M/S Vodafone Idea Limited (Formerly Known as IDEA Cellular Ltd) v State of Kerala & Ors.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **MONDAY, THE 18TH DAY OF MAY 2020 / 28TH VAISAKHA, 1942** ## **WP(C).No.7286 OF 2020(I)** ## **PETITIONER:** **M/S.VODAFONE IDEA LIMITED (FORMERLY KNOWN AS IDEA CELLULAR LTD), VJ TOWER,SERVICE ROAD,VYTILLA.P.O, ERNAKULAM-682019, REP.BY ITS HEAD LEGAL (NODAL OFFICER), RAJESH.M.V,AGED 50 YEARS, S/O.M.V.RAGHAVAN,RESIDING AT VILLA NO.42, ASSET KASAVU,TOG ROAD, SOUTH KALAMASSERY,COCHIN.** **BY ADV. SRI.P.SATHISAN** ## **RESPONDENTS:** **1 STATE OF KERALA REPRESENTED BY ITS SECRETARY, LOCAL SELF GOVERNMENT DEPARTMENT,SECRETARIAT, THIRUVANANTHAPURAM.P.O,PIN-695001.** **2 SECRETARY, ALUVA MUNICIPALITY,PWD QUARTERS, PERIYAR NAGAR,ALUVA.P.O, ERNAKULAM-683101. 3 ALUVA MUNICIPALITY, PWD QUARTERS,PERIYAR NAGAR,ALUVA.P.O, ERNAKULAM-683101,REPRESENTED BY ITS SECRETARY. SRI.K.J.MANU RAJ, GOVT.PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.05.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## ALEXANDER THOMAS, J. --------------------------------------- W.P. (C) No. 7286 of 2020 --------------------------------------Dated this the 18[th] day of May, 2020 ## J U D G M E N T The prayers in the above Writ Petition (Civil) are as follows: “ - _i. Issue a writ of mandamus or such other writ or direction directing the 1[st] respondent to ensure that no coercive proceedings are initiated by local authorities against the petitioner rendering telecom service from its offices and outlets, under Sec.447 of the Kerala Municipality Act 1994 or under Sec.232 of Kerala Panchayath Raj Act 1994,_ - _ii. Issue to writ of Certiorari or such other writ or direction calling for entire records leading up to Exhibit P2 and quash the same as illegal and improper,_ - _iii. Issue a writ of mandamus or such other writ or direction directing the respondents not to initiate any proceedings against petitioner similar to Exhibit P2 without compliance of directions by 1[st] respondent as per Exhibit P5,_ - _iv. To Award costs of the proceedings to the petitioner. v. Issue such other writs, orders or directions which this Hon'ble Court may find deem fit and proper in the circumstances of the case.”_ 2. Heard Sri.P.Sathisan, learned counsel appearing for the petitioner and Sri.K.J.Manu Raj, learned Government Pleader appearing for R-1 (State). Though R-2 & R-3 (Aluva Municipality) have been duly served, they have not entered appearance. 3. The petitioner is a Telecome Service Provider and the petitioner company would state that they are storing Subscriber Identification Module (SIM) cards in their own shop rooms which in the instant case comes within the territorial limits of the respondent W.P. (C) No. 7286 of 2020 ..3.. Aluva Municipality. Earlier the petitioner company was aggrieved by the fact that, when they apply to local self government institution concerned for Trade License under Section 232 of the Kerala Panchayath Raj Act, and Section 447 of the Kerala Municipalities Act, 1994, those local self institutions did not classify their goods as merely SIM cards, but it was described as electronic goods or telecommunication articles which according to them would unnecessarily and unlawfully expose them to an action under the various taxation statutes. The petitioner had then approached this Court by filing WP(C).No.34356/2015 and had placed reliance on the judgment of the Apex Court rendered in the case in _**Bharat Sanchar Nigam Ltd. (BSNL) & Anr. v. UOI & Ors. [STC (2006) 91],**_ wherein the Apex Court has declared the law that SIM cards cannot be classified as electronic goods or telecommunication articles. Accordingly, the petitioner then contended that, therefore the classification of SIM cards which are kept stock in their shops, as electronic goods or telecommunication articles by the various Panchayaths and Municipalities concerned would amount to violation of the legal position declared by the Apex Court in the aforesaid _**BSNL's case**_ W.P. (C) No. 7286 of 2020 ..4.. _**supra**_ and would thus expose them to unnecessary complications with the taxation authorities. This court as per Ext.P-4 judgment dated 17.2.2017 in WP(C).No. 34356/2015 and connected cases, had taken note of the said specific contention made by the petitioner on the basis of the judgment of the Apex Court in _**BSNL's case supra**_ and had also taken note of the problematic scenario faced by the petitioner and other similar persons. However, this Court noted a practical problem inasmuch as, the rules framed under Section 232 of the Kerala Panchayat Raj Act, 1994 or in the rules framed under Section 447 of the Kerala Municipalities