# COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL LIMITED AND OTHERS

- **Citation:** [2018] 14 S.C.R. 489
- **Court:** Supreme Court of India
- **Decided:** 2018-12-05
- **Case number:** Civil Appeal No. 11843 of 2018
- **Bench:** A. K. Sikri, Ashok Bhushan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/competition-commission-of-india-v-bharti-airtel-limited-and-others-32667
- **Pages:** 96

## Headnote

Competition Act, 2002: ss.14, 19, 21, 21A and 26 - RJIL filed
information under the Act alleging anti-competitive agreement/
cartel having been formed by three major telecom operators (IDOs)
along with COAI - Grievance of RJIL was that the IDOs intentionally
ignored its request to augment Point of Interconnection (POIs) for
access, National Long Distance and international Long Distance
services, as the capacity already provided to it was causing huge
POI congestion resulting in call failures on its network - Apart
from IDOs, certain allegations were made against COAI also - It
was alleged that IDOs were denying mobile number portability
(MNP) requests of customers who wanted to switch to RJIL competing
service and that COAI was acting at the behest of IDOs against the
interest of competing member i.e. RJIL and not for the common interest
of industry and consumers as a whole - CCI held that prima facie
case existed and an investigation was warranted and directed
Director General to cause investigation in the case - Jurisdiction
of CCI to deal with the matter was challenged by IDOs and COAI -
Held: As the TRAI is constituted as an expert regulatory body which
specifically governs the telecom sector, the said aspects of the
disputes are to be decided by the TRAI in the first instance - These
are jurisdictional aspects - TRAI, being a specialised sectoral
regulator and also armed with sufficient power to ensure fair, nondiscriminatory and competitive market in the telecom sector, is better
suited to decide the said issues - The concepts of "subscriber",
"test period", "reasonable demand", "test phase and commercial
phase rights and obligations", "reciprocal obligations of service
providers" or "breaches of any contract and/or practice", arising
out of TRAI Act and the policy so declared, are the matters within
the jurisdiction of the Authority/TDSAT under the TRAI Act only -
Once that exercise is done and there are findings returned by the
[2018] 14 S.C.R. 489
489
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TRAI which lead to prima facie conclusion that IDOs have indulged
in anti-competitive practices, CCI can be activated to investigate
the matter going by the criteria laid down in relevant provisions of
Competition Act - Telecom Regulatory Authority of India Act, 1997
- Telegraph Act, 1885 - Telecommunication - Jurisdiction.
Competition Act, 2002: Salient features of the Act, discussed.
Competition Act, 2002: Competition Commission of India
(CCI) - Duties and functions - The CCI is entrusted with duties,
powers and functions to deal with three kinds of anti-competitive
practices - These are: (a) where agreements are entered into by
certain persons with a view to cause an appreciable adverse effect
on competition; (b) where any enterprise or group of enterprises,
which enjoys dominant position, abuses the said dominant position;
and (c) regulating the combination of enterprises by means of mergers
or amalgamations to ensure that such mergers or amalgamations
do not become anti-competitive or abuse the dominant position which
they can attain - The purpose of CCI is to eliminate such practices
which are having adverse effect on the competition, to promote and
sustain competition and to protect the interest of the consumers and
ensure freedom of trade, carried on by the other participants, in
India - For the purpose of conducting an inquiry, the CCI is
empowered to call any person for rendering assistance and/or
produce the records/material for arriving at even the prima facie
opinion.
Competition Act, 2002: s.26(1) - Writ petition against order
under s.26(1) of 2002 Act - Maintainability of - RJIL filed
information under the Act alleging anti-competitive agreement/cartel
having been formed by three major telecom operators (IDOs) along
with COAI - CCI exercised its right under s.26 and held that prima
facie case existed and an investigation was warranted into the matter
and directed

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COMPETITION COMMISSION OF INDIA
v.
