INTRODUCTION

From enjoying natural monopolies to witnessing tough competition for services, the telecom
sector in India has come a long way. It is now characterized by one of the fastest-growing
sectors of deploying the latest technology and driving the economic growth in India. With the
rapid intervention of innovation and competition redefining the sector dynamics, there are
new emerging challenges that force the telecom and competition authorities to rethink their
role and function and adopt a collaborative approach in deciding intersecting issues.

In 2017, Reliance Jio Infocomm Limited (RJIL), a new entrant in the telecommunications
market approached Competition Commission of India (CCI) against the incumbents for
forming a cartel to deny market entry. Prior to that, it approached the Telecom Regulatory
Authority of India (TRAI) against the incumbents for denying adequate points of
interconnection. CCI passed an order in favour of the informant, which was challenged in the
Bombay High Court and later appeared in the Supreme Court of India. The case that breathed
fresh air at every level of Court in the country is a landmark decision in settling the role of
CCI with respect to telecom sectoral regulators, particularly in issues that simultaneously fall
within the jurisdiction of both the bodies.

The objectives of both legislation, when reading together, intend to create an environment
that may facilitate fair competition. In fulfilling the concerned objective, the jurisdiction of
TRAI and the CCI overlap. Although the watchdogs (CCI and TRAI) share a common goal,
they differ in their mandate and approach. The difference in the approach adopted by the CCI
and TRAI towards a similar objective leads to cases of jurisdictional conflicts. The
Researcher aims to analyze the decision of the Supreme Court of India in terms of its far-
reaching effects on CCI while touching base on developments in the case at every level of
proceedings through the lens of optimal regulation and competition.

The Supreme Court of India, by a recent  judgement dated 5th December 2018, while
dismissing the appeals filed by the Competition Commission of India (CCI ) and Reliance
JIO and by upholding the   Bombay High Court (“High Court”) judgment dated
21st September 2017, which had quashed the CCI prima facie order directing investigation
under section 26(1) of the Competition Act,2002 (the Act)  against Bharti Airtel, Vodafone ,
Idea ( “existing telecom players”) and the trade association , the  Cellular Operators
Association of India ( COAI)   has deftly found a middle path and resolved the long debated
tussle for supremacy between the overarching fair market watchdog, the CCI and the sector
specific regulators , the Telecom Regulatory Authority of India (TRAI), in this case, by
postponing scrutiny into any possible co-ordination or collusion between the existing telecom
players through the platform of COAI or otherwise .

Further, the Apex Courts, while upholding its earlier much celebrated judgment in the Steel
Authority of India Ltd. (SAIL) case,1 (SAIL Case) on the nature of the CCI prima facie order
under section 26(1) of the Act (administrative and not quasi-judicial as contended by the
existing telecom players) has also, for the first time, made a distinction between examination
of competition issues by CCI in a sector having a statutory regulator and a sector without one.
The Court has invoked the need for use of section 21A of the Act, which makes it mandatory
for CCI to obtain opinion of the sector regulator on sector specific issues first.

The Apex court has accordingly held that until the jurisdictional facts (the “technical issues”
pertaining to contentious point of connection, interconnection charges, point of
interconnection etc. between existing telecom players and reliance Jio) are decided by TRAI,
CCI cannot proceed to investigate any possible coordination between the existing telecom
players. The Court, however, rejected the contention of the existing telecom players that CCIs
jurisdiction is completely ousted in cases where a statutory regulator (TRAI in this case)
exists 
BACKGROUND
In exercise of powers under Section 13 r/w Section 11 of the TRAI Act, the TRAI issued
direction dated 7th June, 2005 to all the telecom service providers to provide
interconnection[2] within 90 days of the applicable payments made by the interconnection
seeker. On October 21, 2013, Reliance Jio Infocomm Limited (Reliance Jio) was granted
Unified License and Unified Access Service License under Section 4 of the Telegraph Act,
1885 by the Department of Telecom (DoT) for providing telecommunication services in all
22 circles in India. Reliance Jio executed interconnection agreements with the existing
telecom operators viz. Bharti Airtel Ltd. (“Airtel”), Idea Cellular Ltd. (“Idea”) and Vodafone
India Ltd. (“Vodafone”) [collectively referred as Incumbent Dominant Operators- IDOs in
the judgment.
Reliance Jio, vide letter dated 21st June 2016, requested the IDOs to augment Point of
interconnection (POI) for access, National Long Distance (NLD) and International Long
1
Supreme Court dismisses CCI & Reliance Jio's appeals-upholds TRAI's jurisdiction to decide upon technical
issues with Bharti Airtel, Vodafone, Idea | (competitionlawyer.in).
Distance (ILD) services, as the capacity already provided to it was causing huge POI
congestion, resulting in call failures on its network. According to Reliance Jio, the IDOs
intentionally ignored the aforesaid request, and Reliance Jio issued a letter to TRAI,
following which TRAI had to intervene and it heard the grievances on both sides. IDOs’
grievances basically being focused on free calls being offered by Reliance Jio as a test run
which led to an unprecedented traffic congestion on their respective networks.
Soon thereafter, In September 2016, one Mr. Rajan Sardana filed information before the
Competition Commission of India (“CCI”) and similar application was filed by one Justice
K.A Puj (Retd.). Subsequently, an information was filed by Reliance Jio itself before the CCI
alleging cartelization amongst the IDOs and Cellular Operators Association of India
(“COAI”), by causing delay/denying (i) the provisioning of POIs to Reliance Jio, (ii) Mobile
Number Portability requests of customers who wanted to switch to Jio (iii) also, COAI was
acting on behest of the IDOs against the interest of Reliance Jio.

