REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) NO. 285 OF 2010
Avishek Goenka … Petitioner
Versus
Union of India & Anr. … Respondents
J U D G M E N T
Swatanter Kumar, J.
1. The petitioner is a businessman engaged in the business of
distribution of pre-paid virtual and tangible calling value for mobile
phone subscribers and also sells new customer acquisition packs and
follows it up, by collection of customer application forms and
executing tele-calling, to verify customer credentials. In this
Public Interest Litigation, the petitioner has attempted to highlight
the grave issue of non-observance of norms/regulations/guidelines
related to proper and effective subscriber verification by various
service providers. In fact, according to the petitioner, there is
rampant flouting of norms/regulations/guidelines relating to this
subject matter and there is no proper verification of the subscribers
prior to selling of the pre-paid mobile connections to them.
2. The Telecom Regulatory Authority of India (for short, “TRAI”) is
the regulatory body for the telecommunications sector in India and the
Union of India has responsibility to issue guidelines and frame
regulations and conditions of licence, in consultation with the TRAI,
to ensure coordination, standardization and compliance with the
regulations, as well as protecting the security interests of the
country.
3. It is the averment of the petitioner that the telecom sector has
witnessed the most fundamental structural and institutional reforms
since 1991. This sector has grown significantly in the last few
years. As per the Annual Report for 2009-2010 of the Department of
Telecommunication, Ministry of Communications and IT, Government of
India (for short “DoT”), as on 31st December, 2009, the Indian telecom
sector had about 5622.11 million connections. The tele-density per
hundred population, which is an important indicator of telecom
penetration in the country, has increased from 2.32 per cent in March,
1999 to 47.88 per cent in December, 2009. The Eleventh Five Year
Plan for 2007-2012 had provided a target of 600 million connections,
but the industry has already provided around 700 million connections,
thus far exceeding the target. Different random studies in relation to
pre-paid Subscriber Identity Module (SIM) cards show widespread
violation of guidelines for Know Your Customer (KYC) and even other
common guidelines. The SIM cards are provided without any proper
verification, which causes serious security threat as well as
encourages malpractices in the telecom sector. It appears that 65 per
cent of all pre-paid SIM cards issued in Jammu & Kashmir and 39 per
cent of all pre-paid SIM cards in Mumbai, may have been issued without
verification; which means that 1 out of every 6 pre-paid SIM cards is
issued without proper verification. The averment is that such
unverified SIM cards are also used in terrorist attacks.
4. This Court, in the case of State (NCT of Delhi) Vs. Navjot
Sandhu alias Afsan Guru [(2005) 11 SCC 600] had, with some caution,
referred to a large number of calls which had been made by terrorists
from instruments containing unverified SIM cards. It is further
averred by the petitioner that around 80 per cent of the pre-paid SIM
cards may be purchased in pre-activated form which is in violation of
the notifications issued by the DoT, dated 22.11.2006 and 23.3.2009
respectively, banning the sale of pre-activated SIM cards. Another
significant fact that has been brought out in this petition is that,
pre-paid SIM cards, which are the most commonly issued without
verification, constitute 96 per cent of the total SIM cards sold.
This indicates the seriousness of the problem as well as the security
hazard that emerges from the telecom sector.
5. Thus, the petitioner has prayed that there should be strict
implementation of subscriber verification guidelines, physical
verification be compulsory in future and physical re-verification of
existing subscriber base be conducted in a transparent manner. He also
seeks the prevention of inflated subscriber base. On all matters in
relation to these prayers, he pleads for issuance of appropriate writ,
orders or directions. Upon notice, the DoT as well as the TRAI had
put in appearance and placed on record the guidelines issued by the
DoT, as well as the comments of TRAI, respectively.
6. The petitioner, during the pendency of the petition, filed an
Interim Application, I.A. No. 6 of 2012, wherein he referred to a
circulation containing the draft norms prepared by the Government of
India (DoT) in relation to :
• Re-verification of existing customer base.
• Verification process as followed in Assam, J&K to be extended
across country.
• Mail of SIM card and activation details to the address of the
subscriber, both being sent separately. This method is
similar to that of delivery of debit, credit cards.