BHARTI AIRTEL LIMITED AND OTHERS
(Civil Appeal No. 11843 of 2018)
DECEMBER 05, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Competition Act, 2002: ss.14, 19, 21, 21A and 26 - RJIL filed
information under the Act alleging anti-competitive agreement/
cartel having been formed by three major telecom operators (IDOs)
along with COAI - Grievance of RJIL was that the IDOs intentionally
ignored its request to augment Point of Interconnection (POIs) for
access, National Long Distance and international Long Distance
services, as the capacity already provided to it was causing huge
POI congestion resulting in call failures on its network - Apart
from IDOs, certain allegations were made against COAI also - It
was alleged that IDOs were denying mobile number portability
(MNP) requests of customers who wanted to switch to RJIL competing
service and that COAI was acting at the behest of IDOs against the
interest of competing member i.e. RJIL and not for the common interest
of industry and consumers as a whole - CCI held that prima facie
case existed and an investigation was warranted and directed
Director General to cause investigation in the case - Jurisdiction
of CCI to deal with the matter was challenged by IDOs and COAI -
Held: As the TRAI is constituted as an expert regulatory body which
specifically governs the telecom sector, the said aspects of the
disputes are to be decided by the TRAI in the first instance - These
are jurisdictional aspects - TRAI, being a specialised sectoral
regulator and also armed with sufficient power to ensure fair, nondiscriminatory and competitive market in the telecom sector, is better
suited to decide the said issues - The concepts of "subscriber",
"test period", "reasonable demand", "test phase and commercial
phase rights and obligations", "reciprocal obligations of service
providers" or "breaches of any contract and/or practice", arising
out of TRAI Act and the policy so declared, are the matters within
the jurisdiction of the Authority/TDSAT under the TRAI Act only -
Once that exercise is done and there are findings returned by the
[2018] 14 S.C.R. 489
489
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TRAI which lead to prima facie conclusion that IDOs have indulged
in anti-competitive practices, CCI can be activated to investigate
the matter going by the criteria laid down in relevant provisions of
Competition Act - Telecom Regulatory Authority of India Act, 1997
- Telegraph Act, 1885 - Telecommunication - Jurisdiction.
Competition Act, 2002: Salient features of the Act, discussed.
Competition Act, 2002: Competition Commission of India
(CCI) - Duties and functions - The CCI is entrusted with duties,
powers and functions to deal with three kinds of anti-competitive
practices - These are: (a) where agreements are entered into by
certain persons with a view to cause an appreciable adverse effect
on competition; (b) where any enterprise or group of enterprises,
which enjoys dominant position, abuses the said dominant position;
and (c) regulating the combination of enterprises by means of mergers
or amalgamations to ensure that such mergers or amalgamations
do not become anti-competitive or abuse the dominant position which
they can attain - The purpose of CCI is to eliminate such practices
which are having adverse effect on the competition, to promote and
sustain competition and to protect the interest of the consumers and
ensure freedom of trade, carried on by the other participants, in
India - For the purpose of conducting an inquiry, the CCI is
empowered to call any person for rendering assistance and/or
produce the records/material for arriving at even the prima facie
opinion.
Competition Act, 2002: s.26(1) - Writ petition against order
under s.26(1) of 2002 Act - Maintainability of - RJIL filed
information under the Act alleging anti-competitive agreement/cartel
having been formed by three major telecom operators (IDOs) along
with COAI - CCI exercised its right under s.26 and held that prima
facie case existed and an investigation was warranted into the matter
and directed Director General to cause investigation in the case -
In writ petition, High Court was called upon to decide as to whether
the jurisdiction of the CCI was entirely excluded or to what extent
the CCI could exercise its jurisdiction in these cases when the matter
could be dealt with any another regulator, namely, the TRAI - Held:
When such jurisdictional issues arose, the writ petition would clearly
be maintainable - Constitution of India - Art.226 - Judicial review.
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Competition Act, 2002: s.26(1) - Whether the High Court
could give its findings on merits - Held: Once the order under s.26(1)
of the 2002 Act is held to be administrative in nature and that it was
merely a prima facie opinion directing the Director General to carry
the investigation, the High Court was not competent to adjudge the
validity of such an order on merits - The observations of the High
Court giving findings on merits, therefore, were not appropriate -
At the same time, since the order of the High Court is upheld on the
aspect that the CCI could exercise jurisdiction only after proceedings
under the TRAI Act had concluded/attained finality, the ultimate
direction given by the High Court quashing the order passed by the
CCI is not liable to be interfered with as such an exercise carried
out by the CCI was premature.
Telecom Regulatory Authority of India Act, 1997: Salient
features of the Act, discussed.
Disposing of the appeals, the Court
HELD : 1.1 The Competition Act, 2002 deals with three
kinds of practices which are treated as anti-competitive and are
prohibited. These are: (a) where agreements are entered into
by certain persons with a view to cause an appreciable adverse
effect on competition; (b) where any enterprise or group of
enterprises, which enjoys dominant position, abuses the said
dominant position; and (c) regulating the combination of
enterprises by means of mergers or amalgamations to ensure
that such mergers or amalgamations do not become anticompetitive or abuse the dominant position which they can attain.
The CCI is entrusted with duties, powers and functions to deal
with three kinds of anti-competitive practices. The purpose is to
eliminate such practices which are having adverse effect on the
competition, to promote and sustain competition and to protect
the interest of the consumers and ensure freedom of trade, carried
on by the other participants, in India. For the purpose of
conducting such an inquiry, the CCI is empowered to call any
person for rendering assistance and/or produce the records/
material for arriving at even the prima facie opinion.
[Paras 67, 68][551-B-C; 558-A-C]
COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL
LIMITED AND ORS.
