The Delhi High Court on Monday upheld TRAI's decision making it mandatory for cellular operators to compensate subscribers for call drops from January 1, 2016.
A bench of Chief Justice G Rohini and Justice Jayant Nath dismissed a batch of petitions filed by Cellular Operators Association of India, a body of Unified Telecom Service Providers of India and 21 telecom operators, including Vodafone, Bharti Airtel and Reliance.
"We uphold the validity of (TRAI's) regulation," it said.
The court said that it has not stayed the notification of Telecom Regulatory Authority of India (TRAI) since filing of the writ petition, therefore the telecom regulator is at liberty to implement its decision January 1, 2016 onwards.
"There is no dispute about the power of TRAI to make regulation under section 36 of the Act. The impugned regulation has been made in exercise of the power conferred under the Act, keeping in mind the paramount interest of the consumer," the bench observed.
"It is also relevant to note that the regulations do not penalise every call drop but is limited only to three call drops a day per consumer," it said.
The telecom operators had moved the high court seeking quashing of TRAI's regulation contending that it was a "knee- jerk reaction" which penalised them without proving any wrong-doing.
The telcos had termed the regulation as "arbitrary and whimsical" and contended that providing compensation to the consumers amounted to interfering with the companies' tariff structure and this could be done only by an order and not a regulation.
The bench, while brushing aside the telcos' contention, concurred with the submissions made by Additional Solicitor General P S Narasimha that the regulation is in interest of the consumer.
The court also observed in its 39-page verdict that the compensation for call drops was capped at Rs 3 only and the regulation also mandated only compensating the calling consumer not the receiver.
The bench said, "We are of the view that regulation cannot be held to be beyond the scope of the regulating power of TRAI on any ground whatsoever."
It said that under "no circumstances" the decision of TRAI can be "termed as penalty".
Earlier, TRAI had told the high court that consumers have a right to get compensated for call drops and this was different from the quality of service guidelines that cellular service providers have to follow under the licence conditions.
However, the telecom companies had argued that even if the consumers were facing a problem, a regulation without statutory backing cannot be created.
The bench said, "We are unable to appreciate the contentions of the petitioners (cellular operators) that quality of service regulation and regulation are mutually contradictory/destructive."
The telecom firms had claimed that everyone was prejudiced against them, while referring to some of the pleas filed by consumer groups in support of the TRAI's October 16 regulation last year which mandates cellular operators to pay consumers one rupee per call drop experienced on their networks, subject to a cap of Rs 3 a day.
TRAI had termed the call drops as a "pervasive problem", saying it amounted to "harassment" of consumers as well as breach of contract that telcos had with subscribers.
In an affidavit, TRAI had told the court that a technical consultation paper was sent to all stakeholders, including telecom firms, on the call drops issue and all their representations were considered before the rule was made.
TRAI had on December 22, last year told the court that no coercive steps would be taken against telecom firms till January 6 for not complying with the call drop compensation norms.