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Jurisdiction of TDSAT -Challenge to the Regulations framed under sec.36 of Telecom Regulatory Authority of India Act for rapid developement of Telecommunication – Apex court held that TDSAT has no jurisdiction – view taken by TDSAT and the Delhi High Court does not represent correct law. – aggrieved person shall be free to challenge the validity of the regulations framed under Section 36 of the Act by filing appropriate petition before the High Court. = Bharat Sanchar Nigam Limited … Appellant versus Telecom Regulatory Authority of India and others … Respondents = published in http://judis.nic.in/supremecourt/imgst.aspx?filename=41056

Jurisdiction of TDSAT -Challenge to the Regulations framed under sec.36 of Telecom

 

Telecom Regulatory Authority of India

Telecom Regulatory Authority of India (Photo credit: Wikipedia)

 

Regulatory Authority of India Act for rapid developement of Telecommunication – Apex court held that TDSAT has no jurisdiction – view taken by TDSAT and  the Delhi High Court does not represent correct law. – aggrieved person shall be free to challenge  the  validity of the regulations framed under Section 36 of the Act by filing  appropriate petition before the High Court. =

 

 

 

“Whether in exercise of the power vested in  it  under  Section

 

           14(b) of the  Act,  TDSAT  has  the  jurisdiction  to  entertain

 

           challenge to the  regulations  framed  by  the  Authority  under

 

           Section 36 of the Act.  =

 

 

 

1. Whether in the event of any inconsistency between the terms

 

                 and conditions of the licenses issued under  Section  4  of

 

                 the Indian Telegraph Act, 1885 and the  provisions  of  the

 

                 Telecom Regulatory Authority of India Act, 1997 (for short,

 

                 ‘the Act’), the provisions of the Act would prevail in view

 

                 of the purpose and  object  for  which  the  Act  has  been

 

                 passed,   i.e.,   for   ensuring   rapid   development   of

 

                 telecommunications in the country  incorporating  the  most

 

                 modern technology and, at the  same  time,  protecting  the

 

                 interests of the consumers and the service providers?

 

  2.  Whether  Authority  has  powers  to  fix  the  terms   and

 

                 conditions of inter connectivity between service providers,

 

                 in respect of all the licenses, irrespective  of  the  fact

 

                 whether  licenses  issued  before  or  after  24.1.2000   –

 

                 especially in view  of  the  non-obstante  clause  in  sub-

 

                 section (1) of Section 11 and sub-clause (ii) of Clause (b)

 

                 of sub-section (l) of Section 11 of  the  TRAI  (Amendment)

 

                 Act of 2000?

 

3. Whether Authority has no power to fix terms and  conditions

 

                 of interconnectivity between service providers  in  respect

 

                 of licenses issued after  24.01.2000  including  terms  and

 

                 conditions of interconnection  agreements  –  in  view  of,

 

                 inter-alia, the scheme laid down in the provisos to Section

 

                 11(1) of the TRAI Act, 1997 as amended on 24.01.2000 and if

 

                 it  does  not  have  any  such  power  what  would  be  the

 

                 harmonious construction of the amended clause  11(1)(b)(ii)

 

                 and the  new  scheme  more  specifically  embodied  in  the

 

                 provisos?

 

   4. Whether under the amended provisions of the TRAI Act,  1997

 

                 introduced w.e.f 24.01.2000 – the  harmonious  construction

 

                 of Section 11(1)(b)(ii) and the scheme of the  provisos  to

 

                 Section 11(1) would allow the Authority to have  the  power

 

                 to fix the terms and conditions of  interconnectivity  with

 

                 respect to licenses issued before 24.1.2000,  only  to  the

 

                 extent  the  licensor  (Govt.   of   India)   accepts   the

 

                 recommendations of the Authority for incorporation  in  the

 

                 new licenses, so as to achieve level playing field  between

 

                 the service providers granted licenses before and after the

 

                 amendment of the TRAI A

 

 5. Whether the appeals are maintainable in the present form?

 

=

 

a preliminary issue  relating  to  jurisdiction  of  the

 

Telecom  Disputes  Settlement  Appellate  Tribunal  (TDSAT)   to   entertain

 

challenge to the regulations framed by the Authority may be  decided  before

 

the  questions  framed  vide  order  dated  6.2.2007  are   taken   up   for

 

consideration. =

 

 

 

 In the result, the question framed by the Court  is  answered  in  the

 

following terms:

 

       In exercise of the power vested in it  under  Section  14(b)  of  the

 

      Act, TDSAT does not have the jurisdiction to entertain  the  challenge

 

      to the regulations framed by the Authority under  Section  36  of  the

 

      Act.

 

 

 

65.   As a corollary, we hold that the contrary view taken by TDSAT and  the

 

Delhi High Court does not represent correct law.  At the same time, we  make

 

it clear that the aggrieved person shall be free to challenge  the  validity

 

of the regulations framed under Section 36 of the Act by filing  appropriate

 

petition before the High Court.

 

66.   The cases may now be listed before an appropriate Bench  for  deciding

 

the questions framed vide  order  dated  6.2.2007  passed  in  Civil  Appeal

 

No.3298/2005 and some of the connected matters.

 

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5253 OF 2010
Bharat Sanchar Nigam Limited … Appellant
versus
Telecom Regulatory Authority of India and others … Respondents
With
Civil Appeal Nos. 951-952 of 2005
Civil Appeal No. 3298 of 2005
Civil Appeal No. 3299 of 2005
Civil Appeal No. 4529 of 2005
Civil Appeal Nos. 5834-5836 of 2005
Civil Appeal No. 5837 of 2005
Civil Appeal No. 6049 of 2005
Civil Appeal No. 802 of 2006
Civil Appeal No. 2731 of 2006
Civil Appeal No. 2794 of 2006
Civil Appeal No. 3504 of 2006
Civil Appeal Nos. 4965-4966 of 2007
Civil Appeal No. 177 of 2008
Civil Appeal Nos. 598-599 of 2008
Civil Appeal No. 5184 of 2010
Civil Appeal No. 5873 of 2010
Civil Appeal No. 6068 of 2010
Civil Appeal No. 6255 of 2010
Civil Appeal No. D28298 of 2010
T.C. (C) No. 39 of 2010
Civil Appeal Nos. 271-281 of 2011

 

JUDGMENT
G.S. SINGHVI, J.
1. By an order dated 6.2.2007 passed in Civil Appeal No. 3298 of 2005 –
Telecom Regulatory Authority of India (Authority) v. Bharat Sanchar Nigam
Limited (BSNL) and connected matters, a two Judge Bench made a reference to
the larger Bench for determination of the following substantial questions
of law of public importance:
1. Whether in the event of any inconsistency between the terms
and conditions of the licenses issued under Section 4 of
the Indian Telegraph Act, 1885 and the provisions of the
Telecom Regulatory Authority of India Act, 1997 (for short,
‘the Act’), the provisions of the Act would prevail in view
of the purpose and object for which the Act has been
passed, i.e., for ensuring rapid development of
telecommunications in the country incorporating the most
modern technology and, at the same time, protecting the
interests of the consumers and the service providers?
2. Whether Authority has powers to fix the terms and
conditions of inter connectivity between service providers,
in respect of all the licenses, irrespective of the fact
whether licenses issued before or after 24.1.2000 –
especially in view of the non-obstante clause in sub-
section (1) of Section 11 and sub-clause (ii) of Clause (b)
of sub-section (l) of Section 11 of the TRAI (Amendment)
Act of 2000?
3. Whether Authority has no power to fix terms and conditions
of interconnectivity between service providers in respect
of licenses issued after 24.01.2000 including terms and
conditions of interconnection agreements – in view of,
inter-alia, the scheme laid down in the provisos to Section
11(1) of the TRAI Act, 1997 as amended on 24.01.2000 and if
it does not have any such power what would be the
harmonious construction of the amended clause 11(1)(b)(ii)
and the new scheme more specifically embodied in the
provisos?
4. Whether under the amended provisions of the TRAI Act, 1997
introduced w.e.f 24.01.2000 – the harmonious construction
of Section 11(1)(b)(ii) and the scheme of the provisos to
Section 11(1) would allow the Authority to have the power
to fix the terms and conditions of interconnectivity with
respect to licenses issued before 24.1.2000, only to the
extent the licensor (Govt. of India) accepts the
recommendations of the Authority for incorporation in the
new licenses, so as to achieve level playing field between
the service providers granted licenses before and after the
amendment of the TRAI Act?
5. Whether the appeals are maintainable in the present form?

 

2. The larger Bench heard the arguments on various dates but released
the cases vide order dated 19.10.2011. Thereafter, by mistake the Registry
listed all the matters before a two Judge Bench. During the course of
hearing, Shri A.S. Chandhiok, learned senior advocate appearing for BSNL
invited the Court’s attention to orders dated 6.2.2007 and 21.10.2010 and
pointed out that the cases were earlier heard by the larger Bench.
Thereupon, the two Judge Bench directed that the cases be posted before the
larger Bench.
3. When the cases were listed before this Bench, learned counsel for the
parties agreed that a preliminary issue relating to jurisdiction of the
Telecom Disputes Settlement Appellate Tribunal (TDSAT) to entertain
challenge to the regulations framed by the Authority may be decided before
the questions framed vide order dated 6.2.2007 are taken up for
consideration. Thereupon, the Court decided to hear the arguments on the
following question:

 

“Whether in exercise of the power vested in it under Section
14(b) of the Act, TDSAT has the jurisdiction to entertain
challenge to the regulations framed by the Authority under
Section 36 of the Act.

 

4. For better appreciation of the arguments advanced by learned counsel
for the parties, we may notice the facts borne out from the records of
different appeals.
Civil Appeal Nos. 5253, 5184, 5873, 6068, 6255 of 2010 and Civil Appeal No.
D28298 of 2010

 
5.1 The delay in filing and re-filing C.A. No. D28298 of 2010 is
condoned.
5.2 These appeals have been filed by Bharat Sanchar Nigam Limited
(BSNL), Cellular Operators Association of India (COAI), Association of
Unified Telecom Service Providers of India (AUSPI), the Authority, M/s.
Sistema Shyam TeleServices Limited and Mahanagar Telephone Nigam
Limited (MTNL), respectively, against order dated 28.5.2010 passed by TDSAT
whereby the appeal preferred by BSNL against the Telecommunication
Interconnection (Port Charges) Amendment Regulation (1 of 2007) was allowed
and the Authority was directed to give fresh look at the regulations and
BSNL was directed not to claim any amount from any operator during the
interregnum, i.e., from the date of coming into force of the regulations
and the date of the order.
5.3 A perusal of the record shows that port charges came to be prescribed
in Schedule 3 of the Telecommunication Interconnection (Charges and Revenue
Sharing) Regulations, 1999, which came into force on 28.5.1999. By virtue
of Clause 8, the regulations were given overriding effect qua the
interconnection agreements. MTNL challenged the 1999 regulations before the
Delhi High Court in Civil Writ Petition No. 6543/1999, which was allowed by
the Division Bench of the High Court vide order dated 17.1.2000 [MTNL v.
TRAI, AIR 2000 (Delhi) 208] and it was held that the Regulations framed
under Section 36 of the Act could not be given overriding effect.
Thereafter, the Authority framed the Telecommunication Interconnection
(Port Charges) Amendment Regulations (6/2001). The port charges were
specified in the schedule to the amended regulations. The amended
regulations were challenged in Appeal Nos.11/2002 and 31/2003, which were
allowed by TDSAT vide orders dated 27.4.2005 and 3.5.2005 respectively.
5.4 In view of the aforesaid orders of TDSAT, the Authority sought
response of various service providers for review of port charges. In that
process, BSNL raised objection to the jurisdiction of the Authority to vary
the terms and conditions of interconnection agreements or the contractual
rates. On 2.2.2007, the Authority issued Telecommunication Interconnection
(Port Charges) Amendment Regulation (1 of 2007) reducing the port charges
required to be paid by private telecom operators to BSNL by about 23-29%.
BSNL challenged Notification dated 2.2.2007 in Appeal No. 4/2007. By an
order dated 28.5.2010, TDSAT allowed the appeal of BSNL and issued
directions to which reference has been made hereinabove.

 

Civil Appeal Nos. 951-952/2005

 

6.1 Civil Appeal No. 951/2005 has been filed by the Authority against
order dated 21.4.2004 by which TDSAT allowed Appeal No.2/2004 filed by BSNL
questioning direction dated 31.12.2003 issued under Section 13 read with
Section 11(1)(b) of the Act. Civil Appeal No. 952/2005 has been filed by
the Authority against order dated 10.8.2004 by which TDSAT dismissed
Petition No.2/2004 for review of order dated 21.4.2004.
6.2 On receiving information that some operators were disconnecting
Points of Interconnection (PoI) for the reason of non payment of
Interconnection Usage Charges and other such reasons, the Authority issued
direction dated 31.12.2003 under Section 13 read with Section 11(1)(b)
conveying to all service providers that disconnection of PoIs was not
desirable because the subscribers would be inconvenienced and all disputes
should be resolved through mutual negotiations. It was also provided that
if the dispute could not be resolved, then 10 days’ notice of disconnection
should be given to the erring party with a copy to the Authority. In the
event of non-intervention by the Authority, the aggrieved party could
disconnect the PoI or approach the Authority for determination of the
matter.
6.3 BSNL filed Appeal No.2/2004 for striking down the aforesaid direction
on the ground that only TDSAT was vested with the jurisdiction to decide
the disputes and the Authority had no jurisdiction in the matter. TDSAT
allowed the appeal and held that the Authority did not have the
jurisdiction to entertain dispute between the service providers. TDSAT
noted that the words “dispute” and “determination” have been used in the
direction issued by the Authority, referred to the judgment of this Court
in Cellular Operators Association of India v. Union of India (2003) 3 SCC
186 and held that the jurisdiction of TDSAT is quite wide and is
circumscribed only by the three instances, i.e., disputes before the MRTP
Commission, Consumer Forums and those under Section 7B of the Telegraph
Act.
6.4 The Authority filed Review Petition No. 2/2004 and argued that while
the Authority can be faulted for the use of words “dispute” and
“determination”, its power to intervene cannot be questioned. Another plea
taken by the Authority was that the regulations framed under Section 36 are
in the nature of subordinate legislation and validity thereof cannot be
questioned before TDSAT. The review petition was dismissed by TDSAT vide
order dated 10.8.2004 reiterating that it had jurisdiction to entertain
dispute relating to validity of regulations.

 

Civil Appeal Nos. 3298 and 4529 of 2005

 

7.1 These appeals are directed against order dated 27.4.2005 passed by
TDSAT in Appeal Nos. 11 and 12 of 2002 filed by BSNL and MTNL respectively,
challenging Clause 3.1 of the Telecommunication Interconnection (Reference
Interconnect Offer) Regulation, 2002 (2 of 2002).
7.2 In exercise of its powers under Section 36 read with Section 11(1)(c)
and (d) of the unamended Act, the Authority prescribed revenue sharing for
service providers under the Calling Party Pays regime on 17.9.1999. This
was challenged before the Delhi High Court. In its judgement [MTNL v. TRAI
(supra)], the High Court observed that the Authority has no power to change
or vary rights of parties under contracts or licenses.
7.3 After the judgment of the High Court, the Act was amended by
Ordinance dated 24.1.2000 and Section 11(1)(b)(ii) was inserted to enable
the Authority to fix the terms and conditions of interconnectivity between
the service providers.
7.4 In exercise of the power vested in it under Section 36 read with
Section 11(1)(b)(ii), (iii) and (iv), the Authority framed the 2002
Regulations. Under Clause 3.1 of these regulations, the service providers
with significant market share were required to publish their Reference
Interconnect Offer (RIO) within 90 days of the issue of the Regulations
with prior approval of the Authority. The 2002 Regulations stipulate the
broad framework, structure and provisions on which the service provider is
to make an offer of interconnection with other service providers. BSNL
submitted the proposed RIO on 12.7.2002. MTNL also submitted proposed RIO
sometime in 2002. The RIOs of BSNL and MTNL were approved with certain
changes effected vide identically worded letters dated 9.10.2002.
7.5 BSNL and MTNL filed Appeal Nos. 11 and 12/2002 challenging letters
dated 9.10.2002 issued by the Authority. It was contended inter alia that
the Authority did not have the power to frame such a regulation. They
argued that the changes suggested in the RIO were non transparent and under
the garb of the regulations, the Authority cannot be conferred power to fix
the terms and conditions of interconnectivity which BSNL and MTNL can offer
to other service providers. Clause 3.1 was challenged insofar as it had
been interpreted to take away the statutory right to appeal as granted
under the Act.
7.6 TDSAT disposed of both the appeals vide order dated 27.4.2005. TDSAT
extensively referred to the orders passed in Review Petition No.2/2004 in
Appeal No.2/2004 (BSNL v. TRAI) and Appeal No.3/2005 as also the order
passed by the Delhi High Court wherein it was held that TDSAT is empowered
to hear appeals involving challenge to the validity of the regulations
framed under Section 36. TDSAT then held that even after amendment of the
Act, the Authority does not have the power to amend or override the terms
and conditions of the interconnect agreements executed by the service
providers.

 

Civil Appeal Nos. 3299, 6049 of 2005 and 802 of 2006

 