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Excel Crop Care Limited v. Competition Commission of
India and Another (2017) 8 SCC 47 : [2017] 5 SCR
901 - relied on
1.2 While inquiring into any alleged contravention and
determining whether any agreement has an appreciable adverse
effect on competition, factors which are to be taken into
consideration are mentioned in sub-section (3) of Section 19.
These include creation of barriers to new entrants in the market,
driving existing competitors out of the market and foreclosure
of competition by hindering entry into the market. All these
activities have connection with the 'market'. The word 'market'
has reference to 'relevant market'. As per sub-section (5) of
Section 19, such relevant market can be relevant geographic
market or relevant product market. The instant case relates to
telecommunication market. [Para 69][558-C-E]
2.1 The telecom market is regulated by the statutory regime
contained in the TRAI Act. Under the said Act, TRAI is
established as a regulator which exercises control/supervision
and also provides guidance to the telecom/mobile market. This
statutory body is required to function as per the provisions of the
TRAI Act as well as the Rules and Regulations framed thereunder.
Additionally, the telecom companies are also governed by
licence agreements entered into between the Central
Government and such service providers, for providing telephone/
telecommunication services to the customers/subscribers.
[Para 71][559-C-D]
2.2 Some of the features which govern the
telecommunication industry are: (a) To protect the interest of
the service providers and consumers of the telecom sector and
to permit and ensure technical compatibility and effective interrelationship between different service providers and for ensuring
compliance of licence conditions by all the service providers,
TRAI was constituted under the Telecom Regulatory Authority
of India Act, 1997. TRAI is a recommendatory/advisory and
regulatory body discharging the functions envisaged under subsection (1) of Section 11 of the said Act. TRAI, inter alia, is
charged with ensuring fair competition amongst service
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providers, including fixing the terms and conditions of entire
activity between the service providers and laying down the
standards of Quality of Service (QoS) to be provided by each
service provider. In exercise of its functions, TRAI has issued
detailed Regulations for telecom services, including fixation and
revision of tariffs (Tariff Order), fixation of Inter-connect Usage
Charges (IUC), prescription of quality of service standards, etc.
(b) The Telecom Service Providers, which include the
respondents as well as RJIL, provide telecommunication access
service and are PAN India Telecom Service Providers. They are
governed by the Cellular Mobile Telephone Service (CMTS)/
Unified Access Service Licence (UASL) issued by the
Telecommunications Department, Government of India under
section 4 of the Telegraph Act. (c) The Central Government has
the exclusive privilege of establishing, maintaining and working
telegraphs under the Telegraph Act and the Central Government
is authorised to grant licence on such terms and conditions and
in consideration of such payment as it thinks fit to any person to
establish, maintain or work as telegraph within any part of the
country. By virtue of Section 4 of the Telegraph Act, a service
provider is duty bound to enter into a licence agreement with the
former for unified licence, with authorisation for provision of
services, as per the terms and conditions prescribed in the
Schedule. As a condition of the said licence, the licensee agrees
and unequivocally undertakes to fully comply with the terms and
conditions stipulated in the licence agreement without any
deviation or reservation of any kind. The licence is governed by
the provisions of the Telegraph Act, the Indian Wireless
Telegraphy Act, 1933, the TRAI Act and the Information
Technology Act, 2000, as modified or regulated from time to time.
[Para 73][565-G-H; 566-A-G]
2.3 The interconnection agreement, inter alia, provides for
the following clauses: (a) to meet all reasonable demand for the
transmission and reception of messages between the interconnect
systems; (b) to establish and maintain such one or more POIs as
are reasonably required and are of sufficient capacity and in
sufficient numbers to enable transmission and reception of the
messages by means of applicable systems; and (c) to connect
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and keep connected to the applicable systems. By virtue of the
licence, the licensee is obligated to ensure quality of service as
prescribed by the licensor or TRAI and failure on their part to
adhere to the quality of service stipulated by TRAI would make
the licensor liable to be treated for breach of the terms and
conditions of the licence. In order to render effective services,
it is mandatory for the licensee to interconnect/provide POIs to
all eligible telecom service providers to ensure that calls are
completed to all destinations and interconnection agreement is
entered into between the different service providers which
mandates each of the party to the agreement to provide to the
other interconnection traffic carriage and all the technical and
operational quality service and time lines, i.e. the equivalent to
that which the party provides to itself. [Para 74][567-A-C, F-H;
568-A-B]
3.1 With the advent of globalisation/liberalisation leading
to free market economy, regulators in respect of each sector have
assumed great significance and importance. It becomes their
bounden duty to ensure that such a regulator fulfils the objectives
enshrined in the Act under which a particular regulator is created.
