL's letter of 29 October 2004 asserted that RIL had violated clauses of the NLD and Basic Service Interconnect Agreements by tampering with CLI and handing over incoming international calls as domestic calls (i.e., unauthorized routing).
  • BSNL maintained field units were correct in raising bills for penalties, arrears of ADC (Access Deficit Charges) and IUC (Inter-User Charges), and issuing disconnection notices where misuse was detected.
  • BSNL reported that a deposit of Rs. 53.71 crores had been adjusted against some field-unit bills (up to 13 October 2004) and directed RIL to pay outstanding dues to field units within seven days (by 5 November 2004) or permit field units to take action as per the Interconnect Agreement.
  • BSNL contended there was no corporate-level arrangement or contractual basis for the HCD service, and that tampering with CLI is not permitted under the license, interconnect agreement or TRAI regulations; therefore, handover of such traffic to BSNL was unlawful.

Petitioner (RIL) — Main Contentions

  • RIL denied that it had engaged in "tampering" of CLI and argued that presentation of switch CLI is a normal feature in networks and cannot be termed tampering; RIL asserted that HCD operation and the presented CLI are not violations of the Interconnect Agreement.
  • RIL contended that even if HCD traffic were treated as ILD calls attracting IUC and ADC, the total liability for the disputed period would not exceed Rs. 29 crores and that RIL had made payments (including Rs. 53.71 crores and an additional Rs. 29 crores). RIL characterised BSNL's demand of Rs. 182.07/182.7 crores as penal in nature and without legal or factual basis.
  • RIL argued the threatened disconnections would disrupt services to large numbers of subscribers and sought maintenance of status quo pending arbitration, relying on the arbitration clause and Section 9 relief from this Court.
  • RIL submitted that security concerns were unfounded as call detail records for HCD calls were maintained and available for monitoring and interception by designated security agencies.

Respondent's Preliminary Objection (Raised by Mr. Rajiv Nayyar)

  • BSNL contended that RIL should have approached the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) under the amended TRAI Act (reference to introduction of Section 14) and relied on Section 15 of the TRAI Act to argue that civil courts are ousted and cannot grant injunctions in respect of actions under the Act.
  • BSNL argued TDSAT has the character of a judicial authority and can grant interim reliefs equivalent to those under arbitration law.
  • For present purposes, BSNL invited the Court to address its preliminary objection; however, counsel for BSNL also invited consideration of the petition on merits without prejudice to the jurisdictional plea.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Gujarat Bottling Co. Ltd. and Others v. Coca-Cola Co. and Others, (1995) 5 SCC 545 Equitable discretion in granting or vacating interlocutory relief (Order 39 CPC principles); conduct of the party (clean hands doctrine) is a material consideration in injunctive relief applications. The Court invoked the principles in Gujarat Bottling to emphasize that Section 9 relief under the Arbitration Act is equitable in nature, requires the applicant to have clean hands and a prima facie case. On a prima facie assessment, the Court found RIL's conduct tainted and refused discretionary relief accordingly.

Court's Reasoning and Analysis

The Court proceeded by examining jurisdictional and substantive aspects but noted that because BSNL's counsel invited that the petition be considered on merits without prejudice to the jurisdictional plea, it was not necessary to resolve the jurisdictional question raised under the TRAI Act conclusively. The Court nonetheless recorded the existence of the preliminary objection that TDSAT may oust civil court jurisdiction under the TRAI Act (Sections 14 and 15), but chose to decide the petition on merits to the extent necessary for interim relief.

On the substantive question, the Court observed that Section 9 of the Arbitration & Conciliation Act, 1996 confers discretionary equitable relief, and its scope is in pari materia with Order XXXIX of the Civil Procedure Code. The Court relied on the principles exemplified in Gujarat Bottling that equitable jurisdiction to grant or vacate interlocutory relief requires consideration of the applicant's conduct, including whether the applicant comes with "clean hands".

Applying those principles to the record before it, the Court undertook a prima facie review of the parties' correspondence and the Interconnect Agreement. The Agreement provisions reproduced in the record required delivery of calls with correct CLI, prohibited bypass and unauthorized diversion of traffic, and provided for liability and billing where calls were handed over to incorrect ports (including entitlement to bill at specified charges or highest slab rates).