As the matter was with TRAI as well, TRAI issued recommendations to DoT after finding
that IODs have violated conditions under the Standard of Quality of Service of Basic
Telephone Service (Wireline) and Cellular Mobile Telephone Service Regulations,2009
(hereinafter referred to as the ‘QoS’), interconnection agreements and Unified License. TRAI
recommended that a fine of Rs. 50 crore as per local service area be imposed on the IDOs for
not adhering to TRAI norms and regulations. On the other hand, CCI took cognizance of the
three above-mentioned information filed before it which were registered as Case No. 81, 83
and 95 of 2016 and passed an Order dated 21 st April, 2017 under Section 26(1) of the Act
directing investigation by the DG into alleged cartelization amongst the IDOs (“prima facie
order”).
Writ Petitions were filed immediately by the IDOs against the said prima facie order
challenging the jurisdiction of CCI as the matter fell within the exclusive jurisdiction of
another regulatory authority- TRAI.

BOMBAY HIGH COURT DECISION

In a nutshell, the judgement of the High Court dated 21 st September 2017 held that insofar as
contracts, license issues, quality of services, interconnection agreements etc. which are
regulated by the TRAI Act are concerned, as the first instance, it is the authority of TRAI to
decide these questions. Once there is a determination of the respective rights and obligations
under these licenses by the authority under the TRAI Act, only thereafter the CCI gets
jurisdiction to go into the questions of anti-competitive practices. In other words,
the jurisdictional facts are to be decided by the authorities under the TRAI Act which has
exclusive jurisdiction to determine those issues as the TRAI is the statutory authority
established for this very purpose, and unless there is determination of these facts, the
machinery under the Competition Act, 2002 cannot be invoked.
The High court, therefore, holding that it was premature for the CCI to entertain the
Information filed before it, quashed the CCI’s prima facie order.

Contentions on behalf of Appellants: The issue pending before CCI was whether there
existed any anti-competitive agreement that existed between the Respondents to prevent the
entry of Reliance Jio. This practise was prohibited under section 3(3)(b) of the Competition
Act. 20 Whereas the issue pending before TRAI was concerning the violation in terms of the
license agreement, other interconnection regulations, and the quality of service regulations.
Hence it was argued, that CCI would have jurisdiction in determining whether there existed
any anti-competitive agreements and possible violation of Section 3.

Contentions on behalf of the Respondents: That only TRAI had all the jurisdiction in such
matters regulating Telecom Operators as it was a sectoral regulator. Court held: The Court
rejected the contentions of the respondents. With regard to Section 60, of the Competition
Act, the court held that CCI shall have jurisdiction over this issue but it can be exercised only
after TRAI has rendered its decision. Through this judgement, Court harmonised the
objectives of the Competition Act 2002 and TRAI on the other hand. The 2018 Supreme
Court judgement in CCI v. Bharti Airtel was decisive in resolving the jurisdictional conflicts
between sectoral regulator TRAI and the CCI, and in outlining the distinctions between the
two. The Court had explained that the ‘CCI is not a sector-based body but has the jurisdiction
across which transcends sectoral boundaries, thereby covering all the industries.’2

SUPREME COURT DECISION

The Supreme Court, in its decision dated 5 th December 2018, framed three issues which were
raised before it, as formulated below:
1. The Jurisdiction of CCI