8.1 These appeals have been filed against order dated 3.5.2005 of TDSAT
whereby it allowed Appeal No.31/2003 and partly allowed Petition No.20/2004
and quashed direction dated 22.7.2003 issued by the Authority on the
premise that it did not have the power to override and make direct
interconnectivity mandatory.
8.2 Direct connectivity between different service providers was
introduced in light of NTP 1999 and the same was provided for in the
license agreements of existing licensees through an amendment on 29.1.2001
as per DoT letter dated 9.8.2000 which stated that direct connectivity was
permitted for the purpose of terminating traffic on the basis of mutual
agreements. In the meanwhile, on 29.9.2000 BSNL was granted license to
provide cellular mobile services and it commenced its Cellone Cellular
Services in October 2002.
8.3 The Act was amended vide Ordinance dated 24.1.2000 to include the
power to fix the terms and conditions of interconnectivity between service
providers (Section 11(1)(b)(ii) of the amended Act).
8.4 The Authority issued Telecommunication Interconnection (Reference
Interconnect Offer) Regulation, 2002 on 12.7.2002 and mooted the idea of an
Interconnect Gateway Switch. On 15.5.2003, the Authority issued a
consultation paper stating that if one of the parties demands direct
connectivity it needs to be made mandatory through regulations. On
30.6.2003, the Authority called upon stakeholders to discuss the issue of
direct connectivity. Thereafter, the Authority issued direction dated
22.7.2003 under Section 13 of the Act to all service providers directing
that direct connectivity be made between service providers at the earliest
and not later than three months from the issue of the direction so as to
promote network efficiency and consumer interest.
8.5 BSNL filed Appeal No. 31/2003 challenging direction dated 22.7.2003
on the ground that the same was contrary to the terms and conditions of the
license agreements of basic and cellular operators.
8.6. The Authority issued IUC Regulations dated 29.10.2003 mandating
direct connectivity between service providers. As per clause (b) of
Schedule II, charges could be levied through mutual negotiations but they
were to be lower than Rs.0.20. BSNL issued Circular dated 28.1.2004 levying
charge of Rs.0.4 per minute for a call from cellular mobile network to
another cellular network transited by BSNL. This charge included Rs.0.30
towards call termination and Rs.0.19 towards transit.
8.7 The Authority released Consultation Paper on Interconnect Exchange
cum Inter-Carrier Billing Clearance House for Multi-Operator Multi-Service
Scenario on 13.4.2004 mooting Interconnect Exchange as an alternative to
direct connectivity.
8.8 COAI filed Petition No. 20/2004 seeking a direction against BSNL
CellOne to directly connect to the Cellular Service Providers and to strike
down the BSNL Circular requiring payment of Rs 0.19 transit charges which
BSNL Basic Services Division was demanding and collecting.
8.9 TDSAT allowed Appeal No.31/2003 and partly allowed petition
No.20/2004 and quashed direction dated 22.7.2003 on the ground that the
Authority cannot issue direction resulting in modification of the licence
issued after 2000 amendment. TDSAT held that fixation of the terms and
conditions of interconnectivity and ensuring effective interconnectivity is
part of the legislative mandate of the Authority under Section 11(1)(b)(ii)
and (iii). TDSAT referred to its earlier order dated 27.4.2005 passed in
Appeal Nos. 11 and 12/2002 and held that the amendment of the Act does not
override the law laid down by the Delhi High Court in MTNL v. TRAI (supra).
TDSAT further held that the power vested in the Authority could be
exercised in harmony with the terms of interconnectivity of licenses issued
after the 2000 amendment and the principles laid down in the High Court
judgment. With regard to the claim of COAI, TDSAT held that though BSNL was
justified in collecting Rs.0.19 transit charges from Level I TAX to
termination of calls in PSTN network or for providing interconnectivity to
networks of other service providers, it was not justified in charging
transit charges to the extent of Rs.0.19 for transit calls from, Level I
TAX to Cellone’s Gateway MSC. TDSAT held that it cannot direct BSNL to
implement direct connectivity as the Authority did not have the power to
override license terms and conditions for making the same mandatory either
by direction under Section 13 or by regulation under Section 36.
Civil Appeal Nos.5834-5836 and 5837 of 2005
9.1 These appeals are directed against order dated 27.4.2005 passed by
TDSAT whereby it allowed Petition No. 9 of 2001 filed by Association of
Basic Telecom Operators and others and Petition No. 3/2001 filed by
Cellular Operators Association of India, dismissed Petition No. 12/2003
filed by private BSOs as withdrawn and dismissed Appeal No. 5/2002 filed by
BSNL.
9.2 Access charges to be paid by the Basic Licensees to the DoT (now
BSNL) were provided for in tender document issued on 16.1.1995 at the rate
of Rs 0.64 per MCU for STD calls and Rs 0.87 per MCU for ISD calls.
Clarification was issued on 27.5.1996 reducing the charges to Rs 0.50 per
MCU for STD calls and Rs 0.70 per MCU for ISD calls.
9.3 In 1997-98 interconnect agreements were signed between Basic
Operators and the then DoT providing for payment of interconnect charges
including port charges at a minimum of Rs 54,000/- per PCM termination per
annum for a period of 3 years and then actual/full cost based rates, and
access charges at Rs 0.50 per MCU for STD calls and Rs 0.70 per MCU for ISD
calls. By 1.8.1999 all BSOs migrated to the revenue sharing regime instead
of the fixed license fee regime. Port charges in respect of Cellular Mobile
Service Providers were prescribed by the DoT vide Circulars dated 27.9.1996
and 5.6.1998 which extended that arrangement for computation of port
charges which was incorporated in interconnection agreements signed with
private BSOs to CMSPs.
9.4 The Authority issued Telecommunication Interconnection (Charges and
Revenue Sharing) Regulation, 1999 (hereinafter ‘Interconnection Regulations
1999’) vide notification dated 28.5.1999 by which the port charges as also
the access charges were reduced. Clause 8 of the Regulations provided that
the Regulations would have an over-riding effect on the interconnect
agreements entered into between the operators and DoT/BSNL. Consequent to
the issuing of Interconnect Regulations 1999, DoT issued circulars dated
1.10.1999, 12.10.1999 and 25.10.1999 altering the post charges and access
charges. That clause was struck down by Delhi High Court in MTNL v. TRAI
(supra).
9.5 After its creation on 1.10.2000, BSNL issued communications dated
28.4.2001 and 31.5.2001 requesting an increase in the access charges,
making the regime of payment dependent on actual work done by the concerned
operator. The BSOs made a representation to the Authority objecting to this
increase.
9.6 AUSPI filed Petition No. 9/2001 before TDSAT challenging
communications dated 28.4.2001 and 31.5.2001. Vide interim order dated
10.7.2001, AUSPI was directed to continue paying the admitted amounts.
AUSPI paid the port charges and access charges under Interconnect
Regulations, 1999 and hence BSNL issued circulars dated 2.11.2001 and
21.11.2001 for recovery of the amounts calculated on the basis of the
interconnect agreements stating that in light of the Delhi High Court
judgement, letter dated 12.10.1999 issued by DoT on the basis of
Interconnection Regulations 1999 had become null and void. As per this
circular, BSNL revised retrospectively w.e.f. 1.5.1999 port charges to be
levied from CMSPs at rates prevailing prior to 1.5.1999. Thereupon, AUSPI
amended Petition No. 9/2001 and challenged circular dated 2.11.2001 apart
from the applicable rates of port charges. COAI separately filed Petition
No.3/2002 for quashing circular dated 2.11.2001.
9.7 During the pendency of those petitions, the Authority issued
Telecommunication Interconnection (Charges and Revenue Sharing) Regulation,
2001 on 14.12.2001 which dealt only with access charges. These regulations
were challenged by BSNL in Appeal No. 5/2002. the Authority thereafter
issued Telecommunication Interconnection (Port Charges) Regulation, 2001
fixing rates of port charges w.e.f. 28.12.2001. These regulations were
accepted and adopted by all the parties.
9.8 Private BSOs filed Petition No. 12/2003 challenging the applicable
rate of port charges for period till issuance of Port Charges Regulation
dated 28.12.2001. By an order dated 27.4.2005, TDSAT allowed Petition Nos.
9/2001 and 3/2002 and quashed circular dated 2.11.2001 by observing that
the demands raised therein are without basis. It held that the BSOs and
CMSPs were liable to pay charges as per the DoT letter dated 12.10.1999
till the coming into effect of the Authority Port Charges Regulations,
2001. TDSAT dismissed Petition No.12/2003 filed by private BSOs as
withdrawn. It also dismissed Appeal No.5/2002 filed by BSNL and upheld the
validity of the Interconnection Regulations, 2001 on the ground that they
had become necessary to bring about certainty in the access charges regime
and it could not be said that the Authority acted unfairly or arbitrarily
to enrich private operators.

 

Civil Appeal Nos. 2731, 2794 and 3504 of 2006.

 

10.1 The Authority issued direction dated 22.7.2003 under Section 13
of the Act to all service providers directing that direct connectivity be
made between service providers at the earliest and not later than three
months from the issue of the direction so as to promote network efficiency
and consumer interest.
10.2 BSNL filed Appeal No. 31/2003 challenging direction dated
22.7.2003 on the ground that the same was contrary to the terms and
conditions of the license agreements of basic and cellular operators.
10.3 In October 2003, the Authority issued Telecom Interconnection
Usages Charges Regulations (IUC Regulations) mandating direct connectivity
between service providers. As per clause (b) of Schedule II, charges could
be levied through mutual negotiations subject to the condition that they
shall not exceed Rs.0.20 per minute. BSNL issued Circular dated 28.1.2004
levying charge of Rs 0.4 per minute for a call from cellular mobile network
to another cellular network transited by BSNL. This charge includes Rs 0.30
towards call termination and Rs 0.19 towards transit.
10.4 BSNL issued Circular dated 2.7.2004 to its telecom circles
informing them of its decision to permit direct connectivity with the BSNL
Cellular Network. Reliance Infocom was one of the UASL operators who had
sought such connectivity. NLD and ILD operators were permitted to establish
direct connectivity with CellOne network vide BSNL Circular dated 4.8.2004.
Vide Circular dated 23.8.2004, Reliance was given direct interconnect as
NLDO/ILDO on the same terms and conditions as Bharti Televentures Ltd.
10.5 COAI filed Petition No. 20/2004 seeking a direction against
BSNL CellOne to directly connect to the Cellular Service Providers and to
strike down the BSNL Circular requiring payment of Rs 0.19 as transit
charges which BSNL Basic Services Division was demanding and collecting.
10.6 Vide order dated 3.5.2005, TDSAT allowed Appeal No. 31/2003 and
quashed direction dated 22.7.2003 holding that the direction mandating
direct connectivity resulted in modification of license conditions of
licenses issued after the 2000 amendment and as such this was not in
accordance with the provision of the Act. TDSAT partly allowed Petition No.
20/2004 and held that BSNL was not justified in charging transit charges to
the extent of Rs 0.19 for transit calls from, Level I TAX to Cellone’s
Gateway MSC. Relief of refund of amounts already collected was not granted.
10.7 In compliance of TDSAT’s order, the Authority issued Telecom
Regulatory Authority of India (Transit Charges for Bharat Sanchar Nigam
Limited’s CellOne Terminating Traffic) Regulation, 2005 (10 of 2005) dated
8.6.2005 under Section 36 read with section 11(1)(b)(ii), (iii) and (iv)
clarifying that no transit charges shall be levied by BSNL on cellular
operators for accessing CellOne subscribers wherever MSCs of both CellOne
and private CMSPs are connected to the same BSNL switch.
10.8 Bharti Televentures Ltd. made representation dated 18.5.2005 to
BNL to extend the benefit of Tribunal’s order dated 3.5.2005. It also
submitted representation dated 13.6.2005 to the Authority to amend
regulations dated 8.6.2005 extending the waiver to fixed line service
providers. Thereupon, fresh Addenda II was inserted into the Interconnect
Agreement between Bharti and BSNL on 5.7.2005 which deals with the issue of
direct connectivity and payment of transit charges.
10.9 BSNL extended benefit of the judgment dated 3.5.2005 to Tata
Teleservices Limited in May 2005 on the ground that it was similarly
situated as the cellular operators. However, in October 2005 it withdrew
the benefit and demanded that Tata pay transit charges at Rs 0.19 on the
ground that Tata could not avail of the benefit of the judgment as it was a
UAS licensee and not a CMSP.
10.10 BSNL forwarded a draft Addenda to the Interconnect Agreement to
Reliance Infocom Limited on 14.3.2005. The same was signed by the parties
on 17.11.2005 for NLD services and on 6.1.2006 as UASL operator. Reliance
filed representation before the Authority dated 30.8.2005 to extend
regulation date 8.6.2005 to UAS licensees also. This request was declined
by the Authority on 6.9.2005. In light of decision dated 11.11.2005 passed
by TDSAT mandating level playing filed and reciprocity between service
providers and the subsequent the Authority directive dated 16.11.2005
applying this judgment to all service providers although the petitioners
had been only cellular operators, Reliance filed another representation
dated 12.12.2005 but did not get any response from the Authority.
10.11 Bharti Televentures Limited filed Appeal No. 8/2005 seeking extension
of the benefit of order dated 3.5.2005 and also for modification of the
regulations and for extension of the benefit to similarly situated UAS
Licensees.
10.12 By an order dated 10.2.2006, TDSAT dismissed the appeal and held that
the transit charges would be determined by the interconnect agreement
voluntarily entered into between Bharti and BSNL post judgment dated
3.5.2005. However, TDSAT did not go into the issue of whether basic service
providers can be construed as similarly situated to cellular operators.
10.13 Bharti Televentures Limited challenged the aforesaid order in Review
Application No. 1/2006, which was dismissed vide order dated 3.5.2006.
10.14 Tata Teleservices Limited filed Petition No. 132/2005 praying for
extending the benefit of order dated 3.5.2005, setting aside the demands of
BSNL for Rs 0.19 as transit charges and modification of the regulations.
That petition was dismissed by TDSAT vide order dated 3.5.2006 on the
ground that similar appeal filed by Bharti Televentures Limited had been
dismissed. Appeal No.7/2006 filed by Reliance Infocom Limited was also
dismissed by TDSAT by relying upon the orders passed in the cases of Bharti
Televentures Limited and Tata Teleservices Limited.
Civil Appeal Nos. 4965-66 of 2007, 177 and 598-599 of 2008
11.1 The Authority issued the 4th amendment to the IUC Regulations
on 6.1.2005. Soon thereafter, BSNL issued circular dated 29.1.2005 for
implementation of the Regulations stating in Annexure 2 that revenue shall
be shared between BSNL and the private operator in the ratio of 50:50 for
international roaming calls. COAI filed representations dated 31.1.2005,
7.2.2005, 8.2.2005 and 14.2.2005 against this circular. The Authority
issued letter dated 31.1.2005 to BSNL inviting it to attend a discussion on
the implementation of IUC Regulations with regard to separate trunk group
for handing over roaming calls. In light of this, BSNL issued Circular
dated 1.2.2005 deferring the formation on trunk group to 14.2.2005 for
national roaming calls and to 7.2.2005 for international roaming calls. The
matter was deferred further to 14.2.2005 and then to 28.2.2005 vide
Circulars dated 8.2.2005 and 14.2.2005.
11.2 However, by some further correspondence, the Authority sought
comments from all service providers on 11.3.2005 on the issues of levy of
ADC and revenue sharing on roaming subscriber traffic. It moved a
consultation paper on 17.3.2005 to address the issue of revenue share
arrangement between terminating network and visiting network. BSNL
submitted its comments on this paper on 10.5.2005. In the meanwhile, the
Authority issued 5th amendment to the IUC Regulations on 11.4.2005 making
ADC applicable to national calls at Rs 0.30 per minute and international
roaming calls at Rs 3.25 per minute. The amendment was implemented by BSNL
vide Circular dated 9.5.2005. The amendment as it related to application of
ADC was challenged by COAI in Appeal No. 7/2005 which was allowed vide
order dated 21.9.2005. Thereafter, BSNL withdrew circular dated 9.5.2005
vide circular dated 13.10.2005.
11.3 On 23.6.2006, the Authority issued 6th amendment to IUC
Regulations. BSNL issued Circular dated 28.2.2006 for implementation of the
6th amendment and provided for higher termination charges for roaming
calls. Thereupon, COAI filed complaints before BSNL and also before the
Authority regarding higher termination charges for roaming calls. The
Authority issued letter dated 20.4.2006 to BSNL along with complaints filed
by COAI and M/s BPL. Complaint of Bharti was also forwarded vide letter
dated 24.4.2006. Despite agreeing to discuss the matter with the private
operators, BSNL started raising bills as per the circular. COAI and others
made representations dated 24.5.2006 and 12.6.2006 against thee demands.
BSNL replied to the Authority’s letter vide letter dated 28.4.2006 stating
that the license agreements provide for revenue share and the circular was
strictly in accordance with the same.
11.4 Vide decision dated 11.9.2006, the Authority rejected the claim
of BSNL for revenue sharing in respect of roaming calls and directed BSNL
to charge Rs 0.30 per minute for termination of national and international
roaming calls as prescribed in IUC Regulations.
11.5 BSNL filed Appeal No. 14/2006 challenging the Authority’s
decision dated 11.9.2006 on the ground of lack of jurisdiction. COAI also
filed Appeal No.16/2006 challenging the decision of the Authority insofar
as it was made prospective.
11.6 During the pendency of the appeals, the Authority notified
Telecommunication Tariff (forty fourth amendment) Order, 2007 on 24.1.2007
fixing maximum permissible charges for national roaming calls.
11.7 After hearing the parties, TDSAT vide order dated 24.8.2007
dismissed Appeal Nos. 14 and 16 of 2006 and Petition No.319/2006 and held
that the decision taken by the Authority was legally correct and justified.
11.8 The Authority filed MA No. 121/2007 for correction of order
dated 24.8.2007 for deletion of the words “admitted” from para 6 line 12
and “and is recommendatory” from para 9 line 24. MA was allowed vide
impugned order dated 12.9.2007 and the words “and is recommendatory” were
deleted. TDSAT held that functions enumerated in Section 11(1)(b) cannot be
said to be part of the recommendatory power which is contained in Section
11(1)(a).
11.9 COAI and others filed EA No. 21/2007 seeking implementation of
TDSAT’s order dated 24.8.2007 and claiming benefit of the Authority order
from 11.9.2006 when it was issued and refund of the amounts collected
contrary to the same. EA was allowed vide impugned order dated 28.11.2007
and BSNL was directed to refund the amounts collected in excess of the
Authority decision dated 11.9.206. Tribunal held that by virtue of its
order, the Authority decision would be operative prospectively from the
date on which it was issued and especially in light of the absence of stay,
BSNL was not entitled to collect any sum contrary to the Authority decision
and cannot now take advantage of its wrong.
Civil Appeal Nos. 271-281 of 2011
12.1 These appeals have been filed for setting aside final judgment
and order dated 29.9.2010 passed by TDSAT whereby it disposed off Appeal
Nos. 4/2006; 6/2006; 5/2007; 5/2008; 2-8/2009 and remanded the matter to
the Authority with a direction to consider the matter relating to IUC
Regulations afresh.
12.2 The Authority issued Telecommunication Interconnection (Charges
and Revenue Sharing) Regulation (No. 5 of 2001) – basic framework for
regulating access charges on 14.12.2001. Separate Regulation for regulating
port charges was issued by the Authority in Dec 2001. On 24.1.2003, the
Authority issued Telecom Interconnection Usage Charges Regulation, 2003
according to which termination charges were fixed at Rs 0.30 per minute
(metro) and Rs 0.40 (circle). The concept of Access Deficit Charge (ADC)
was also introduced at 30% of the total sectoral revenue – fee paid by
private operators to cross subsidise BSNL for deploying its fixed network
in non-lucrative areas.
12.3 On receipt of representation dated 4.2.2003 by COAI about the
anomalies in the 2003 IUC Regulations, the Authority undertook a review on
29.10.2003 and reduced the termination charges to a uniform rate, i.e., Rs.
0.30 per minute for all types of calls and the ADC was made 10%. The
representation made by COAI for further reduction in the amount of
termination charges was, however, rejected by the Authority.
12.4 Between 2005 and 2008, 5 amendments were made and in the matter
of payment of ADC on 9.3.2009, the Authority notified IUC (Amendment
Regulations, 2009) fixing termination charge at Rs 0.20 per minute for
local and national long distance calls and mobile telephone services.
These regulations were challenged by BSNL and various private operators by
filing separate appeals, the details of which are given below:

 

|Appeal No. |Appellant |Details of Appeal |
|Appeal No. |BSNL |Challenged the IUC Regulations, 2006 alleging|
|6/2006 | |denial of payment of ADC by TRAI and |
| | |prescription of uniform termination charges |
| | |when cost of calls terminating in wireless |
| | |network is almost 1/3rd of calls on the |
| | |wireline network. |
|Appeal No. |BSNL |Challenged the 8th Amendment dt. 21.3.2007 to|
|5/2007 | |the extent of reduction of ADC payable to |
| | |BSNL and fixation of uniform termination |
| | |charges (Mobile Termination Charge and Fixed |
| | |Termination Charge). |
|Appeal No. |BSNL |Challenged the 9th Amendment dt. 27.3.2008 to|
|5/2008 | |the extent of reduction of ADC payable to |
| | |BSNL and fixation of uniform termination |
| | |charges. |
|Appeal No. |COAI |Challenging the Regulations, 2006 to the |
|4/2006 | |extent that Mobile Termination Charge at Rs. |
| | |0.30 per minute has been maintained which is |
| | |not cost based as stated by TRAI. |
|Appeal No. |BSNL |Seeking setting aside of the Regulation dt. |
|2/2009 | |9.3.2009 to the extent of fixation of |
| | |termination charges and carriage charge. |
|Appeal No. |AUSPI |Seeking setting aside of Regulation dt. |
|3/2009 | |9.3.2009. Review of termination charge, |
| | |transit charge and port charge. |
|Appeal No. |Vodafone |Seeking setting aside of Regulation dt. |
|4/2009 | |9.3.2009. Reduce termination charge to 35 |
| | |paise or remand for fresh consideration by |
| | |TRAI. Determine MTC using Forward looking |
| | |long range increment cost (FL-LRIC). Take in |
| | |to account CAPEX, OPEX, common cost and cost |
| | |of capital mark up listed under the heading |
| | |“International Practice in Cost Modelling” |
| | |which is very well established. Not to offset|
| | |this cost by applying amount attributable to |
| | |revenue earned from provision of telecom |
| | |services including VAS in determining MTC. |
|Appeal No. |M/s Bharati|Similar to Vodafone. |
|5/2009 |Airtel |Additionally, increase termination charges on|
| | |international roaming. Determination of |
| | |transit charge/carriage charge from level II |
| | |TAX to SDCC and Intra SDCA and TAX transit |
| | |charge on basis of cost principles. |
|Appeal No. |M/s Idea |Similar to M/s Bharati Airtel |
|6/2009 |Cellular | |
| |Ltd. & Ors.| |
|Appeal No. |M/s Aircel |Similar to Vodafone. |
|7/2009 |Ltd. & Ors.| |
|Appeal No. |Etisalat |Seeking setting aside of Regulation dt. |
|8/2009 |D.B. |9.3.2009. Direction to TRAI to: re-introduce |
| |Telecom (P)|termination charges based on whether operator|
| |Ltd. |is a new entrant and had fulfilled roll out |
| | |obligation; determine MTC at not more then 09|
| | |paise per minute and FTC at not more than 10 |
| | |paise per minute; fix TAX transit charge at |
| | |not more than 02 paise; reduce long distance |
| | |carriage charge to not more than 11 paise per|
| | |minute; fix ‘nil’ charge for receipt of |
| | |interconnect SMS traffic on the receiving |
| | |telecom network. |

