LexBHARAT SANCHAR NIGAM LTD. & ANR. versus BPL MOBILE CELLULAR LTD. & ORS.
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[2008] 8 S.C.R. 729 BHARAT SANCHAR NIGAM LTD. & ANR. II. BPL MOBILE CELLULAR LTD. & ORS. (Civil Appeal Nos. 6341-6342 Of 2003) A MAY 14, 2008 ' B [S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ.) Contract Act, 1872: S. 8 Agreement between patties and Department of Telecom- munications - Fructifying into concluded contract - Internal c circulars issued by the Deparlment of Telecommunications - Applicability thereof on the contracts - Held: Parties bound by the concluded contract - Doctrine of 'acceptance sub-si- lentio' not applicable - Parties not even aware of the circulars or the letters issued from time to time - Indian Telegraph Act, D 1885, Section 7 - Indian Telegraph Rules, Rules 434, 475A, 478, 494, 496 and 498. Doctrines: Doctrine of 'acceptance sub-silentio' - Applicability of. Words & Phrases: 'Prescribed' - Meaning of. E In these appeals arising from the orders of Telecom Disputes Settlement and Appellate Tribunal (TDSAT), the F core question involved was the effect of the application of internal circulars issued by the Department of Telecom- munications (DOT) in the contracts entered into by and between the parties as regards the inter-connection links provided by DOT. G On behalf of the appellants it was submitted that the Rules framed under the Indian Telegraph Act are binding on the service providers; that the lease agreement entered into by and between the parties having categorically pro- 729 H 730 SUPREME COURT R!:PORTS [2008] 8 S.C.R. A vided that circular letters would be applicable as regards dem.and of the payment on flat basis being higher than the rent and guarantee (fpr short"R & G''), the impugned judgment is not sustainable; .that from the Minutes dated 2.02.1996, it. would appear that the licensees were aware B of the existing circular orders. Furthermore, although the official books are for internal use, they are available in the market having been published under the name of Swarny's ·.Treatise on Telephone Rules; that if .under the contract, the BSNL was entitled to charge a higher amount, the c impugned judgment is wholly unsustainable; that the question is .•n<>twhet.her the circulars have the statutory force or nofbut a perusal of the licence agreement would clearly go tC? show that the licensees agreed to pay the tariff as prescribed by DOT; i.n view of clauses 4.1 and 0 19.5 of the licence agreement, it must be held thatthe pre- scribed rate and period would mean that as prescribed · by the authc)rized officer of DOT. from . time to time; that the licencees entered into contracts with their eyes wide open and irf that view of the matter as rates have been E fixed by the circulars, the same are only required to be forwarded to the Bill Department so that they can raise bills in terms thereof; that in terms of th.e circulars, revi- sion of rates were to be carried out by the co.nce.rned de· . partments as would appear from the circular Nos.4·31/ 86(R(Pt) dated 17.6.1988, 24-1187-PHC (Pt) 8 dated F 13,11.1988, 1•2/89-Rlptdated 18.2.1991, 4-11190-R dated 30.9.1991 and 4~11/90-R dated 1.4;1992 and as the respon- dents had been paying on the basis thereof, they cannot now be permitted to approbate and reprobate; and that in regard to the minimum guarantee period, it was sub- G mitted that the agreement .refers to the Rules and the circulars. On behalf of the respondents, it was contended that the parties entered into the agreement having regard· to H the commercial representations made to them by DOT I'" ,. • ,. .. BHARAT SANCHAR NIGAM LTD. & ANR. v. BPL 731 MOBILE CELLULAR LTD. & ORS. wherefor a booklet has been issued. It was furthermore A submitted that the parties were given options, viz., (i) the licensees could purchase equipments and install the same or take lease of the equipments installed by DOT on (a) flat rate basis; or (b) on capital cost; (ii) the parties have en- tered into the agreement on the premise that the charges B will have to be paid on rent and guarantee basis; and that the subsequent stand taken by the appellants herein to raise demands on enhanced basis relying on or on the basis of the internal circulars is wholly unsustainable. Dismissing the appeals, the Court c HELD: 1. A contract qua contract, however, must be consensual. It must meet the statutory requirements and . reasons under the provisions of the Indian Contract Act. When a contract is entered into by and between the
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