• Refuse to recognize government ID cards as sufficient proof,
etc.
7. According to the petitioner, these norms have not been adhered
to and in fact, the present instructions / guidelines formulated by
DoT are at variance to the norms, ignoring essential precautions for
verification of subscriber identity and safe distribution of pre-paid
SIM cards.
8. We have already noticed that the rapid expansion of the telecom
sector and its impact on development, both, equally impose
responsibility on the Government of India, the regulatory body and the
various stakeholders in the telecom sector to carry out proper
verification of the pre-paid SIM cards and ensure national safety and
security. To achieve this object, it is primarily for the expert
bodies and the Government of India to act and discharge their
respective functions.
9. In terms of Section 11 of the Telecom Regulatory Authority of
India Act, 1997 (for short, ‘the Act’), it is a statutory obligation
upon the TRAI to recommend a regulatory regime which will serve the
purpose of development, facilitate competition and promote efficiency,
while taking due precautions in regard to safety of the people at
large and the various other aspects of subscriber verification.
Similarly, the DoT is responsible for discharging its functions and
duties as, ultimately, it is the responsibility of the Government to
provide for the safety of its citizens. The TRAI has to regulate the
interests of telecom service providers and subscribers, so as to
permit and ensure orderly growth of telecom sector. The Government of
India and TRAI, both, have to attain this delicate balance of
interests by providing relevant instructions or guidelines in a timely
manner and ensuring their implementation in accordance with law.
10. While referring to the guidelines issued by DoT and the comments
of TRAI thereupon, the petitioner has raised, inter alia, but
primarily, the following objections :
i) Despite clear guidelines and decision to complete re-
verification of existing customer base, scheduled to be
completed between 1st November, 2009 to 31st October, 2010,
which time was further extended to 31st December, 2010, no
effective steps have been taken to complete this exercise.
ii) Re-verification has been left in the hands of the interested
stakeholders, i.e., the service providers themselves, who are
not taking appropriate and effective steps to complete the re-
verification exercise.
iii) The delivery of the pre-paid SIM card to the prospective
subscribers should be effected by registered post and home
delivery process, so as to provide basic verification of the
address of the subscriber.
iv) There should be no relaxation of requirement for photograph of
the subscriber in the Customer Acquisition Forms (CAF).
v) Lastly, that there should be heavy penalty for violation of the
guidelines and particularly, for providing pre-paid SIM cards to
subscribers whose identity and addresses are unverified.
11. Before this Court, the DoT filed its instructions dated 14th
March, 2011, relating to various aspects involved in the present case
and specifically, on the manner of verification of new mobile
subscribers (pre-paid and post-paid). These instructions, inter
alia, dealt with the verification and activation of mobile
connections, special guidelines for issue of mobile connections to
foreigners and outstation users, bulk mobile connections, change in
the name of subscriber, disconnection, lodging of complaints and even
imposition of penalties. Clause 3(vii) of these instructions
provided that pre-activated SIM cards are not to be sold. In case of
sale of pre-activated SIM cards, a penalty of Rs. 50,000/- per such
connection shall be levied upon the service provider/licensee, in
addition to immediate disconnection of the mobile connection.
12. Most of the grievances raised by the petitioner have been
appropriately dealt with under these instructions. But, however,
some of the issues have not been comprehensively provided for. The
TRAI filed an affidavit dated 14th March, 2012, dealing with the
instructions of the DoT, dated 14th March, 2011. In the said
affidavit, however, TRAI suggested certain variations as provided in
Annexure R-I to their affidavit. According to TRAI, the verification
of identity is dealt with differently in different countries, some
have provided stringent standards of documentation of identification
while others have not issued any guidelines and left it to the
discretion of the service provider. In India, TRAI recommended that
the Customer Acquisition Form (CAF) have a “unique” number, which may
be affixed at a central warehouse, rather than prior to distribution.