 

12.5 By an order dated 12.5.2009, TDSAT dismissed Appeal Nos.
6/2006, 5/2007 and 5/2008. However, by the impugned order some of the
appeals were disposed of and the matter was remanded to the Authority with
a direction to consider the matter afresh and complete the consultation
process in a time bound manner so that the new IUC charges could be made
effective/implemented by 1.1.2011.
Transferred Case No.39 of 2010
13.1 The transferred case is Letters Patent Appeal No.337/2007
titled TRAI v. Telecom Dispute Settlement Appellate Tribunal and another,
which was filed before the Division Bench of the Delhi High Court against
order dated 23.12.2005 passed by the learned Single Judge in Writ Petition
No.2838/2005.
13.2 The Authority enacted the Telecommunication Interconnection
Usage Charges Regulation 2003 (4 of 2003) on 29.10.2003 under Section 36
read with Section 11(1)(b)(ii), (iii) and (iv). These regulations were
amended vide notifications dated 25.11.2003, 12.12.2003 and 31.12.2003 and
6.1.2005. By the last amendment, provision was made for modification of
the method and manner of charging Access Deficit Charges
13.3 MTNL filed Appeal No. 3/2006 for quashing the amendment made in
2005 on the premise that its entitlement to Access Deficit Charges had been
arbitrarily reduced. On notice by TDSAT, the Authority raised a
preliminary objection to the former’s jurisdiction. TDSAT relied upon
various provisions of the Act, the judgments of this Court in Clariant
International Limited v. Security Exchange Board (2004) 8 SCC 524, Cellular
Operators Association of India v. Union of India (2003) 3 SCC 186 and West
Bengal Electivity Regulatory Commission v. CESC Ltd (2002) 8 SCC 715 and
held that the Authority is empowered to frame regulations circumscribed by
the statutory provisions and that it has no authority to frame regulations
in respect of matters not specifically provided for and in such matters
only TDSAT had the jurisdiction to issue directions.
14. Before proceeding further, we may notice the background in which the
Act was enacted. In India, the first telegraph link was established in 1939
between Calcutta and Diamond Harbour. In 1851, the telegraph line was
opened for traffic but it was largely confined to the work of East India
Company. The Indian Telegraph Act was enacted in 1885. It gave exclusive
privilege of establishing, maintaining and working of telegraphs to the
Central Government, which was also empowered to grant licence to private
persons to establish telegraph network in any part of India.
15. After Independence, the Government of India took complete control of
the telecom sector and brought it under the Post and Telegraph Department.
One major step taken for improving telecommunication services in the
country was the establishment of a modern telecommunication manufacturing
facility at Bangalore under the public sector, in the name of “Indian
Telephone Industries Ltd”. 1984 represents an important milestone in the
development of telecommunication sector. In that year, the Centre for
Development of Telematics (“C-DoT”) was set up for developing indigenous
technologies and licences were given to the private sector to manufacture
subscriber-equipment. In 1986, Mahanagar Telephone Nigam Ltd. and Videsh
Sanchar Nigam Ltd. (“VSNL”) were set up. In July 1992 a decision was taken
to allow private investment for the services like electronic mail,
voicemail, data services, audio text services, video text services, video
conferencing, radio paging and cellular mobile telephone.
16. In February 1993, the Finance Minister in his Budget speech announced
Government’s intention to encourage private sector involvement and
participation in Telecom to supplement efforts of Department of
Telecommunications especially in creation of internationally competitive
industry. On 13.5.1994, National Telecom policy was announced which was
placed in Parliament saying that the aim of the policy was to supplement
the effort of the Department of Telecommunications in providing
telecommunications services. The main objectives of that policy were:

 

“(i) affording telecommunication for all and ensuring the availability
of telephone on demand;

 
(ii) providing certain basic telecom services at affordable and
reasonable prices to all people and covering all villages;

 
(iii) giving world standard telecom services; addressing consumer
complaints, dispute resolution and public interface to receive special
attention and providing the widest permissible range of services to
meet the customers’ demand and at the same time at a reasonable price;

 
(iv) creating a major manufacturing base and major export of telecom
equipment having regard to the country’s size and development; and

 
(v) protecting the defence and security interests of the country.”

 
17. With the entry of private operators into telecom sector, proper
regulation of the sector was considered appropriate. An important step in
the institutional reform of Indian telecom sector was setting up of an
independent regulatory authority, i.e., Telecom Regulatory Authority.
Initially, it was proposed to set up the Authority as a non-statutory body
and for that purpose, the Indian Telegraph (Amendment) Bill, 1995 was
introduced and was passed by Lok Sabha. However, when the matter was taken
up in Rajya Sabha, the members expressed the view that the Authority should
be set up as a statutory body. Keeping that in view as also the 22nd Report
of the Standing Committee on Communications, the Telecom Authority of India
Ordinance, 1996 was promulgated. In Delhi Science Forum v. Union of India
(1996) 2 SCC 405, this Court took cognizance of some of the provisions
contained in the Ordinance and observed:

 

“The existence of a Telecom Regulatory Authority with the appropriate
powers is essential for introduction of plurality in the Telecom
sector. The National Telecom Policy is a historic departure from the
practice followed during the past century. Since the private sector
will have to contribute more to the development of the telecom network
than DoT/MTNL in the next few years, the role of an independent
Telecom Regulatory Authority with appropriate powers need not be
impressed, which can harness the individual appetite for private
gains, for social ends. The Central Government and the Telecom
Regulatory Authority have not to behave like sleeping trustees, but
have to function as active trustees for the public good.”
(emphasis supplied)

 

18. The 1996 Ordinance was replaced by the Act. The main purpose of
establishing the Authority as a statutory body was to ensure that the
interest of consumers are protected and, at the same time, to create a
climate for growth of telecommunications, broadcasting and cable services
in such a manner which could enable India to play leading role in the
emerging global information society. The goals and objectives of the
Authority are as follows:
i. Increasing tele-density and access to telecommunication services in
the country at affordable prices.
ii. Making available telecommunication services which in terms of
range, price and quality are comparable to the best in the world.
iii. Providing a fair and transparent policy environment which
promotes a level playing field and facilitates fair competition.
iv. Establishing an interconnection regime that allows fair,
transparent, prompt and equitable interconnection.
v. Re-balancing tariffs so that the objectives of affordability
and operator viability are met in a consistent manner.
vi. Protecting the interest of consumers and addressing general
consumer concerns relating to availability, pricing and quality of
service and other matters.
vii. Monitoring the quality of service provided by the various operators.
viii. Providing a mechanism for funding of net cost areas/ public
telephones so that Universal Service Obligations are discharged by
telecom operators for spread of telecom facilities in remote and rural
areas.
ix. Preparing the grounds for smooth transition to an era of
convergence of services and technologies.
x. Promoting the growth of coverage of radio in India through
commercial and noncommercial channels.
xi. Increasing consumer choice in reception of TV channels and
choosing the operator who would provide television and other related
services.
19. The Preamble and Sections 3, 11 to 14, 18, 33, 35, 36 and 37 of the
Act (unamended) read as under:
“Preamble
An Act to provide for the establishment of the Telecom Regulatory
Authority of India to regulate the telecommunication, and services,
and for matters connected therewith or incidental thereto.

 
Section 3 – Establishment and incorporation of Authority-(1) With
effect from such date as the Central Government may, by notification
appoint, there shall be established, for the purposes of this Act, an
Authority to be called the Telecom Regulatory Authority of India.

 
(2) The Authority shall be a body corporate by the name aforesaid,
having perpetual succession and a common seal, with power, subject to
the provisions of this Act, to acquire, hold and dispose of property,
both movable and immovable, and to contact, and shall, by the said
name, sue or be sued.

 
(3) The authority shall consist of a
Chairperson, and not less than two, but not exceeding six members, to
be appointed by the Central Government.

 
(4) The head office of the Authority shall be at New Delhi.

 
Section 11. Functions of Authority
(1) Notwithstanding anything contained in the Indian Telegraph Act,
1885 the functions of the Authority shall be to-

 

a. recommend the need and timing for introduction of new service
provider;

 

b. recommend the terms and conditions of licence to a service
provider;

 

c. ensure technical compatibility and effective inter-connection
between different service providers;

 

d. regulate arrangement amongst service providers of sharing
their revenue derived from providing telecommunication
services;

 

e. ensure compliance of terms and conditions of licence;

 

f. recommend revocation of licence for non-compliance of terms
and conditions of licence;

 

g. laydown and ensure the time period for providing local and
long distance circuits of telecommunication between different
service providers;

 

h. facilitate competition and promote efficiency in the
operation of telecommunication services so as to facilitate
growth in such services;

 

i. protect the interest of the consumers
of telecommunication service;

 

j. monitor the quality of service and conduct the periodical
survey of such provided by the service providers;

 

k. inspect the equipment used in the network and recommend the
type of equipment to be used by the service providers;

 

l. maintain register of interconnect agreements and of all such
other matters as may be provided in the regulations;

 

m. keep register maintained under clause (I) open for inspection
to any member of public on payment of such fee and compliance
of such other requirements as may be provided in the
regulations;

 

n. settle disputes between service providers;

 

o. render advice to the Central Government in the matters
relating to the development of telecommunication technology
and any other matter reliable to telecommunication industry
in general;

 

p. levy fees and other charges at such rates and in respect of
such services as may be determined by regulations;

 

q. ensure effective compliance of universal service obligations;

 

r. perform such other functions including such administrative
and financial functions as may be entrusted to it by the
Central Government or as may be necessary to carry out the
provisions of this Act.

 

(2) Notwithstanding anything contained in the Indian Telegraph Act,
1885, the Authority may, from time to time, by order, notify in the
Official Gazette the rates at which the telecommunication services
within India and outside India shall be provided under this Act
including the rates at which messages shall be transmitted to any
country outside India;

 

Provided that the Authority may notify different rates for different
persons or class of persons for similar telecommunication services and
where different rates are fixed as aforesaid the Authority shall
record the reasons therefor.

 

(3) While discharging its functions under sub-section (1), the
Authority shall not act against the interest of the sovereignty and
integrity of India, the security of the State, friendly relations with
foreign States, public order, decency or morality.

 

(4) The Authority shall ensure transparency while exercising its
powers and discharging its functions.

 
12. Powers of Authority to call for information, conduct
investigations, etc.-(1) Where the Authority considers it expedient so
to do, it may, by order in writing,-

 
(a) call upon any service provider at any time to furnish in writing
such information or explanation relating to its affairs as the
Authority may require; or
(b) appoint one or more persons to make an inquiry in relation to the
affairs of any service provider; and
(c) direct any of its officers or employees to inspect the books of
account or other documents of any service provider.

 
(2) Where any inquiry in relation to the affairs of a service provider
has been undertaken under sub-section (1),-

 
(a) every officer of the Government Department, if such service
provider is a department of the Government;
(b) every director, manager, secretary or other officer, if such
service provider is a company; or
(c) every partner, manager, secretary or other officer, if such
service provider is a firm; or
(d) every other person or body of persons who has had dealings in the
course of business with any of the persons mentioned in clauses (b)
and (c),
shall be bound to produce before the Authority making the inquiry, all
such books of account or other documents in his custody or power
relating to, or having a bearing on the subject-matter of such inquiry
and also to furnish to the Authority with any such statement or
information relating thereto, as the case may be, required of him,
within such time as may be specified.

 
(3) Every service provider shall maintain such books of account or
other documents as may be prescribed.

 
(4) The Authority shall have the power to issue such directions to
service providers as it may consider necessary for proper functioning
by service providers.

 
13. Powers of Authority to issue directions- The Authority may, for
the discharge of its functions under sub-section (1) of section 11,
issue such directions from time to time to the service providers, as
it may consider necessary.

 
14. Authority to settle disputes-(1) If a dispute arises, in respect
of matters referred to in sub-section (2), among service providers or
between service providers and a group of consumers, such disputes
shall be adjudicated by a bench constituted by the Chairperson and
such bench shall consist of two members;

 
Provided that if the members of the bench differ on any point or
points they shall state the point or points on which they differ and
refer the same to a third member for hearing on such point or points
and such point or points shall be decided according to the opinion of
that member.

 
(2) The bench constituted under sub-section (1) shall exercise, on and
from the appointed day all such jurisdiction, powers and authority as
were exerciseable immediately before that date by any
civil court on any matter relating to-

 
(i) technical compatibility and inter-connections between service
providers;
(ii) revenue sharing arrangements between different service providers;
(iii) quality of telecommunication services and interest of consumers;

 
Provided that nothing in sub-section shall apply in respect of matters
relating to-
(a) the monopolistic trade practice, restrictive trade practice and
unfair trade practice which are subject to the jurisdiction of the
Monopolies and Restrictive Trade Practices Commission established
under sub-section (1) of section 5 of the Monopolies and Restrictive
Trade Practices Act, 1969;
(b) the complaint of an individual consumer maintainable before a
Consumer Disputes Redressal Forum or a Consumer Disputes Redressal
Commission or the National Consumer Redressal Commission established
under section 9 of the Consumer Protection Act, 1986;
(c) dispute between telegraph authority and any other person referred
to in sub-section (1) of section 7B of the Indian Telegraph Act, 1885.

 

 

 
18. Appeal to High Court – Any person aggrieved by any decision or
order of the Authority may file an appeal to the High Court within
thirty days from the date of communication of the decision or order of
the Authority to him;

 
Provided that the High Court may, if it is satisfied that the
appellant was prevented by sufficient cause from filing the appeal
within the said period, allow it to be filed within a further period
not exceeding sixty days.

 
33. Delegation. – The Authority may, by general or special order in
writing, delegate to any member, officer of the Authority or any other
person subject to such conditions, if any, as may be specified in the
order, such of its powers and functions under this Act (except the
power to settle dispute under Chapter IV and to make regulation under
section 36) as it may deem necessary.

 
35.Power to make rules.- (1) The Central government may, by
notification, make rules for carrying out the purposes of this Act.

 
(2) In particular and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
following matters, namely;-

 
(a) the salary and allowances payable to and the other conditions of
service of the Chairperson and members under sub-section (5) of
section 5;

 
(b) the powers and functions of the Chairperson under subsection (1)
of section 6;

 
(c) the procedure for conducting an inquiry made under subsection (2)
of section 7;

 
(d) the category of books of accounts or other documents which are
required to be maintained under sub-section (3) of section 12;

 
(e) the period within which an application is to be made under sub-
section (1) of section 15;

 
(f) the manner in which the accounts of the Authority shall be
maintained under sub-section (1) of section 23;

 
(g) the time within which and the form and manner in which returns and
report are to be made to the Central Government under sub-section (1)
and (2) of section 24;

 
(h) any other matter which is to be, or may be, prescribed, or in
respect of which provision is to be made, by rules;

 
36. Power to make regulations.-(1) The Authority may, by notification,
make regulations consistent with this Act and the rules made
thereunder to carry out the purposes of Act.

 
(2) In particular, and without prejudice to the generality of the
foregoing power, such regulations may provide for all or any of the
following matters, namely:-

 
(a) the times and places of meetings of the Authority and the
procedure to be followed at such meetings under subsection (1) of
section 8, including quorum necessary for the transaction of business;

 
(b) the transaction of business at the meetings of the Authority under
sub-section (4) of section 8;

 
(c) the salaries and allowances payable to and the other conditions of
service of officers and other employees of the Authority under sub-
section (2) of section 10;

 
(d) matters in respect of which register is to be maintained by the
Authority under clause (l) of sub-section (l) of section 11;

 
(e) levy of fee and lay down such other requirements on fulfilment of
which a copy of register may be obtained under clause (m) of sub-
section (l) of section 11;

 
(f) levy of fees and other charges under clause (p) of subsection (1)
of Section 11.

 
37. Rules and regulations to laid before Parliament. – Every rule and
every regulation made under this Act shall be laid, as soon as may be
after it is made, before each House of Parliament, while it is in
session, for a total period of thirty days which may be comprised in
one session or in two or more successive sessions, and if, before the
expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any
modification in the rule or regulations or both Houses agree that the
rule or regulation should not be made, the rule or regulation shall
thereafter have effect only in such modified form or be of no effect,
as the case may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything
previously done under that rule or regulation.”

 

 

 

20. With a view to overcome the difficulties experienced in the
implementation of the Act, the Central Government constituted a Group on
Telecom and IT Convergence under the Chairmanship of the Finance Minister.
The recommendations made by the Group led to the issuance of the Telecom
Regulatory Authority of India (Amendment) Ordinance, 2000, which was
replaced by the Telecom Regulatory Authority of India (Amendment) Act,
2000. One of the important features of the Amendment Act was the
establishment of a Tribunal known as the Telecom Disputes Settlement and
Appellate Tribunal for adjudicating disputes between a licensor and a
licencee, between two or more service providers, between a service provider
and a group of consumers, and also to hear and dispose of any appeals from
the direction, decision or order of the Authority.
21. The provisions of the amended Act, which have bearing on the decision
of the question framed in the opening paragraph of this judgment are as
under:

 

“2. Definitions. –(1) xxx xxx xxx

 

(aa) “Appellate Tribunal” means the Telecom Disputes Settlement and
Appellate Tribunal established under section 14;

 

(b) “Authority” means the Telecom Regulatory Authority of India
established under sub- section (1) of section 3;

 

(e) “Licensee” means any person licensed under sub- section (1) of
section 4 of the Indian Telegraph Act, 1885 (13 of 1885) for providing
specified public telecommunication services;

 

(ea) “licensor” means the Central Government or the telegraph
authority who grants a license under section 4 of the Indian Telegraph
Act, 1885;

 

(i) “regulations” means regulations made by the Authority under this
Act;

 

(j) “service provider” means the Government as a service provider and
includes a licensee;

 

(k) “telecommunication service” means service of any description
(including electronic mail, voice mail, data services, audio tax
services, video tax services, radio paging and cellular mobile
telephone services) which is made available to users by means of any
transmission or reception of signs, signals, writing, images and
sounds or intelligence of any nature, by wire, radio, visual or other
electro- magnetic means but shall not include broadcasting services:

 

Provided that the Central Government may notify other service to be
telecommunication service including broadcasting services.

 

11. Functions of Authority.—(1) Notwithstanding anything contained in
the Indian Telegraph Act, 1885 (13 of 1885), the functions of the
Authority shall be to—

 

(a) make recommendations, either suo motu or on a request from the
licensor, on the following matters, namely—

 

(i) need and timing for introduction of new service provider;

 

(ii) terms and conditions of licence to a service provider;

 

(iii) revocation of licence for non-compliance of terms and conditions
of licence;

 

(iv) measures to facilitate competition and promote efficiency in the
operation of telecommunication services so as to facilitate growth in
such services;

 

(v) technological improvements in the services provided by the service
providers;

 

(vi) type of equipment to be used by the service providers after
inspection of equipment used in the network;

 

(vii) measures for the development of telecommunication technology and
any other matter relatable to telecommunication industry in general;

 

(viii) efficient management of available spectrum;

 

(b) discharge the following functions, namely—

 

(i) ensure compliance of terms and conditions of licence;

 

(ii) notwithstanding anything contained in the terms and conditions of
the licence granted before the commencement of the Telecom Regulatory
Authority of India (Amendment) Act, 2000, fix the terms and conditions
of interconnectivity between the service providers;

 

(iii) ensure technical compatibility and effective inter-connection
between different service providers;

 

(iv) regulate arrangement amongst service providers of sharing their
revenue derived from providing telecommunication services;

 

(v) lay down the standards of quality of service to be provided by the
service providers and ensure the quality of service and conduct the
periodical survey of such service provided by the service providers so
as to protect interest of the consumers of telecommunication service;

 

(vi) lay down and ensure the time period for providing local and long
distance circuits of telecommunication between different service
providers;

 

(vii) maintain register of interconnect agreements and of all such
other matters as may be provided in the regulations;

 

(viii) keep register maintained under clause (vii) open for inspection
to any member of public on payment of such fee and compliance of such
other requirement as may be provided in the regulations;

 

(ix) ensure effective compliance of universal service obligations;

 

(c) levy fees and other charges at such rates and in respect of such
services as may be determined by regulations;

 

(d) perform such other functions including such administrative and
financial functions as may be entrusted to it by the Central
Government or as may be necessary to carry out the provisions of this
Act:

 

Provided that the recommendations of the Authority specified in clause
(a) of this sub-section shall not be binding upon the Central
Government:

 

Provided further that the Central Government shall seek the
recommendations of the Authority in respect of matters specified in
sub-clauses (i) and (ii) of clause (a) of this sub-section in respect
of new licence to be issued to a service provider and the Authority
shall forward its recommendations within a period of sixty days from
the date on which that Government sought the recommendations:

 

Provided also that the Authority may request the Central Government to
furnish such information or documents as may be necessary for the
purpose of making recommendations under sub-clauses (i) and (ii) of
clause (a) of this sub-section and that Government shall supply such
information within a period of seven days from receipt of such
request:

 

Provided also that the Central Government may issue a licence to a
service provider if no recommendations are received from the Authority
within the period specified in the second proviso or within such
period as may be mutually agreed upon between the Central Government
and the Authority:

 

Provided also that if the Central Government having considered that
recommendation of the Authority, comes to a prima facie conclusion
that such recommendation cannot be accepted or needs modifications, it
shall refer the recommendation back to the Authority for its
reconsideration, and the Authority may, within fifteen days from the
date of receipt of such reference, forward to the Central Government
its recommendation after considering the reference made by that
Government. After receipt of further recommendation if any, the
Central Government shall take a final decision.

