Case: Bharat Sanchar Nigam Ltd.  Vs. Bpl Mobile Cellular Ltd.

private and charges for non-exchange lines. The Tribunal which is an expert body, opined : "12. We find grey areas in the submissions made by both the sides. Firstly, it is not at all clear whether the lease arrangements entered into by the petitioner with the respondents were covered under Rule 434 Section IX or section X of Indian Telegraph Act. Rule 434 section IX and Section X deal with charges for Private Wires and Non-Exchange Lines, respectively. These two terms, viz. "Private Wires" and "Non-Exchange Lines", have been defined under the Indian Telegraph Rules as under :"Rule 2(II) : Private Wires are those which connect two subscribers through a departmental exchange system whether a private relay set is installed at the exchange or not and are not connected to the local telephone system and to the general trunk net work;*****************Rule 2(33a) : Non-exchange lines are those which connect two subscribers without any departmental exchange intervening."From the application forms annexed by the petitioner to its petition, it may be seen that what was asked for was Data Circuit. Such circuits were more in the nature of long- distance telephone circuits between two cities as may be evidenced by the following list of leased lines obtained by the petitioner which have been listed in the petition :Lease Circuits Obtained in1. Cochin - Thiruvananthapuram January 19972. Cochin - Thiruvananthapuram July 19973. Cochin - Calicut January 19974. Cochin - Calicut July 19975. Cochin - Thrissur February 19976. Cochin - Thrissur August 19977. Thiruvananthapuram - Kollam November 19978. Calicum - Kannur November 19979. Cochin - Kottayam November 199710. Cochin - Kollam January 199811.Cochin - Kannur February 199812. Cochin - Thiruvalla May 199813.Cochin - Palakkad May 199814.Thrissur - Kunnamkulam June 199815. Thrissur - Palakkad June 1998 The leased data circuits taken by the petitioner were between two exchanges of DoT/BSNL at two different cities. Thus, it is difficult to accept the contention that the circuits leased between two exchanges of BSNL located in two different cities were covered within the ambits of "Private Wire" or "Non-exchange Lines" as defined under Indian Telegraph Rules. Consequently the applicability of Rule 434 in the instant is not warranted.12A. We have taken note of the contention of Respondent No.1 that by its order dated 17th June, 1988 the minimum period of hire for 2 Mbps lines was 3 years and the hirer was required to pay for the entire period in case of premature surrender. The relevant question is whether this was made known to the petitioner or the petitioner was expected to have a knowledge of this. From the copy of the Order No.4-31/86-R(Pt.) dated 17th June, 1988 placed on record by Respondent No.1, it is seen that it is a Circular issued by one Shri D.V.B. Rao, Assistant Director General (Costing), Rates Section, Department of Telecommunicatiosn and addressed to All Heads of Telecom Circles; All Heads of Metro, Major and Minor Telephone Districts; General Manager, MTNL, Bombay/New Delhi. Copies were endorsed to a host of officials, all belonging to the Department of Telecommunications. It was, therefore, basically an office circular for internal use and not a document released to the general public.XXX XXX XXX15. As a result of all that is stated in the earlier paragraphs we hold that it has not been conclusively established that the contracts for leased data circuits between the petitioner and the respondents were covered under Rule 434 of the Indian Telegraph Rules and that the minimum guarantee period and penalties for premature surrender, as indicated in Rule 434 were applicable to these contracts. We also hold that the petitioner had no reason whatsoever for the non-observance of Rule 475-A of Indian Telegraph Rules in view of its categorical undertaking to abide by the provisions of these Rules." 38. Prima facie, the proviso appended to Section 9 and Section 10 providing for a minimum guaranteed period of three years does not appear to have any application. The authorities of the DOT also did not think so. They proceeded on the basis of and having regard to the phraseology used in Rules 478 and 496 that minimum period is only three months. 39. Applicability of minimum guaranteed period of three years was sought to be enforced from a circular letter dated 17.6.1988 only. The effect of the said circular letter has been discussed hereinbefore. We have furthermore noticed the vacillating stand taken by the appellants herein in the case of C.G. Faxemail. They sought to charge the double of the amount as prescribed in the contract on the basis that the service which is being provided by them is close user group service. TRAI held it not to be so. TRAI, as noticed hereinbefore, relied upon two circulars only, namely 13.7.1985 and 22.11.1996, the latter one being after the contract was entered into. TDSAT, apart from holding that the said circular letters are internal documents, did not deal with the internet service providers. 40. It thereafter relied upon the circular letter dated 15.4.1998 and not on the circular letter dated 3.6.1995, the former having no application to a contract which was entered into prior thereto. Even the said letter provided for three months minimum guarantee period for long distance lease lines. Even DOT raised three months demand notice on or about 26.11.1998. 41. Yet again, the DOT in its letter dated 13/14.1.1999 confirmed that paragraph A of the circular letter dated 26.11.1998 referred to Rule 496. The parties were not ad idem as to whether these circuits being long distance lease lines would be governed by which circular. Furthermore, the authorities of the DOT, assuming that they are applicable, despite the circular letters, consciously entered into contract for one years period on which the parties had acted thereupon. 