Insofar as the telecom sector is concerned, the TRAI Act itself
mentions the objective which it seeks to achieve. It not only
exercises control/supervision over the telecom service providers/
licensees, TRAI is also supposed to provide guidance to the
telecom/mobile market. 'Introduction' to the TRAI Act itself
mentions that due to tremendous growth in the services it was
considered essential to regulate the telecommunication services
by a regulatory body which should be fully empowered to control
the services, in the best interest of the country as well as the
service providers. TRAI is, thus, constituted for orderly and
healthy growth of telecommunication infrastructure apart from
protection of consumer interest. It is assigned the duty to achieve
the universal service which should be of world standard quality
on the one hand and also to ensure that it is provided to the
customers at a reasonable price, on the other hand. In the
process, purpose is to make arrangements for protection and
promotion of consumer interest and ensure fair competition.
[Paras 78, 79][570-B-D; 571-E]
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Modern Dental College and Research Centre and Others
v. State of Madhya Pradesh and Others (2016) 7 SCC
353 - followed
3.2 Specific functions which are assigned to TRAI, amongst
other, include ensuring technical compatibility and effective interrelationship between different service providers; ensuring
compliance of licence conditions by all service providers; and
settlement of disputes between service providers. In the instant
case, dispute raised by RJIL specifically touches upon these
aspects as the grievance raised is that the IDOs have not given
POIs as per the licence conditions resulting into non-compliance
and have failed to ensure inter se technical compatibility thereby.
Not only RJIL raised this dispute, it even specifically approached
TRAI for settlement of this dispute which arose between
various service providers, namely, RJIL on the one hand
and the IDOs on the other, wherein COAI is also roped in.
[Paras 79, 80][571-F-H; 572-A]
3.3 As the TRAI is constituted as an expert regulatory
body which specifically governs the telecom sector, the said
aspects of the disputes are to be decided by the TRAI in the first
instance. These are jurisdictional aspects. Unless the TRAI
finds fault with the IDOs on the said aspects, the matter cannot
be taken further even if it is assumed that the CCI has the
jurisdiction to deal with the complaints/information filed before
it. RJIL has approached the DoT in relation to its alleged
grievance of augmentation of POIs which in turn had informed
RJIL that the matter related to inter-connectivity between service
providers is within the purview of TRAI. RJIL thereafter
approached TRAI; TRAI intervened and issued show-cause
notice and post issuance of show-cause notice and directions,
TRAI issued recommendations on the issue of inter-connection
and provisioning of POIs to RJIL. The sectoral authorities are,
therefore, seized of the matter. TRAI, being a specialised sectoral
regulator and also armed with sufficient power to ensure fair, nondiscriminatory and competitive market in the telecom sector, is
better suited to decide the said issues. After all, RJIL's grievance
is that inter-connectivity is not provided by the IDOs in terms of
the licenses granted to them. TRAI Act and Regulations framed
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thereunder make detailed provisions dealing with intense
obligations of the service providers for providing POIS. These
provisions also deal as to when, how and in what manner POIs
are to be provisioned. They also stipulate the charges to be
realised for POIs that are to be provided to another service
provider. Even the consequences for breach of such obligations
are mentioned. [Para 83][573-F-H; 574-A-C]
4. The High Court was right in concluding that till the
jurisdictional issues were straightened and answered by the TRAI
which would bring on record findings on the said aspects, the
CCI is ill-equipped to proceed in the matter. Having regard to
the said nature of jurisdiction conferred upon an expert regulator
pertaining to this specific sector, the High Court is right in
concluding that the concepts of "subscriber", "test period",
"reasonable demand", "test phase and commercial phase rights
and obligations", "reciprocal obligations of service providers"
or "breaches of any contract and/or practice", arising out of TRAI
Act and the policy so declared, are the matters within the
jurisdiction of the Authority/TDSAT under the TRAI Act only.
Only when the jurisdictional facts in the instant matter are
determined by the TRAI against the IDOs, the next question
would be whether it was a result of any concerted agreement
between the IDOs and COAI supported the IDOs in that
endeavour. It would be at that stage the CCI can go into the
question as to whether violation of the provisions of TRAI Act
amounts to 'abuse of dominance' or 'anti-competitive
agreements'. [Para 84][574-D-F]
5. Whether TRAI has the exclusive jurisdiction to deal
with matters involving anti-competitive practices to the exclusion
of CCI altogether because of the reason that the matter pertains
to telecom sector?
5.1 The CCI is to determine whether the conduct of the
parties was unilateral or it was a collective action based on an
agreement. Agreement between the parties, if it was there, is
pivotal to the issue. Such an exercise has to be necessarily
undertaken by the CCI. The Competition Act is also a special
statute which deals with anti-competition. If the activity
undertaken by some persons is anti-competitive and offends
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Section 3 of the Competition Act, the consequences thereof are
provided in the Competition Act. Section 27 empowers the CCI
to pass certain kinds of orders, stipulated in the said provision,
after inquiry into the agreements for abuse of dominant position.
Moreover, it is within the exclusive domain of the CCI to find
out as to whether a particular agreement will have appreciable
adverse effect on competition within the relevant market in India.
For this purpose, CCI is to take into consideration the provisions
contained in the Competition Act, including Section 29 thereof.
