MANAGING DIRECTOR, BHARTI AIRTEL LIMITED AND THE REGIONAL MANAGER, BHARTI AIRTEL LIMITED Vs. ASSISTANT CONTROLLER OF LEGAL METROLOGY

JUDGEMENT

(1.) THE Government Pleader is directed to take notice for the respondent. The petition coming on for Preliminary Hearing - 'B' Group, is considered for final disposal, having regard to the facts and circumstances. The petitioners are said to be the licensees under Section 4 of the Indian Telegraph Act, 1885 (Hereinafter referred to as the TT Act', for brevity), duly licensed to operate Cellular Mobile telephone Services as well as the Land Line Telephone services in Karnataka Telecom Circle, within the scope of license granted by the Union of India. The nature of services, which are required to be rendered under the license agreement, is to provide Cellular Mobile Telephone Services to any of the intending subscribers, after obtaining necessary testimonials and activating the services. In order to render the services, it is necessary for the petitioners to supply the subscribers with certain electronic gadgets, which may be either Subscriber Identity Module (SIM) Card and the Fixed Wires Phone to provide internet access, Modem and to have access to the Land line services, telephone equipments. These are all the equipments which are given to the subscribers in lieu of the services rendered and the dominant object of license in itself is rendering service and ancillary to the main object of rendering services, certain electronic gadgets are to be given to the subscribers. These are provided to the subscribers with a condition that upon they ceasing to be the subscribers, such gadgets are to be returned as it continues to be the property of the petitioners. In relation to the packages containing such electronic gadgets, such as SIM cards and the Fixed Wire Phones etc., a notional value was computed by the Sales Tax Department under the Karnataka Sales Tax Act, 1957 (Hereinafter referred to as the 'KST Act.:, for brevity), which issue had reached the apex court and it was declared that the issue of SIM cards is only in lieu of the service with the service being a dominant object and therefore, had held that the supply of SIM Cards, Fixed Wire Phones etc., does not amount to sale attracting the provisions of the KST Act. Notwithstanding this, the department of Legal Meteorology, through its Inspectors, had caused search and seizure in relation to the packages SIM Cards, Fixed Wire Phones and had sought to initiate criminal proceedings against the petitioners at various places. The petitioners had filed writ petitions challenging the action of the department. These writ petitions were allowed and it was declared that the supply of SIM Cards and the Fixed Wire Phones cannot be termed as a Packaged Commodity within the meaning of Packaged Commodity Rules, 1977. Similar exercise had been undertaken by the respondent, wherein search and seizure was conducted under the provisions of the Standards of Weights and Measures Act, 1976 (Hereinafter referred to as the 'SWM Act', for brevity) and the electronic equipment, which is provided was seized, on an allegation that the package did not contain the complete address of the manufacturer etc. A notice had been issued directing the compounding of the offence. It was replied to state that the particular package start up kit does not come within the purview of the Act and requested for dropping of further proceedings. Notwithstanding the reply, no decision was taken and the respondent has proceeded to initiate proceedings by filing a private complaint which is registered as PC No. 41/2003 -04 and is now registered as CC 1448/2004 on the file of the III Additional Civil Judge (Junior Division) and IV JMFC at Tumkur and summons has been issued. It is at that stage that the present writ petition is filed.

(2.) IT is contended that it is well -settled that the petitioners are merely a service provider of telephone services, whether in the nature of Mobile Cellular Telephone Services or Land Line Telephone -Services in Karnataka Telecom Circle, either in relation to the provisions of the KST Act or under the provisions of the SWM Act. It is well -settled that the supply of equipments to the subscribers is only in lieu of services and such supply of equipment cannot be termed as a distinct transaction to attract the provisions of the Sale of Goods Act, 1930 or the provisions of the SWM Act. It is also settled that a person cannot be vexed in criminal proceedings as the initiation of criminal proceedings in itself is having a tendency of violating Article 21 of the Constitution of India. It is further pointed out that this court while dealing with an identical issue of the same petitioner in WP 11486/2007 and other connected cases, has by its order, dated 8.1.2010, held that the emphasis under the SWM Act and the Rules thereof, is in respect of commodities, which are intended for sale by themselves. Though the commodities in question are displayed in packaged form, they are not meant for sale by themselves. It is always coupled with or incidental to the subscriber availing the services provided by the petitioner. Further, as there is clearly an agreement that the subscriber has to surrender the devices on termination of the contract, it cannot be said that there is any element of sale involved. The suggestion that the petitioner has devised a way to include the cost of the devise into the service charges that are imposed, cannot be accepted as a finding of fact, without there being any adjudication in this regard. Hence, it ought to be held that the proceedings sought to be initiated by the third respondent in the case on hand is misplaced. Accordingly, following the said decision, the present writ petition is allowed. The impugned proceedings are quashed.