The Court noted that BSNL's corporate letter and supporting field-unit bills alleged widespread tampering of CLI and unauthorized routing, and quantified billed arrears (stating that field units had raised bills at 353 POI locations amounting to approximately Rs. 182.7 crores, and that Rs. 53.71 crores had been adjusted against some bills). RIL's defence—that presentation of a switch CLI is a normal feature and that HCD operation is not tampering or violative—was recorded.

However, on a prima facie consideration, the Court concluded that the record suggested RIL had surreptitiously breached the Interconnect Agreement in a manner intended to withhold monies payable to BSNL by changing CLI so as to disguise international traffic as domestic, thereby reducing RIL's liability to BSNL. The Court found it difficult to accept that CLI would have been changed unless RIL's conduct was inconsistent with the Interconnect Agreement. The difference between the higher termination rates (Rs. 4.40–5.00 per minute as provided in the Agreement) and low local charges (e.g., Rs. 0.30) underlined the commercial incentive to disguise traffic.

Given that finding, the Court held that RIL had not established a prima facie case entitled to discretionary interim relief and that RIL's conduct defeated its equitable claim to an injunction. On the balance of convenience, the Court noted both parties were financially solvent and that any eventual arbitration award in favour of RIL could be adjusted or recovered later; therefore, maintenance of status quo was not warranted on those grounds. The Court also observed that although correspondence used the term "penalty", BSNL's demands were for amounts envisaged by the Agreement.

The Court emphasized that its observations on merits were prima facie and would not bind the tribunal or authority that ultimately decides the disputes between the parties.

Holding and Implications

Holding: The Petition is DISMISSED.

Implications and immediate consequences:

  • RIL was not granted interim relief under Section 9 of the Arbitration & Conciliation Act; BSNL is not restrained by this Court from pursuing disconnections or other contractually authorized steps in accordance with the Interconnect Agreement and the field-unit notices, subject to any future orders by the appropriate adjudicatory forum.
  • Parties were directed to bear their respective costs of the petition.
  • The Court's findings on the merits were expressly described as prima facie observations and the judgment noted that those observations would not bind the final decision-maker (e.g., arbitrator or Tribunal). No new binding legal precedent was declared by the Court on the substantive questions; the Court applied established equitable principles (as in Gujarat Bottling) to the facts before it.

This summary is based exclusively on the material contained in the provided opinion and does not add or infer facts beyond that text.

Show full summary ...

    Reliance Infocomm Limited Petitioner v. Bharat Sanchar Nigam Limited

    Vikramajit Sen, J.:— The prayers in this Petition are that Bharat Sanchar Nigam Limited (BSNL in short) be directed to continue to provide to Reliance In-focomm Limited (RIL in short) of Interconnect Facilities at all points of Interconnection in accordance with the Inter-Connection Agreement subsisting between the parties regarding ILD, NLD and UA services and further that BSNL be restrained from disconnecting the Petitioners Points of Inter-connect or acting upon the threats of disconnection contained in its letter dated 29th October, 2004.

    2. The matter has been argued in great detail as the Respondent is also represented by Mr. Rajiv Nayyar. The letter dated 29th October, 2004 (Annexure P20) is on the subject of ‘Violation’ of NLD service Interconnect Agreement-Unauthorised routing.' This letter refers to RILs communication dated 14th October, 2004? The stand of the Respondent can be gleaned from the said letter which is therefore reproduced verbatim:

    Bharat Sanchar Nigam Limited

    (A Government of India Enterprise)

    611, Statesman House, B-148, Barakhamba Road, New Delhi.-1

    No. 431-2/2004-Regln Dated 29th October 2004

    To

    M/s. Reliance Infocomm Limited,

    13th Floor, Vijaya Building,

    17 Barakhamba Road, New Delhi-110001.

    Subject: Violation of NLD Service Interconnect Agreement-Unauthorised routing

    Please refer to your office letter No. RIL/BSNL/04-05/267 dated 14th October, 2004 addressed to CMD, BSNL requesting to accept payment of Rs. 53.71 crores with an intention to amicably settle the issue with BSNL stating that these deposits are subject to adjustment against the final decision reached by the BSNL HQ on this issue and further requested to issue necessary directives to the BSNL field units to restore all the disconnected POIs and not to disrupt any more POIs till a final decision is taken by BSNL HQ. You had further stated in this letter dated 14.10.2004 that the decision of BSNL HQ would be acceptable to M/s. Reliance Infocomm Limited (RIL).