Sections 45 and 46 also authorise the CCI to impose penalties in
certain situations. Obviously, all these functions not only come
within the domain of the CCI, TRAI is not at all equipped to deal
with the same. Even if TRAI also returns a finding that a particular
activity was anti-competitive, its powers would be limited to the
action that can be taken under the TRAI Act alone. It is only the
CCI which is empowered to deal with the same anti-competitive
act from the lens of the Competition Act. If such activities offend
the provisions of the Competition Act as well, the consequences
under that Act would also follow. Therefore, contention of the
IDOs that the jurisdiction of the CCI stands totally ousted cannot
be accepted. Insofar as the nuanced exercise from the stand
point of Competition Act is concerned, the CCI is the experienced
body in conducting competition analysis. Further, the CCI is
more likely to opt for structural remedies which would lead the
sector to evolve a point where sufficient new entry is induced
thereby promoting genuine competition. This specific and
important role assigned to the CCI cannot be completely wished
away and the 'comity' between the sectoral regulator (i.e. TRAI)
and the market regulator (i.e. the CCI) is to be maintained.
[Paras 89, 90][576-C-G; 578-B-F]
Haridas Exports v. All India Float Glass Manufacturers'
Assn. & Ors. (2002) 6 SCC 600 : [2002] 1 Suppl. SCR
229 - relied on
5.2 The primacy has to be given to the respective
objectives of the two regulators under the two Acts. At the same
time, since the matter pertains to the telecom sector which is
specifically regulated by the TRAI Act, balance is maintained by
permitting TRAI in the first instance to deal with and decide the
COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL
LIMITED AND ORS.
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jurisdictional aspects which can be more competently handled by
it. Once that exercise is done and there are findings returned by
the TRAI which lead to the prima facie conclusion that the IDOs
have indulged in anti-competitive practices, the CCI can be
activated to investigate the matter going by the criteria laid down
in the relevant provisions of the Competition Act and take it to
its logical conclusion. The CCI could not have dealt with this
matter at this stage itself without availing the inquiry by TRAI.
Also, insofar as the telecom sector is concerned, jurisdiction of
the CCI under the Competition Act is not totally ousted.
[Paras 91, 92][578-G-H; 579-A-B]
6. Whether the writ petitions filed before the High Court
of Bombay were maintainable?
In the case of Steel Authority of India Limited, nature of the
order passed by the CCI under Section 26(1) of the Competition
Act was gone into. The Court, in no uncertain terms, held that
such an order would be an administrative order and not a quasijudicial order. The case set up by the respondents was that the
CCI did not have the jurisdiction to entertain any such request
or information which was furnished by RJIL and two others. The
question, thus, pertained to the jurisdiction of the CCI to deal
with such a matter and in the process the High Court was called
upon to decide as to whether the jurisdiction of the CCI is entirely
excluded or to what extent the CCI can exercise its jurisdiction
in these cases when the matter could be dealt with by another
regulator, namely, the TRAI. When such jurisdictional issues
arise, the writ petition would clearly be maintainable. Thus,
although the view of the High Court that the impugned order
was quasi-judicial order is not accepted, the High Court was
competent to deal with and decide the issues raised in
exercise of its power under Article 226 of the Constitution.
The
writ
petitions
were,
therefore,
maintainable.
[Paras 94, 96, 97][580-C-D; 582-B-C; 583-F]
7. Whether the High Court could give its findings on
merits?
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Once it is held that the order under Section 26(1) of the
Competition Act is administrative in nature and further that it
was merely a prima facie opinion directing the Director General
to carry the investigation, the High Court was not competent to
adjudge the validity of such an order on merits. At the same time,
since it is held that the order of the High Court on the aspect
that the CCI could exercise jurisdiction only after proceedings
under the TRAI Act had concluded/attained finality, i.e. only after
the TRAI returns its findings on the jurisdictional, the ultimate
direction given by the High Court quashing the order passed by
the CCI is not liable to be interfered with as such an exercise
carried out by the CCI was premature. [Paras 98, 99][583-G-H;
584-A-B]
Barium Chemicals Ltd. and Another v. Company Law
Board and Others AIR 1967 SC 295 : [1966] SCR 311
- relied on
State (NCT of Delhi) v. Sanjay (2014) 9 SCC 772 :
[2014] 9 SCR 1063 ; Solidaire India Ltd. v. Fairgrowth
Financial Services Ltd. & Ors. (2001) 3 SCC 71 : [2001]
1 SCR 932 ; Union of India and Another v. Association
of Unified Telecom Service Providers of India and
Others (2011) 10 SCC 543 : [2011] 14 SCR 657 ;
Competition Commission of India v. Steel Authority of
India Limited and Another (2010) 10 SCC 744 : [2010]
11 SCR 112 ; Competition Commission of India v.
Coordination Committee of Artistes and Technicians of
West Bengal Film and Television & Ors. (2017) 5 SCC
17 : [2017] 5 SCR 1 ; Begum Sabiha Sultan v. Nawab
Mohd. Mansur Ali Khan & Ors. (2007) 4 SCC 343 :
[2007] 5 SCR 36 ; State of Punjab v. Labour Court,
Jullundur & Ors. (1980) 1 SCC 4 : [1980] 1 SCR
953 ; Ashoka Marketing Ltd. & Anr. v. Punjab National
Bank & Ors. (1990) 4 SCC 406 : [1990] 3 SCR 649 ;
Bhavnagar University v. Palitana Sugar Mill (P) Ltd.
