BSNL can impose max penalty on RCom for masked calls - SC

New Delhi: The Supreme Court on Monday upheld the imposition of maximum penalty by BSNL on Anil Ambani Group firm RCom for wrongly routing international calls through the state-run telco’s network as local connections by tampering with calling line identification (CLI) numbers.
Athree-judge bench headed by the Chief Justice S H Kapadia said that as per BSNL’s interconnect agreement with RCom, the state-run firm had the right to levy a penalty on all calls routed by ADAG firm through its network, including local calls, based on the highest call rate slab. The Supreme Court also held that by masking international call as local, RCom had tried to destroy the “principles of level-playing field” and BSNL has the right to recover its losses.


The apex court also set aside the earlier order of telecom tribunal TDSAT in favour of RCom, saying such violations come under “strict liability”, where the PSU can impose penalty on each and every call from their point of interconnection (PoI). “We set aside the impugned judgment and remit the matter to TDSAT to decide the matter de novo in accordance with the law laid down,” said the bench, which also consisted of Justices K S Radhakrishnan and Swatanter Kumar.
TDSAT had on May 24, 2010, set aside the bills raised by BSNL and said that Clause 6.4.6 of the interconnect agreement between RCom and PSU was penal in nature; therefore, the BSNL cannot impose a penalty on all calls routed by RCom through its PoI. The TDSAT had further said the amount of penalty was not commensurate to the actual damage suffered by BSNL and it would have to draw a distinction between unauthorised calls and calls with a missing or modified CLI number.
The apex court further said telcos are “obliged to maintain the integrity of its PoI” under the interconnect agreement. “It is important to note that each service provider, including BSNL, is a market player. Each UASL is entitled to a levelplaying field. The nature of the call, be it local or national or international, as indicated by corresponding CLI, is the basis for the levy of IUC.”
“If by wrong routing of calls or by masking the cost of providing services is reduced, the concerned operator gets an undue advantage not only in the Indian market over other competing operators, but also in the international market.”
“Hence, an international call coming from the masked number alone cannot be taken into account,” said the apex court, while allowing the plea of BSNL. The court further said, “All this leads to reduced cost for the defaulting UASL, which provides not only increase in its profit, but also gives it an advantage in international market vis-a-vis other competitors including BSNL.”
“One must keep in mind the concept of pricing of these contracts and the level-playing field provided to operators because it is on costing and pricing that the loss to BSNL is measured and, therefore, all calls during the relevant period have to be seen,” the court said.