    2.0 Also, refer to your letter No. RIL/BSNL/04-05/2079 dated 26.10.2004 on the same subject wherein you had stated that M/s. Reliance Infocomm Limited (RIL) had started providing HCD services in May 2004 and that M/s. RIL had started routing all the HCD service calls on ILD trunk routes from 16th September, 2004. Further, in this letter dated 26th October 2004 you have also raised the issues with respect to Notices and the demand notes being issued by the various field units of BSNL. It has also been stated that you had not violated clauses 2:1.9.2 and 2.5 of BSO Interconnect Agreement and Clauses 2.1.13.1 and 2.1.13.2 of NLD Interconnect Agreement; and that the penalty has been charged at some locations for the period when POIs were not even opened for traffic. You had further requested to form a committee to look into these issues and settle then as per Interconnect Agreement.

    3.0 In this context you may refer this office letter No. 431-2/2004-Regln dated 8th October, 2004 wherein it had already been conveyed to you that the activity of illegal hand-over of incoming international call as domestic calls by tampering of CLI is not ‘Home Country Direct Service’. It was also conveyed to you that without prejudice to above, there is neither any agreed arrangement between M/s. Reliance Infocomm Ltd. and BSNL for any service called ‘Home Country Direct Service’ nor any provision in the License and Interconnect Agreement to tamper with the CLI and terminate calls as domestic call in BSNL's network.

    4.0 The issue has been further deliberated and found that there has been clearly a violation of terms and conditions of Interconnect Agreement of NLD services and Basic Services as the case may be wherever you have illegally handed over incoming international calls with CLI tampered as domestic calls to BSNL. It is to inform you that the BSNL field units are fully correct in raising bills for penalty amount and arrears of ADC and issuing disconnection notices to M/s. RIL for violation of various clauses of NLD and Basic service Interconnect Agreement.

    5.0 On receipt of the payment of Rs. 53.71 crores and based on your request, as mentioned in para 1.0 above, it was decided to reconnect the POIs wherever disconnected and defer disconnection of POIs at other locations of M/s. RIL under misuse of tampering of CLI till further orders because the bills raised by BSNL field units till that date as reported to BSNL HQ were of the order of about Rs. 48 crores. The BSNL field units were to continue to raise bills for arrears to M/s. RIL wherever tampering of CLI is detected after analyzing the CDRs as per the terms and conditions of the Interconnect Agreements.

    6.0 Information has now been received from many BSNL field units regarding bills raised for arrears of ADC at various locations of POI of M/s. RIL. As per present information available with BSNL Corporate Office the bills for the arrears have been raised at 353 POI locations and the amount of bills raised, for arrears of IUC including ADC & penalty as per terms and conditions of the interconnect Agreement, till now to M/s. RIL is Rs. 182.7 crores. The bills of arrears for balance POI locations, are being raised to you by BSNL field units.

    7.0 In addition to above, arrears of IUC including ADC for incoming international traffic with tampered CLI as domestic calls terminated in mobile networks of various private operators as well as M/s. Reliance Infocomm Limited are also pending, bills for which are also being raised to you. This is in addition to arrears to be recovered from you for such international traffic transited by you through MTNL, meant for termination in BSNL, for which MTNL has not billed you as yet.

    8.0 I am directed to convey you further that the amount of Rs. 53.71 crores paid in BSNL Headquarter has been adjusted against some of the bills raised by BSNL field units at various POI stations up to 13th October, 2004 as per the list enclosed at Annexure-1. For balance amount against these POI stations and for remaining POI stations, M/s. RIL should immediately deposit all pending dues directly to various field units of BSNL against the bills raised by respective BSNL field units within a period of one week. In case, the BSNL field units do not receive payment of such bills raised within a period of 7 days from the date of issue of this letter (i.e by 5th November 2004) then BSNL field units shall be free to take action as per provision of the Interconnect Agreement.

    9.0 It is further to inform you that the committee, as requested by you in your above referred letter dated 26th October 2004, cannot be formed at BSNL Corporate Office level to look into the individual cases related to amount of such bills issued by various BSNL field units for penalty & arrears of ADC. You may take up such cases with the concerned POI in-charge of BSNL for resolving the same after making all the payments due to the concerned BSNL field unit in this regard.

