' QAZI FAEZ ISA, J.---Through these petitions leave to appeal has been sought against the judgment dated 8th March 2013 of a learned Single Judge of the Islamabad High Court whereby he had dismissed Writ Petition No. 1152 of 2012 and First Appeal against Order (FAO) Nos. 16, 17, 18 and 19 of 2012.
2. The petitioners who are cellular mobile operators ("CMOs") had assailed the directive issued by the Director (Consumer Protection) of the Pakistan Telecommunication Authority ("PTA") vide letter dated 9th April, 2012 ("the impugned letter"), reproduced hereunder:--- "Subject: DIFFERENT PRIZE INAMI SCHEMES OFFERED BY CMOS ' Please refer to PTA's earlier letter No. Misc./ DG(S)/10/PTA, dated 6th July, 2010 on the captioned subject (copy attached) and in super session of any other communication except the aforesaid letter.
2. It has been observed that various complaints are being received to Pakistan Telecommunication Authority on regular basis that Cellular Mobile Operators are offering different prize schemes to their customers. From the contents of such alluring prize schemes, it has been observed with serious concern that these prizes schemes are prima facie contrary to law, PTA's aforesaid direction and in violation of regulation 8(4) and 8(5)(i) of Telecom Consumer Protection Regulation, 2009.
3. Keeping in view the nature, content and increasing number of the complaints on the subject issue, PTA considers these prize schemes as being misleading and against the law, hence, you are hereby directed to stop all types of "Prize Schemes" including genuine schemes with immediate effect in the interest of consumers and submit compliance report by 13th April, 2012. In case of failure legal action will be initiated in accordance with law.
4. This issues with the approval of the Authority.
' Ahmed Shamim Pirzada Director (Consumer Protection)"
' The letter dated 6th July, 2010 referred to in the impugned letter was issued by the Director General (Services), PTA and is reproduced hereunder:--- "Subject: Different Prize/Inami Schemes offered by CMOs PTA has issued licenses to CMOs to establish, maintain and operate License system and to provide services as per license conditions to their subscribers: and in compliance of laws of Pakistan and regulations issued by the Authority.
2. These unwarranted schemes started by CMOs have given rise to fraudulent/misleading activities by unscrupulous elements which has helped them in extorting money from the poor and innocent subscribers/public.. As a result of these schemes PTA has been receiving large number of complaints on regular basis. In addition consumers have also approached to the Supreme. Court.
Innocent customers/public receive calls/SMS where they are lured in and exploited by offering attractive Cash Prizes/Inami Scheme including balance increase/ transfer of credit faciliy etc.
3. After analyzing the whole issue and the nature of complaints received, PTA is of the view that these Prize Schemes are the root cause of all unwarranted such activities being general from platform of CMOs resulting fraudulent/misleading activities. Therefore, it is requested to stop all types of "Prize Schemes" with immediate effect and compliance report in this regard be submitted by 15th July, 2010.
4. This issues with the approval of the Authority.
' Muhammad Talib Dogar Director General (Services)"
3. That after issuance of PTA's letter dated 6th July, 2010 a meeting was held on 23rd July, 2010 between the petitioners and PTA and certain decisions were taken, which were recorded by the Director General (Services) in his letter of 2nd August, 2010 reproduced hereunder: ' Subject: Minutes of the Meeting on Combating ' Fraudulent Activities ' A meeting was held on 23rd July, 2010 at PTA HQs Islamabad to discuss the matters relating to preventive measures against incidents of fraudulent activities. Officers of the Authority and representative from the five cellular mobile operators attended the meeting Chairman PTA chaired the meeting.
2. Welcoming the participants Chairman PTA took up the matter of increase in complaints relating to fraudulent prize scams and resultant loss of money to the affected consumers. Chairman PTA informed the participants that a number of complaints are being received by the Authority on the matter through the Supreme Court, Cabinet Division and Member Parliamentarians besides those from the general public on daily basis. Chairman PTA observed that robust media campaigns on prevailing promotional campaigns on prize schemes initiated by the CMOs is being exploited by unscrupulous elements for luring general consumers towards fake award of prize money and transfer of balance. He stated that PTA is already playing its role in creating awareness among the general public on the matter through publication of bilingual advertisements in the national media.
Chairman emphasized that the matter needs to be tackled in a focused manner for which effective preventive measures needed to be taken.