& Ors. (2003) 2 SCC 111 : [2010] 11 SCR 112 ;
Competition Commission of India v. Steel Authority of
India Ltd. & Anr. (2010) 10 SCC 744 : [2007] 10 SCR
656 ; Carona Ltd. v. Parvathy Swaminathan & Sons
(2007) 8 SCC 559 : [2007] 10 SCR 656 - referred to
COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL
LIMITED AND ORS.
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Deutsche Telekom v. European Commission Case
C-280/08 P, Judgment dated 14.10.2010 ; FTC v.
Supreme Court Trial Lawyers Association 493 US 411
(1990) ; Credit Suisse v. Billing et al 551 US 264 (2007)
- referred to
Case Law Reference
[2002] 1 Suppl. SCR 229
referred to
Para 26
[2014] 9 SCR 1063
referred to
Para 29
[2001] 1 SCR 932
referred to
Para 30
[2011] 14 SCR 657
referred to
Para 33
[2010] 11 SCR 112
referred to
Para 37
[2017] 5 SCR 1
referred to
Para 44
[2007] 5 SCR 36
referred to
Para 51
[1980] 1 SCR 953
referred to
Para 52
[1990] 3 SCR 649
referred to
Para 54
[2010] 11 SCR 112
referred to
Para 57
[2007] 10 SCR 656
referred to
Para 58
[2007] 10 SCR 656
referred to
Para 58
[2017] 5 SCR 901
referred to
Para 67
(2016) 7 SCC 353
referred to
Para 77
[1966] SCR 311
relied on
Para 96
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11843
of 2018.
From the Judgment and Order dated 21.09.2017 of the High Court
of Judicature at Bombay in WP No. 7173 of 2017.
With
Civil Appeal Nos. 11846, 11844-45, 11852 and 11847-51 of 2018.
P. S. Narasimha, ASG, Prashanto Sen, Dr. Abhishek Manu Singhvi,
Ramji Srinivasan, Amit Sibal, Darius J. Khambata, Soli K. Cooper,
P. Chidambaram, Gopal Jain, Navroz Seervai, Siddharth Luthra, Sr. Advs.
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Arjun Krishnan, Dhruv Malik, V. C. Shukla, Ankur Suingh,
Sumit Srivastava, Sarvesh Mishra, Udayan Verma, Kamlendra,
Rahul Tanwani, K. R. Sadiprabhu, Ritin Rai, Raghav Shankar, Hiten
Sampat, Vishnu Sharma, Nakul Nayak, Aabhas Kshetarpal, Ms. Kritika
Bharadwaj, Tushar Bhardwaj, Avishkar Singhvi, Nidhiram Sharma, Srijan
Sinha, Naveen Hegde, Jayant Malik, Amit Bhandari, Avinash Amarnath,
Marezban P. Bharucha, Ms. Alka Bharucha, Ms. Swathi Girimaji, Areen
De, Vipul Wadhwa, Harsh Kaushik, Atul Dua, Ms. Chinmayee Chandra,
Ankush Walia, Param Tandon, Anju Berry, Aashish Gupta,
Aditya Mukherjee, Ms. Sugnadha Rohatgi, S. S. Shroff, Sanjay Kapur,
Ms. Megha Karnwal, Ms. Mansi Kapur and Ms. Shubhra Kapur, Advs.
for the appearing parties.
The Judgment of the Court was delivered by
A. K. SIKRI, J. 1. Leave granted.
2. Reliance Jio Infocomm Limited (hereinafter referred to as
'RJIL') has filed information under Section 19(1) of the Competition
Act, 2002 (hereinafter referred to as the 'Competition Act') before the
Competition Commission of India (for short, 'CCI') alleging anticompetitive agreement/cartel having been formed by three major telecom
operators, namely, Bharti Airtel Limited, Vodafone India Limited and
Idea Cellular Limited (Incumbent Dominant Operators) (hereinafter
referred to as the 'IDOs'). Similar Informations under Section 19 of the
Competition Act were also filed by one Mr. Ranjan Sardana, Chartered
Accountant, and Mr. Justice Kantilal Ambalal Puj (Retd.). These were
registered by the CCI as Case Nos. 80-81, 83 and 95 respectively. As
per Section 26 of the Competition Act, on receipt of such an information,
the CCI has to form an opinion as to whether there exists a prima facie
case or not. If it is of the opinion that there exists a prima facie case,
the CCI directs the Director General to cause an investigation to be
made into the matter. Apart from the IDOs, certain allegations were
also made against the Cellular Operators Association of India (for short,
'COAI'). The CCI issued notice to these parties and after hearing the
RJIL, the aforesaid cellular companies and COAI, it passed a common
order dated April 21, 2017 in all these cases (by clubbing them together)
holding a view that prima facie case exists and an investigation is
warranted into the matter. It, accordingly, directed the Director General
to cause investigation in the case.
COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL
LIMITED AND ORS.
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Introduction:
3. Four writ petitions came to be filed by the Bharti Airtel Limited,
Vodafone India Limited, Idea Cellular Limited and COAI respectively.
The prayed for quashing of the aforesaid order and consequential action/
proceedings on the ground that the CCI did not have any jurisdiction to
deal with such a matter. Show-cause notices were issued pursuant to
which the CCI as well as RJIL filed their counter affidavits. The mater
was heard and vide judgment dated September 21, 2017 the High Court
has allowed these writ petitions and quashed/set aside the order dated
April 21, 2017 passed by the CCI and consequently notices issued by
the Director General of the CCI have also been quashed. We may
reproduce the conclusions and operative portion of the order passed by
the Bombay High Court here itself, which are as under:
"130. Conclusions:
a) All the Writ Petitions are maintainable and entertainable. This
Court has territorial jurisdiction to deal and decide the challenges
so raised against impugned order (majority decision) dated 21 April
2017, passed by the Competition Commission of India (CCI) under
the provisions of Section 26(1) of the Competition Act, 2002 in
case Nos. 81 of 2016, 83 of 2016 and 95 of 2016 and all the
consequential actions/notices of the Director General under Section
41 of the Competition Act arising out of it.
b) The telecommunication Sector/Industry/Market is governed,
regulated, controlled and developed by the Authorities under the
Telegraph Act, the Telecom Regulatory Authority of India Act
(TRAI Act) and related Regulations, Rules, Circulars, including
all government policies. All the "parties", "persons",
"stakeholders", "service providers", "consumers" and "enterprise"
are bound by the statutory agreements/contracts, apart from related
policy, usage, custom, practice so announced by the Government/
Authority, from time to time.
c) The question of interpretation of clarification of any "contract
clauses", "unified license", "interconnection agreements", "quality
of service regulations", "rights and obligations of TSP between
and related to the above provisions", are to be settled by the
Authorities/TDSAT and not by the Authorities under the
Competition Act.
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d) The concepts of "subscriber", "test period", "reasonable
demand", "test phase and commercial phase rights and obligations",
"reciprocal obligations of service providers" or "breaches of any
contract and/or practice", arising out of TRAI Act and the policy
so declared, are the matters within the jurisdiction of the Authority/
TDSAT under the TRAI Act only.
e) The Competition Act and the TRAI Act are independent
statutes. The statutory authorities under the respective Acts are
to discharge their power and jurisdiction in the light of the object,
for which they are established. There is no conflict of the
jurisdiction to be exercised by them. But the Competition Act
itself is not sufficient to decide and deal with the issues, arising
out of the provisions of the TRAI Act and the contract conditions,
under the Regulations.
f) The Competition Act governs the anti-competitive agreements
and its effect - the issues about "abuse of dominant position and
combinations". It cannot be used and utilized to interpret the
contract conditions/policies of telecom Sector/Industry/Market,
arising out of the Telegraph Act and the TRAI Act.
g) The Authority under the Competition Act has no jurisdiction to
decide and deal with the various statutory agreements, contracts,
including the rival rights/obligations, of its own. Every aspects of
development of telecommunication market are to be regulated
and controlled by the concerned Department/ Government, based
upon the policy so declared from time to time, keeping in mind the
need and the technology, under the TRAI Act.
h) Impugned order dated 21 April 2017 passed by the Competition
Commission of India (CCI) under the provisions of Section 26(1)
of the Competition Act, 2002 and all the consequential actions/
notices of the Director General under Section 41 of the Competition
Act proceeded on wrong presumption of law and usurpation of
jurisdiction, unless the contract agreements, terms and clauses
and/or the related issues are settled by the Authority under the
TRAI Act, there is no question to initiating any proceedings under
the Competition Act as contracts/agreements go to the root of the
alleged controversy, even under the Competition Act.
COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL
LIMITED AND ORS. [A. K. SIKRI, J.]
