UNION OF INDIA Vs. TATA TELESERVICES MAHARASHTRA LTD

JUDGEMENT

(1.) This appeal by the Union of India, the respondent in a proceeding before the Telecom Disputes Settlement & Appellate Tribunal (for short, "the TDSAT") in a petition filed by the respondent herein under Section 14 of the Telecom Regulatory Authority of India Act, 1997 (for short "the Act") is under Section 18 of the Act. The respondent approached the TDSAT praying for a declaration that the action of the Union of India in raising a claim and in recovering the amount as per its demand dated 10.8.1999, was bad in law and be set aside, for a declaration that the set off made by invoking condition 19 of the licence the respondent had with the appellant in respect of the Maharashtra Service Area was illegal and unauthorised and for setting aside the same, for directing the appellant to refund an amount of Rs.50 crores together with interest from the date of the purported set off of that amount with the amounts due to the respondent till the date of refund and for other consequential and incidental reliefs. In answer, the appellant contended that it was entitled to make the set off and the set off made was authorised and legal and that there is no reason to interfere with the set off and the respondent was not entitled to the recovery of Rs.50 crores with interest thereon. A claim that the appellant is entitled to recover as damages from the respondent a sum of Rs.654.25 crores towards the loss suffered by it on account of the respondent herein failing to fulfil its obligations under the Letter of Intent issued to it in respect of the Karnataka Telecom Circle was also put forward. The TDSAT upheld the claim of the respondent, rejected the claim of the appellant that it was entitled to a legal or equitable set off of the sum of Rs.50 crores and more importantly held that it has no jurisdiction to entertain a counter claim at the instance of the appellant. Of course, it was also pointed out that the counter claim itself was not properly framed and was somewhat vague. Thus the claim of the respondent was accepted and a direction was issued to the appellant to refund the sum of Rs.50 crores to the respondent with interest thereon at 17 per cent per annum from the date the said amount was appropriated by the appellant till its payment along with costs of the proceedings. This adjudication of the TDSAT is challenged in this appeal.

(2.) Section 18 of the Act provides for an appeal to this Court from an order or decision of the TDSAT whether in exercise of its appellate jurisdiction or in exercise of its original jurisdiction on one or more of the grounds specified in Section 100 of the Code of Civil Procedure. The two substantial questions of law sought to be adjudicated on are (1) whether the TDSAT was justified in not accepting the plea of set off raised by the appellant and (2) whether the TDSAT has not failed to exercise the jurisdiction vested in it by law in declining to go into the merits of the counter claim made by the appellant and in rejecting the same as being not maintainable.

(3.) The question whether the plea of set off, whether legal or equitable is liable to be upheld might depend on our conclusion on the question whether a counter claim at the instance of the Union of India in a proceeding initiated before the TDSAT by a licensee or service provider, is maintainable. If we hold that the counter claim is maintainable, necessarily the same would have to be adjudicated on, on merits and the result of such an adjudication would have impact on the plea of set off put forward by the appellant. Of course, if our answer to the said question is that the counter claim is not maintainable, then we have to decide independently whether the finding entered by the TDSAT on the plea of set off is vitiated by a substantial error of law or not. We will, therefore, first tackle the question whether the counter claim made by the Union of India was maintainable.