 

(2) Notwithstanding anything contained in the Indian Telegraph Act,
1885 (13 of 1885), the Authority may, from time to time, by order,
notify in the Official Gazette the rates at which the
telecommunication services within India and outside India shall be
provided under this Act including the rates at which messages shall be
transmitted to any country outside India:

 

Provided that the Authority may notify different rates for different
persons or class of persons for similar telecommunication services and
where different rates are fixed as aforesaid the Authority shall
record the reasons therefor.

 

(3) While discharging its functions under sub-section (1), or sub-
section (2) the Authority shall not act against the interest of the
sovereignty and integrity of India, the security of the State,
friendly relations with foreign States, public order, decency or
morality.

 

(4) The Authority shall ensure transparency while exercising its
powers and discharging its functions.

 

12. Powers of Authority to call for information, conduct
investigations, etc. – (1) Where the Authority considers it expedient
so to do, it may, by order in writing,-

 

(a) call upon any service provider at any time to furnish in writing
such information or explanation relating to its affairs as the
authority may require; or

 

(b) appoint one or more persons to make an inquiry in relation to the
affairs of any service provider; and

 

(c) direct any of its officers or employees to inspect the books of
account or other documents of any service provider.

 

(2) Where any inquiry in relation to the affairs of a service provider
has been undertaken under sub-section (1),-

 

(a) every officer of the Government Department, if such service
provider is a department of the Government;

 

(b) every director, manager, secretary or other officer, if such
service provider is a company; or

 

(c) every partner, manager, secretary or other officer, if such
service provider is a firm; or

 

(d) every other person or body of persons who has had dealings in the
course of business with any of the persons mentioned in clauses (b)
and (c),

 

shall be bound to produce before the Authority making the inquiry, all
such books of account or other documents in his custody or power
relating to, or having a bearing on the subject-matter of such inquiry
and also to furnish to the Authority with any such statement or
information relating thereto, as the case may be, required of him,
within such time as may be specified.

 

(3) Every service provider shall maintain such books of account or
other documents as may be prescribed.

 

(4) The Authority shall have the power to issue such directions to
service providers as it may consider necessary for proper functioning
by service providers.

 

13. Power of Authority to issue directions.—The Authority may, for the
discharge of its functions under sub-section (1) of section 11, issue
such directions from time to time to the service providers, as it may
consider necessary:

 

Provided that no direction under sub-section (4) of Section 12 or
under this section shall be issued except on the matters specified in
clause (b) of sub-section (1) of Section 11.”

 

14. Establishment of Appellate Tribunal.—The Central Government shall,
by notification, establish an Appellate Tribunal to be known as the
Telecom Disputes Settlement and Appellate Tribunal to–

 

(a) adjudicate any dispute–

 

(i) between a licensor and a licensee;

 

(ii) between two or more service providers;

 

(iii) between a service provider and a group of consumers;

 

Provided that nothing in this clause shall apply in respect of matters
relating to–

 

(A) the monopolistic trade practice, restrictive trade practice and
unfair trade practice which are subject to the jurisdiction of the
Monopolies and Restrictive Trade Practices Commission established
under sub-section (1) of section 5 of the Monopolies and Restrictive
Trade Practices Act, 1969 (54 of 1969);

 

(B) the complaint of an individual consumer maintainable before a
consumer Disputes Redressal forum or a Consumer Disputes Redressal
Commission or the National Consumer Redressal commission established
under section 9 of the Consumer Protection Act, 1986 (68 of 1986);

 

(C) dispute between telegraph authority and any other person
referred to in sub-section (1) of section 7B of the Indian Telegraph
Act 1885 (13 of 1885);

 

(b) hear and dispose of appeal against any direction, decision or
order of the Authority under this Act.

 

14A. Application for settlement of disputes and appeals to Appellate
Tribunal.-

 

(7) The Appellate Tribunal may, for the purpose of examining the
legality or propriety or correctness of any dispute made in any
application under sub-section (1), or of any direction or order or
decision of the Authority referred to in the appeal preferred under
sub-section (2), on its own motion or otherwise, call for the records
relevant to disposing of such applications or appeal and make such
orders as it thinks fit.

 

14M. Transfer of pending cases.–All applications, pending for
adjudication of disputes before the Authority immediately before the
date of establishment of the Appellate Tribunal under this Act, shall
stand transferred on that date to such Tribunal:

 

Provided that all disputes being adjudicated under the provisions of
Chapter IV as it stood immediately before the commencement of the
Telecom Regulatory Authority (Amendment) Act, 2000, shall continue to
be adjudicated by the Authority in accordance with the provisions,
contained in that Chapter, till the establishment of the Appellate
Tribunal under the said Act:

 

Provided further that all cases referred to in the first provision
shall be transferred by the Authority to the Appellate Tribunal
immediately on its establishment under section 14.

 

14N. Transfer of appeals.–(1) All appeals pending before the High
Court immediately before the commencement of the Telecom Regulatory
Authority (Amendment) Act, 2000, shall stand transferred to the
Appellate Tribunal on its establishment under section 14.

 

(2) Where any appeal stands transferred from the High Court to the
Appellate Tribunal under sub-section (1),-

 

(a) the High Court shall, as soon as may be after such transfer,
forward the records of such appeal to the Appellate Tribunal; and

 

(b) the Appellate Tribunal may, on receipt of such records, proceed
to deal with such appeal, so far as may be from the stage which was
reached before such transfer or from any earlier stage or de novo as
the Appellate Tribunal may deem fit.

 

18. Appeal to Supreme Court—(1) Notwithstanding anything contained in
the Code of Civil Procedure, 1908 (5 of 1908) or in any other law, an
appeal shall lie against any order, not being an interlocutory order,
of the Appellate Tribunal to the Supreme Court on one or more of the
grounds specified in section 100 of that Code.

 

(2) No appeal shall lie against any decision or order made by the
Appellate Tribunal with the consent of the parties.

 

(3) Every appeal under this section shall be preferred within a period
of ninety days from the date of the decision or order appealed
against:

 

Provided that the Supreme Court may entertain the appeal after the
expiry of the said period of ninety days, if it is satisfied that the
appellant was prevented by sufficient cause from preferring the appeal
in time.

 

33. Delegation. – The Authority may, by general or special order in
writing, delegate to any member, officer of the Authority or any other
person subject to such conditions, if any, as may be specified in the
order, such of its powers and functions under this Act (except the
power to settle dispute under Chapter IV and to make regulation under
section 36) as it may deem necessary.

 

35. Power to make rules.-(1) The Central Government may, by
notification, make rules for carrying out the purposes of this Act.

 

(2) In particular, and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
following matters namely:-

 

(a) the salary and allowances payable to and the other conditions of
service of the Chairperson and members under sub-section (5) of
section 5;

 

(aa) the allowance payable to the part-time members under sub-section
(6A) of section 5;

 

(b) the powers and functions of the Chairperson under sub- section (1)
of section 6;

 

(c) the procedure for conducting an inquiry made under sub- section
(2) of section 7;

 

(ca) the salary and allowances and other conditions of service of
officers and other employees of the Authority under sub-section (2) of
section 10;

 

(d) the category of books of account or other documents which are
required to be maintained under sub-section (3) of section 12;

 

(da) the form, the manner of its verification and the fee under sub-
section (3) of section 14A;

 

(db) the salary and allowances payable to and other terms and
conditions of service of the Chairperson and other Members of the
Appellate Tribunal under section 14E;

 

(dc) the salary and allowances and other conditions of service of the
officers and employees of the Appellate Tribunal under sub-section (3)
of section 14H;

 

(dd) any other power of a civil court required to be prescribed under
clause (i) of sub-section (2) of section 16;

 

(e) the period within which an application is to be made under sub-
section (1) of section 15;

 

(f) the manner in which the accounts of the Authority shall be
maintained under sub-section (1) of section 23;

 

(g) the time within which and the form and manner in which returns and
report are to be made to the Central Government under sub-sections (1)
and (2) of section 24;

 

(h) any other matter which is to be, or may be, prescribed, or in
respect of which provision is to be made, by rules.

 

36. Power to make regulations.-(1) The Authority may, by notification,
make regulations consistent with this Act and the rules made
thereunder to carry out the purpose of this Act.

 

(2) In particular, and without prejudice to the generality of the
foregoing power, such regulations may provide for all or any of the
following matters, namely:-

 

(a) the times and places of meetings of the Authority and the
procedure to be followed at such meetings under sub-section (1) of
section 8, including quorum necessary for the transaction of business;

 

 

 

(b) the transaction of business at the meetings of the Authority under
sub-section (4) of section 8;

 

(c) omitted by Act 2 of 2000

 

(d) matters in respect of which register is to be maintained by the
Authority under clause (l) of sub-section (1) of section 11;

 

(e) levy of fee and lay down such other requirements on fulfilment of
which a copy of register may be obtained under sub clause (b) of sub-
section (1) of section 11;

 

(f) levy of fees and other charges under clause (c) of sub-section (1)
of section 11.

 

37. Rules and regulations to laid before Parliament. – Every rule and
every regulation made under this Act shall be laid, as soon as may be
after it is made, before each House of Parliament, while it is in
session, for a total period of thirty days which may be comprised in
one session or in two or more successive sessions, and if, before the
expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any
modification in the rule or regulations or both Houses agree that the
rule or regulation should not be made, the rule or regulation shall
thereafter have effect only in such modified form or be of no effect,
as the case may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything
previously done under that rule or regulation.”

 

 

 

22. A comparative statement of the relevant provisions of the unamended
and amended Acts is given below:

 

