TRAI And CCI Are Sectoral Regulators With Defined Jurisdictions, Any Overlap Will Not Oust Jurisdiction Of Either: Kerala High Court

Justice D.K. Singh in his 142 page judgment laid down the position of law while hearing Writ Petitions stating an alleged 'conflict' of jurisdiction between the two regulatory bodies.

The court observed that CCI is a sectoral regulator, so far as it relates to the curbing of anticompetitive practices in India is concerned. It further said that TRAI is also a sectoral regulator which is tasked with protecting interests of service providers and consumers of the telecom sector, to ensure technical compatibility and effective interrelationship between different service providers and to ensure compliance with license conditions by all the service providers.

It, thus, said that both the authorities are sectoral/special regulators which operate in different and distinct fields, and some overlapping of the jurisdiction will not oust the jurisdiction of one sectoral regulator at the expense of the other.

Background

Asianet Digital Network Pvt. Ltd. (ADNPL – a wholly owned subsidiary of the petitioner, Asianet Satellite Communications) and Kerala Communicators Cable Ltd. (KCCL) are competitor MSOs (Muti-System Operator) that have both entered into agreements with Star India Pvt. Ltd. (SIPL) to receive broadcasting signals from SIPL for monetary consideration and to distribute the channels of SIPL to its customers.

ADNPL, alleging abuse of dominant position by SIPL in violation of S. 4(2)(a)(ii) and 4(2)(c) of the Competition Act, 2002, submitted information to the Competition Commission of India (CCI). As per the information, SIPL was offering discriminatory discounts to KCCL in violation of TRAI Regulations, denying market access to ADNPL, and providing unfair advantage to KCCL.

Section 4 pertains to what would constitute dominant position. Section 4(2)(a)(ii) states that dominant position is abused where an enterprise or a group directly or indirectly, imposes unfair or discriminatory price in purchase or sale (including predatory price) of goods or service. The explanation states that purposes of this clause, the unfair or discriminatory condition in purchase or sale of goods or service referred to in sub-clause (i) and unfair or discriminatory price in purchase or sale of goods (including predatory price) or service referred to in sub-clause (ii) shall not include such [condition or price] which may be adopted to meet the competition. 

Section 4(2)(c) states that dominant position would be abused if an enterprise or group indulges in practice or practices resulting in denial of market access [in any manner].

It was also alleged that SIPL was in violation of Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017 (Interconnection Regulations) and Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017.

These, collectively referred to as the New Regulatory Framework, mandate that broadcasters are to treat distributors non-discriminatorily and offer discounts on fair and transparent terms to ensure a level playing field.

According to ADNPL, SIPL, in violation of the maximum discount of 35% (split as 15% towards discount and 20% towards distribution fee) allowed by the new regulatory framework, offered discount of up to 50% to KCCL. Thereby, ADNPL was forced to increase the price of its channels higher than those of KCCL. This resulted in loss of consumers to the former and corresponding gain to the latter.

In the information, it was stated that SIPL and KCCL entered into sham agreements purporting to advertise the petitioner's channel 'Asianet' on KCCL's Test channel. This Test channel, it was alleged, has no real viewership as it merely shows only these advertisements full time. The aforesaid actions of SIPL were alleged to be violations under the Competition Act.

Among the reliefs prayed for before the CCI, ADNPL had also requested for investigation by the Director General (DG). The CCI considered the materials on record and the information provided and found that KCCL was getting 70% discount, much above the regulatory cap of 35%. Thus, it was of the opinion that there exists a prima facie case, warranting investigation by the DG. Hence, a direction to investigate was given to the DG.

Multiple writ petitions were filed before the Bombay High Court by the parties challenging the aforesaid order of the CCI. However, the writ petitions were disposed of by the Bombay High Court noting that no part of the cause of action had arisen within the jurisdiction of the Court.

Subsequently, the present writ petitions were filed before the Kerala High Court challenging the order of the CCI.

Petitioner's arguments

The gist of the petitioner's arguments was that the allegations in the Information pertains mainly to violation of the TRAI Regulations and therefore, the exclusive jurisdiction over the matter falls in the hands of TRAI, not CCI.

It was also argued that TRAI is a sectoral regulator, which is empowered to deal with anti-competitive activity in the broadcasting sector. In order to avoid confusion, only one regulator may be permitted to regulate a particular activity.

In this case, it relates to broadcasting services and therefore, TRAI Act, being a special law should prevail over Competition Act, which is a general law. In such circumstances, TRAI is the appropriate and only regulator and no other authority should entertain the complaints.

As per the petitioner's submission, in paragraph 18 of TRAI's Explanatory Memorandum to the 2017 Regulations, it is stated that TRAI is a Sectoral Regulator of broadcasting services and cable services, and has the task of ensuring fair competition. Therefore, TRAI is empowered to deal with competition issues and grant remedies on an ex-ante basis.

The CCI would have jurisdiction only if there is allegation of cartelisation, which is absent in this case, it was argued. The CCI ought to have decided on maintainability and jurisdiction at the threshold, before directing the Director General to conduction investigation.

It was also argued that the CCI ought to have issued notice to parties instead of making an ex parte direction. Therefore, the order passed by CCI without notice and opportunity of hearing is in violation of the principles of natural justice and therefore, liable to set aside.

ADNPL's arguments

SIPL entered into sham marketing agreements with KCCL by abusing SIPL's dominant position and denied market access to ADNPL, violating S.4. TRAI's regulatory scope is limited to 'interconnection' and since these agreements were entered into after interconnection, TRAI does not regulate them.