3. Representatives from the industry highlighted that all prevailing prize schemes are in line with the prevailing laws and Regulations and above stated fraudulent activities were being witnessed before the operators initiated their respective promotional prize schemes. Moreover the industry is already working on the deadline of 31st August, 2010 for installation of anti-spam filters and provision of Call/SMSs barring facility to consumers. Representatives of CMOs added that industry is, committed to play its role towards combating fraudulent activities in the larger interest of the consumers.
4. In the light of the above, following decisions were taken:-- i. CMOs shall initiate national media campaign on print and electronic media on the pattern of the advertisement published on behalf of the Authority creating awareness among general consumers with regard to fraudulent activity. Regional media shall be specifically focused during the subject, campaign. Ii. All industry advertisements on promotional prize schemes shall contain a disclaimer message warning consumer not to respond to any calls/SMSs regarding award of prize money in lieu of balance transfer. The contents of the same shall be approved by the Authority. iii. CMOs shall ensure that their respective help lines shall cater to all consumer complaints with regard to fraudulent and obnoxious activities. Iv. CMOs shall ensure that the MSISDN verified to be involved in fraudulent transfer of balance shall be blocked with immediate effect but not later than 24 hours. IMEI number of the involved handset shall also be blocked at all networks, Black & Grey lists as defined in the relevant SOP on the matter shall be communicated to the Authority on monthly basis. Money transferred to the MSISDNs involved as a second and onward string in fraudulent activity shall be frozen by the CMOs and user antecedents of the said MSISDNs shall be provided to Authority within 48 hours for further perusal of the matter. CMOs, shall make all reasonable efforts to refund the transferred amount to the complainant. v. CMOs shall ensure that all decisions vide Minutes of the meeting dated 14th July, 2010 pertaining to installation of anti spam filters, provision of Calls/SMS barring facility via short code (420) shall be ensured as per the communicated deadlines.
5. Compliance report on the actions vide Para above shall be forwarded to this office by 9th August, 2010 positively."
4. That we have heard the learned counsel for the petitioners, namely, Messrs Makhdoom Ali Khan, Muhammad Ali Raza, Salman Akram Raja, Sajid Mehmood Sheikh, and Mr. Sardar Muhammad Aslam who adopted their arguments. It was contended on behalf of the petitioners that:---
(a) The prize schemes offered by the petitioners to their customers did not contravene any law therefore the petitioners could not be prevented from offering them;
(b) That prior to issuing the impugned letter neither a show-cause notice nor an opportunity of a hearing was provided to the petitioners;
(c) That in the impugned letter it was alleged that regulations 8(4) and 8(5)(i) of the Telecom Consumers Protection Regulations, 2009 ("the Regulations") had been contravened, but the said regulations were not applicable, which are respectively reproduced hereunder: "8(4) A Commercial Practice is a misleading omission if, in its factual context, taking account of all its features and circumstances and the limitation of the communication, medium, it omits, hides or provides in an unclear, unintelligible, ambiguous or untimely manner such material information that the average Consumer needs, according to the context, to take an informed Transactional Decision and thereby cause or is likely to cause the average Consumer to take a Transactional Decision that he would not have taken otherwise.
8(5) The following Commercial Practices shall be regarded as unfair in all circumstances:
(i) Falsely claiming that a Service is able to facilitate winning in games of chance;"
5. That on the other hand Mr. Shafqat Jan, the learned counsel for PTA, contended that:
(a) The petitioners had obtained from PTA licences, issued under section 21 of the Pakistan Telecommunication (Re-organization) Act, 1996 ("the Act"), and clause 3.1.3 required the licensee petitioners to comply with the directives issued by PTA, and the impugned letter was such a directive, Clause 3.1.3 of the licence is reproduced hereunder: "The Licensee shall at all times co-operate with the Authority and its authorized representatives in the exercise of the functions assigned to the Authority under the Act. The Licensee shall comply with all orders, determinations, directives and decisions of the Authority." [emphasis added]
(b) The impugned letter was issued, without discrimination, to all cellular mobile operators;
(c) The impugned letter was issued to protect the interest of consumers as envisaged in sections 4(1) (m) and 6(f) of the Act, which, respectively, required PTA to, "regulate competition in the telecommunication sector and protect consumer rights" and to ensure that, "the interests of users of telecommunication services are duly safeguarded and protected";
(d) Clause 3.1.2 of the licence required the licensee petitioners to comply with "the laws of Pakistan" and the said prize schemes were contrary to the laws of Pakistan; and
(e) As no adverse action was taken or contemplated, there was no need for the prior issuance of a show-cause notice or to grant the petitioners an opportunity of a hearing.