|UNAMENDED ACT |AMENDED ACT |
|PREAMBLE |PREAMBLE |
|An Act to provide for the |An Act to provide for the |
|establishment of the Telecom |establishment of the Telecom |
|Regulatory Authority of India to |Regulatory Authority of India and |
|regulate the telecommunication |the Telecom Disputes Settlement and |
|services, and for matters connected|Appellate Tribunal to regulate the |
|therewith or incidental thereto. |telecommunication services, |
| |adjudicate disputes, dispose of |
| |appeals and to protect the interests|
| |of service providers and consumers |
| |of the telecom sector, to promote |
| |and ensure orderly growth of the |
| |telecom sector and for matters |
| |connected therewith or incidental |
| |thereto. |
|Section 3. |Section 3 |
|Establishment and incorporation of |Establishment and incorporation of |
|Authority.-(1) With effect from |Authority.-(1) With effect from such|
|such date as the Central Government|date as the Central Government may, |
|may, by notification appoint, there|by notification appoint, there shall|
|shall be established, for the |be established, for the purposes of |
|purposes of this Act, an Authority |this Act, an Authority to be called |
|to be called the Telecom Regulatory|the Telecom Regulatory Authority of |
|Authority of India. |India. |
|(2) The Authority shall be a body |(2) The Authority shall be a body |
|corporate by the name aforesaid, |corporate by the name aforesaid, |
|having perpetual succession and a |having perpetual succession and a |
|common seal, with power, subject to|common seal, with power, subject to |
|the provisions of this Act, to |the provisions of this Act, to |
|acquire, hold and dispose of |acquire, hold and dispose of |
|property, both movable and |property, both movable and |
|immovable, and to contract, and |immovable, and to contract, and |
|shall, by the said name, sue or be |shall, by the said name, sue or be |
|sued. |sued. |
|(3) The Authority shall consist of |(3) The Authority shall consist of a|
|a Chairperson, and not less than |Chairperson, and not more than two |
|two, but not exceeding six members,|whole-time members and not more than|
|to be appointed by the Central |two part-time members, to be |
|Government. |appointed by the Central Government.|
|(4) The head office of the |(4) The head office of the Authority|
|Authority shall be at New Delhi. |shall be at New Delhi. |
|Section 11. |Section 11. |
|Functions of Authority.-(1) |Functions of Authority.-(1) |
|Notwithstanding anything contained |Notwithstanding anything contained |
|in the Indian Telegraph Act, 1885 |in the Indian Telegraph Act, 1885 |
|the functions of the Authority |(13 of 1885), the functions of the |
|shall be to- |Authority shall be to- |
|recommend the need and timing for |make recommendations, either suo |
|introduction of new service |motu or on a request from the |
|provider; |licensor, on the following matters, |
|recommend the terms and conditions |namely:- |
|of licence to a service provider; |need and timing for introduction of |
|ensure technical compatibility and |new service provider; |
|effective inter-connection between |terms and conditions of licence to a|
|different service providers; |service provider; |
|regulate arrangement amongst |revocation of licence for |
|service providers of sharing their |non-compliance of terms and |
|revenue derived from providing |conditions of licence; |
|telecommunication services; |measures to facilitate competition |
|ensure compliance of terms and |and promote efficiency in the |
|conditions of licence; |operation of telecommunication |
|recommend revocation of licence for|services so as to facilitate growth |
|non-compliance of terms and |in such services; |
|conditions of licence; |technological improvements in the |
|lay down and ensure the time period|services provided by the service |
|for providing local and long |providers; |
|distance circuits of |type of equipment to be used by the |
|telecommunication between different|service providers after inspection |
|service providers; |of equipment used in the network; |
|facilitate competition and promote |measures for the development of |
|efficiency in the operation of |telecommunication technology and any|
|telecommunication services so as to|other matter relatable to |
|facilitate growth in such services;|telecommunication industry in |
|protect the interest of the |general; |
|consumers of telecommunication |efficient management of available |
|service; |spectrum; |
|monitor the quality of service and |discharge the following functions, |
|conduct the periodical survey of |namely:- |
|such provided by the service |ensure compliance of terms and |
|providers; |conditions of licence; |
|inspect the equipment used in the |notwithstanding anything contained |
|network and recommend the type of |in the terms and conditions of the |
|equipment to be used by the service|licence granted before the |
|providers; |commencement of the Telecom |
|maintain register of interconnect |Regulatory Authority of India |
|agreements and of all such other |(Amendment) Act, 2000, fix the terms|
|matters as may be provided in the |and conditions of inter-connectivity|
|regulations; |between the service providers; |
|keep register maintained under |ensure technical compatibility and |
|clause (l) open for inspection to |effective inter-connection between |
|any member of public on payment of |different service providers; |
|such fee and compliance of such |regulate arrangement amongst service|
|other requirements as may be |providers of sharing their revenue |
|provided in the regulations; |derived from providing |
|settle disputes between service |telecommunication services; |
|providers; |lay-down the standards of quality of|
|render advice to the Central|service to be provided by the |
|Government in the matters relating |service providers and ensure the |
|to the development of |quality of service and conduct the |
|telecommunication technology and |periodical survey of such service |
|any other matter relatable to |provided by the service providers so|
|telecommunication industry in |as to protect interest of the |
|general; |consumers of telecommunication |
|levy fees and other charges at such|service; |
|rates and in respect of such |lay-down and ensure the time period |
|services as may be determined by |for providing local and long |
|regulations; |distance circuits of |
|ensure effective compliance of |telecommunication between different |
|universal service obligations; |service providers; |
|perform such other functions |maintain register of interconnect |
|including such administrative and |agreements and of all such other |
|financial functions as may be |matters as may be provided in the |
|entrusted to it by the Central |regulations; |
|Government or as may be necessary |keep register maintained under |
|to carry out the provisions of this|clause (vii) open for inspection to |
|Act. |any member of public on payment of |
|(2) Notwithstanding anything |such fee and compliance of such |
|contained in the Indian Telegraph |other requirement as may be provided|
|Act, 1885, the Authority may, from |in the regulations; |
|time to time, by order, notify in |ensure effective compliance of |
|the Official Gazette the rates at |universal service obligations; |
|which the telecommunication |levy fees and other charges at such |
|services within India and outside |rates and in respect of such |
|India shall be provided under this |services as may be determined by |
|Act including the rates at which |regulations; |
|messages shall be transmitted to |perform such other functions |
|any country outside India; |including such administrative and |
|Provided that the Authority may |financial functions as may be |
|notify different rates for |entrusted to it by the Central |
|different persons or class of |Government or as may be necessary to|
|persons for similar |carry out the provisions of this |
|telecommunication services and |Act: |
|where different rates are fixed as |Provided that the recommendations of|
|aforesaid the Authority shall |the Authority specified in clause |
|record the reasons therefor. |(a) of this sub-section shall not be|
|(3) While discharging its functions|binding upon the Central Government:|
|under sub-section (1), the |Provided further that the Central |
|Authority shall not act against the|Government shall seek the |
|interest of the sovereignty and |recommendations of the Authority in |
|integrity of India, the security of|respect of matters specified in |
|the State, friendly relations with |sub-clauses (i) and (ii) of clause |
|foreign States, public order, |(a) of this sub-section in respect |
|decency or morality. |of new licence to be issued to a |
|(4) The Authority shall ensure |service provider and the Authority |
|transparency while exercising its |shall forward its recommendations |
|powers and discharging its |within a period of sixty days from |
|functions. |the date on which that Government |
| |sought the recommendations: |
| |Provided also that the Authority may|
| |request the Central Government to |
| |furnish such information or |
| |documents as may be necessary for |
| |the purpose of making |
| |recommendations under sub-clauses |
| |(i) and (ii) of clause (a) of this |
| |sub-section and that Government |
| |shall supply such information within|
| |a period of seven days from receipt |
| |of such request: |
| |Provided also that the Central |
| |Government may issue a licence to a |
| |service provider if no |
| |recommendations are received from |
| |the Authority within the period |
| |specified in the second proviso or |
| |within such period as may be |
| |mutually agreed upon between the |
| |Central Government and the |
| |Authority: |
| |Provided also that if the Central |
| |Government having considered that |
| |recommendation of the Authority, |
| |comes to a prima facie conclusion |
| |that such recommendation cannot be |
| |accepted or needs modifications, it |
| |shall, refer the recommendation back|
| |to the Authority for its |
| |reconsideration, and the Authority |
| |may within fifteen days from the |
| |date of receipt of such reference, |
| |forward to the Central Government |
| |its recommendation after considering|
| |the reference made by that |
| |Government. After receipt of further|
| |recommendation if any, the Central |
| |Government shall take a final |
| |decision. |
| |(2) Notwithstanding anything |
| |contained in the Indian Telegraph |
| |Act, 1885 (13 of 1885), the |
| |Authority may, from time to time, by|
| |order, notify in the Official |
| |Gazette the rates at which the |
| |telecommunication services within |
| |India and outside India shall be |
| |provided under this Act including |
| |the rates at which messages shall be|
| |transmitted to any country outside |
| |India: |
| |Provided that the Authority may |
| |notify different rates for different|
| |persons or class of persons for |
| |similar telecommunication services |
| |and where different rates are fixed |
| |as aforesaid the Authority shall |
| |record the reasons therefor. |
| |(3) While discharging its functions |
| |under sub-section (1) or sub-section|
| |(2) the Authority shall not act |
| |against the interest of the |
| |sovereignty and integrity of India, |
| |the security of the State, friendly |
| |relations with foreign States, |
| |public order, decency or |
| |morality. |
| |(4) The Authority shall ensure |
| |transparency while exercising its |
| |powers and discharging its |
| |functions. |
|Section 13 | |
|Powers of Authority to issue |Section 13 |
|directions.- The Authority may, for|Power of Authority to issue |
|the discharge of its functions |directions.- The Authority may, for |
|under sub-section (1) of section |the discharge of its functions under|
|11, issue such directions from time|sub-section (1) of section 11, issue|
|to time to the service providers, |such directions from time to time to|
|as it may consider necessary. |the service providers, as it may |
| |consider necessary: |
| |Provided that no direction under |
| |subsection (4) of section 12 or |
| |under this section shall be issued |
| |except on the matters specified in |
| |clause (b) of sub-section. (1) of |
| |section 11. |
|CHAPTER IV |CHAPTER IV |
|SETTLEMENT OF DISPUTES |APPELLATE TRIBUNAL |
|Section 14. |Section 14. |
|Authority to settle disputes.- (1) |Establishment of Appellate |
|If a dispute arises, in respect of |Tribunal.– The Central Government |
|matters referred to in sub-section |shall, by notification, establish an|
|(2), among service providers or |Appellate Tribunal to be known as |
|between service providers and a |the Telecom Disputes Settlement and |
|group of consumers, such disputes |Appellate Tribunal to— |
|shall be adjudicated by a bench |(a) adjudicate any dispute— |
|constituted by the Chairperson and |(i) between a licensor and a |
|such bench shall consist of two |licensee; |
|members: |(ii) between two or more service |
|Provided that if the members of the|providers; |
|bench differ on any point or points|(iii) between a service provider and|
|they shall state the point or |a group of consumers: |
|points on which they differ and |Provided that nothing in this clause|
|refer the same to a third member |shall apply in respect of matters |
|for hearing on such point or points|relating to— |
|and such point or points shall be |(A) the monopolistic trade practice,|
|decided according to the opinion of|restrictive trade practice and |
|that member. |unfair trade practice which are |
|(2) The bench constituted under |subject to the jurisdiction of the |
|sub-section (1) shall exercise, on |Monopolies and Restrictive Trade |
|and from the appointed day all such|Practices Commission established |
|jurisdiction , powers and authority|under subsection (1) of section 5 of|
|as were exercisable immediately |the Monopolies and Restrictive Trade|
|before that date by any civil court|Practices Act, 1969 (54 of 1969); |
|on any matter relating to- |(B) the complaint of an individual |
|(i) technical compatibility and |consumer maintainable before a |
|interconnections between service |Consumer Disputes Redressal Forum or|
|providers; |a Consumer Disputes Redressal |
|(ii) revenue sharing arrangements |Commission or the National Consumer |
|between different service |Disputes? Redressal Commission |
|providers; |established under section 9 of the |
|(iii) quality of telecommunication |Consumer Protection Act, 1986 (68 of|
|services and interest of consumers:|1986); |
|Provided that nothing in this |(C) dispute between telegraph |
|sub-section shall apply in respect |authority and any other person |
|of matters relating to- |referred to in sub-section (1) of |
|(a) the monopolistic trade |section 7B of the Indian Telegraph |
|practice, restrictive trade |Act, 1885 (13 of 1885); |
|practice and unfair trade practice |(b) hear and dispose of appeal |
|which are subject to the |against any direction, decision or |
|jurisdiction of the Monopolies and |order of the Authority under this |
|Restrictive Trade Practices |Act. |
|Commission established under |Section 14A – Application for |
|subsection (1) of Section 5 of the |settlement of disputes and appeals |
|Monopolies and Restrictive Trade |to Appellate Tribunal |
|Practices Act, 1969 (54 of 1969); |(1) The Central Government or a |
|(b) the complaint of an individual |State Government or a local |
|consumer maintainable before a |authority or any person may make an |
|Consumer Disputes Redressal Forum |application to the Appellate |
|or a Consumer Disputes Redressal |Tribunal for adjudication of any |
|Commission or the National Consumer|dispute referred to in clause (a) of|
|Disputes? Redressal Commission |section 14. |
|established under section 9 of the |(2) The Central Government or a |
|Consumer Protection Act, 1986 (68 |State Government or a local |
|of 1986); |authority or any person aggrieved by|
|(c) dispute between telegraph |any direction, decision or order |
|authority and any other person |made by the Authority may prefer an |
|referred to in sub-section (1) of |appeal to the Appellate Tribunal. |
|section 7-B of the Indian Telegraph|(3) Every appeal under sub-section |
|Act, 1885 (13 of 1885). |(2) shall be preferred within a |
| |period of thirty days from the date |
| |on which a copy of the direction or |
| |order or decision made by the |
| |Authority is received by the Central|
| |Government or the State Government |
| |or the local authority or the |
| |aggrieved person and it shall be in |
| |such form, verified in such manner |
| |and be accompanied by such fee as |
| |may be prescribed: |
| |Provided that the Appellate Tribunal|
| |may entertain any appeal after the |
| |expiry of the said period of thirty |
| |days if it is satisfied that there |
| |was sufficient cause for not filing |
| |it within that period. |
| |(4) On receipt of an application |
| |under sub-section (1) or an appeal |
| |under sub-section (2), the Appellate|
| |Tribunal may, after giving the |
| |parties to the dispute or the appeal|
| |an opportunity of being heard, pass |
| |such orders thereon as it thinks |
| |fit. |
| |(5) The Appellate Tribunal shall |
| |send a copy of every order made by |
| |it to the parties to the dispute or |
| |the appeal and to the Authority, as |
| |the case may be. |
| |(6) The application made under |
| |subsection (1) or the appeal |
| |preferred under sub-section (2) |
| |shall be dealt with by it as |
| |expeditiously as possible and |
| |endeavour shall be made by it to |
| |dispose of the application or appeal|
| |finally within ninety days from the |
| |date of receipt of application or |
| |appeal, as the case may be: |
| |Provided that where any such |
| |application or appeal could not be |
| |disposed of within the said period |
| |of ninety days, the Appellate |
| |Tribunal shall record its reasons in|
| |writing for not disposing of the |
| |application or appeal within that |
| |period. |
| |(7) The Appellate Tribunal may, for |
| |the purpose of examining the |
| |legality or propriety or |
| |correctness, of any dispute made in |
| |any application under sub-section |
| |(1), or of any direction or order or|
| |decision of the Authority referred |
| |to in the appeal preferred under |
| |sub-section (2), on its own motion |
| |or otherwise, call for the records |
| |relevant to deposing of such |
| |application or appeal and make such |
| |orders as it thinks fit. |
| |Section 14M – Transfer of pending |
| |cases |
| |All applications, pending for |
| |adjudication of disputes before the |
| |Authority immediately before the |
| |date of establishment of the |
| |Appellate Tribunal under this Act, |
| |shall stand transferred on that date|
| |to such Tribunal: |
| |Provided that all disputes being |
| |adjudicated under the provisions of |
| |Chapter IV as it stood immediately |
| |before the commencement of the |
| |Telecom Regulatory Authority of |
| |India (Amendment) Act, 2000, shall |
| |continue to be adjudicated by the |
| |Authority in accordance with the |
| |provisions, contained in that |
| |Chapter, till the establishment of |
| |the Appellate Tribunal under the |
| |said Act: |
| |Provided further that all cases |
| |referred to in the first proviso |
| |shall be transferred by the |
| |Authority to the Appellate Tribunal |
| |immediately on its establishment |
| |under section 14. |
| | |
| |Section 14N – Transfer of appeals |
| |(1) All appeals pending before the |
| |High Court immediately before the |
| |commencement of the Telecom |
| |Regulatory Authority of India |
| |(Amendment) Act, 2000, shall stand |
| |transferred to the Appellate |
| |Tribunal on its establishment under |
| |section |
| |14. |
| |(2) Where any appeal stands |
| |transferred from the High Court to |
| |the |
| |Appellate Tribunal under sub-section|
| |(1),— |
| |(a) the High Court shall, as soon as|
| |may be after such transfer, forward |
| |the |
| |records of such appeal to the |
| |Appellate |
| |Tribunal; and |
| |(b) the Appellate Tribunal may, on |
| |receipt of such records, proceed to |
| |deal with such appeal, so far as may|
| |be from the stage which was reached |
| |before such transfer or from any |
| |earlier stage or de novo as the |
| |Appellate Tribunal may deem fit. |
|Section 16 | |
|Procedures and powers of |Section 16 |
|Authority.- (1) The Authority shall|Procedure and powers of Appellate |
|be guided by the principles of |Tribunal.- (1) The Appellate |
|natural justice. |Tribunal shall not be bound by the |
|(2) The Authority shall have, for |procedure laid down by the Code of |
|the purpose of discharging their |Civil Procedure, 1908 (5 of 1908), |
|functions under this Chapter, the |but shall be guided by the |
|same powers as are vested in a |principles of natural justice and, |
|civil court under the Code of Civil|subject to the other provisions of |
|Procedure, 1908 (5 of 1908) in |this Act, the Appellate Tribunal |
|respect of the following matters, |shall have powers to regulate its |
|namely |own procedure. |
|summoning and enforcing the |(2) The Appellate Tribunal shall |
|attendance of any person and |have, for the purposes of |
|examining him on oath; |discharging its functions under this|
|requiring the discovery and |Act, the same powers as are vested |
|production of documents; |in a civil court under the Code of |
|receiving evidence on affidavits; |Civil Procedure, 1908 (5 of 1908), |
|issuing commissions for the |while trying a suit, in respect of |
|examination of witnesses or |the following matters, namely:— |
|documents; |summoning and enforcing the |
|reviewing its decisions; |attendance of any person and |
|dismissing an application for |examining him on oath; |
|default or deciding it ex parte; |requiring the discovery and |
|setting aside any order of |production of documents; |
|dismissal of any application for |receiving evidence on affidavits; |
|default or any order passed by it |subject to the provisions of |
|ex parte; |sections 123 and 124 of the Indian |
|any other matter which may be |Evidence Act,1872 (1 of 1872), |
|prescribed. |requisitioning any public record or |
|(3) Every proceeding before the |document or a copy of such record or|
|Authority shall be deemed to be a |document, from any office; |
|judicial proceeding within the |issuing commissions for the |
|meaning of Sections 193 and 228, |examination of witnesses or |
|and for the purpose of Section 196 |documents; |
|of the Indian Penal Code, 1860 (45 |reviewing its decisions; |
|of 1860) and the Authority shall be|dismissing an application for |
|deemed to be a civil court for all |default or deciding it, ex parte; |
|the purposes of Section 195 and |setting aside any order of dismissal|
|Chapter XXVI of the Code of |of any application for default or |
|Criminal Procedure 1973 (2 of |any order passed by it, ex parte; |
|1974). |and |
| |any other matter which may be |
| |prescribed. |
| |(3) Every proceeding before the |
| |Appellate Tribunal shall be deemed |
| |to be a judicial proceeding within |
| |the meaning of sections 193 and 228,|
| |and for the purposes of section 196 |
| |of the Indian Penal Code (45 of |
| |1860) and the Appellate Tribunal |
| |shall be deemed to be a civil court |
| |for the purposes of section 195 and |
| |Chapter XXVI of the Code of Criminal|
| |Procedure, 1973 (2 of 1974). |
|Section 19 |Section 19. |
|Orders passed by Authority or High |Orders passed by Appellate Tribunal |
|Court to be executable as a |to be executable as a decree.-(1) An|
|decree.- Every order made by the |order passed by the Appellate |
|Authority under this Act or the |Tribunal under this Act shall be |
|order made by the High Court in any|executable by the Appellate Tribunal|
|appeal against any order of the |as a decree of civil court, and for |
|Authority shall, on a certificate |this purpose, the Appellate Tribunal|
|issued by any officer of the |shall have all the powers of a civil|
|Authority or the Registrar of the |court. |
|High Court, as the case may be, be |(2) Notwithstanding anything |
|deemed to be decree of the civil |contained in sub-section (1), the |
|court and shall be executable in |Appellate Tribunal may transmit any |
|the same manner as a decree of that|order made by it to a civil court |
|court. |having local jurisdiction and such |
| |civil court |
| |shall execute the order as if it |
| |were a decree made by that court. |
|Section 20 |Section 20 |
|Penalty for wilful failure to |Penalty for wilful failure to comply|
|comply with orders of Authority or |with orders of Appellate |
|High Court.- If any person wilfully|Tribunal.-If any person wilfully |
|fails to comply with the orders of |fails to comply with the order of |
|the Authority or any order of the |the Appellate Tribunal, he shall be |
|High Court, as the case may be, he |punishable with fine which may |
|shall be punishable with fine which|extend to one lakh rupees and in |
|may extend to one lakh rupees and |case of a second or subsequent |
|in case of a second or subsequent |offence with fine which may extend |
|offence with fine which may extend |to two lakh rupees and in the case |
|to two lakh rupees and in the case |of continuing contravention with |
|of continuing contravention with |additional fine which may extend to |
|additional fine which may extend to|two lakh rupees for every day during|
|two lakh rupees for every day |which such default continues.] |
|during which the default continues.| |
|Section 36 |Section 36 |
|Power to make regulations.-(1) The |Power to make regulations.-(1)The |
|Authority may, by notification, |Authority may, by notification, make|
|make regulations consistent with |regulations consistent with this Act|
|this Act and the rules made |and the rules made thereunder to |
|thereunder to carry out the |carry out the purposes of this Act. |
|purposes of this Act. |(2) In particular, and without |
|(2) In particular, and without |prejudice to the generality of the |
|prejudice to the generality of the |foregoing power, such regulations |
|foregoing power, such regulations |may provide for all or any of the |
|may provide for all or any of the |following matters, namely:- |
|following matters, namely:- |(a) the times and places of meetings|
|(a) the times and places of |of the Authority and the procedure |
|meetings of the Authority and the |to be followed at such meetings |
|procedure to be followed at such |under sub-section (1) of section 8, |
|meetings under sub-section (1) of |including quorum necessary for the |
|Section 8, including quorum |transaction of business; |
|necessary for the transaction of |(b) the transaction of business at |
|business; |the |
|(b) the transaction of business at |meetings of the Authority under |
|the meetings of the Authority under|sub-section (4) of section 8; |
|sub-section (4) of Section 8; |xxx |
|(c) the salaries and allowances |(d) matters in respect of which |
|payable to and the other conditions|register is to be maintained by the |
|of service of officers and other |authority under sub-clause (vii) of |
|employees of the Authority under |clause (b) of sub-section (1) of |
|sub-section (2) of Section 10; |section 11; |
|(d) matters in respect of which |(e) levy of fee and lay down such |
|register is to be maintained by the|other requirements on fulfilment of |
|Authority under clause (l) of |which a copy of register may be |
|sub-section (1) of Section 11; |obtained under sub-clause (viii) of |
|(e) levy of fee and lay down such |clause (b) of sub-section (1) of |
|other requirements on fulfilment of|section 11; |
|which a copy of register may be |(f) levy of fees and other changes |
|obtained under clause (m) of |under clause (c) of sub-section (1) |
|sub-section (1) of Section 11; |of section 11; |
|(f) levy of fees and other charges | |
|under clause (p) of sub-section (1)| |
|of section 11. | |

 

23. We shall now deal with the question formulated by this Court, the
first facet of which relates to the scope of Section 36 of the Act.
24. Shri R.F. Nariman, learned Solicitor General argued that the power
vested in the Authority to make regulations for carrying out the purposes
of the Act is very wide and is not controlled by Section 36(2), which
provides for framing of regulations on specified matters. He submitted
that if power is conferred upon a statutory authority to make subordinate
legislation in general terms, the particularization of the topics is merely
illustrative and does not limit the scope of the general power. Learned
Solicitor General further argued that for carrying out the purposes of the
Act, the Authority can make regulations on various matters specified in
other sections including Sections 8(1), 8(4), 11(1)(b), 12(4) and 13. He
submitted that the regulations made under Section 36(1) and (2) are in the
nature of subordinate legislation and are required to be laid before each
House of Parliament in terms of Section 37 and Parliament can approve,
modify or annul the same. He further submitted that a restrictive
interpretation of Section 36(1) with reference to Clauses (a), (b) and (d)
of Section 36(2) will make the provision otiose and the Court should not
adopt that course.
25. Shri A.S. Chandhiok, learned senior counsel appearing for BSNL argued
that sub-section (1) of Section 36 should not be construed as conferring
unbridled power upon the Authority to make regulations, else other
provisions like Sections 12(4) and 13, which empower the Authority to issue
directions on certain matters would become redundant. Shri C.S.
Vaidyanathan, learned senior counsel appearing for the appellants in C.A.
Nos.6049/2005, 802/2006, 4523/2006 and 5184/2010 argued that Section 36(1)
should be construed consistent with other provisions of the Act and
regulations cannot be made on the matters covered by other provisions. He
referred to Section 11(2) and argued that the power conferred upon the
Authority to issue an order fixing the rates at which the telecommunication
services are to be provided within and outside India including the rates at
which messages are required to be transmitted to any country outside India
and the power vested in the authority under Section 12(4) and 13 to issue
directions to the service providers cannot be controlled by making
regulations under Section 36(1). Shri Vaidyanathan emphasized that if
Parliament has conferred power upon the Authority under Section 11(2) to
notify the rates by a transparent method, the power under Section 36(1)
cannot be used for framing regulation on that topic. Learned senior
counsel referred to Section 62 of the Electricity Act, 2003, which,
according to him, is pari materia to Section 11(2) and argued that in view
of paragraph 15 of the judgment in PTC India Limited v. Central Electricity
Regulatory Commission (2010) 4 SCC 603, regulations cannot be framed on the
subject specified in that section. Dr. A.M. Singhvi, learned senior
counsel appearing for the appellants in C.A. Nos.271-281/2011 argued that
the operation of Section 36(1) of the Act is controlled by Section 36(2),
which provide for framing of regulation in respect of some ministerial acts
required to be performed under the Act and argued that the Authority cannot
make regulations on the subjects specifically covered by other provisions.
Dr. Singhvi submitted that the Court should not give an interpretation to
Section 36(1) which will make the Authority an unruly horse and enable it
to style every instrument as a regulation and thereby exclude the same from
challenge before TDSAT. An ancillary argument made by Dr. Singhvi is that
if regulations are framed on the topics covered by other provisions of the
Act, then TDSAT will be denuded much of its jurisdiction and the purpose of
creating an independent adjudicatory body will be defeated. Shri Mukul
Rohatgi, learned senior counsel argued that the scope of Section 36(1)
should be confined to the topics specified in sub-section (2) thereof, else
the same will become inconsistent with other provisions of the Act
including Sections 11(2), (4), 12(4) and 13. Shri Ramji Srinivasan,
learned counsel appearing in some of the appeals, argued that the
regulation making power under Section 36(1) cannot be used for nullifying
the power of the Authority to issue directions on the topics specified in
Sections 11(1)(b), 11(2), 12(4) and 13.
26. We have considered the respective arguments. Under the unamended Act,
the Authority had the following three types of functions:

 
RECOMMENDATORY FUNCTIONS

 
Under Section 11 (1) (a) of the TRAI Act 1997, the Authority is
required to make recommendations either suo moto or on a request from
the licensor, i.e., Department of Telecommunications or Ministry of
Information & Broadcasting in the case of Broadcasting and Cable
Services.

 
TRAI has powers to make recommendations either suo motu or on request
from the licensor on the following matters as per Section 11(1)(a):

 
i) need and timing for introduction of new service provider;

 

ii) terms and conditions of licence to a service provider;

 

iii) revocation of licence for non-compliance of terms and conditions
of licence;

 

iv) measures to facilitate competition and promote efficiency in the
operation of telecommunication services so as to facilitate
growth in such services;

 

v) technological improvements in the services provided by the
service providers;

 

vi) type of equipment to be used by the service providers after
inspection of equipment used in the network;

 

vii) measures for the development of telecommunication technology and
any other matter relatable to telecommunication industry in
general;

 

viii) efficient management of available spectrum.

 

 

 
REGULATORY FUNCTIONS

 
The Authority also had regulatory and tariff setting functions, like
ensuring compliance of terms and conditions of licence, laying
standard of Quality of Service (QoS) to be provided by service
providers and notifying the rates at which telecommunication has to be
provided and ensuring effective compliance of USOs. It also had the
power to call upon any service provider at any time to furnish in
formation or explanation, in writing, relating to its affairs. It was
required to ensure transparency while exercising its powers and
discharging its functions. It was given powers to punish for violation
of its directions.

 
Another approach was through feedback / representations received from
consumers / consumer organizations, experts etc.

 

These functions could be discharged by the Authority through a
multipronged approach. One of these approaches was by analyzing the
reports received from the service providers. In certain cases, the
Authority could on its own initiative take action for ensuring
compliance of terms and conditions of license.