TRAI also recommended that the CAF form should be simpler in its
content as the form presently in use is not serving its purpose
adequately. TRAI has annexed to its affidavit, as Annexure I, the
sample form which should be adopted as a regular form to be filled in
by the subscriber. According to TRAI, in a manner similar to bulk
users, even individual users should disclose all the SIM cards and
connections in the name of such individual, with due verification by
the licensee. Also differing with the instructions of DoT on the issue
of manner of conversion from pre-paid to post-paid connections and
vice-versa, as well as regarding the transferability of mobile
connections, TRAI submits that the both should be permissible, the
former being treated as a change in tariff plan (not as a fresh or a
transferred connection) and the latter as a new mobile connection,
subject to consent of the existing owner of the mobile connection.
13. The other issue on which DoT and TRAI differed is, whether the
employees of the licensee/service provider should be required to
personally update the subscriber details in the database. While
according to DoT, this should be carried out by the employees of the
licensee itself, however, according to TRAI, it can be done by their
authorized representatives, keeping in view various factors, like
expense, time, efficiency and practicability. Both TRAI and DoT are
agreeable that such a database of all the registered subscribers
should be maintained by the licensee and the same be made accessible
to the security agencies. Giving an example of the Nigerian
Communication Commission, which maintains a similar database of all
registered subscribers, TRAI concludes that even the general evidence
demonstrates that such database makes verification and tracing of the
identity of the subscriber easier, particularly in absence of the
Unique ID cards. Some of the licensees and service providers
intervened in the present writ petition and have taken a stand that
they are, in fact, maintaining database details of all registered
subscribers. Such information is also made available to the
Government Department or security agencies on demand and in accordance
with law.
14. If one examines the powers and functions of TRAI, as postulated
under Section 11 of the Act, it is clear that TRAI would not only
recommend, to the DoT, the terms and conditions upon which a licence
is granted to a service provider but has to also ensure compliance of
the same and may recommend revocation of licence in the event of non-
compliance with the regulations. It has to perform very objectively
one of its main functions, i.e., to facilitate competition and promote
efficiency in the operation of the telecommunication services, so as
to facilitate growth in such services. It is expected of this
regulatory authority to monitor the quality of service and even
conduct periodical survey to ensure proper implementation.
15. What emerges from the above discussion is that the stakeholders
DoT, TRAI and the licencees are ad idem in regard to most of the
issues in terms of the instructions prepared by the DoT. However,
there are certain points on which there is a difference of opinion
between the DoT and the TRAI. This limited divergence is required to
be resolved by further clarification and issuance of more specific
instructions. These issues fall under two categories: - firstly, what
has been pointed out by the petitioner and secondly, where the DoT and
the TRAI hold different opinion as noticed above. Proper deliberation
between the stakeholders possessed of technical knowhow can resolve
such issues usefully and effectively.
16. The abovementioned points of divergence between TRAI and DoT are
matters which will have serious ramifications not only vis-à-vis the
regulatory authorities and the licensees but also on the subscribers
and the entire country. These aspects demand serious deliberation at
the hands of the technical experts. It will not be appropriate for
this Court to examine these technical aspects, as such matters are
better left in the domain of the statutory or expert bodies created
for that purpose. The concept of ‘regulatory regime’ has to be
understood and applied by the courts, within the framework of law, but
not by substituting their own views, for the views of the expert
bodies like an appellate court. The regulatory regime is expected to
fully regulate and control activities in all spheres to which the
particular law relates.
17. We have clearly stated that it is not for this Court to examine
the merit or otherwise of such policy and regulatory matters which
have been determined by expert bodies having possessing requisite
technical knowhow and are statutory in nature. However, the Court
would step in and direct the technical bodies to consider the matter
in accordance with law, while ensuring that public interest is
safeguarded and arbitrary decisions do not prevail. This Court in the
case of Delhi Science Forum & Ors. v. Union of India [AIR 1996 SC 1356
= (1996) 2 SCC 405], while dealing with provision of licences to
private companies as well as establishment, maintenance and working of
such licences under the provisions of the Telegraph Act, 1885, applied
the ‘wednesbury principle’ and held that ‘as such the Central
Government is expected to put such conditions while granting licences
which shall safeguard the public interest and the interest of the
nation. Such conditions should be commensurate with the obligations
that flow while parting with the privilege which has been exclusively
vested in the Central Government by the Act’. It is the specific case
of the petitioner and some of the affected parties in the present
proceedings that certain very important aspects, including security,
have not been appropriately dealt with in the instructions dated 14th
March, 2011.