The Director General has already submitted its report to CCI and the CCI will now give an opportunity to hear the petitioner before an order is passed. Therefore, the issue of jurisdiction can be raised at this stage.

The dispute encompasses abuse of dominant position and denial of market access involving marketing/placement agreements, which falls within the jurisdiction of CCI and not TRAI. Moreover, there is no requirement of notice or hearing before passing order under S.26.

It was argued that there is no issue of interconnection between the parties and therefore, TRAI does not have jurisdiction.

Findings

The Court looked in detail into the various provisions of the Competition Act and the Telecom Regulatory Authority of India Act, as well as key decisions in the field of law under consideration.

Broadly, there were four questions which were considered by the Court:

1. Whether TRAI Act is a special statute and the Competition Act a general statute dealing with anti-competitive practices?
   
   
2. Whether CCI not have jurisdiction when there is allegation of misuse of dominant position?
   
   
3. Whether TRAI should have first examined the allegation and not CCI? and
   
   
4. Whether information alleges misuse of dominant position as well as violations of TRAI Regulations, whether TRAI ought to have determined the jurisdictional facts first and then only CCI should proceed with the matter?

Some overlap in discharge of functions, both special laws

The objective of the Competition Act is to identify and prevent anti-competitive practices and restrain undertakings from behaving independently of effective competitive pressure. Moreover, S. 60 of the Act gives an overriding effect to the Act in the event of conflict or inconsistency with any other law.

TRAI is a regulatory body, which performs recommendatory/advisory functions, and also ensures fair competition amongst service providers. In order to discharge such role, it fixes the terms and condition of inter-connection between service providers and lays down standards of Quality of Service (QoS) to be provided by each service provider.

Regarding the first issue, the Court held that the Competition Act and the TRAI Act are both special legislations in their respective fields. The court  observed:

“There may be some overlapping while discharging the functions by the CCI and the TRAI in respect of the telecom market in India is concerned, but there is no provision under the TRAI Act to deal with the three anti-competitive practices as mentioned above, including misuse of the dominant position of a market player as defined under Section 4 of the Competition Act.”

CCI oversees misuse of dominant position, TRAI checks violation of its regulations or license conditions

The Court clearly defined the jurisdiction limits of the regulatory bodies and resolved questions regarding 'conflict'/ overlap of jurisdiction. It was held that CCI would have exclusive jurisdiction in case of misuse of dominant position as per S.4 of the Competition Act.

However, in case of violations of TRAI Regulations or licence conditions, TRAI would examine the allegations, and not the CCI.

Regarding overlap of jurisdiction, it was found that there is no conflict between the jurisdictions of TRAI and CCI. The observations of the Court are produced below:

“Both the authorities operate in different and distinct fields, and some overlapping of the jurisdiction will not oust the jurisdiction of one sectoral regulator at the expense of the other. The CCI, which is the sectoral regulator for dealing with anti-competitive practices in the relevant market and misuse of the dominant position, will have the jurisdiction to deal with the said allegation and not the TRAI. If there are allegations regarding violation of the terms of the license conditions or the provisions of the Regulations framed by the TRAI, the TRAI, being the sectoral regulator of the field, would assume jurisdiction to deal with those allegations. This Court, therefore, is of the view that there is no conflict insofar as the jurisdiction of the two sectoral regulators is concerned.”

Don't want to scuttle CCI proceedings at present

Regarding the question of whether the petitioners should have approached the TRAI and not the CCI in the first instance, the Court held that it does not want to scuttle the proceedings before the CCI at the present stage when the investigation by the Director General has been completed.

Finding that the CCI is competent to hear and decide on jurisdictional questions, the Court observed:

“It is also important to mention here that the order passed under Section 26 of the Competition Act does not have civil consequences, and it is an order in rem. The petitioners will have an opportunity to address their arguments before the CCI even regarding its jurisdiction. This Court, therefore, at this stage of the proceedings before the CCI, does not want to scuttle the proceedings, and the CCI itself is competent to deal with the jurisdictional issue as well.”

Conclusion

The Court dismissed the writ petitions finding that the petitioners shall have the liberty to argue on maintainability and jurisdiction before the CCI itself. The CCI was directed to decide on the question of jurisdiction at the first instance before deciding the case on merits.

Case Title: Asianet Star Communications Private Limited v. Competition Commission Of India and others, and Connected cases

Case No: WP(C) No. 29766 of 2022 and Connected cases

Citation: 2025 LiveLaw (Ker) 308

Counsels for the Petitioner: V.V. Nandagopal Nambiar, Maninder Singh (Sr.), Jaiju Babu (Sr.), Santhosh Mathew (Sr.), Smitha (Ezhupunna), Chitra Johnson, Victor George V.M., Prabas Bajaj, K. Gopalakrishna Kurup (Sr.), Ranjeet Singh Sidhu, Sidharth Chopra, Swikriti Singhania, Kuber Mahajan, Akshay Agarwal, Sneha Jain, Saikrishna Rajagopal

Counsels for the Respondents: Mariam Mathai, N. Venkataraman – ASGI, Jaishankar V. Nair – CGC, Ritin Rao (Sr.), Avinash Amarnath, Tarun Donadi, Uday Bali, Naman Golechha, Dayaar Singla, Saji Varghese T.G., Arun Thomas, Anil Sebastian Pulickel, Mathew Nevin Thomas, Kurian Antony Mathew

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