 
ADJUDICATORY FUNCTIONS

 
Originally, TRAI was also empowered to adjudicate upon disputes among
Service Providers or between the Service Providers and a group of
Consumers on matters relating to technical compatibility and
interconnection between the Service Providers, revenue sharing
arrangement between Service Providers, quality of telecommunication
services and interests of consumers.

 

 

 
27. After the amendment of 2000, the Authority can either suo motu or on
a request from the licensor make recommendations on the subjects enumerated
in Section 11(1)(a)(i) to (viii). Under Section 11 (1)(b), the authority
is required to perform nine functions enumerated in clauses (i) to (ix)
thereof. In these clauses, different terms like ‘ensure’, ‘fix’,
‘regulate’ and ‘lay down’ have been used. The use of the term ‘ensure’
implies that the Authority can issue directions on the particular subject.
For effective discharge of functions under various clauses of Section 11(1)
(b), the authority can frame appropriate regulations. The term ‘regulate’
contained in sub-clause (iv) shows that for facilitating arrangement
amongst service providers for sharing their revenue derived from providing
telecommunication services, the Authority can either issue directions or
make regulations.
28. The terms ‘regulate’ and ‘regulation’ have been interpreted in large
number of judgments. We may notice few of them. In V.S. Rice & Oil Mills
v. State of A.P. AIR 1964 SC 1781, agreements for a period of ten years had
been executed for supply of electricity and the same did not contain any
provision authorising the Government to increase the rates during their
operation. However, in exercise of power under Section 3(1) of the Madras
Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949,
the State Government issued order enhancing the agreed rates. The same was
challenged on the ground that any increase in agreed tariff was out of the
purview of Section 3(1). Chief Justice Gajendragadkar, speaking for the
Constitution Bench, observed as under:
“The word regulate is wide enough to confer power on the State to
regulate either by increasing the rate, or decreasing the rate, the
test being what is it that is necessary or expedient to be done to
maintain, increase, or secure supply of the essential articles in
question and to arrange for its equitable distribution and its
availability at fair prices. The concept of fair prices to which
Section 3(1) expressly refers does not mean that the price once fixed
must either remain stationary, or must be reduced in order to attract
the power to regulate. The power to regulate can be exercised for
ensuring the payment of a fair price, and the fixation of a fair price
would inevitably depend upon a consideration of all relevant and
economic factors which contribute to the determination of such a fair
price. If the fair price indicated on a dispassionate consideration of
all relevant factors turns out to be higher than the price fixed and
prevailing, then the power to regulate the price must necessarily
include the power to increase so as to make it fair. Hence the
challenge to the validity of orders increasing the agreed tariff rate
on the ground that they are outside the purview of Section 3(1) cannot
be sustained.”

 
29. In State of Tamil Nadu v. Hind Stone (1981) 2 SCC 205, this Court
held that the word ‘regulate’ must be interpreted to include ‘prohibition’
within its fold. Some of the observations made in that judgment (paragraph
10) are extracted below:
“We do not think that ‘regulation’ has that rigidity of meaning as
never to take in ‘prohibition’. Much depends on the context in which
the expression is used in the statute and the object sought to be
achieved by the contemplated regulation. It was observed by Mathew, J.
in G.K. Krishnan v. State of T.N. (1975) 1 SCC 375: ‘The word
“regulation” has no fixed connotation. Its meaning differs according
to the nature of the thing to which it is applied.’ In modern statutes
concerned as they are with economic and social activities,
‘regulation’ must, of necessity, receive so wide an interpretation
that in certain situations, it must exclude competition to the public
sector from the private sector. More so in a welfare State. It was
pointed out by the Privy Council in Commonwealth of Australia v. Bank
of New South Wales (1949) 2 All ER — and we agree with what was stated
therein — that the problem whether an enactment was regulatory or
something more or whether a restriction was direct or only remote or
only incidental involved, not so much legal as political, social or
economic consideration and that it could not be laid down that in no
circumstances could the exclusion of competition so as to create a
monopoly, either in a State or Commonwealth agency, be justified. Each
case, it was said, must be judged on its own facts and in its own
setting of time and circumstances and it might be that in regard to
some economic activities and at some stage of social development,
prohibition with a view to State monopoly was the only practical and
reasonable manner of regulation. The statute with which we are
concerned, the Mines and Minerals (Regulation and Development) Act, is
aimed, as we have already said more than once, at the conservation and
the prudent and discriminating exploitation of minerals. Surely, in
the case of a scarce mineral, to permit exploitation by the State or
its agency and to prohibit exploitation by private agencies is the
most effective method of conservation and prudent exploitation. If you
want to conserve for the future, you must prohibit in the present. We
have no doubt that the prohibiting of leases in certain cases is part
of the regulation contemplated by Section 15 of the Act.”

 
30. In K. Ramanathan v. State of Tamil Nadu (1985) 2 SCC 116, this Court
interpreted the word ‘regulation’ appearing in Section 3(2)(d) of the
Essential Commodities Act, 1955 and observed:
“The word “regulation” cannot have any rigid or inflexible meaning as
to exclude “prohibition”. The word “regulate” is difficult to define
as having any precise meaning. It is a word of broad import, having a
broad meaning, and is very comprehensive in scope. There is a
diversity of opinion as to its meaning and its application to a
particular state of facts, some courts giving to the term a somewhat
restricted, and others giving to it a liberal, construction. The
different shades of meaning are brought out in Corpus Juris Secundum,
Vol. 76 at p. 611:

 
“‘Regulate’ is variously defined as meaning to adjust; to
adjust, order, or govern by rule, method, or established mode;
to adjust or control by rule, method, or established mode, or
governing principles or laws; to govern; to govern by rule; to
govern by, or subject to, certain rules or restrictions; to
govern or direct according to rule; to control, govern, or
direct by rule or regulations.

 
‘Regulate’ is also defined as meaning to direct; to direct by
rule or restriction; to direct or manage according to certain
standards, laws, or rules; to rule; to conduct; to fix or
establish; to restrain; to restrict.”

 
See also: Webster’s Third New International Dictionary, Vol. II, p.
1913 and Shorter Oxford Dictionary, Vol. II, 3rd Edn., p. 1784.

 
It has often been said that the power to regulate does not necessarily
include the power to prohibit, and ordinarily the word “regulate” is
not synonymous with the word “prohibit”. This is true in a general
sense and in the sense that mere regulation is not the same as
absolute prohibition. At the same time, the power to regulate carries
with it full power over the thing subject to regulation and in absence
of restrictive words, the power must be regarded as plenary over the
entire subject. It implies the power to rule, direct and control, and
involves the adoption of a rule or guiding principle to be followed,
or the making of a rule with respect to the subject to be regulated.
The power to regulate implies the power to check and may imply the
power to prohibit under certain circumstances, as where the best or
only efficacious regulation consists of suppression. It would
therefore appear that the word “regulation” cannot have any inflexible
meaning as to exclude “prohibition”. It has different shades of
meaning and must take its colour from the context in which it is used
having regard to the purpose and object of the legislation, and the
Court must necessarily keep in view the mischief which the legislature
seeks to remedy.

 
The question essentially is one of degree and it is impossible to fix
any definite point at which “regulation” ends and “prohibition”
begins. We may illustrate how different minds have differently reacted
as to the meaning of the word “regulate” depending on the context in
which it is used and the purpose and object of the legislation. In
Slattery v. Nalyor LR (1888) 13 AC 446 the question arose before the
Judicial Committee of the Privy Council whether a Bye-law by reason of
its prohibiting internment altogether in a particular cemetery, was
ultra vires because the Municipal Council had only power of regulating
internments whereas the Bye-law totally prohibited them in the
cemetery in question, and it was said by Lord Hobhouse, delivering the
judgment of the Privy Council:

 
“A rule or Bye-law cannot be Held as ultra vires merely because
it prohibits where empowered to regulate, as regulation often
involved prohibition.”

 
31. In Jiyajeerao Cotton Mills Ltd. v. M.P. Electricity Board 1989 Supp
(2) SCC 52, the validity of the orders providing for higher charges/tariff
for electricity consumed beyond legally fixed limit was upheld in view of
Section 22(b) of the Electricity Act, which permits the State Government to
issue an appropriate order for regulating the supply, distribution and
consumption of electricity. It was held that the Court while interpreting
the expression “regulate” must necessarily keep in view the object to be
achieved and the mischief sought to be remedied. The necessity for issuing
the orders arose out of the scarcity of electricity available to the Board
for supplying to its customers and, therefore, in this background the
demand for higher charges/tariff was held to be a part of a regulatory
measure.
32. In Deepak Theatre v. State of Punjab 1992 Supp (1) SCC 684, this
Court upheld classification of seats and fixation of rates of admission
according to the paying capacity of a cinegoer by observing that the same
is an integral part of the power to make regulation and fixation of rates
of admission became a legitimate ancillary or incidental power in
furtherance of the regulation under the Act.
33. The term ‘regulation’ was also interpreted in Quarry Owners’
Association v. State of Bihar (2000) 8 SCC 655 in the context of the
provisions contained in the Mines and Minerals (Regulation Development)
Act, 1957 and it was held:
“Returning to the present case we find that the words “regulation of
mines and mineral development” are incorporated both in the Preamble
and the Statement of Objects and Reasons of this Act. Before that we
find that the Preamble of our Constitution in unequivocal words
expresses to secure for our citizens social, economic and political
justice. It is in this background and in the context of the provisions
of the Act, we have to give the meaning of the word “regulation”. The
word “regulation” may have a different meaning in a different context
but considering it in relation to the economic and social activities
including the development and excavation of mines, ecological and
environmental factors including States’ contribution in developing,
manning and controlling such activities, including parting with its
wealth, viz., the minerals, the fixation of the rate of royalties
would also be included within its meaning.”

 

 

 

34. Reference in this connection can also be made to the judgment in U.P.
Coop. Cane Unions Federation v. West U.P. Sugar Mills Association (2004) 5
SCC 430. In that case, the Court interpreted the word ‘regulation’
appearing in U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953
and observed:

 

“ “Regulate” means to control or to adjust by rule or to subject to
governing principles. It is a word of broad impact having wide meaning
comprehending all facets not only specifically enumerated in the Act,
but also embraces within its fold the powers incidental to the
regulation envisaged in good faith and its meaning has to be
ascertained in the context in which it has been used and the purpose
of the statute.”

 
35. It is thus evident that the term ‘regulate’ is elastic enough to
include the power to issue directions or to make regulations and the mere
fact that the expression “as may be provided in the regulations” appearing
in clauses (vii) and (viii) of Section 11(1)(b) has not been used in other
clauses of that sub-section does not mean that the regulations cannot be
framed under Section 36(1) on the subjects specified in clauses (i) to (vi)
of Section 11(1)(b). In fact, by framing regulations under Section 36, the
Authority can facilitate the exercise of functions under various clauses of
Section 11(1)(b) including clauses (i) to (vi).
36. We may now advert to Section 36. Under sub-Section (1) thereof the
Authority can make regulations to carry out the purposes of the Act
specified in various provisions of the Act including Sections 11, 12 and
13. The exercise of power under Section 36(1) is hedged with the condition
that the regulations must be consistent with the Act and the Rules made
thereunder. There is no other restriction on the power of the Authority to
make regulations. In terms of Section 37, the regulations are required to
be laid before Parliament which can either approve, modify or annul the
same. Section 36(2), which begins with the words “without prejudice to the
generality of the power under sub-section (1)” specifies various topics on
which regulations can be made by the Authority. Three of these topics
relate to meetings of the Authority, the procedure to be followed at such
meetings, the transaction of business at the meetings and the register to
be maintained by the Authority. The remaining two topics specified in
Clauses (e) and (f) of Section 36(2) are directly referable to Section
11(1)(b)(viii) and 11(1)(c). These are substantive functions of the
Authority. However, there is nothing in the language of Section 36(2) from
which it can be inferred that the provisions contained therein control the
exercise of power by the Authority under Section 36(1) or that Section
36(2) restricts the scope of Section 36(1).
37. It is settled law that if power is conferred upon an authority/body
to make subordinate legislation in general terms, the particularization of
topics is merely illustrative and does not limit the scope of general
power. In Emperor v. Sibnath Banerji AIR 1942 PC 156, the Privy Council
considered the correctness of the judgment of the Federal Court, which held
that Rule 26 of the Defence of India Rules framed under clause (j) of
Section 3(2) of the Defence of India Act, 1939 was ultra vires the
provisions of the Act. While reversing the judgment of the Federal Court,
the Privy Council observed:

 

“In the opinion of their Lordships, the function of sub-section (2) is
merely an illustrative one; the rule-making power is conferred by sub-
section (1), and “the rules” which are referred to in the opening
sentence of Sub-section (2) are the . Rules which are authorized by,
and made under, sub-section (1); the provisions of sub-section (2) are
not restrictive of Sub-section (1), as, indeed is expressly stated by
the words “without prejudice to the generality of the powers conferred
by sub-section (l).”

 

 

 
38. The proposition laid down in Sibnath Banerji’s case was followed by
this Court in large number of cases. In Afzal Ullah v. State of Uttar
Pradesh 1964 (4) SCR 991, the Constitution Bench considered challenge to
the validity of bye-law No.3 framed by Municipal Board, Tanda. The
appellant had questioned the bye-law on the ground that the same was ultra
vires the provisions of Section 241 of the United Provinces Municipalities
Act, 1916. The facts of that case were that the appellant had established a
market for selling food-grains, vegetables, fruits, fish etc. The Chairman
of the Municipal Board issued a notice to the appellant requiring him to
obtain a licence for running the market with an indication that if he fails
to do so, criminal proceedings will be initiated against him. On account
of his failure to take the required licence, the appellant was tried by
Tahsildar, Tanda in Criminal Case No.141 of 1960. The Tahsildar
acquitted the appellant on the ground that the prosecution had failed to
prove the fact that in the market established on the land belonging to the
appellant, vegetables, fruits and fish were sold. The order of acquittal
was set aside by the High Court and the appellant was convicted under
Section 299(1) of the 1916 Act read with clause (3) of the relevant bye-
laws. In the appeal filed before this Court, it was argued that bye-law
3(a) and other bye-laws passed by the Board are ultra vires the provisions
of Section 241 of the Act. The Constitution Bench referred to the
provisions of Sections 241 and 298 of the Act and various clauses of
Section 298(2) which specify the topics on which bye-laws can be framed and
observed:

 

“Even if the said clauses did not justify the impugned Bye-law, there
can be little doubt that the said Bye-laws would be justified by the
general power conferred on the Boards by Section 298(1). It is now
well-settled that the specific provisions such as are contained in the
several clauses of Section 298(2) are merely illustrative and they
cannot be read as restrictive of the generality of powers prescribed
by Section 298(1) (vide Emperor v. Sibnath Banerji). If the powers
specified by Section 298(1) are very wide and they take in within
their scope Bye-laws like the ones with which we are concerned in the
present appeal, it cannot be said that the powers enumerated under
Section 298(2) control the general words used by Section 298(1). These
latter clauses merely illustrate and do not exhaust all the powers
conferred on the Board, so that any cases not falling within the
powers specified by Section 298(2) may well be protected by Section
298(1), provided, of course, the impugned Bye-law can be justified by-
reference to the requirements of Section 298(1). There can be no doubt
that the impugned Bye-laws in regard to the markets framed by
Respondent 2 are for the furtherance of municipal administrate ion
under the Act, and so, would attract the provisions of Section 298(1).
Therefore, we are satisfied that the High Court was right in coming to
the conclusion that the impugned Bye-laws are valid.”

 
(emphasis supplied)

 

 

 

39. In Rohtak Hissar District Electricity Supply Company Ltd. v. State of
Uttar Pradesh and others AIR 1966 SC 1471, this Court dealt with the rule
making power of the State Government under the Uttar Pradesh Industrial
Disputes Act, 1947 and observed:

 

“Section 15(1) confers wide powers on the appropriate Government to
make rules to carry out the purposes of the Act; and Section 15(2)
specifies some of the matters enumerated by clauses (a) to (e), in
respect of which rules may be framed. It is well-settled that the
enumeration of the particular matters by sub-section (2) will not
control or limit the width of the power conferred on the appropriate
Government by sub-section (1) of Section 15; and so, if it appears
that the item added by the appropriate Government has relation to
conditions of employment, its addition cannot be challenged as being
invalid in law.”

 

(emphasis supplied)

 
40. In K. Ramanathan v. State of Tamil Nadu (supra), a three-Judge Bench
of this Court considered the scope of Section 3(1), (2) and Section 5 of
the Essential Commodities Act, 1955. The appellant and other
agriculturists of Tanjavur District had challenged the constitutional
validity of clause 3(1-a) of the Order issued by the Central Government
under Section 5 read with Section 3 of the Essential Commodities Act, 1955
placing complete ban on the transport, movement or otherwise carrying of
paddy outside the districts. The High Court rejected their challenge and
dismissed the writ petitions. Before this Court, it was argued that the
delegation of power under Section 5 of the Act must necessarily be given a
restricted interpretation. While rejecting the argument, this Court
referred to the judgment in Sibnath Banerji’s case, Santosh Kumar Jain v.
State AIR 1951 SC 201 and observed:
“Learned Counsel for the appellant however strenuously contends that
the delegation of powers by the Central Government under Section 5 of
the Act must necessarily be in relation to ‘such matters’ and subject
to ‘such conditions’ as may be specified in the notification. The
whole attempt on the part of the learned Counsel is to confine the
scope and ambit of the impugned order to CL (d) of Sub-section (2) of
Section 3 of the Act which uses the word ‘regulating’ and take it out
of-the purview of Sub-section (1) of Section 3 which uses the words
‘regulating or prohibiting’. That is not proper way of construction of
Sub-section (1) and (2) of Section 3 of the Act in their normal
setting. The restricted construction of Section 3 contended for by
learned Counsel for the appellant would render the scheme of the Act
wholly unworkable as already indicated, the source of power to make an
order of this description is Sub-section (1) of Section 3 of the Act
and sub’s. (2) merely provides illustration for the general powers
conferred by Sub-section (1). Sub-section (2) of Section 3 of the Act
commences with the words ‘Without prejudice to the generality of the
powers conferred by Sub-section (1)’. It is manifest that Sub-section
(2) of Section 3 of the Act confers no fresh powers but is merely
illustrative of the general powers conferred by Sub-section (1) of
Section 3 without exhausting the subjects in relation to which such
powers can be exercised.”

 

 

 
41. The question was again considered in D.K. Trivedi and Sons v. State
of Gujarat 1986 (Supp) SCC 20. This Court was called upon to examine the
challenge to the constitutionality of Section 15 of the Mines and Minerals
(Regulation and Development) Act, 1957, the power of the State Governments
to make rules under Section 15 to enable them to charge dead rent and
royalty in respect of leases of mines and minerals granted to them and to
enhance the rates of dead rent and royalty. While repelling the argument
that the 1957 Act does not contain guidelines for exercise of power by the
State Government under Section 15(1), this Court observed:

 

“32. There is no substance in the contention that no guidelines are
provided in the 1957 Act for the exercise of the rule-making power of
the State Governments under Section 15(1). As mentioned earlier,
Section 15(1) is in pari materia with Section 13(1). Section 13,
however, contains sub-section (2) which sets out the particular
matters with respect to which the Central Government may make rules
“In particular, and without prejudice to the generality of the
foregoing power”, that is, the rule-making power conferred by sub-
section (1). It is well settled that where a statute confers
particular powers without prejudice to the generality of a general
power already conferred, the particular powers are only illustrative
of the general power and do not in any way restrict the general power.
Section 2 of the Defence of India Act, 1939, as amended by Section 2
of the Defence of India (Amendment) Act, 1940, conferred upon the
Central Government the power to make such rules as appeared to it “to
be necessary or expedient for securing the defence of British India,
the public safety, the maintenance of public order or the efficient
prosecution of war, or for maintaining supplies and services essential
to the life of the community”. Sub-section (2) of Section 2 conferred
upon the Central Government the power to provide by rules or to
empower any authority to make orders providing for various matters set
out in the said sub-section. This power was expressed by the opening
words of the said sub-section (2) to be “Without prejudice to the
generality of the powers conferred by sub-section (1)”. In King
Emperor v. Sibnath Banerji the Judicial Committee of the Privy Council
held:

 
“In the opinion of Their Lordships, the function of sub-section
(2) is merely an illustrative one; the rule-making power is
conferred by subsection (1), and ‘the rules’ which are referred
to in the opening sentence of sub-section (2) are the rules
which are authorized by, and made under, sub-section (1); the
provisions of sub-section (2) are not restrictive of sub-section
(1), as, indeed, is expressly stated by the words ‘without
prejudice to the generality of the powers conferred by sub-
section (1).”