    (Mahipal Singh)

    Jt. DDG(Regulation-I)

    29th October 2004

    Ph:011 23714522

    Enclosure: Annexure-1 regarding apportionment of amount of Rs. 53.71 crores to various field units.

    Copy to

    1. All CGMTs BSNL Telecom Circles/Metro Districts/Maintenance Regions with a request to disconnect all POIs of M/s. RIL, wherever notice for misuse and bills for the arrears have been raised but M/s. RIL does not make all payments due to BSNL, after adjusting amount apportioned by BSNL Corporate Office against individual POI station as detailed in Annexure-1, within prescribed time period of 7 days i.e till 5th November 2004 without seeking any further instructions, from BSNL Corporate Office, in this regard. Traffic analysis of all other POIs may be carried out and in case any such discrepancies are detected, action may be taken in accordance with the Interconnect Agreement.

    2. DDG (CA)/DDG(TRF/DDG(NM, BSNL Corporate Office, New Delhi for information and necessary action please.

    3. Mr. Rohtagi, learned Senior Counsel appearing for RIL had stated that the Petitioner had received peremptory Orders from the Government of India, Department of Telecommunication, New Delhi to discontinue its extant practice adhered to by RIL within one hour. This happened because the “Government has consistently maintained that the Calling Line Identification shall not be changed. Further, the handing over of the telecommunication traffic has to be as per the provisions of the licence agreement and Regulations issued by Telecom Regulatory Authority of India from time to time as per provisions of Telecom Regulatory Authority of India Act, 1997 (hereinafter referred to as ‘TRAI Act’) and such handing over of ‘ the traffic has also to be as per the mutual agreed interconnection agreements. Hence M/s Reliance Infocomm Ltd. is directed to discontinue such features within one hour of the receipt of this letter and should explain within fifteen days of the receipt of this letter as to why appropriate action including imposition of penalty may not be taken against M/s Reliance Infocomm Ltd. for violation of terms & conditions of the licences as indicated above.”

    4. Mr. Rohtagi has forcefully argued that the manner in which RIL has conducted its business does not infarct any of the covenants of the In terconnect Agreement. It is evident from the correspondence exchanged between the parties as well as with the Government of India that the in terpretation of RIL of the Interconnect Agreement is that its Home Country Direct Service is not violative of the Agreement even though a change has been effective in the CLI.

    5. The following clauses of the “INTERCONNECTING AGREE MENT” dated 1st November, 2002 have been relied upon by learned coun sel for the parties:

    RIL shall terminate its traffic on to the network of BSNL as mandated by TRAI from time to time. RIL and BSNL shall deliver all calls on each other's network with CLI in the terminating SDCA. Both parties reserve the right to reject calls without CLI.

    .......

    No by pass of traffic shall be resorted to by any party by picking up and/or delivering the traffic at any point other than as permitted under the terms and conditions of the licence agreement or as agreed herein. In case unauthorized diversion in routing comes to notice, the other party shall be free to disconnect the POI in that area, after intimating the defaulting party one week in advance. Moreover, the resources shall be used for the purpose for which these have been earmarked and no other service shall be offered by utilizing such resources without agreement of other party or the explicit written consent of BSNL.

    .......

    Incoming international calls, intercircle STD calls from fixed networks and intercircle STD calls from WLL(M) and cellular networks shall be handed over to BSNL at its SDCC tandem exchange by RIL on separate ports for the purpose of traffic measurement and revenue sharing. The traffic on each port or group of ports will be limited to the type mentioned above.

    In case it is detected that incoming international calls or intercircle STD calls from cellular network and WLL(M) subscribers are handed over to BSNL on any port other than the earmarked ports, BSNL shall be entitled to bill RIL for the termination charge applicable to the highest slab for all calls recorded on that port for the proceeding two months or the date of provisioning of that POI whichever is later.

    .......

    BSNL shall charge RIL @ Rs. 4.40 per minute for termination of these calls in BSNL's network in the same SDCA. It shall charge @ Rs. 5.00 per minute for calls terminating in other fixed networks and transited via BSNL's network.

    If BSNL detects that incoming international calls are being handed over or have been made over to BSNL at any other port which is not meant for carrying such calls, BSNL shall be free to charge RIL minimum access charge for incoming international calls as at clause 6.4.2 above for all the calls recorded on these ports from the date of provisioning of that POI or for the preceding two months whichever is less apart from taking other legal actions including disconnection of POIs or temporary suspension of the interconnection Agreements. No terminating calls other than international calls shall be accepted from RIL without CLI. In case of calls without CLI, termination charge as per clause 6.4.2 above shall be charged from RIL.