2
Neha Sinha, CCI vs. SEBI: Overlapping Jurisdiction of CCI and a Sectoral Regulator, IndiaCorp Law,
(21.03.2021, 9.00p.m) https://indiacorplaw.in/2021/02/cci-v-sebi-overlapping-jurisdiction-of-cci-and-a-
sectoralregulator.htm
The Supreme Court before determining the issue, undertook a careful analysis of the
provision of the Act and TRAI Act, 1997 and arrived at the conclusion that the functioning of
the telecom companies which are granted license under Section 4 of the Telegraph Act, 1885
is regulated by the provision contained in the TRAI Act. The Hon’ble Supreme Court
observed that, in the instant case, dispute raised by Reliance Jio is that the IDOs have not
given POIs as per the license conditions resulting into non-compliance and have failed to
ensure inter alia technical compatibility thereby. In addition, not only has Reliance Jio raised
this dispute, it has specifically approached TRAI for settlement and TRAI is seized of this
particular dispute. TRAI being a specialized sectoral regulator and also armed with sufficient
power to ensure fair, non-discriminatory and competitive market in the telecom sector, is
better suited to decide the current issue.
The Hon’ble Supreme Court, therefore, agreed with the findings of the High Court that till
the jurisdictional issues are straightened and answered by the TRAI, the CCI is ill equipped to
proceed in the matter.

However, it is pertinent to note that the Hon’ble Supreme Court did not totally oust the
jurisdiction of CCI. The Hon’ble Supreme Court observed that even if TRAI returns a finding
that a particular activity was anti-competitive, its powers would be limited to the action that
can be taken under the TRAI Act alone, and if such activities offend the provisions of the
Competition Act, 2002, the consequences under that Act would also follow.

In totem, since the matter pertains to the telecom sector which is specifically regulated by the
TRAI Act, balance is maintained by permitting TRAI in the first instance to deal with and
decide the jurisdictional aspects which can be more competently handled by it. Once that
exercise is done and there are finding returned by TRAI which lead to the prima
facie conclusion that IDOs have indulged in anti-competitive practices, CCI can be activated
to investigate the matter.  Therefore , the Hon’ble  Supreme Court in its decision, does not bar
the jurisdiction of CCI altogether but only pushes it to a later stage, after the TRAI has
undertaken necessary exercise in the first place.
2. Whether the Writ Petitions filed before the Bombay High Court were
maintainable, as the Order passed by CCI under Section 26(1) of the Act is
administrative in nature?
 The Hon’ble Supreme Court although, while upholding its earlier decision in the SAIL
case acknowledged  that the order passed under Section 26(1) of the Act, is administrative
(and not quasi- judicial) in nature, held that the Writ petitions were still maintainable since
the jurisdictional issues raised before it could only have been examined under the
extraordinary powers of the High Court under Article 226 of the Constitution .
3. Whether the High Court gave its finding on merits in the Writ Petition?
The Hon’ble Supreme Court observed that as it has acknowledged that the order under
Section 26(1) of the Act is administrative in nature, the High Court would not be competent
to adjudge the validity of such an order on merits. However, since the Hon’ble Supreme
Court is upholding the order of the High court with respect to the jurisdictional conflict, the
ultimate decision of the High court quashing the CCI’s order under Section 26(1) of the Act
is not liable to be interfered.

CASE COMMENT
This is undoubtedly another landmark judgment from Justice AK Sikri . This judgment
assumes significance because, 
Firstly-The Hon’ble Supreme Court has finally shown a middle path to resolve the long-
debated issue of  jurisdictional conflict between the CCI and sector regulators . The Hon’ble
Supreme Court, by invoking the doctrine of harmonious construction has balanced the stand
by giving TRAI the power to determine the rights and obligations of the parties first, and then
if it apprehends the existence of anti-competitive act, invokes the jurisdiction of CCI. In
coming to this conclusion , the Apex Court has , without making a special reference, followed
the existing jurisprudence on this issue in the USA , illustrated in the noted cases of Credit
Suisse Case,3 and the Verizon Communications  case,4 decided by the US Supreme Court;
 Secondly– the Hon’ble Supreme Court while upholding its earlier much celebrated judgment
in the Steel Authority of India Ltd. (SAIL) case [5] (SAIL Case) on the nature of the CCI prima
facie order under section 26(1) of the Act ( administrative and not quasi-judicial as contended
by the existing telecom players) has also , for the first time , made a distinction between
examination of competition issues  by CCI in a sector having a statutory regulator and a
sector without one; 
Thirdly ,the Hon’ble Court has not ruled out the possibility of co-ordination between the
existing telecom players to challenge the maverick business model of Reliance Jio and has
,therefore left the determination of such competition issues open by CCI subsequent to the
determination on the technical issues by TRAI.