Act 1994, the list of articles for which Trade Licenses are to be issue are specifically enumerated in those rules, and that there is lacuna in the rules inasmuch as, the goods under the head “SIM” cards are not expressly enumerated in those classifications and that, presumably it is on account of this aspect that the local self government bodies had proceeded to classify SIM cards under the available head in the rules as electronic goods or telecommunication articles. Accordingly, this Court held that the said grievances of the petitioner and other similarly situated persons should be considered by the competent authority of the W.P. (C) No. 7286 of 2020 ..5.. respondent State Government and directed that the respondent State Government should consider the representations so filed by the petitioners in those cases, so that the said lacuna in the statutory rules would be appropriately remedied etc. In compliance with the directions issued by this Court in Ext.P-4 judgment dated 17.2.2017 in WP ©.No.34356/2015 and connected cases, the competitive authority of the 1[st] respondent State Government has indeed taken note and acted upon the said grievance of the petitioner and has issued Ext.P-5 G.O.(RT) No.1824/2018/LSGD dated 4.7.2018, whereby it has been ordered that based on the recommendations of the Director of Panchayaths and the Director of Urban affairs, steps could be taken to incorporate SIM card, Mobile Phone, Mobile Accessories, etc, as separate items the list of items attach to the Panchayat/ Municipalities Rules, in the matter of issuance of license to factories, traders etc. The State Government has also directed in Ext.P-5 that the Director of Urban Affairs and the Director of Panchayaths will furnish necessary proposal for amendment of the applicable rules in that regard etc. 4. The present grievance of the petitioner is that, though the 1[st] respondent State Government has taken view cognizance of W.P. (C) No. 7286 of 2020 ..6.. real grievances faced by the petitioner in the matter, and though the Director of Panchayats and Director of Urban Affairs have also recommended to the State Government to amend License Rules so as to include SIM Cards and mobile accessories as separate items, in the light of for the abovesaid judgment of the Apex Court in _**BSNL's case supra**_ , etc, as the Rules have not so far been formally amended, the 2[nd] respondent Aluva Municipality is taking steps to classify trade of the petitioner involving SIM Cards etc, as “electronic goods or telecommunication articles” etc, whereby the petitioner is again made to face the same problem and that the said action would amount to violation of the legal position settled by the Apex Court in _**BSNL's case supra**_ etc. 5. After hearing the petitioner's counsel and the learned Government Pleader appearing for the respondent State Government, this Court had passed an order dated 10.3.2020, which reads as follows: _“Notice before admission for R1 State of Kerala is taken by the learned Government Pleader. Issue notice before admission to R2 and R3 by special messenger returnable within 3 days._ _2. The Principal Secretary to Government of Kerala in the Local Self Government Department will furnish specific instructions as to the steps taken for ensuring notifying the amendment to the Rules framed under the Kerala Municipality Act, 1994 as well as the Kerala Panchayat Raj Act, 1994 to incorporate the matter relating to conduct of trade and business in relation to “sim card, mobile phone and mobile_ W.P. (C) No. 7286 of 2020 ..7.. _accessories” as a separate item in the list of items attached to the applicable rules framed under the Kerala Municipalities Act and Kerala Panchayat Raj Act, which deals with issue of Trade/D&O licenses and also as to the minimum time required for notifying such amendment in the Gazette of Kerala in pursuance of Ext.P5 GO.RT.No.1824/2018/LSGD dated 04/07/2018._ _3. Further, having due regard to the facts and circumstances of this case and in the interest of justice, it is ordered that in view of the considered decision taken by the 1[st] respondent Government of Kerala in the LSGD as per Ext.P5 GO.RT.No.1824/2018/LSGD dated 04/07/2018, it is ordered that in case the petitioner makes requisite application for issuance of trade license for conduct of trade or business in relation to “sim card, mobile phones and mobile accessories”, then the 2[nd] respondent-Secretary of Aluva Municipality will issue trade license to the petitioner to deal with “sim card, mobile phones and mobile accessories”, on a provisional basis, if the application is otherwise an order. On the petitioner making such requisite application within one week, the 2[nd] respondent Secretary will do the needful in compliance with the abovesaid order within one week thereafter. Accordingly it is ordered that further coercive steps proposed as per the impugned Ext.P2 notice dated 30/01/2020 issued by respondents 2 and 3 shall stand automatically vacated until further orders from this Court.”