Sri Durga Lodge vs Director of Telecommunications

Tirath Singh Thakur, J.—Two demand notices claiming advance and differential amount of rental in connection with the telephone facility provided to the petitioner is what has been brought for challenge in this Writ Petition. The controversy arises in the background of the following facts.

The petitioner is running a lodge in the name & style of Sri. Durga Lodge at Shimoga. The lodge comprises two separate buildings situate in a common compound. Some of the rooms in the lodge are provided with telephone facilities. Originally the petitioner had only one telephone connection, but, with increase in his business, it applied for a 5+20 PBX which was sanctioned in its favour in the year 1975. In the said PBX, 9 extensions were internal, while the remaining 11 being located in the second building were treated to be external extensions. On account of the increase in the rental rates effected in the year 1987, the petitioner applied for a separate PBX for the second building with 3+9 connections. In response to this proposal, the 2nd respondent is said to have advised the petitioner that in case the second building was situated in the same compound and interconnected by a permanent corridor, all the extensions in the second building could be treated as internal extensions and the two buildings treated as one. The petitioner accordingly claims to have provided a permanent corridor connecting the two buildings. The Telecommunication authorities, according to the petitioner, were satisfied with the corridor so provided and treating the external extensions as internal extensions, refunded a part of the advance rental recovered by them. In the year 1988 the petitioner decided to replace the existing 5+20 PBX by a PBX with a higher capacity of 10+50. This higher capacity PBX was installed by the authorities in June 1988, ever since when all the extensions provided have been treated as internal extensions. It is not in dispute that since the year 1988 till the filing of this petition the petitioner had been paying rents and other charges for the 10+50 PBX on the basis that the extensions provided were ail internal in nature.

While the position stood thus, the petitioner received a demand notice dated 18.3.1991 demanding a sum of Rs. 56,500/- from him on account of advance rental for the period 1.4.1991 to 31.3.1992 by treating 29 extensions out of a total of 50 as external. This demand was followed by yet another demand notice dated 20.3.1991 demanding a further sum of Rs. 95,195/- on account of the difference in the rents payable for the aforesaid 29 extensions retrospectively with effect from 22.3.1987 upto 31.3.1991.

On receipt of the above demand notices, the petitioner by its letter dated 27.3.1991 made a part payment of Rs. 27,500/- towards the advance rental demanded on the assumption that all the extensions provided were internal in nature. The balance amount demanded was however questioned by the petitioner on the ground that the same was not payable besides being unreasonable and highly excessive.

From the statement of objections filed on behalf of the respondents, it appears that on receipt of the aforesaid letter from the petitioner, a reply dated 29.4.1991 was sent by the Accounts Officer, respondent No. 3 herein, to the petitioner, in which the demand raised against the petitioner was sought to be justified and the part payment made by the petitioner accepted as an on account payment towards the total demand raised. It was further pointed out that in case the balance amount was not remitted by the petitioner, the telephone connections provided would be disconnected. The petitioner thereafter appears to have addressed a detailed representation dated 6.5.1991 to the first respondent, a copy of which is enclosed to the Writ Petition as Annexure-F, in which it was interalia pointed out that the extensions in the 10+50 PBX provided by the Department had till the date of issue of demand notices to be treated to be internal extensions and that since a permanent corridor had been provided between the two buildings, the extensions provided in the second building could in terms of the Telecommunication Rules, 1961 be treated as internal extensions only. The calculation of the amount by the respondents was also disputed besides pointing out that the Department''s effort to convert the internal extensions into external was wholly unjustified. The receipt of the representation notwithstanding, the telephone connections provided were disconnected for non-payment of the dues which the petitioner got reconnected on payment of a part of the amount demanded. Having thus secured the reconnection, the petitioner came up with the present Writ Petition assailing the two demand notices and praying for a mandamus directing the respondents to treat the extensions provided as internal extensions and charge the same accordingly.

