A bench of Chief Justice G Rohini and Justice Jayant Nath also said it did not appear that the Telecom Regulatory Authority of India (TRAI) had considered the objections raised by the cellular operators against the compensatory regulation which mandates them to pay consumers one rupee per call drop experienced on their networks, subject to a cap of Rs 3 per day.

The bench, however, agreed with TRAI that the regulator had the power to make the present regulation, which aimed at compensating consumers for the call drops.

In his response, Additional Solicitor General (ASG) P S Narasimha, appearing for TRAI, said a technical consultation paper was sent to all stakeholders, including telecom firms, on the call drops issue and all their representations were considered before the rule was made.

The ASG said the compensatory rule was made due to consumer complaints that call drops were happening more often and added that the call drops amounted to the service providers 'breaching' the contract they have with the users.