    6. By letter dated 22nd September, 2004 BSNL had notified RIL inter alia to the following effect—

    “M/s Reliance Infocomm Limited (RIL) has violated the terms and conditions of the Interconnect Agreement, License Agreement as well as instructions of the Licensor and TRAI by tampering CLI of incoming international calls and terminating them into BSNL's network as domestic calls. By doing so, M/s RIL has not only bypassed the admissible ADC payable to BSNL but has also violated the prescribed guidelines required for security purposes.

    Further, it has been stated that M/s RIL has informed Dt. on 8th September 2004 about the Home Country Direct Service. It is to inform you that the handoever of incoming international calls by M/s Reliance Infocomm Limited (RIL) as an NLDO with tampered CLI was detected in Ahmedabad in Gujarat Circle of BSNL in the month of August 2004 itself. This was much before your alleged presentation to Dt. on 8th September, 2004 regarding ITU-T recommenda-tipns on Home Country Direct Service which indicates that you had been handing over such unauthorized calls to BSNL since long. BSNL does not have any agreement with M/s RIL for provision of Home Country Direct Service in the network of BSNL. Operation of such services for termination of incoming international calls in BSNL's network by M/s RIL is, therefore, not permitted.”

    7. This defence of RIL is available in its letter dated October 19, 2004 (Annexure P18) inter alia in the following passage.

    It is denied that RIC UASL has engaged in the “tampering” of the CLI. In any event and without prejudice to the other submissions made, presentation of switch CLI can not be termed as. “tempering with CLI”, because the same is a normal feature in any network including those of BSNL/MTNL where the operator assisted services are provided, whether through the operator or through IVRS. Moreover, this is not in violation of the Interconnect agreement.

    In the second stage of the call, the corresponding domestic calls originated on the request of the calling party are handed over by RIC (UASL) to the other interconnected operators. Since these calls were originating from the HCD switch, the call CLI was that with the National Significant number.

    The concern here may be the requirement of CLI for the security purposes. In these regard it is stated that even in the HCD service, the entire call detail records from abroad to India are maintained and are available. The calls can be monitored, intercepted for call records can be traced by the designated security agencies, like any other call traffic. Therefore, the service does not pose any security threat.

    8. Mr. Nayyar has raised a preliminary objection regarding the maintainability of this Petition on the grounds that RIL ought to’ have approached the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) which has been established as a consequence of the amendment to the Telecom Regulatory Authority of India Act, 1997 by the introduction of Section 14 therein. Mr. Nayyar has drawn to attention section 15 of the trai act which in his opinion ousts the jurisdiction of Civil Courts and prescribes that “no injunction shall be granted by any Court or other authority in respect of any action taken in pursuance of any power conferred by or under this Act.” It is his contention that the TDSAT assumes the character or wears the mantle of a judicial authority and therefore possesses the power to issue injunctions and other interim measures as envisaged in section 9 of the arbitration & conciliation act, 1996. To the contrary, Mr. Rohtagi has vociferously contended that this Court retains the power to pass appropriate Orders under Section 9 or the appointment of an Arbitrator under section 11 of the arbitration & conciliation act because of the avowed existence of an Arbitration clause between the parties. He has laid emphasis on the non-obstante language contained in section 5 of the arbitration & conciliation act which, in his understanding, would uncontrovertedly prevail over any provision of the TRAI Act or any other statute where this language is not found. Mr. Nayyar, however, has invited the consideration of the Petition on its merits, without prejudice to the contention that this Court would not possess jurisdiction to entertain this Petition. Hence it is not necessary to answer this legal nodus..

    9. Mr. Rohtagi has submitted that since BSNL has imposed the payment of a penalty, and as both parties are financially solvent, the balance of Convenience would to maintain status-quo while awaiting the decision in the Arbitration. He had also reiterated, in particular, the following grounds in the Petition:

    Even assuming for the sake of arguments that HCD services provided by the petitioners were liable for being treated as ILD calls and full IUC and ADC charges are payable to the respondents, even then such payment for the entire period in dispute, i.e in May 2004 to 16th September 2004 would not exceed Rs. 29 crores. The petitioners have not only made this payment but have also made an additional payment of Rs. 29 crores. The demands made by the respondent of Rs. 182.07 crores are not for any dues towards ADC arrears, but are in the nature of penalty. In any case there is no legal or factual basis for such demand. On the basis of the petitioners' records which are audited/scrutinized by auditors of international repute, these figures would be verified. The demand for the penalty amount is thus clearly on surmises and conjectures in addition to the same being illegal.