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504 SUPREME COURT REPORTS [2018] 14 S.C.R.
i) The Authority, like the Commission and/or Director General,
has no power to deal and decide the stated breaches including of
"delay, "denial", and "congestion" of POIs unless settled finally
by the Authorities/TDSAT under the TRAI Act. Therefore, there
is no question to initiate any inquiry and investigations under Section
26(1) of the Competition Act. It is without jurisdiction. Even at
the time of passing of final order, the Commission and the Authority,
will not be in a position to deal with the contractual terms and
conditions and/or any breaches, if any. The uncleared and vague
information are not sufficient to initiate inquiry and/or investigation
under the Competition Act, unless the governing law and the policy
of the concerned "market" has clearly defined the respective rights
and obligations of the concerned parties/persons.
j) Impugned order dated 21 April 2017 and all the consequential
actions/notices of the Director General under the Competition Act,
therefore, in the present facts and circumstances, are not mere
"administrative directions".
k) Impugned order dated 21 April 2017 and all the consequential
actions/notices of the Director General under the Competition Act
are, therefore, illegal, perverse and also in view of the fact that it
takes into consideration irrelevant material and ignores the relevant
material and the law.
l) Every majority decision cannot be termed as "cartelisation".
Even ex-facie service providers and its Association COAI have
not committed any breaches of any provisions of the Competition
Act.
131. Hence the following
ORDER
a) Impugned order dated 21 April 2017, passed by the Competition
Commission of India (CCI) under the provisions of Section 26(1)
of the Competition Act, 2002 in case Nos. 81 of 2016, 83 of 2016
and 95 of 2016 and all the consequential actions/notices of the
Director General under Section 41 of the Competition Act, are
liable to be quashed and set aside, in exercise of power under
Article 226 of the Constitution of India. Order accordingly.
b) All the Writ Petitions are allowed.
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c) There shall be no order as to costs.
d) In view of the above, nothing survives in Civil Application
(Stamp) No. 17736 of 2017 in Writ Petition No. 7164 of 2017 and
the same is also disposed of. No costs."
4. Gist of the aforesaid order, as per the High Court, is that insofar
as the telecom sector/industry/market is concerned, same is governed,
regulated, controlled and developed by the authorities under the India
Telegraph Act, 1885 (hereinafter referred to as the 'Telegraph Act'),
the Telecom Regulatory Authority of India Act, 1997 (for short, 'TRAI
Act'), and as well as the related Regulations, Rules, Circulars, etc.
Therefore, the question of interpretation or clarification of any "contract
clauses", "unified license", "interconnection agreements", "quality of
service regulations", "rights and obligations of TSP between and related
to the above provisions", are to be settled by the Authorities/Telecom
Disputes Settlement and Appellate Tribunal (TDSAT) and not by the
Authorities under the Act. It has also held that the Competition Act and
the TRAI Act are independent statutes and the statutory authorities under
the respective Acts are to discharge their power and jurisdiction in the
light of the objectives for which they are established. The Competition
Act is itself not sufficient to decide and deal with the issues arising out
of the provisions of the TRAI Act etc. Thus, the CCI has no jurisdiction
to decide and deal with the various statutory agreements, contracts,
including rival rights/obligations, of its own. The issues arising out of
contract agreements, terms and clauses and/or the related issues are to
be settled by the authority under the TRAI Act in the first instance and
unless these issues are decided, there is no question of initiating any
proceedings under the Act. In a nutshell, it is held that insofar as contracts,
etc. which are regulated by the TRAI Act are concerned, in the first
instance, it is the authority under the TRAI Act which has to decide
these questions. Once there is a determination of the respective rights
and obligations under these licenses by the authority under the TRAI
Act, which provided an information to the effect that the particular act
appears to be anti-competitive, only thereafter the CCI gets jurisdiction
to go into the question of such anti-competitive practice. Primarily the
message behind the decision of the High Court is that jurisdictional facts
are to be decided by the authorities under the TRAI Act which has the
exclusive jurisdiction to determine those issues as the TRAI is the
statutory authority established for this very purpose, and unless there is
COMPETITION COMMISSION OF INDIA v. BHARTI AIRTEL
LIMITED AND ORS. [A. K. SIKRI, J.]
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506 SUPREME COURT REPORTS [2018] 14 S.C.R.
a determination of these facts, the machinery under the Competition Act
cannot be invoked. To put it otherwise, the judgment proceeds to decide
that it was premature for the CCI to entertain the Information for want
of determination of such issues that fall within the domain of the TRAI
Act.
5. It is obvious that the RJIL is not happy with the aforesaid
outcome. Even the CCI feels aggrieved. CCI has impugned this decision
by filing four special leave petitions, while the other one has been filed
by the RJIL.
6. The material facts which are absolutely essential to determine
the controversy, eschewing the unnecessary details, may now be
recapitulated.
Factual Background:
With the decision of the Government of India, more than 25 years
ago, ushering into era of globalisation and liberalisation, lot of avenues
opened up. It led to the privatisation of business in many sectors which
were, hitherto, monopolistic domain of the Government. These included
aviation, insurance, telecommunication etc.