Page 1 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

Page 2 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:

2

Page 3 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

3

Page 4 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?

4

Page 5 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.

5

Page 6 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

5.1The delay in filing and re-filing C.A. No. D28298 of 2010 is

condoned.

5.2These 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.

6

Page 7 5.3A 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.

5.4In 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

7

Page 8 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

6.1Civil 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.

6.2On receiving information that some operators were disconnecting

Points of Interconnection (PoI) for the reason of non payment of

8

Page 9 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.

6.3BSNL 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

9

Page 10 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.

6.4The 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

7.1These 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).

10

Page 11 7.2In 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.

7.3After 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.

7.4In 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

11

Page 12 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.

7.6TDSAT 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.

12

Page 13 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

8.1These 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.

8.2Direct 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.

13

Page 14 8.3The 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).

8.4The 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.

14

Page 15 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.

8.7The 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.

8.8COAI 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

15

Page 16 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

16

Page 17 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

9.1These 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.

9.2Access 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.

9.3In 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

17

Page 18 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.

9.4The 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).

18

Page 19 9.5After 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.

9.6AUSPI 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

19

Page 20 of port charges. COAI separately filed Petition No.3/2002 for quashing

circular dated 2.11.2001.

9.7During 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.

9.8Private 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

20

Page 21 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

21

Page 22 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.

22

Page 23 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

23

Page 24 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

24

Page 25 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.

25

Page 26 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

26

Page 27 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.

27

Page 28 11.3 On 23.6.2006, the Authority issued 6

th

amendment to IUC

Regulations. BSNL issued Circular dated 28.2.2006 for

implementation of the 6

th

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

28

Page 29 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

29

Page 30 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.

30

Page 31 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.

31

Page 32 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.

6/2006

BSNL Challenged the IUC Regulations, 2006

alleging 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.

5/2007

BSNL Challenged the 8th Amendment dt.

21.3.2007 to the extent of reduction of ADC

payable to BSNL and fixation of uniform

termination charges (Mobile Termination

Charge and Fixed Termination Charge).

Appeal

No.

5/2008

BSNL Challenged the 9th Amendment dt.

27.3.2008 to the extent of reduction of ADC

payable to BSNL and fixation of uniform

termination charges.

Appeal

No.

4/2006

COAI Challenging the Regulations, 2006 to the

extent that Mobile Termination Charge at

Rs. 0.30 per minute has been maintained

which is not cost based as stated by TRAI.

Appeal BSNL Seeking setting aside of the Regulation dt.

32

Page 33 No.

2/2009

9.3.2009 to the extent of fixation of

termination charges and carriage charge.

Appeal

No.

3/2009

AUSPI Seeking setting aside of Regulation dt.

9.3.2009. Review of termination charge,

transit charge and port charge.

Appeal

No.

4/2009

VodafoneSeeking setting aside of Regulation dt.

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.

5/2009

M/s

Bharati

Airtel

Similar to Vodafone.

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.

6/2009

M/s Idea

Cellular

Ltd. &

Ors.

Similar to M/s Bharati Airtel

Appeal

No.

7/2009

M/s

Aircel

Ltd. &

Ors.

Similar to Vodafone.

Appeal

No.

8/2009

Etisalat

D.B.

Telecom

(P) Ltd.

Seeking setting aside of Regulation dt.

9.3.2009. Direction to TRAI to: re-introduce

termination charges based on whether

operator is a new entrant and had fulfilled

roll out obligation; determine MTC at not

33

Page 34 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

34

Page 35 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.

35

Page 36 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

36

Page 37 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;

37

Page 38 (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 22

nd

Report of the Standing Committee on

Communications, the Telecom Authority of India Ordinance, 1996

38

Page 39 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:

39

Page 40 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.

40

Page 41 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.

41

Page 42 (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

42

Page 43 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;

43

Page 44 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,-

44

Page 45 (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.

45

Page 46 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

46

Page 47 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.

47

Page 48 (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.

48

Page 49 (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

49

Page 50 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.

50

Page 51 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:

51

Page 52 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)

52

Page 53 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:

53

Page 54 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.

54

Page 55 (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),-

55

Page 56 (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–

56

Page 57 (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

57

Page 58 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.

58

Page 59 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;

59

Page 60 (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.

