RELIANCE INFOCOMM LTD versus BHARAT SANCHAR NIGAM LTD. & ORS.

Citation: [2008] 7 S.C.R. 201 · Decided: 30-04-2008 · Supreme Court of India · Bench: S.H. KAPADIA · Disposal: Dismissed
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Judgment (excerpt)

[2008] 7 S.C.R. 201 
RELIANCE INFOCOMM LTD. 
II. 
BHARAT SANCHAR NIGAM LTD. & ORS. 
(Civil Appeal No. 936 of 2006) 
APRIL 30, 2008 
(S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.) 
Telecommunication Usage Charges Regulation, 2003: 
S.2 (XXV/11) and Clarificatory Circular dated March 4, 
2005, issued by TRAI: 
Access Deficit Charges/Interconnection Usage Charges 
A 
B 
c 
- Levy of, on Wireless Local Loop (Mobile) Services -
Opposed by the licensee of Unified Access Service on ground 
that fixed Wireless Service as used by it limited to one Base D 
Transceiver Station, thus, classifiable as Wireless Local Loop 
(Fixed) and falls under exception to such levy levy/demand -
Held: Access deficit is the difference between costs and local 
calls as incurred by respondent in providing cordless services 
to be funded through demand/levy of Access Deficit Charges 
on licensee/services provider - TRA/ issuing Regulations and E 
Explanatory memorandums specifying principles for such levy 
- Categorization of services for levying a charge by way of 
ADC/IUC is a matter of policy an,d revenue recognition and is 
part of regulatory requirements - Service provider well aware 
of distinction underlying between WLL(M) and WLL(F) in 
F 
connection with cellular service - The categorization of the 
services into fixed wireline and wireless services with further 
classification into fixed wireless Access and limited/full mobility 
has been reflected in the Unified Access Service License 
issued to appellant-licensee - Regarding chargeability of G 
ADC/IUC, TRAI followed it by issuing regulation/Explanatory 
memorandum and clarificatory circulars classifying the service 
impugned as WLL(M) - Since service impugned is not capable 
of complying with Premises Specific Restriction Test, it is 
201 
H 
202 
SUPREME COURT REPORTS 
(2008] 7 S.C.R. 
A WLL(M) and not WLL(F) - Hence the licensee is liable to pay 
ADCllUC - Directions issued by Circular dated 4.3.2005 by 
TRAI is clarificatory in nature and amendatory and by 
prescribing in it Premises Specific Regulation TRAI did not 
intend to reclassify WLL(F) service as WLL(M) - There is no 
B retrospectivity involved in the case, therefore, ADC could be 
changed with retrospective effect - No infirmity found in the 
impugned order warranting interference by Supreme Court. 
c 
D 
Words & Phrases: 
'Base Transceiver Service', 'Fixed Wireless Access', 
'House Location Registers', 'Mobility', 'Public Telephone 
Network', 'Visitors Handover Location Register' in the context 
of Telecommunication Usage Charges Regulations, 2003. 
WLL(F) & WLL(M) - Distinction between - Discussed. 
'Fixed Wireless Terminal' and 'Fixed Wireless Access' 
- Distinction between - discussed. 
The questions which arose for determination before 
this Court in the present appeal were as to whether the 
E Unlimited Cordless Service (UDS) as provided by the 
appellant, the Licensee is classifiable as Wireless Local 
Loop (Mobile)/WLL (M) service for the purpose of payment 
of Assess Deficit Charges as held by the Telecom 
Regulatory Authority of India in terms of Regulation 
F (XX.VIII) of the Telecommunication Interconnection Usage 
Charges Regulation 2003 or as to whether it is classifiable 
as Fixed Wireless Phone Service (FWPS)/Fixed Wireless 
Service (FWS) limited to one Base Transceiver Service 
(BTS), a Wireless Local Loop (Fixed)/WLL(F) and, 
G therefore, not liable to payment of Access Deficit Charges 
as claimed by the appellant. 
Dismissing the appeal, the Court 
HELD: 1.1 Regulatory regime includes methodology 
H for calculating access deficit. Access deficit is to be 
RELIANCE INFOCOMM LTD. v. BHARAT SANCHAR 
NIGAM LTD. & ORS. 
203 
funded through Access Deficit Charge (ADC). Access A 
deficit has to be calculated according to a formula which 
provides a reasonable return on the investment made, i.e., 
a return on capital employed. Interconnected Usage 
Charges (IUC)/ADC is part of revenue regime. It is for TRAI 
to consider the framework used for calculating IUC/ADC, 
8 
a subsidy. Access deficit essentially is to compensate 
the difference between costs and local calls revenue. 
(Para - 18) [220-E, F; 221-A] 
1.2 From time to time, TRAI has issued Regulations. 
These regulations are accompanied by Explanatory C 
Memorandums. ADC has been specified differently in 
these regulations for fixed, Wireless Local Loop (Mobile) 
or WLL(M) and cellular mobile calls. In doing so, the TRAI 
has kept in mind the fact that standar
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