42. A finding of fact has been arrived at by TDSAT that the said circular letters are not applicable. Rule 434 was not applicable. Appeal to this Court, in terms of Section 18 of the Act is maintainable only on a substantial question of law.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]22. For the purpose of determining the questions involved in the present appeals, we may ignore the fact that pursuant to or in furtherance of the negotiations held by and between the parties, the respondents imported equipments but, for one reason or the other, as noticed hereinbefore, the same could not be installed. However, the DOT in its letter dated 30.09.1996 categorically stated that it could put up its own equipments under contribution work basis, which would mean that the charges would be on the basis of capital cost. In view of the aforementioned representations made by the DOT, the respondents had agreed to take the equipment on rent and guarantee basis which was itself calculated on capital costs.23. We are, furthermore, not concerned with the tariff order issued by TRAI. What, however, may be noticed is that even the tariff order provides for a lower tariff than the agreed rate.25. In view of the aforementioned law laid down by this Court, there cannot be any doubt whatsoever that the circular letters cannot ipso facto be given effect to unless they become part of the contract. We will assume that some of the respondents knew thereabout. We will assume that in one of the meetings, they referred to the said circulars. But, that would not mean that they are bound thereby. Apart from the fact that a finding of fact has been arrived at by the TDSAT that the said circular letters were not within the knowledge of the respondents herein, even assuming that they were so, they would not prevail over the public documents which are the brochures, commercial information and the tariffs.26. If the parties were ad idem as regards terms of the contract, any change in the tariff could not have been made unilaterally. Any novation in the contract was required to be done on the same terms as are required for entering into a valid and concluded contract. Such an exercise having not been resorted to, we are of the opinion that no interference with the impugned judgment is called for.27. For invoking clauses 4.1 and 19.5 of the licence agreement, we may notice that the word `prescribed is not defined. It has not been defined even in the Indian Telegraph Act. It has not been defined in the licence. The said provision unlike clause 18.14 does not use the words `from time to time. A contract entered into by the parties, it will bear a repetition to state, must be certain. It must conform to the provisions of the Indian Contract Act. Ordinarily, the word `prescribed would mean prescribed by Rules. Section 7(2)(ee) of the Indian Telegraph Act provides for the Rule making power for the purpose of laying down the tariff. We may not be understood to be laying down a law that in absence of any statutory rule framed under the Indian Telegraph Act, no contract can be entered into. In absence of any statutory Rule governing the field, the parties would be at liberty to enter into any contract containing such terms and conditions as regards the rate or the period stipulating such terms as the case may be. The matter might have been different if the parties had entered into an agreement with their eyes wide open that the circular letter shall form part of the contract. They might have also been held bound if they accepted the new rates or the periods either expressly or sub silentio. When on the basis of terms of the contract, different rates can be prescribed, the same must be expressly stated. When the word `prescribed is not defined, the same, in our opinion, would mean that prescribed in accordance with law and not otherwise.The respondent had two options. They were asked to choose one. Thus, a representation was made that they would be entitled to obtain lease the equipments (resources) at an R&G basis. Payments have been made on that basis. The question which would arise for consideration is as to whether the basis of making a demand itself can be changed. The answer to the said question, in our opinion, must be rendered in negative.In the instant case, the resources to be leased out were subject to agreement. The terms were to be mutually agreed upon. The terms of contract, in terms of Section 8 of the Contract Act, fructified into a concluded contract. Once a concluded contract was arrived at, the parties were bound thereby. If they were to alter or modify the terms thereof, it was required to be done either by express agreement or by necessary implication which would negate the application of the doctrine of `acceptance sub silentio. But, there is nothing on record to show that such a course of action was taken. The respondents at no point of time were made known either about the internal circulars or about the letters issued from time to time not only changing the tariff but also the basis thereof.31. We will assume that the contention of the learned Additional Solicitor General that the internal circulars are issued for their application by the local officers. If they have committed a mistake, the same could be rectified.A finding of fact has been arrived at by TDSAT that the said circular letters are not applicable. Rule 434 was not applicable. Appeal to this Court, in terms of Section 18 of the Act is maintainable only on a substantial question of law.