(Telecom matters back to Consumer Commissions)

Supreme Court reverses its own order

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

Dr Prem Lata, Ex-Member Consumer Forum

It was a historic day when the Hon’ble Apex Court after long thirteen years declared on 16the  Feb 2022 in Civil Appeal No 923 of 2017 (Arising out of SLP (C) No 28615 of 2016) Vodafone Idea Cellular Ltd. Versus Ajay Kumar Agarwal that Consumer Protection Act is a Specific act and not a General act. The three judge’s 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 (2009) 8 SCC 481 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. Matter comes 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 entire issue;

It was as back as in 1992 when National Commission in a case before it for adjudication was 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 Distt.Manager ,Patna and  Bihar State ware housing corporation 1(1991)CPJ 379, National commission held that consumer can seek remedy under the Consumer Protection Act.

Again on another occasion in the case of District Manager, Telephones, Patna V Dr Tarun Barthvar 1(1992) CPJ 47, the question before the commission was as to whether the consumer forum has the jurisdiction to decide a dispute involving meter reading or excess billing which are covered under section 7 B of the Indian Telegraph Act 1885, the commission held -yes

Further in a case of Mahanagar Telephone Nigam Ltd V  Ghevar Chand Seasmal Sonigara, 1992(!!)CPR 427;(1992)CPJ ,476 the question was more specific as to whether it was not mandatory for the complainant to invoke the arbitration clause under the Telegraph Act National Commission held –no.

The similar issue was raised in case of Union of India  V  Dr B S Sidhu 1992,1992(1)CPR, 537;1 (1992)CPJ,208 ,in a case of Govt of India ,Secretary,department of Telecom V Satya Narayan Lal,(111)(1993)CPJ, 335,and also in case of Union of India through Rajkot Telephone V Dhanji Bai( 1994)11,CPR, 664;111(1994)CPJ,62, National Commission in all the above cases 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 (1997)11,CPJ ,60 ,National Commission confirmed the jurisdiction of consumer fora.

Supreme court also held in number of cases while deciding the various  issues under consumer protection act 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 .

It is how till the latest judgement pronounced by the Honorable  Supreme Court on 1.9.2009, Consumer foras had been dealing with all telecom matters filed by consumers.

Supreme in civil appeal no 7687 of 2004 in the case of GM Telecom V M Krishanan barred the jurisdiction of consumer foras and held that  such disputes will be decided by arbitrator under section 7B of Indian Telegraph Act .The award so made shall be final and not open to challenge before any court /forum 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.

Apex court has further remarked that it is a well settled law that special law overrides the general law

In that context, a two-Judge Bench of this Court thus held

“In our opinion when there is a special remedy provided in Section 7-B 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, question was as to whether this bar applies on private players also. These private companies came into the field of tele communication through the notification allotting license to these companies. Ministry of Communication, Department of telecommunications, licensing group ,Basic service cell issued notification on 24^th may 1999 .Through this notification ,exercising the provisions of sec 19-B 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, 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 7-B of the Indian telegraph act. The question was will 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 is 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 (supra) 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 result of 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 bind them to follow apex court precedence .Due to this reason parliament had to incorporate telecom word in Consumer Protection Act 2019

 

 Now two major questions are again the issues before the same apex court which is the larger bench comprising three judges

1.     Whether consumer protection act is a general law or specific law.

2.     Whether Arbitration clause bars the jurisdiction of consumer commissions

 

On the first point the court disagreed with the view taken in M. Krishnan (supra)

"The decision is incorrect on two grounds. First, it failed to recognize that the Act of 1986 is not a general law but a special law that has been enacted by Parliament specifically to protect the interest of consumers. Second, even if it is assumed that the Act of 1986 is a general law, it is a settled position of law that if there is any inconsistency between two legislations, the later law, even if general in nature, would override an earlier special law."

On the second issue of bar by arbitration clause  Hon’ble Supreme court did not accept that incorporation of Telecom word in the new act reveals that telecom matters were barred in earlier act and  it is the only reason for their stand to reverse the earlier order. Apex  Court discussed the provisions of the act as they were in the act 1986 itself and confirmed their stand on making illustration of  Section 2(s) of the earlier Act of 1986 The apex Court held that the use of the expression 'includes but not limited to' is very much important to understand the spirit and purpose of law. By adopting language which provides that the expression 'service' would mean service of any description which is made available to potential users further confirms the intention of law makers

Referring to  Emaar MGF Land Ltd. v. Aftab Singh11 12 (2019) 12 SCC 751, this Court has held that an arbitration agreement governed by the Arbitration and Conciliation Act 1996 will not oust the jurisdiction of the consumer forum to entertain a complaint of deficiency of goods or services. ‘Service’ means under Section 2(42) of “Act of 2019”,the Consumer Protection Act, 2019 means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

 Referring to the case of Ajoy Kumar Banerjee v. Union of India three-judge Bench of this Court observed:

“ the question what is the general law and what is the special law and in case of conflict which law would prevail would have arisen and that would have necessitated the application of the principle ‘Generalia specialibus non derogant’. The general rule to be followed in case of conflict between two statutes is that the later abrogates the earlier one. In other words, a prior special law would yield to a later general law’

Supreme Court finally held on 16 Feb 2022 in Civil Appeal No 923 of 2017

(Arising out of SLP (C) No 28615 of 2016) Vodafone Idea Cellular Ltd.

Versus Ajay Kumar Agarwal

·        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 the consumer commissions.

Dr Prem Lata

Legal Head VOICE (Ex-Member, Consumer Forum)

 

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