In a major relief to telecom operators, the Supreme Court on Wednesday scrapped the regulation by TRAI that allowed users to claim compensation for dropped calls. Terming the regulation “arbitrary” and “unreasonable”, the apex court said TRAI had framed the law without “intelligent care and deliberation”.

The 99-page judgment, delivered by Justices RF Nariman and Kurian Koseph, said it was not clear why TRAI had decided to limit the compensation to three call drops a day, or how it had arrived at the figure of ₹1 to compensate inconvenience caused to the consumer. “It is equally unclear why the calling party alone is provided compensation because… the inconvenience (due to the interruption of a call) is suffered both by the calling party and the person who receives the call.” The court said: “All this betrays a complete lack of intelligent care and deliberation in framing such a regulation by the Authority, rendering the impugned regulation manifestly arbitrary and unreasonable.”

Punching holes in TRAI’s stand, the court said that though the regulator admitted that 36.9 per cent of call drops could be due to the fault of the consumer, the regulation assumes the service provider is 100 per cent at fault.

“We are afraid that the orderly growth of the telecom sector cannot be ensured or promoted by a manifestly arbitrary or unreasonable regulation which makes a service provider pay a penalty without it being necessarily at fault,” the court said, adding that the regulation violated the fundamental rights of the operators.

Stating that the High Court had erred while upholding the TRAI position, the apex court said the finding that a transparent process was followed by TRAI in making the regulation is only partly correct. “Unfortunately nothing is disclosed as to why service providers were incorrect when they said that call drops were due to various reasons, some of which cannot be said to be because of the fault of the service provider,” it said.

While the Centre chose to distance itself from the regulation, TRAI did not comment on the court order.

Transparency laws According to sector specialists, the court order not only raises questions about TRAI’s credibility, it also points to the larger issue of transparency in constitutional bodies. The Supreme Court, in fact, exhorted Parliament to take up this issue and frame legislation along the lines of the US Administrative Procedure Act by which all subordinate legislation is subject to a transparent process. “Not only would such legislation reduce arbitrariness in subordinate legislation making, but it would also conduce to openness in governance,” the court said.

Impact The immediate impact of the Supreme Court ruling will be on mobile consumers, who will not get any compensation for poor quality of service offered by the telecom operators. Consumer groups said that they may together seek a review. Abhishek Srivastava, Chairman of Lucknow-based Consumer Guild, said: “Consumer groups should work together to tackle this situation. We can even appeal for a review.”

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