 
The above proposition of law has been approved and accepted by this
Court in Om Prakash v. Union of India (1970) 3 SCC 942 and Shiv Kirpal
Singh v. V.V. Giri (1970) 2 SCC 567.

 
33. A provision similar to sub-section (2) of Section 13, however,
does not find place in Section 15. In our opinion, this makes no
difference. What sub-section (2) of Section 13 does is to give
illustrations of the matters in respect of which the Central
Government can make rules for “regulating the grant of prospecting
licences and mining leases in respect of minerals and for purposes
connected therewith”. The opening clause of sub-section (2) of Section
13, namely, “In particular, and without prejudice to the generality of
the foregoing power”, makes it clear that the topics set out in that
sub-section are already included in the general power conferred by sub-
section (1) but are being listed to particularize them and to focus
attention on them. The particular matters in respect of which the
Central Government can make rules under sub-section (2) of Section 13
are, therefore, also matters with respect to which under sub-section
(1) of Section 15 the State Governments can make rules for “regulating
the grant of quarry leases, mining leases or other mineral concessions
in respect of minor minerals and for purposes connected therewith”.
When Section 14 directs that “The provisions of Sections 4 to 13
(inclusive) shall not apply to quarry leases, mining leases or other
mineral concessions in respect of minor minerals”, what is intended is
that the matters contained in those sections, so far as they concern
minor minerals, will not be controlled by the Central Government but
by the concerned State Government by exercising its rule-making power
as a delegate of the Central Government. Sections 4 to 12 form a group
of sections under the heading “General restrictions on undertaking
prospecting and mining operations”. The exclusion of the application
of these sections to minor minerals means that these restrictions will
not apply to minor minerals but that it is left to the State
Governments to prescribe such restrictions as they think fit by rules
made under Section 15(1). The reason for treating minor minerals
differently from minerals other than minor minerals is obvious. As
seen from the definition of minor minerals given in clause (e) of
Section 3, they are minerals which are mostly used in local areas and
for local purposes while minerals other than minor minerals are those
which are necessary for industrial development on a national scale and
for the economy of the country. That is why matters relating to minor
minerals have been left by Parliament to the State Governments while
reserving matters relating to minerals other than minor minerals to
the Central Government. Sections 13, 14 and 15 fall in the group of
sections which is headed “Rules for regulating the grant of
prospecting licences and mining leases”. These three sections have to
be read together. In providing that Section 13 will not apply to
quarry leases, mining leases or other mineral concessions in respect
of minor minerals what was done was to take away from the Central
Government the power to make rules in respect of minor minerals and to
confer that power by Section 15(1) upon the State Governments. The
ambit of the power under Section 13 and under Section 15 is, however,
the same, the only difference being that in one case it is the Central
Government which exercises the power in respect of minerals other than
minor minerals while in the other case it is the State Governments
which do so in respect of minor minerals. Sub-section (2) of Section
13 which is illustrative of the general power conferred by Section
13(1) contains sufficient guidelines for the State Governments to
follow in framing the rules under Section 15(1), and in the same way,
the State Governments have before them the restrictions and other
matters provided for in Sections 4 to 12 while framing their own rules
under Section 15(1).”
(emphasis supplied)

 

 

 
42. The same proposition has been reiterated in Academy of Nutrition
Improvement v. Union of India (2011) 8 SCC 274 [Para66] . The observations
contained in the last portion of that paragraph suggesting that the power
conferred upon the rule making authority does not entitle it to make rules
beyond the scope of the Act has no bearing on these cases because it has
not been argued before us that the regulations framed under Section 36 are
ultra vires the provisions of the Act.
43. Here it will be apposite to mention that Section 11(1)(b)(iv)
specifically postulates making of regulations for discharging the functions
specified in those clauses. Section 11(2), which contains non-obstante
clause vis-à-vis the Indian Telegraph Act, 1885, lays down that the
Authority may, from time to time, by order notify the rates at which the
telecommunication services within or outside India shall be provided under
the Act subject to the limitation specified in Section 11(3). Under Section
12(1), the Authority is empowered to issue order and call upon any service
provider to furnish such information or explanation relating to its affair
or appoint one or more persons to make an inquiry in relation to the
affairs of any service provider and direct inspection of the books of
account or other documents of any service provider. Sections 12(4) and 13
of the Act on which reliance has been placed by the learned counsel for the
respondents in support of their argument that the Authority cannot frame
regulations on the subjects mentioned in these two sections are only
enabling provisions. This is evinced from the expressions “shall have the
power” used in Section 12(4) and “The Authority may” used in Section 13.
In terms of Section 12(4), the Authority can issue such directions to
service providers, as it may consider necessary, for proper functioning by
service providers. Section 13 lays down that the Authority may for
discharge of its functions under Section 11(1), issue such directions to
the service providers, as it may consider necessary. The scope of this
provision is limited by the proviso, which lays down that no direction
under Section 12(4) or Section 13 shall be issued except on matters
specified in Section 11(1)(b). It is thus clear that in discharge of its
functions, the Authority can issue directions to the service providers.
The Act speaks of many players like the licensors and users, who do not
come within the ambit of the term “service provider”. If the Authority has
to discharge its functions qua the licensors or users, then it will have to
use powers under provisions other than Sections 12(4) and 13. Therefore,
in exercise of power under Section 36(1), the Authority can make
regulations which may empower it to issue directions of general character
applicable to service providers and others and it cannot be said that by
making regulations under Section 36(1) the Authority has encroached upon
the field occupied by Sections 12(4) and 13 of the Act.
44. Before parting with this aspect of the matter, we may notice Sections
33 and 37. A reading of the plain language of Section 33 makes it clear
that the Authority can, by general or special order, delegate to any member
or officer of the Authority or any other person such of its powers and
functions under the Act except the power to settle disputes under Chapter
IV or make regulations under Section 36. This means that the power to make
regulations under Section 36 is non-delegable. The reason for excluding
Section 36 from the purview of Section 33 is simple. The power under
Section 36 is legislative as opposed to administrative. By virtue of
Section 37, the regulations made under the Act are placed on par with the
rules which can be framed by the Central Government under Section 35 and
being in the nature of subordinate legislations, the rules and regulations
have to be laid before both the Houses of Parliament which can annul or
modify the same. Thus, the regulations framed by the Authority can be made
ineffective or modified by Parliament and by no other body.
45. In view of the above discussion and the propositions laid down in the
judgments referred to in the preceding paragraphs, we hold that the power
vested in the Authority under Section 36(1) to make regulations is wide and
pervasive. The exercise of this power is only subject to the provisions of
the Act and the Rules framed under Section 35 thereof. There is no other
limitation on the exercise of power by the Authority under Section 36(1).
It is not controlled or limited by Section 36(2) or Sections 11, 12 and 13.

 

46. The second and more important facet of the question framed by the
Court is whether TDSAT has the jurisdiction to entertain challenge to the
regulations framed by the Authority.
47. The learned Solicitor General referred to Articles 323A and 323B of
the Constitution, Section 14 of the Administrative Tribunals Act, 1985, the
judgment of the larger Bench in L. Chandra Kumar v. Union of India (1997) 3
SCC 261 and argued that whenever Parliament wishes to confer power of
judicial review on an adjudicatory body other than the regular Courts, it
has enacted a provision like Section 14 of the 1985 Act. He submitted that
the language of Section 14 of the Act, which was enacted after 12 years of
the enactment of the 1985 Act and was amended in 2000 does not empower
TDSAT to undertake judicial review of subordinate legislation. Learned
Solicitor General further argued that the words ‘direction’, ‘decision’ or
‘order’ used in Section 14(b) should not be given over-stretched meaning to
empower TDSAT to entertain challenge to the regulations made under Section
36 of the Act, which are in the nature of subordinate legislation. He
emphasized that if these words are interpreted to include the regulations
made under Section 36, the same interpretation would hold good qua the
rules framed under Section 35 because they are also in the nature of
subordinate legislation. Learned Solicitor General submitted that it would
be an extremely anomalous position if the rules framed under Section 35 and
the regulations framed under Section 36 are challenged before TDSAT and
validity thereof is examined by a Bench comprising non-judicial members.
The learned Solicitor General relied upon the judgment of the Constitution
Bench in PTC India Ltd. v. Central Electricity Regulatory Commission (2010)
4 SCC 603 and argued that even though in paragraph 94 of the judgment the
Bench had observed that summary of findings and answer to the reference
shall not be construed as a general principle of law to be applied to
Appellate Tribunals vis-à-vis Regulatory Commissions constituted under
other enactments including the Act, the ratio of the judgment is clearly
attracted in the present case. He submitted that Section 79 of the
Electricity Act, 2003 (for short, ‘the 2003 Act’) does not contain Clauses
like 11(1)(b)(vii) and (viii) of the Act and provision like Section 36(2)
of the Act is not contained in the 2003 Act and further that Section 111 of
the 2003 Act contains only the word ‘order’ as against the words
‘direction’, ‘decision’ or ‘orders’ used in Section 14 but that these
differences are insignificant and there is no justification to ignore the
ratio of the judgment of the Constitution Bench. Shri Nariman submitted
that distinction sought to be made by the other side with reference to the
language of Sections 79, 111 and 178(2)(ze) of the Electricity Act, 2003 is
illusory because after noticing Section 121 which uses the words ‘orders’,
‘instructions’ or ‘directions’, the Constitution Bench has unequivocally
held that the said section does not confer power of judicial review on the
Appellate Tribunal.
48. S/Shri A.S. Chandhiok, C.S. Vaidyanathan, Dr. A.M. Singhvi, Ramji
Shrinivashan and Mukul Rohatgi, learned senior counsel relied upon the
judgment of the larger Bench in L. Chandra Kumar vs. Union of India (supra)
and argued that every Tribunal constituted under an Act of Parliament or
State Legislature is empowered to exercise power of judicial review qua the
rules and regulations. They also relied upon the judgments of this Court in
Cellular Operators Assn. of India v. Union of India (2003) 3 SCC 186, Hotel
& Restaurant Association v. Star India (P) Ltd. (2006) 13 SCC 753, Union of
India v. TATA Teleservices (Maharashtra) Ltd. (2007) 7 SCC 517, Union of
India v. Association of Unified Telecom Service Providers of India (2011)
10 SCC 543 and argued that the validity of the regulations framed under
Section 36 can be examined by TDSAT and in appropriate cases the same can
be struck down. They further argued that the regulations framed under
Section 36 are essentially in the nature of a decision taken by the
Authority and the same can always be subjected to challenge under Section
14(b). Learned senior counsel also referred to order dated 28.3.2006
passed by a three-Judge Bench in Civil Appeal No.6743/2003 – Telecom
Regulatory Authority of India v. BPL Mobile Cellular Ltd. and argued that
having taken the stand before this Court that a ‘direction’ includes
‘regulation’, the Authority is estopped from adopting a different posture
before this Court on the issue of maintainability of appeal under Section
14(b) involving challenge to the regulations. Dr. Singhvi and Shri Rohatgi
argued that one of the objectives of the amendments made in 2000 was to
create a specialised body for expeditious adjudication of disputes and
appeals and that objective will be totally defeated if the regulations
framed under Section 36 are excluded from the ambit of Section 14(b). They
also relied upon the judgment of this Court in Madras Bar Association v.
Union of India (2010) 11 SCC 1 and argued that once Parliament has
conferred power of judicial review upon TDSAT, there is no valid ground to
whittle down the scope thereof by giving a restrictive interpretation to
Section 14(b) of the Act.
49. Before dealing with the respective arguments, we may revert back to
Section 14 (unamended and amended). Under the unamended Section 14(1), the
Authority could decide disputes among service providers and between service
providers and a group of consumers. In terms of Section 14(2) (unamended),
the bench constituted by the Chairperson of the Authority can exercise
powers and authority which were exercisable earlier by the Civil Court on
technical compatibility and inter-connections between service providers,
revenue sharing arrangements between different service providers, quality
of telecommunication services and interest of consumers. However, the
disputes specified in clauses (a), (b) and (c) of Section 14(2) could not
be decided by the Bench constituted by the Chairperson.
50. Since the mechanism provided for settlement of disputes under Section
14 of the unamended Act was not satisfactory, Parliament substituted that
section and facilitated establishment of an independent adjudicatory body
known as TDSAT. Clause (a) of amended Section 14 confers jurisdiction upon
TDSAT to adjudicate any dispute between a licensor and licensee, between
two or more service providers and between a service provider and a group of
consumers. Three exceptions to the adjudicatory power of TDSAT relates to
the cases which are subject to the jurisdiction of Monopolies and
Restrictive Trade Practices Commission, the complaint of an individual
consumer which could be maintained under the consumer forums established
under the Consumer Protection Act, 1986 and dispute between Telegraph
Authority and any other person referred to in Section 7B(1) of the Indian
Telegraph Act, 1885. In terms of clause (b) of Section 14 (amended), TDSAT
is empowered to hear and dispose of appeal against any direction, decision
or order of the Authority. Section 14A(1) provides for making of an
application to TDSAT for adjudication of any dispute referred to in Section
14(a). Section 14A(2) and (3) provides for filing an appeal against any
direction, decision or order made by the Authority and also prescribes the
period of limitation. Sub-sections (4) to (7) of Section 14 are, by and
large, procedural. Section 14B relates to composition of Appellate
Tribunal. Section 14C prescribes qualifications for Chairperson and
Members. Section 14D speaks of tenure of the Chairperson and every other
Member of TDSAT. Section 14E speaks of terms and conditions of service.
Section 14F provides for filling up the vacancies. Section 14G deals with
removal and resignation of Chairperson or any Member of TDSAT. Section 14H
relates to staff of TDSAT. Section 14I empowers the Chairperson to make
provisions of distribution of business of TDSAT amongst different Benches
and their roster. Section 14J empowers the Chairperson to transfer cases
from one Bench to the other. Section 14K lays down that decision of any
application or appeal should be by majority. Section 14L treats the
Chairperson and Members etc. of TDSAT to be public servants. Sections 14M
and 14N provide for transfer of pending cases and appeals.
51. The primary objective of the 2000 amendment was to separate
adjudicatory functions of the Authority from its administrative and
legislative functions and ward off the criticism that the one who is
empowered to make regulations and issue directions or pass orders is
clothed with the power to decide legality thereof. The word ‘direction’
used in Section 14(b) is referable to Sections 12(4) and 13. The word
‘order’ is referable to Section 11(2) and 12(1). The word ‘decision’ has
been used in Section 14-A(2) and (7). This is because the proviso to
Section 14-M postulates limited adjudicatory function of the Authority in
respect of the disputes being adjudicated under Chapter IV before the 2000
amendment. This proviso was incorporated in Section 14-M to avoid a hiatus
between the coming into force of the 2000 amendment and the establishment
of TDSAT.
52. None of the words used in Section 14(b) have anything to do with
adjudication of disputes. Before the 2000 Amendment, the applications were
required to be filed under Section 15 which also contained detailed
procedure for deciding the same. While sub-Section (2) of Section 15 used
the word ‘orders’, sub-Sections (3) and (4) thereof used the word
‘decision’. In terms of sub-Section (5), the orders and directions of the
Authority were treated as binding on the service providers, Government and
all other persons concerned. Section 18 provided for an appeal against any
decision or order of the Authority. Such an appeal could be filed before
the High Court. The amendment made in 2000 is intended to vest the original
jurisdiction of the Authority in TDSAT and the same is achieved by Section
14(a). The appellate jurisdiction exercisable by the High Court is also
vested in TDSAT by virtue of Section 14(b) but this does not include
decision made by the Authority. Section 14-N provides for transfer to all
appeals pending before the High Court to TDSAT and in terms of Clause (b)
of sub-Section (2), TDSAT was required to proceed to deal with the appeal
from the stage which was reached before such transfer or from any earlier
stage or de novo as considered appropriate by it. Since High Court while
hearing appeal did not have the power of judicial review of subordinate
legislation, the transferee adjudicatory forum, i.e., TDSAT cannot exercise
that power under Section 14(b).
53. In Cellular Operators Assn. of India v. Union of India (supra),
Pattanaik, C.J., who authored main judgment of the three Judge Bench,
referred to Section 14 and observed:

 

“Suffice it to say, Chapter IV containing Section 14 was inserted by
an amendment of the year 2002 and the very Statement of Objects and
Reasons would indicate that to increase the investors’ confidence and
to create a level playing field between the public and the private
operators, suitable amendment in the Telecom Regulatory Authority of
India Act, 1997 was brought about and under the amendment, a tribunal
was constituted called the Telecom Disputes Settlement and Appellate
Tribunal for adjudicating the disputes between a licensor and a
licensee, between two or more service providers, between a service
provider and a group of consumers and also to hear and dispose of
appeal against any direction, decision or order of the Authority. The
aforesaid provision was absolutely essential as the organizations of
the licensor, namely, MTNL and BSNL were also service providers. That
being the object for which an independent tribunal was constituted,
the power of that Tribunal has to be adjudged from the language
conferring that power and it would not be appropriate to restrict the
same on the ground that the decision which is the subject-matter of
challenge before the Tribunal was that of an expert body. It is no
doubt true, to which we will advert later, that the composition of the
Telecom Regulatory Authority of India as well as the constitution of
GOT-IT in April 2001 consists of a large number of eminent impartial
experts and it is on their advice, the Prime Minister finally took the
decision, but that would not in any way restrict the power of the
Appellate Tribunal under Section 14, even though in the matter of
appreciation the Tribunal would give due weight to such expert advice
and recommendations. Having regard to the very purpose and object for
which the Appellate Tribunal was constituted and having examined the
different provisions contained in Chapter IV, more particularly, the
provision dealing with ousting the jurisdiction of the civil court in
relation to any matter which the Appellate Tribunal is empowered by or
under the Act, as contained in Section 15, we have no hesitation in
coming to the conclusion that the power of the Appellate Tribunal is
quite wide, as has been indicated in the statute itself and the
decisions of this Court dealing with the power of a court, exercising
appellate power or original power, will have no application for
limiting the jurisdiction of the Appellate Tribunal under the Act.
Since the Tribunal is the original authority to adjudicate any dispute
between a licensor and a licensee or between two or more service
providers or between a service provider and a group of consumers and
since the Tribunal has to hear and dispose of appeals against the
directions, decisions or order of TRAI, it is difficult for us to
import the self-contained restrictions and limitations of a court
under the judge-made law to which reference has already been made and
reliance was placed by the learned Attorney-General.”

 

(emphasis supplied)

 

 

 

54. In Union of India v. TATA Teleservices (Maharashtra) Ltd. (supra),
the two Judge Bench of this Court referred to the scheme of the Act and
observed:

 

“The conspectus of the provisions of the Act clearly indicates that
disputes between the licensee or licensor, between two or more service
providers which takes in the Government and includes a licensee and
between a service provider and a group of consumers are within the
purview of TDSAT. A plain reading of the relevant provisions of the
Act in the light of the Preamble to the Act and the Objects and
Reasons for enacting the Act, indicates that disputes between the
parties concerned, which would involve significant technical aspects,
are to be determined by a specialised tribunal constituted for that
purpose. There is also an ouster of jurisdiction of the civil court to
entertain any suit or proceeding in respect of any matter which TDSAT
is empowered by or under the Act to determine. The civil court also
has no jurisdiction to grant an injunction in respect of any action
taken or to be taken in pursuance of any power conferred by or under
the Act. The constitution of TDSAT itself indicates that it is chaired
by a sitting or retired Judge of the Supreme Court or sitting or a
retired Chief Justice of the High Court, one of the highest judicial
officers in the hierarchy and the members thereof have to be of the
cadre of Secretaries to the Government, obviously well experienced in
administration and administrative matters.

 

The Act is seen to be a self-contained code intended to deal with all
disputes arising out of telecommunication services provided in this
country in the light of the National Telecom Policy, 1994. This is
emphasised by the Objects and Reasons also.

 

Normally, when a specialised tribunal is constituted for dealing with
disputes coming under it of a particular nature taking in serious
technical aspects, the attempt must be to construe the jurisdiction
conferred on it in a manner as not to frustrate the object sought to
be achieved by the Act. In this context, the ousting of the
jurisdiction of the civil court contained in Section 15 and Section 27
of the Act has also to be kept in mind. The subject to be dealt with
under the Act has considerable technical overtones which normally a
civil court, at least as of now, is ill equipped to handle and this
aspect cannot be ignored while defining the jurisdiction of TDSAT.”