18. Some divergence on certain specific issues of the regulatory
regime has been projected in the instructions and comments filed by
TRAI and DoT. They need to be resolved but, in absence of any
technical knowhow or expertise being available with this Court, it
will not be appropriate to decide, by a judicial dictum, as to which
of the views expressed by these high powered bodies would be more
beneficial to the regulatory regime and will prove more effective in
advancing the public interest. Essentially this should be left to be
clarified and the disputes be resolved by the expert bodies
themselves. It is a settled canon of law that in a regulatory regime,
the terms and conditions imposed thereunder should be unambiguous and
certain. It is expected that the authorities concerned would enforce
the regulatory regime with exactitude. Therefore, it is not only
desirable but also imperative that TRAI and DoT seriously cogitate on
the issues where divergence has been expressed between them and bring
unanimity in the terms and conditions of licences which would form an
integral part of the instructions dated 14th March, 2011.
19. It may be noticed here that, as interveners, some of the
licensees and/or service providers had criticized some of the terms
and conditions of licence proposed under the instructions dated 14th
March, 2011. These interveners not only made some suggestions with
regard to the ambit and scope of the guidelines and instructions by
TRAI or DoT but also intended to raise certain disputes vis-à-vis DoT
in the capacity of licensees subject to the impugned instructions.
Without any reservation, we make it clear that we are not directly or
indirectly entering upon the adjudication of any dispute or even
differences between the service provider/licensee on the one hand and
TRAI or DoT on the other. If they or any of them have any claim or
dispute with the other, they should resolve the same by taking
recourse to independent proceedings in accordance with law.
20. In view of our above discussion, we partially allow the writ
petition. The instructions dated 14th March, 2011 issued by DoT be and
hereby are accepted by the Court subject to the following conditions:
(i) We hereby direct the constitution of a Joint Expert Committee
consisting of two experts from TRAI and two experts from DoT to
be chaired by the Secretary, Ministry of Communications and
Information Technology, Government of India.
(ii) This Committee shall discuss and resolve the issues on which
TRAI in its affidavit has given opinion divergent to that
declared by DoT in its instructions dated 14th March, 2011.
Following are the points of divergence that require examination
by the Joint Expert Committee :
(a) Whether re-verification should be undertaken by the
service provider/licensee, the DoT itself or any other
central body?
(b) Is there any need for enhancing the penalty for violating
the instructions/guidelines including sale of pre-activated
SIM cards?
(c) Whether delivery of SIM cards may be made by post? Which
is the best mode of delivery of SIM cards to provide due
verification of identity and address of a subscriber?
(d) Which of the application forms, i.e., the existing one or
the one now suggested by TRAI should be adopted as
universal application form for purchase of a SIM card?
(e) In absence of Unique ID card, whether updating of
subscriber details should be the burden of the licensee
personally or could it be permitted to be carried out
through an authorized representative of the licensee?
(f) In the interest of national security and the public
interest, whether the database of all registered
subscribers should be maintained by DoT or by the licensee
and how soon the same may be made accessible to the
security agencies in accordance with law?
(iii) The above notified Committee shall resolve the above specified
issues and any other ancillary issue arising therefrom and make
its recommendations known to the DoT within three months from
today.
(iv) The DoT shall take into consideration the recommendations of the
Joint Expert Committee. The instructions issued by DoT dated
14th March, 2011 shall thereupon be amended, modified, altered,
added to or substituted accordingly. They shall then become
operative in law and binding upon all concerned.
(v) Composite instructions, so formulated, shall positively be
issued by the DoT within 15 weeks from today and report of
compliance submitted to the Registry of this Court.
21. The writ petition is disposed of with the above directions.
There shall be no order as to costs.
….…………......................CJI.
(S.H. Kapadia)
…….…………......................J.
(A.K. Patnaik)
...….…………......................J.
(Swatanter Kumar)
New Delhi
April 27, 2012