6. The prize schemes offered by the petitioners, except the one offered by the Pakistan Telecom Mobile Limited, entice consumers into using their respective networks by sending message/s and or by telephoning the petitioners to enable their cellular phone numbers an entry into a lucky draw, and the winners of the draw would win different prizes. The messages that were sent and 'phone calls made were charged at a considerable higher rate from the one usually charged by the petitioners. The prizes that could be won were extensively published in the media and ranged from cash of five hundred to five million rupees, motorcycles, mobile handsets, different types of cars and quantities of gold ranging from a tola to a hundred tolas of gold. There were also variants of the prize schemes, such as participating in lucky draws when dormant subscriber identification modules (SIMs) were reactivated or when the mobile 'phones of the customers were kept continuously on. The scheme offered by the Pakistan Telecom Mobile Limited was somewhat different; each time a customer recharged his phone with a credit of two hundred rupees or more he/she got one entry to be part of a draw for cars.
7. The impugned letter whereby the petitioners were directed "to stop all types of 'Prize Schemes".
Was issued for three reasons; firstly, because the prize schemes were, "prima facie contrary to law", secondly, since the prize schemes were contrary to PTA's earlier directive of 6th July, 2010 and, thirdly, as the prize scheme were "in violation of regulation 8(4) and 8(5) (1) of the Regulations".
The second of the stated reasons is contrary to the facts since PTA's letter dated 6th July, 2010 appears to have been substituted by the decisions contained in PTA's letter of 2nd August, 2010 (reproduced above). We are therefore left to consider whether the other two reasons cited in the impugned letter are sustainable; and whether prior issuance of a show-cause notice and/or providing an opportunity of a hearing was required.
8. Whether the prize schemes were "contrary to law" requires consideration of sections 294-A and 294-B of the Pakistan Penal Code ("PPC") which restrict/prohibit the operation of a lottery, the launching of lotteries or the offering of prizes. The said provisions are reproduced hereunder: "294-A. Keeping lottery office. Whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorized by the Provincial Government shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both.
' And whoever publishes any proposal to pay any sum, or to deliver any goods or to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery shall be punished with fine which may extend to three thousand rupees."
"294-B. Offering of prize in connection with trade, etc. Whoever offers, or undertakes to offer, in connection with any trade or business or sale, of any commodity, any prize, reward or other similar consideration, by whatever name called, whether in money or kind, against any coupon, ticket number or figure, or by any other device, as an inducement or encouragement to trade or business or to the buying of any commodity, and whoever publishes any such offer, shall be punishable with imprisonment of either description for a term which may extend to six months, or with fine, or with both."
' However, certain provisions of the aforesaid sections ceased to have effect in terms of the judgment of the Shariat Appellate Bench of this Court in the case of Federation of Pakistan v.
Mushtaq Ali, Advocate (PLD 1992 Supreme Court 153), as under: "The Court unanimously holds that"---
(1) Section 294-A of the Pakistan Penal Code insofar as it exempts "State lottery or a lottery authorized by the Provincial Government" is repugnant to the injunction of Islam;
(2) Section 294-B of the Pakistan Penal Code insofar as it by its generality prohibits free trade in commodities on fair market price also, is repugnant to the injunctions of Islam.
' The Court holds by a majority that the findings and observations recorded by the Federal Shariat Court with regard to the National Prize Bonds Scheme being repugnant to the injunctions of Islam are without jurisdiction in view of the bar contained in Article 203-B(c) of the Constitution and sets it aside. The appeal succeeds to this extent only.
' Necessary steps be taken by the 30th June, 1992 to give effect to this decision failing which the aforesaid portions of sections 294-A and 294-B of the P.P.C. Shall cease to have effect."
' The learned counsel for the petitioners, despite being called upon, did not advance any argument with regard to the non-applicability of sections 294-A and 294-B of the PPC to the prize schemes nor to the said judgment of the Shariat Appellate Bench of this Court (above) or to the judgment of the Federal Shariat Court (PLD 1989 Federal Shariat Court 60) to the extent that it was not set aside.
However, Mr. Salman Akram Raja obliquely addressed the issue; he contended that the impugned directive did not refer to section 294-A or 294-B of the PPC or to the said judgments nor were the same a reason that prevailed with the High Court in dismissing the petition and appeals. He further stated that it would not be appropriate for an officer of PTA to determine what conformed to the injunctions of Islam or what was contrary thereto.