 

55. In the aforementioned judgments, this Court has laid emphasis on the
scope of the jurisdiction of TDSAT but has not dealt with the question
whether the words ‘direction’, ‘decision’ or ‘order’ include ‘regulations’
framed under Section 36 of the Act and the same could be subjected to
appellate jurisdiction of TDSAT. Therefore, those judgments cannot be
relied upon for holding that in exercise of power under Section 14(b) of
the Act TDSAT can hear an appeal against regulations framed under Section
36.
56. We may now deal with the judgment of three Judge Bench in Civil
Appeal No.6743/2003 – Telecom Regulatory Authority of India v. BPL Mobile
Cellular Ltd. is clearly distinguishable. The facts of that case were that
in May, 2001 respondent No.1 offered a scheme as a promotional plan to its
customers. Several thousand subscribers accepted the offer. In October,
2001 the scheme was dropped. A public interest litigation was filed by one
subscriber challenging the unilateral dropping of the scheme by respondent
No.1. The High Court passed an order and directed the appellant to submit a
report in that connection. No report having been submitted, by a subsequent
order dated 24.9.2002, the High Court directed the appellant to take steps
after hearing the parties and submit a report of compliance within a period
of three months from the date of the order. Pursuant to this directive the
appellant passed an order on 23.12.2002 holding, inter alia, that
respondent No.1 had violated the provisions of the Telecommunication Tariff
Order, 1999 insofar as it had failed to inform the appellant either as to
the introduction of the scheme or subsequent withdrawal hereof. It was
found that the action of respondent No.l had adversely affected the
interest of the subscribers. Finally the appellant opined that the
violation was of serious nature and to be dealt with in accordance with
Section 29 read with Section 34 of the Act. Thereafter, a complaint was
lodged before the jurisdictional Magistrate. Respondent No.1 filed an
appeal against order dated 23.12.2002. TDSAT allowed the appeal and held
that Section 29 could not be invoked for any violation of an order issued
by the appellant. This Court referred to Sections 29 and 34 and formulated
the following question:

 

“Whether the word ‘directions’ would include the Telecommunication
Tariff Order, 1999 (hereinafter referred to as the ‘Order’) so that
any violation thereof would be punishable under Section 29 read with
Section 34.”

 

 

 

The Court then referred to Sections 11(1)(c), 11(2), 12(4), 13 and
observed:

 

“The order which has been passed in 1999 has in fact sought to and
ensures compliance of the terms and conditions of the licence granted
by the Government of India to the respondent.

 

It appears to us on a reading of all these provisions
that the word ‘directions’ had been used in a wide sense to cover
orders/regulations which in effect direct an action to be taken we
were to limit Section 29 only to directions which were not directory
orders or/directory regulations this would mean that violation of such
orders/regulations would not carry any penal consequence whatsoever.
Consequently, the entire scheme of the Act would become unworkable.
Besides Section 11(1)(b) in respect of which directions may be issued
has itself also been widely framed. Indeed the order in question
pertains to the provisions of Section 11(1)(b)(i) as we have already
stated. It may be that Section 29 creates an offence and therefore,
must be strictly construed. However, that principle will not
militate with the principle that the interpretation of a word must be
made contextually. We have to ascertain the meaning of the word
‘directions’ in Section 29. The word ‘directions’ can take within its
fold directory orders and regulations in the nature of directions as a
matter of semantics. Besides in the context of the Act there is no
reason not to include the orders and regulations containing directions
within the word ‘directions.’ This would also be a logical corollary
as such regulations and orders have appended to them a more serious
mandate.”

 

57. From the above extracted portion of the order it is evident that the
Bench, which decided the matter, felt that the view taken by TDSAT would
encourage rampant violation of the orders without any penal consequence and
the entire scheme of the Act would become unworkable. The word
‘directions’ used in Section 29 of the Act was interpreted to include
orders and regulations in the context of the factual matrix of that case
and the apprehension of the Court that Section 29 would otherwise become
unworkable, but the same cannot be read as laying down a proposition of law
that the words ‘direction’, ‘decision’ or ‘order’ used in Section 14(b)
would include regulation framed under Section 36, which are in the nature
of subordinate legislation.
58. In PTC India Ltd. v. Central Electricity Regulatory Commission
(surpa), the Constitution Bench framed the following questions:

 

“(i) Whether the Appellate Tribunal constituted under the Electricity
Act, 2003 (the 2003 Act) has jurisdiction under Section 111 to examine
the validity of the Central Electricity Regulatory Commission
(Fixation of Trading Margin) Regulations, 2006 framed in exercise of
power conferred under Section 178 of the 2003 Act?

 

(ii) Whether Parliament has conferred power of judicial review on the
Appellate Tribunal for Electricity under Section 121 of the 2003 Act?

 

(iii) Whether capping of trading margins could be done by CERC (the
Central Commission) by making a regulation in that regard under
Section 178 of the 2003 Act?”

 
59. The Constitution Bench extensively referred to the provisions of the
Electricity Act, 2003 including Sections 73, 75, 79, 86, 111, 177, 178,
179, 181 and 182, and observed:

 

“47. On the above submissions, one of the questions which arises for
determination is—whether trading margin fixation (including capping)
under the 2003 Act can only be done by an order under Section 79(1)(j)
and not by regulations under Section 178? According to the
appellant(s) it can only be done by an order under Section 79(1)(j),
particularly when under Section 178(2) power to make regulations is co-
relatable to the functions ascribed to each authority under the said
2003 Act.

 

48. In every case one needs to examine the statutory context to
determine whether a court or a tribunal hearing a case has
jurisdiction to rule on a defence based upon arguments of invalidity
of subordinate legislation or administrative act under it. There are
situations in which Parliament may legislate to preclude such
challenges in the interest of promoting certainty about the legitimacy
of administrative acts on which the public may have to rely.

 

49. On the above analysis of various sections of the 2003 Act, we find
that the decision-making and regulation-making functions are both
assigned to CERC. Law comes into existence not only through
legislation but also by regulation and litigation. Laws from all three
sources are binding. According to Professor Wade, “between legislative
and administrative functions we have regulatory functions”. A
statutory instrument, such as a rule or regulation, emanates from the
exercise of delegated legislative power which is a part of
administrative process resembling enactment of law by the legislature
whereas a quasi-judicial order comes from adjudication which is also a
part of administrative process resembling a judicial decision by a
court of law.

 

50. Applying the above test, price fixation exercise is really
legislative in character, unless by the terms of a particular statute
it is made quasi-judicial as in the case of tariff fixation under
Section 62 made appealable under Section 111 of the 2003 Act, though
Section 61 is an enabling provision for the framing of regulations by
CERC. If one takes “tariff” as a subject-matter, one finds that under
Part VII of the 2003 Act actual determination/fixation of tariff is
done by the appropriate Commission under Section 62 whereas Section 61
is the enabling provision for framing of regulations containing
generic propositions in accordance with which the appropriate
Commission has to fix the tariff. This basic scheme equally applies to
the subject-matter “trading margin” in a different statutory context
as will be demonstrated by discussion hereinbelow.”

 

 

 

The Bench then referred to the judgments in Narinder Chand Hem Raj v. Lt.
Governor, H.P. (1971) 2 SCC 747 and Indian Express Newspapers (Bombay) (P)
Ltd. v. Union of India (1985) 1 SCC 641 and held:

 

“53. Applying the abovementioned tests to the scheme of the 2003 Act,
we find that under the Act, the Central Commission is a decision-
making as well as regulation-making authority, simultaneously. Section
79 delineates the functions of the Central Commission broadly into two
categories—mandatory functions and advisory functions. Tariff
regulation, licensing (including inter-State trading licensing),
adjudication upon disputes involving generating companies or
transmission licensees fall under the head “mandatory functions”
whereas advising the Central Government on formulation of National
Electricity Policy and tariff policy would fall under the head
“advisory functions”. In this sense, the Central Commission is the
decision-making authority. Such decision-making under Section 79(1) is
not dependent upon making of regulations under Section 178 by the
Central Commission. Therefore, functions of the Central Commission
enumerated in Section 79 are separate and distinct from functions of
the Central Commission under Section 178. The former are
administrative/adjudicatory functions whereas the latter are
legislative.

 

54. As stated above, the 2003 Act has been enacted in furtherance of
the policy envisaged under the Electricity Regulatory Commissions Act,
1998 as it mandates establishment of an independent and transparent
Regulatory Commission entrusted with wide-ranging responsibilities and
objectives inter alia including protection of the consumers of
electricity. Accordingly, the Central Commission is set up under
Section 76(1) to exercise the powers conferred on, and in discharge of
the functions assigned to, it under the Act. On reading Sections 76(1)
and 79(1) one finds that the Central Commission is empowered to take
measures/steps in discharge of the functions enumerated in Section
79(1) like to regulate the tariff of generating companies, to regulate
the inter-State transmission of electricity, to determine tariff for
inter-State transmission of electricity, to issue licences, to
adjudicate upon disputes, to levy fees, to specify the Grid Code, to
fix the trading margin in inter-State trading of electricity, if
considered necessary, etc. These measures, which the Central
Commission is empowered to take, have got to be in conformity with the
regulations under Section 178, wherever such regulations are
applicable. Measures under Section 79(1), therefore, have got to be in
conformity with the regulations under Section 178.

 

55. To regulate is an exercise which is different from making of the
regulations. However, making of a regulation under Section 178 is not
a precondition to the Central Commission taking any steps/measures
under Section 79(1). As stated, if there is a regulation, then the
measure under Section 79(1) has to be in conformity with such
regulation under Section 178. This principle flows from various
judgments of this Court which we have discussed hereinafter. For
example, under Section 79(1)(g) the Central Commission is required to
levy fees for the purpose of the 2003 Act. An order imposing
regulatory fees could be passed even in the absence of a regulation
under Section 178. If the levy is unreasonable, it could be the
subject-matter of challenge before the appellate authority under
Section 111 as the levy is imposed by an order/decision-making
process. Making of a regulation under Section 178 is not a
precondition to passing of an order levying a regulatory fee under
Section 79(1)(g). However, if there is a regulation under Section 178
in that regard then the order levying fees under Section 79(1)(g) has
to be in consonance with such regulation.”

 

 

 
The Constitution Bench then considered the question whether Section 121 of
the Electricity Act, 2003 can be read as conferring power of judicial
review upon the Appellate Tribunal. The Bench referred to the judgment in
Raman and Raman Ltd. v. State of Madras AIR 1959 SC 694 and observed:

 

“83. Applying the tests laid down in the above judgment to the present
case, we are of the view that, the words “orders”, “instructions” or
“directions” in Section 121 do not confer power of judicial review in
the Tribunal. It is not possible to lay down any exhaustive list of
cases in which there is failure in performance of statutory functions
by the appropriate Commission. However, by way of illustrations, we
may state that, under Section 79(1)(h) CERC is required to specify the
Grid Code having regard to the Grid Standards. Section 79 comes in
Part X. Section 79 deals with functions of CERC. The word “grid” is
defined in Section 2(32) to mean high voltage backbone system of
interconnected transmission lines, sub-stations and generating plants.
Basically, a grid is a network. Section 2(33) defines “Grid Code” to
mean a code specified by CERC under Section 79(1)(h). Section 2(34)
defines “Grid Standards” to mean standards specified under Section
73(d) by the Authority.

 

84. Grid Code is a set of rules which governs the maintenance of the
network. This maintenance is vital. In summer months grids tend to
trip. In the absence of the making of the Grid Code in accordance with
the Grid Standards, it is open to the Tribunal to direct CERC to
perform its statutory functions of specifying the Grid Code having
regard to the Grid Standards prescribed by the Authority under Section
73. One can multiply these illustrations which exercise we do not wish
to undertake. Suffice it to state that, in the light of our analysis
of the 2003 Act, hereinabove, the words “orders, instructions or
directions” in Section 121 of the 2003 Act cannot confer power of
judicial review under Section 121 to the Tribunal, which, therefore,
cannot go into the validity of the impugned 2006 Regulations, as
rightly held in the impugned judgment.”

 
60. The summary of the findings of the Constitution Bench are contained
in paragraph 92, which is reproduced below:

 

“92. (i) In the hierarchy of regulatory powers and functions under the
2003 Act, Section 178, which deals with making of regulations by the
Central Commission, under the authority of subordinate legislation, is
wider than Section 79(1) of the 2003 Act, which enumerates the
regulatory functions of the Central Commission, in specified areas, to
be discharged by orders (decisions).

 

(ii) A regulation under Section 178, as a part of regulatory
framework, intervenes and even overrides the existing contracts
between the regulated entities inasmuch as it casts a statutory
obligation on the regulated entities to align their existing and
future contracts with the said regulation.

 

(iii) A regulation under Section 178 is made under the authority of
delegated legislation and consequently its validity can be tested only
in judicial review proceedings before the courts and not by way of
appeal before the Appellate Tribunal for Electricity under Section 111
of the said Act.

 

(iv) Section 121 of the 2003 Act does not confer power of judicial
review on the Appellate Tribunal. The words “orders”, “instructions”
or “directions” in Section 121 do not confer power of judicial review
in the Appellate Tribunal for Electricity. In this judgment, we do not
wish to analyse the English authorities as we find from those
authorities that in certain cases in England the power of judicial
review is expressly conferred on the tribunals constituted under the
Act. In the present 2003 Act, the power of judicial review of the
validity of the regulations made under Section 178 is not conferred on
the Appellate Tribunal for Electricity.

 

(v) If a dispute arises in adjudication on interpretation of a
regulation made under Section 178, an appeal would certainly lie
before the Appellate Tribunal under Section 111, however, no appeal to
the Appellate Tribunal shall lie on the validity of a regulation made
under Section 178.

 

(vi) Applying the principle of “generality versus enumeration”, it
would be open to the Central Commission to make a regulation on any
residuary item under Section 178(1) read with Section 178(2)(ze).
Accordingly, we hold that CERC was empowered to cap the trading margin
under the authority of delegated legislation under Section 178 vide
the impugned Notification dated 23-1-2006.

 

(vii) Section 121, as amended by the Electricity (Amendment) Act 57 of
2003, came into force with effect from 27-1-2004. Consequently, there
is no merit in the contention advanced that the said section has not
yet been brought into force.”

 

61. In our view, even though in paragraph 94 of the judgment the
Constitution Bench clarified that the judgment will not govern the cases
under the Act, the ratio of that judgment is clearly attracted in these
cases.
62. The judgments of the larger Bench in L. Chandra Kumar v. Union of
India (supra) and Union of India v. Madras Bar Association (2010) 11 SCC 1
are clearly distinguishable. In L. Chandra Kumar’s case, this Court
considered the scope of Section 14 of the 1985 Act, which reads as under:
“14. Jurisdiction, powers and authority of the Central Administrative
Tribunal.- (1) Save as otherwise expressly provided in this Act, the
Central Administrative Tribunal shall exercise, on and from the
appointed day, all the jurisdiction, powers and authority exercisable
immediately before that day by all courts except the Supreme Court in
relation to-

 

(a) recruitment, and matters concerning recruitment, to any All-India
Service or to any civil service of the Union or a civil post under the
Union or to a post connected with defence or in the defence services,
being, in either case, a post filled by a civilian;

 

(b) all service matters concerning-

 

(i) a member of any All-India Service; or

 

(ii) a person not being a member of an All-India Service or a person
referred to in clause (c) appointed to any civil service of the Union
or any civil post under the Union; or

 

(iii) a civilian not being a member of an All-India Service or a
person referred to in clause (c) appointed to any defence, services or
a post connected with defence,

 

and pertaining to the service of such member, person or civilian, in
connection with the affairs of the Union or of any State or of any
local or other authority within the territory of India or under the
control of the Government of India or of any corporation or society
owned or controlled by the Government;

 

(c) all service matters pertaining to service in connection with the
affairs of the Union concerning a person appointed to any service or
post referred to in sub-clause (ii) or sub-clause (iii) of clause (b),
being a person whose services have been placed by a State Government
or any local or other authority or any corporation or society or other
body, at the disposal of the Central Government for such appointment.

 

Explanation.- For the removal of doubts, it is hereby declared that
references to “Union” in this sub-section shall be construed as
including references also to a Union territory.

 

(2) The Central Government may, by notification, apply with effect
from such date as may be specified in the notification the provisions
of sub-section (3) to local or other authorities within the territory
of India or under the control of the Government of India and to
corporations or societies owned or controlled by Government, not being
a local or other authority or corporation or society controlled or
owned by a State Government:

 

Provided that if the Central Government considers it expedient so to
do for the purpose of facilitating transition to the scheme as
envisaged by this Act, different dates may be so specified under this
sub- section in respect of different classes of, or different
categories under any class of, local or other authorities or
corporations or societies.

 

(3) Save as otherwise expressly provided in this Act, the Central
Administrative Tribunal shall also exercise, on and from the date with
effect from which the provisions of this sub- section apply to any
local or other authority or corporation or society, all the
jurisdiction, powers and authority exercisable immediately before that
date by all courts (except the Supreme Court) in relation to–

 

(a) recruitment, and matters concerning recruitment, to any service or
post in connection with the affairs of such local or other authority
or corporation or society; and

 

(b) all service matters concerning a person other than a person
referred to in clause (a) or clause (b) of sub- section (1) appointed
to any service or post in connection with the affairs of such local or
other authority or corporation or society and pertaining to the
service of such person in connection with such affairs.”

 

 

 

The larger Bench then dealt with the scope of the power of judicial review
vested in the Supreme Court and the High Courts and proceeded to observe:

 

“Before moving on to other aspects, we may summarise our conclusions
on the jurisdictional powers of these Tribunals. The Tribunals are
competent to hear matters where the vires of statutory provisions are
questioned. However, in discharging this duty, they cannot act as
substitutes for the High Courts and the Supreme Court which have,
under our constitutional set-up, been specifically entrusted with such
an obligation. Their function in this respect is only supplementary
and all such decisions of the Tribunals will be subject to scrutiny
before a Division Bench of the respective High Courts. The Tribunals
will consequently also have the power to test the vires of subordinate
legislations and rules. However, this power of the Tribunals will be
subject to one important exception. The Tribunals shall not entertain
any question regarding the vires of their parent statutes following
the settled principle that a Tribunal which is a creature of an Act
cannot declare that very Act to be unconstitutional. In such cases
alone, the High Court concerned may be approached directly. All other
decisions of these Tribunals, rendered in cases that they are
specifically empowered to adjudicate upon by virtue of their parent
statutes, will also be subject to scrutiny before a Division Bench of
their respective High Courts. We may add that the Tribunals will,
however, continue to act as the only courts of first instance in
respect of the areas of law for which they have been constituted. By
this, we mean that it will not be open for litigants to directly
approach the High Courts even in cases where they question the vires
of statutory legislations (except, as mentioned, where the legislation
which creates the particular Tribunal is challenged) by overlooking
the jurisdiction of the Tribunal concerned.”

 

 

 

63. In Union of India v. Madras Bar Association (supra) and State of
Gujarat v. Gujarat Revenue Tribunal Bar Association (2012) 10 SCC 353 :
2012 (10) SCALE 285, this Court applied the principles laid down in L.
Chandra Kumar’s case and reiterated the importance of Tribunals created for
resolution of disputes but these judgments too have no bearing on the
decision of the question formulated before us.

 

64. In the result, the question framed by the Court is answered in the
following terms:
In exercise of the power vested in it under Section 14(b) of the
Act, TDSAT does not have the jurisdiction to entertain the challenge
to the regulations framed by the Authority under Section 36 of the
Act.

 

65. As a corollary, we hold that the contrary view taken by TDSAT and the
Delhi High Court does not represent correct law. At the same time, we make
it clear that the aggrieved person shall be free to challenge the validity
of the regulations framed under Section 36 of the Act by filing appropriate
petition before the High Court.
66. The cases may now be listed before an appropriate Bench for deciding
the questions framed vide order dated 6.2.2007 passed in Civil Appeal
No.3298/2005 and some of the connected matters.

 
………………………………………………………………….
……J.
(G.S. SINGHVI)

 

 

 

………………………………………………………………….
…..J.
(B.S. CHAUHAN)

 

 

 

………………………………………………………………….
…….J.
(FAKKIR MOHAMED IBRAHIM KALIFULLA)

 

New Delhi
December 6, 2013.

 

 

 
[pic]
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133

 

 

 

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