_ 6. The counsel for the petitioner would point out that, though the petitioner had complied with the directions made by this Court on 10.3.2020, and has made the application for grant of provisional license for issuance of Trade License for conduct of business in relation to SIM Card, Mobile Phone and Mobile Accessories etc, so far the 2[nd] respondent Secretary of Aluva Municipality has not granted provisional license inspite of the directions issued by this Court. 7. The learned Government pleader would submit that, presumably could be on account of the non functioning of the W.P. (C) No. 7286 of 2020 ..8.. respondent Municipality's office during the Lock Down period for the last 54 days since 24[th] March 2020 etc. 8. Accordingly it is ordered that, the 2[nd] respondent Secretary will immediately issue Trade License to the petitioner for conduct of the trade or business in relation to “SIM Cards, Mobile Phone and Mobile Accessories”, if their application is otherwise in order, and such Trade License may not be issued by other descriptions like electronic goods or telecommunications articles etc. Further, the grant of such provisional Trade License to the petitioner as aforesaid will be subject to the formal notifications to be issued by the competent authority of the State Government for amendment of applicable rules as already ordered in Ext.P-5 G.O. 9. Further it is ordered that, the competent authority of the State Government including the Director of Urban Affairs and the Director of Panchayats, will take necessary steps to ensure that the process of the formal amendment of the rules framed under Section 232 of the Kerala Panchayath Raj Act, and Section 447 of the Kerala Municipalities Act, 1994, should be finalised without much delay so as to comply with the directives of State Goverment issued in Ext.P-5 G.O. dated 4.7.2018, so that there is adequate W.P. (C) No. 7286 of 2020 ..9.. provision in those statutory rules for grant of trade license in similar cases or dealing with the trade or business as “SIM Cards, Mobile Phones and Mobile Accessories”, and steps in that regard may be duly finalised by the 1[st] respondent State Government and the Directorate of Panchayaths and the Directorate of Urban Affairs without much delay, preferably within a period of six months from the date of production of a certified copy of this judgment. 10. The learned Government Pleader is requested to ensure that, certified copies of this judgment is made available not only to Principal Secretary to Government of Kerala in the Local Self Government Department (1[st] respondent), but also the Director of Panchayaths and the Director of Urban Affairs, so that the abovesaid effective directions are complied with by all concerned without much delay. Further it is also ordered that, the 2[nd] respondent Secretary of the Aluva Municipality would take steps to issue Trade License in favour of the Petitioner as aforedirected on a provisional basis, without much delay, preferably within a period of one month from the date of production of a certified copy of this judgment. W.P. (C) No. 7286 of 2020 ..10.. 11. Until such formal Trade License is issued in favour of the petitioner to deal with the trade or business of “SIM Cards, Mobile Phones and Mobile Accessories” as aforedirected, on a provisional basis, no coercive steps should be taken against the petitioner for functioning of a shop which deals with such items. 12. Registry will ensure that a certified copy of this judgment is forwarded to the 2[nd] respondent Secretary, Aluva Municipality, at the cost of the petitioner for necessary information and compliance. With these observations and directions, the above Writ Petition (Civil) will stand finally disposed of. Sd/- ALEXANDER THOMAS, JUDGE MMG W.P. (C) No. 7286 of 2020 ..11.. ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE RELEVANT EXTRACT OF LICENCE AGREEMENT OF PETITIONER COMPANY.** **EXHIBIT P2 TRUE COPY OF THE NOTICE ISSUED BY THE 2ND AND 3RD RESPONDENT DATED 30.01.2020.** **EXHIBIT P3 TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER BEFORE THE 2ND AND 3RD RESPONDENT DATED 04.02.2020.** **EXHIBIT P4 TRUE COPY OF THE JUDGMENT IN WP(C)NO.34356 OF 2015 DATED 17.02.2017.** **EXHIBIT P5 TRUE COPY OF THE JUDGMENT IN W.P(C)NO.1824/2018/LSGD DATED 04.07.2018.**