9. Mr. Salman Akram Raja was correct to state that, neither the said provisions of the PPC nor the cited judgments were referred either by PTA or by the High Court. He was also correct to say that the officers of PTA should not be permitted to articulate what contravenes the injunctions of Islam or what is permitted. PTA must proceed in accordance with the law governing it, which includes the Act and Regulations, as otherwise the petitioners would not be in a position to conduct their business in accordance with law, a prerequisite whereof necessitates the law's clarity and certainty.
10. The impugned letter did however state that the prize schemes were "contrary to law", which question needs consideration. The petitioners are expected to know the law of Pakistan, including the provisions of PPC and the judgments of the Shariat Appellate Bench of this Court. The petitioners provide cellular mobile services and they must do so, as the licence itself states, "in compliance with the laws of Pakistan" (clause 3.1.2). The laws of Pakistan restrict/prohibit lotteries and offering prizes as respectively stipulated in sections 294-A and 294-B of the Pakistan Penal Code. The lure of the prizes was used to induce customers to send message/s and make telephone calls' at considerably higher rates, and the extra revenue, after deduction of the additional costs incurred and the cost of prizes, add to the profits of the petitioners. Whether or not the petitioners made a profit is not the determining factor, but if the activity was illegal. It needs to be clarified that we are not fixing criminal liability. However, since the said prize schemes appear to be operating as lotteries in contravention of section 294-A, PPC and offering prizes in apparent violation of section 294-B, PPC the PTA would be within its rights to direct the petitioners to stop the said prize schemes.
11. That as regards the alleged contravention of regulation 8(4) of the Regulations, we have examined the said prize schemes and the pleadings of the petitioner. None of the said prize schemes disclose the odds of winning the advertised prizes, nor the number of prizes offered within a particular period. The prize schemes therefore "omits" and/or "hides" the "material information" for a consumer to take and form a "transactional decision" and as such constitutes a "misleading omission" in terms of regulation 8(4), which is defined to be an "unfair practice" and one that the petitioners cannot use as per the provisions of regulation 8(1) read with regulation 8(2) of the Regulations, respectively reproduced hereunder: "8(1) Operators shall not use unfair Commercial Practice when selling Services to Consumers.
8(2) A Commercial Practice shall be regarded as unfair if:
(i) it is contrary to the requirements of Professional Diligence;
(ii) it is a misleading action under provisions of sub-regulation (3);
(iii) it is a misleading omission under provisions of sub-regulation (4); or
(iv) it is listed in sub-regulation (5)."
' The prize schemes can also be categorized as "unclear", "unintelligible" and/or "ambiguous" which are categorized as "misleading" in terms of regulation 8(4) of the Regulations, and are also prohibited by regulation 8(1) read with regulation 8(2)(iii) of the Regulations.
12. We now come to the last stated contravention of regulation 8(5)(i) of the Regulations, which makes a commercial practice unfair, if it "falsely" claims that it is "able to facilitate winning in games of chance" The said provision commences with the word "falsely" thereby suggesting that if the claim is not false and facilitates in winning games of chance the same would be permissible.
Since the PTA has neither urged nor there is any material on record whereby we can determine that the petitioners made a false claim to facilitate winning in games of chance it cannot be stated that regulation 8(5)(i) was violated. We may observe that, if claiming to facilitate in winning games of chance was to be prohibited, the Regulations require to state so clearly.
13. That having determined that the prize schemes were contrary to law (Sections 294-A and 294- B, PPC) and contravened regulation 8(4) of the Regulations we need to consider whether a show- cause notice was required to be given to the petitioners followed by an opportunity of a hearing. It is a principle of long standing that, whenever adverse action is being contemplated against a person a notice and/or opportunity of hearing is to be given to such person. This principle has now been elevated to the status of a fundamental right with the incorporation of Article 10-A in the Constitution of the Islamic Republic of Pakistan (pursuant to the Constitution (Eighteenth Amendment) Act, 2010). However, PTA was not contemplating any action against the petitioners instead it had simply directed them not to offer prizes. The impugned letter also did not stop or in any manner restrict the petitioners' ability to provide the "Licensed Services" as mentioned in their licence. Therefore, it could not be alleged that any right, benefit or privilege of the petitioners was being curtailed or revoked, necessitating the issuance of notices to them and further to be provided with an opportunity of a hearing before the issuance of the directive contained in the impugned letter. Additionally, the petitioners' licences specifically empowered PTA to issue directives (clause 3.1.3) and it is not the petitioners' case that the same was issued on account of malice or in any manner tainted by mala fides. The matter may be looked at from another perspective, which is that the petitioners' were not required to offer prizes to their customers. The petitioners' licences also did not permit them to offer such prizes. Hence, it could not be asserted that the directive has prevented the petitioners from fulfilling an obligation to their customers, or to comply with a term of their licence or any requirement stipulated by PTA.