Mr. Acharya, Learned Counsel appearing for the petitioner argued that the demands in question were wholly arbitrary and unjustified. It was contended that the Departmental authorities having accepted the fact that the second building were the connections were installed was connected by a permanent corridor could not turn round and say that the corridor so provided was not sufficient for treating the extensions as internal extensions. He urged that if the petitioner had known that the extensions in the other building shall be treated to be external extensions notwithstanding the corridor, it may in order to reduce its liability have secured an additional PBX connection for the second building instead of incurring a heavy liability on account of external extensions. In such an event, the petitioner may not have even insisted upon the installation of a PBX with higher capacity "of 10+50 as it had been induced to do by the representations held out to it. He urged that the respondents were estopped by their conduct from demanding the rental retrospectively from the year 1987 and that the demands in question were raised without affording to the petitioner any opportunity of being heard in the matter or disputing the validity thereof hence violative of the principles of natural justice.

Learned Counsel for the respondents on the other hand tried to support the demands made and urged that the corridor provided between the two buildings was not a permanent corridor within the meaning of the Telecommunication Rules. She urged that merely because the extensions in the second building had for some period been treated as internal in nature did not prevent the respondents from correcting their position upon verification and raising a demand in accordance with the rules. According to her there was no need to grant any opportunity of being heard to the petitioner before issuing the demands in question or effecting the threatened disconnection.

I have given my anxious consideration to the submissions made and am of the view that this petition must succeed on a short ground. The impugned demand notices admittedly relate to the telephone extensions provided by the respondents which have for a considerably long period i.e., from 1987 to 1991 been treated to be internal extensions. Payment of rent and other charges have been made by the petitioner and received by the respondents on that basis during all this period. In the circumstances, if the respondents were to treat these extensions to be external in nature either in whole or in part, it was bound to abide by the minimal requirements of natural justice and issue a notice to the petitioner to show cause as to why the said extensions be not treated as external. No such notice or opportunity was admittedly given to the petitioner at any stage before issuing the demand notices. It appears as though the respondents had taken a final decision to the prejudice of the petitioner without giving the petitioner an opportunity to dispute the correctness of the basis on which the said decision was taken. Requirements of a ''fair play in action'' demanded a reasonable opportunity to be given to the petitioner to set up its case against the proposed conversion of internal extensions into external extensions, particularly when any such a decision was bound to have financial implications not only in respect of the past but the future as well. The petitioner is entitled even to invoke the doctrine of legitimate expectation and contend that before the respondents could alter the nature of the extensions provided and raise a demand against it, the least that was required was a notice to the petitioner about the proposed action and a fair and objective consideration of the reply that it may have chosen to give. A citizen is entitled to question a state action on the ground of arbitrariness if any such action is taken in disregard of his reasonable and legitimate expectation. The duty to act fairly and adopt a fair procedure in the decision making process is an essential concomitant of the Rule of law. A citizen can legitimately expect that the authority taking the action would act fairly and in keeping with the requirements of natural justice. An action which betrays such an expectation would be unfair and arbitrary and hence liable to be struck down. Suffice it to say that the impugned demand notices cannot be sustained and have therefore to be quashed. In the light of the view taken by me, I do not consider it necessary to go into the other contentions raised by Mr. Acharya which are left open.

In the result this petition succeeds and is hereby allowed. The impugned demand notices dated 18.3.1991 and 20.3.1991 Annexure-''A'' and ''C'' issued by the 3rd respondent are quashed and by a mandamus the 1st respondent is directed to consider and pass appropriate orders on the representation of the petitioner dated 6.5.1991 Annexure-F to the Writ Petition before raising any fresh demand or ordering any disconnection of the telephone lines provided to it. The first respondent shall wile disposing of the representation give an opportunity of being heard to the petitioner who shall continue to pay the current dues billed against it regularly treating the extensions to be internal in nature till such time the entire controversy is decided by the first respondent. In the circumstances of the case, the parties shall bear their own costs.