3
https://www.competitionlawyer.in/supreme-court-dismisses-cci-reliance-jios-appeals-upholds-trais-
jurisdiction-to-decide-upon-technical-issues-with-bharti-airtel-vodafone-idea/#_ftn3
4
Id.
It was held that till the jurisdictional issues were “straightened and answered by the TRAI
which would bring on record findings” on the various aspects concerned, the CCI was “ill-
equipped to proceed in the matter.” It was further held that “only when the jurisdictional facts
in the present matter were “determined by the TRAI against the IDOs, the next question
would arise as to whether it was a result of any concerted agreement between the IDOs” and
the Cellular Operators Association of India (COAI) “supported the IDOs in that endeavour.”
The Court said that “it would be at that stage the CCI can go into the question as to whether
violation of the provisions of TRAI Act amounts” to ‘abuse of dominance’ or ‘anti-
competitive agreements’, which “also follows from the reading of Sections 21 and 21A of the
Competition Act.”
Rejecting the contention of the IDOs that the jurisdiction of the CCI stands totally ousted, the
Supreme Court observed that “CCI is the experienced body in conducting competition
analysis” and “more likely to opt for structural remedies which would lead the sector to
evolve a point where sufficient new entry is induced thereby promoting genuine
competition.” It was held that “this specific and important role assigned to the CCI cannot be
completely wished away and the ‘comity’ between the sectoral regulator (i.e. TRAI) and the
market regulator (i.e. the CCI) is to be maintained.”

The Supreme Court held that balance is to be “maintained by permitting TRAI in the first
instance to deal with and decide the jurisdictional aspects which can be more competently
handled by it. Once that exercise is done and there are findings returned by the TRAI which
lead to the prima facie conclusion that the IDOs have indulged in anti-competitive practices,
the CCI can be activated to investigate the matter going by the criteria laid down in the
relevant provisions of the Competition Act and take it to its logical conclusion.” It was held
that “this balanced approach in construing the two Acts would take care of Section 60 of the
Competition Act as well”. The Supreme Court observed that its’ analysis “does not bar the
jurisdiction of CCI altogether but only pushes it to a later stage, after the TRAI has
undertaken necessary exercise in the first place, which it is more suitable to carry out.”
If we analyse the judgement, we can observe that there exists a jurisdictional struggle
between the regulatory body and competition law. To understand this conflict it is very
important to demarcate the jurisdictional issue of both statutes. In the present case, TRAI is a
sectoral Regulation and Competition law is a general law and the objectives of both the
statutes are different. The Regulation may be more focused on fixing different types of
market failures, ensuring safety and quality of products and services, assuring consumer
interest, and facilitating public interest like redistribution whereas a competition law is aimed
to prohibit the negative effects on consumer welfare, that can result from the increasing
market power of the enterprises. Thus the overlap of powers can occur in terms of regulating
market failures and prevent any dominance of market power. In the case of
Telefonaktiebolaget LM Ericsson v. CCI,5 the Delhi High Court held that the remedies
provided under section 27 of the Competition Act for abuse of dominant position are
materially different from the remedies provided in the Patents Act, in section 84. That the
scope of CCI enquiry is limited to the abuse the of dominant position by Ericsson and
accordingly CCI can issue orders.6 Thus through this order, Delhi High Court clearly stated
“merely because certain relief sought by Micromax and Intex before CCI are also available in
proceedings under the Patents Act also does not exclude the subject matter of the complaints
from the scope of the Competition Act.” 7 Even in the case of Re: Brickwork Ratings India
Pvt. Ltd. and CRISIL Ltd. and Others, 8 the National Highway Authority, invited tenders from
various Credit Rating Agencies. The Informant Brickwork Ratings alleged that CRISIL Ltd.
India Ratings and Research Pvt. Ltd., CARE Ratings Ltd., and ICRA Ltd. (known as opposite
parties), who had submitted their price quotes for the tender were engaged in cartelisation and
other anti-competitive practises. Since CRA’s comes under the regulation of SEBI, CCI had
invited submissions from SEBI. To this SEBI and other informants alleged that only SEBI as
a market regulator had jurisdiction and not CCI. To this, a bench of CCI chairman and other
members, said "...the Commission notes that though regulation of CRAs may be the subject-
matter domain of SEBI, examining any anti-competitive conduct on the part of CRAs falls
within the jurisdiction of the Commission."9

5
(W.P.(C) 464/2014 & CM Nos.911/2014 & 915/2014).
6
(W.P.(C) 464/2014 & CM Nos.911/2014 & 915/2014).
7
Lucy Rana and Tulip De, India: Telefonaktiebolaget LM Ericsson v. Competition Commission Of India,
Mondaq, (20.03.2021, 5.00p.m)_https://www.mondaq.com/india/antitrust-eu-competition-/480324/telefonaktie
bolaget-lm-ericsson-v-competition-commission-of-india
8
Competition Commission Of India, Case No. 47 of 2019
9
SEBI and Competition Commission at Loggerheads on Jurisdiction over Credit Ratings Agencies, Money-
Life, (20.03.2021, 7.00p.m) https://www.moneylife.in/article/sebi-and-competition-commission-at-loggerheads-
on-jur isdiction-over-credit-ratings-agencies/62638.html
CONCLUSION