14. That both the requirement of a notice and providing an opportunity of a hearing may also be dispensed with in certain type of cases; in the case of Justice Khurshid Anwar Bhinder v. Federation of Pakistan (PLD 2010 SC 483) thirteen Judges (with one hon'ble Judge dissenting) had identified the following categories (paragraph 41 at pages 539 to 541) when this may be done: "(i) When an authority is vested with wide discretion;
(ii) When the maxim `expressio unius est exclusio alterius' is involved;
(iii) Where absence of expectation of hearing exists;
(iv) When compulsive necessity so demands;
(v) When nothing unfair can be inferred;
(vi) When advantage by protracting a proceeding is tried to be reaped; (vii). When an order does not deprive a person of his right or liberty; (viii)In case of arrest, search and seizure in criminal case;
(ix) In case of maintaining academic discipline.
(x) In case of provisional selection to an academic course; and
(xi) In case of enormous malpractices in selection process."
' The Indian Supreme Court in the case of Karnataka Public- Service Commission v. B. M. Vijaya.
Shankar (AIR 1992 Supreme Court 952) stated that, when meeting the requirement of notice and providing an opportunity of hearing will cause "more injustice than justice" or it is not in the "public interest" the same may be withheld. It will be useful to reproduce the following portion from the said judgment: "4. Was natural justice violated? Natural justice is a concept which has succeeded in keeping the arbitrary action within limits and preserving the rule of law. But with all the religious rigidity with which it should be observed, since it is ultimately weighed in balance of fairness, the Courts have been circumspect in extending it to situations where it would cause more injustice than justice.
Even though the procedure of affording hearing is as " important as decision on merits yet urgency of the matter, or public interest at times require flexibility in application of the rule as the circumstances of the case and the nature of the matter required to be dealt may serve interest of justice better by denying opportunity of hearing and permitting the person concerned to challenge the order itself on merits not for lack of hearing to establish bona fide or innocence but for being otherwise arbitrary or against rules. Present is a case which, in our opinion, can safely be placed in a category where natural justice before taking any action stood excluded as it did not involve any misconduct or punishment."
' Another case from the India in a similar vein is the case of Union of India v. J. N. Sinha (AIR. 1971 Supreme Court 40) where it was held, that: "As observed by this Court in Kraipak v. Union of India, AIR 1970 SC 150, "the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law but supplement it." It is true that if a statutory provision can be read consistently with the principles of natural justice, the Courts should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of natural justice. But, if on the other hand, a statutory provision either specifically or by necessary implication excludes the application of any or all the rules of principles of natural justice then the Court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the principles of natural justice. Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power."
15. That in, respect of prize schemes whereby customers were enticed with substantial amounts of cash/ prizes to unnecessarily send messages and make telephone calls, billed at considerably higher rates, the petitioners could not complain that they were not issued a notice or were not provided an opportunity of a hearing as no breach of any fundamental right, any principle of natural justice or even one of fair play had been violated. The regulations were enacted to protect consumers from amongst others unfair commercial practices and to ensure that, "the interests of users of telecommunication services are duly safeguarded and protected" and if the petitioners were resorting to unfair commercial practices or the interest of consumers were being undermined PTA was within its right to issue directives to stop them. ##TSE#
16. That the PTA however also stopped the offer of prizes that could be won on account of usage alone for which neither a message was sent or telephone call made that was charged for. These prizes could not be stated to offend regulation 8(4) or section 294-A or 294-B of the PPC (as determined in the aforesaid judgments of the Federal Shariat Court to the extent that it was not overruled by the Shariat Appellate Bench of this Court). However, such prizes were also stopped by PTA to allay allegations of discrimination and as many complaints (though none specifically with regard to these prizes) had been made. PTA, as noted above, can issue directives and the licensee is required to comply therewith, however, where such prizes were offered that did not violate the licence, the Regulations or the law representations could have been submitted to PTA with full disclosure, but this was not done nor was the impugned letter replied to and straightaway the matter was assailed before the High- Court. To such extent the challenge was premature as PTA had not considered the representation that may have been made let alone determined it. We do not want to state anything further in this regard as otherwise it will effectively decide the outcome of any future representation.
17. That these petitions were dismissed on 14th November, 2014 for reasons to be recorded separately; the aforesaid are the reasons for dismissing them.
High Court Upheld/