    The Respondents have over 90 lacs subscribers on their Unified Access Service Licence and the Petitioners handle approximately 1 crores minutes of calls on Long Distance Services and more than 60 lacs minutes of calls on International Long Distance Services daily. By the threatened actions of the Respondents, these services are sought to be disturbed which is clearly impermissible and therefore immediate orders are necessary so that the Petitioners' services are not disturbed and subscribers and consumers do not suffer unnecessarily because of highhanded and arbitrary actions on part of the Respondents.

    10. I have considered the rival contentions concerning the grant of the relief prayed for in the Petition. It is well settled that the powers vested in this Court by virtue of Section 9 of the Arbitration Act must be exercised in consonance with equity which tempers the grant of any discretionary relief. The scope of section 9 of the arbitration & conciliation act, 1996 is in pari materia with Order XXXIX of the Civil Procedure Code. The observations in Gujarat Bottling Co. Ltd. and others v. Coca Cola Co. and Others, (1995) 5 Supreme Court Cases 545, are indeed apposite and immediate come to mind-In this context, it would be relevant to mention that in the instant case GBC had approached the High Court for the injunction order, granted earlier, to be vacated. Under Order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injunction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdiction of the Court has to show that he himself was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the party against whom he was seeking relief. His conduct should be fair and honest. These considerations will arise not only in respect of the person who seeks an order of injunction under Order 39 Rule 1 or Rule 2 of the Code of Civil Procedure, but also in respect of the party approaching the Court for vacating the ad interim or temporary injunction order already granted in the pending suit or proceedings.

    11. In order to be entitled to discretionary relief, RIL should not be seen to have approached this Court with unclean hands. It must also es tablish that it has a prima facie case i.e that the manner in which it has conducted its business is in consonance with the Interconnect Agreement, the salient provisions of which have been reproduced above. A reading of the Agreement prima facie leads to the conclusion that RIL has surrep titiously breached the covenants and obligations contained in the Inter connect Agreement with the purpose of withholding monies which appear to be due to BSNL. For telephone calls emanating from the United State of America or outside India from third party subscribers distinct from RIL itself, the so called Home Country Direct Service cannot be employed. It is difficult to conceive such an activity as a ‘Direct Service’. It is also not in dispute that by changing the CLI and thereby disguising and attempting to change an international call to a domestic one, the liability of RIL towards BSNL has been drastically reduced. Assuming that RIL was within its contractual rights to use the Home. Country Director Service even for telephonic traffic of third parties, there would scarcely have been any need for RIL to change the caller identification unless it had itself un derstood its business activity to be contrary to the Interconnect Agree ment. There is a vast difference between the liability of Rs. 5.00 or 4.40 per minute and 0.30 corresponding to local call charges which RIL has been paying to BSNL.

    12. At this stage, the existence of a prima facie case is wholly absent. Moreover, prima facie it is evident that the manner in which RIL has conducted its business activities is in dishonest breach of the Interconnect Agreement. Such a party is not entitled to any discretionary relief. So far as the balance of convenience is concerned, it is the common case that both parties are financially solvent having mutual dealing running into Crores of Rupees every month. Therefore in the event of the Arbitration Award being rendered in favour of RIL, there ought to be no difficulty in making the recoveries/adjustments. Moreover, although the word ‘penalty’ has been used in the correspondence, BSNL has only demanded amounts envisages in the Agreement itself.

    13. In these circumstances, I am of the view that a case has not been made out for the issuance of an injunction or any other interim measures as envisaged in section 9 of the arbitration & conciliation act, 1996. The observations made on the merits of the case are of a prima facie character and would not bind the person/authority who has to finally and fully decide upon the disputes between the parties.

    14. The Petition is dismissed. Parties to bear their respective costs.

    15. A copy of this Judgment be given Dasti to counsel for the parties under the signature of the Court Master.

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    Comments

    Reliance Infocomm Limited Petitioner v. Bharat Sanchar Nigam Limited
    (Nov 4, 2004)