60

Page 61 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

61

Page 62 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

An Act to provide for the

establishment of the Telecom

Regulatory Authority of India to

regulate the telecommunication

services, and for matters connected

therewith or incidental thereto.

PREAMBLE

An Act to provide for the

establishment of the Telecom

Regulatory Authority of India and

the Telecom Disputes Settlement

and Appellate Tribunal to regulate

the 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.

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

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

62

Page 63 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 contract, 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.

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 contract, and

shall, by the said name, sue or be

sued.

(3) The Authority shall consist of a

Chairperson, and not more than two

whole-time members and not more

than two part-time 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;

Section 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

63

Page 64 (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) lay down 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

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:-

64

Page 65 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 (l) 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

(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

inter-connectivity 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

65

Page 66 telecommunication

technology and any other

matter relatable 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

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:

66

Page 67 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.

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

67

Page 68 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

68

Page 69 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

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.

Section 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

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

69

Page 70 SETTLEMENT OF DISPUTES

Section 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 exercisable

immediately before that date by

any civil court on any matter

relating to-

(i) technical compatibility and

interconnections between service

providers;

(ii) revenue sharing arrangements

APPELLATE TRIBUNAL

Section 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 subsection (1)

of section 5 of the Monopolies

and Restrictive Trade Practices

Act, 1969 (54 of 1969);

(B) the complaint of an

individual consumer

70

Page 71 between different service

providers;

(iii) quality of telecommunication

services and interest of consumers:

Provided that nothing in this 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

subsection (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 Disputes?

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 7-B of the Indian

Telegraph Act, 1885 (13 of

1885).

maintainable before a Consumer

Disputes Redressal Forum or a

Consumer Disputes Redressal

Commission or the National

Consumer Disputes? 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.

Section 14A - Application for

settlement of disputes and

appeals to Appellate Tribunal

(1) The Central Government or a

State Government or a local

authority or any person may make

an application to the Appellate

Tribunal for adjudication of any

dispute referred to in clause (a) of

section 14.

(2) The Central Government or a

State Government or a local

authority or any person aggrieved

by any direction, decision or order

made by the Authority may prefer

71

Page 72 an appeal to the Appellate Tribunal.

(3) Every appeal under sub-section

(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)

72

Page 73 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,

73

Page 74 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

74

Page 75 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

Authority.- (1) The Authority shall

be guided by the principles of

natural justice.

(2) The Authority shall have, for

the purpose of discharging their

functions under this Chapter, the

same powers as are vested in a civil

court under the Code of Civil

Procedure, 1908 (5 of 1908) in

respect of the following matters,

namely

(a)summoning and

Section 16

Procedure and powers of

Appellate Tribunal.- (1) The

Appellate Tribunal shall not be

bound by the procedure laid down

by the Code of Civil Procedure,

1908 (5 of 1908), but shall be

guided by the principles of natural

justice and, subject to the other

provisions of this Act, the Appellate

Tribunal shall have powers to

regulate its own procedure.

(2)The Appellate Tribunal shall

have, for the purposes of

75

Page 76 enforcing the attendance

of any person and

examining him on oath;

(b)requiring the discovery

and production of

documents;

(c)receiving evidence on

affidavits;

(d)issuing commissions for

the examination of

witnesses or documents;

(e)reviewing its decisions;

(f)dismissing an application

for default or deciding it

ex parte;

(g)setting aside any order of

dismissal of any

application for default or

any order passed by it ex

parte;

(h)any other matter which

may be prescribed.

(3) Every proceeding before the

Authority shall be deemed to be a

judicial proceeding within the

meaning of Sections 193 and 228,

and for the purpose of Section 196

of the Indian Penal Code, 1860 (45

of 1860) and the Authority shall be

deemed to be a civil court for all

the purposes of Section 195 and

Chapter XXVI of the Code of

discharging its functions under this

Act, the same powers as are vested

in a civil court under the Code of

Civil Procedure, 1908 (5 of 1908),

while trying a suit, in respect of the

following matters, namely:—

(a) summoning and enforcing

the attendance of any

person and examining him

on oath;

(b) requiring the discovery and

production of documents;

(c) receiving evidence on

affidavits;

(d) subject to the provisions of

sections 123 and 124 of the

Indian Evidence Act,1872

(1 of 1872), requisitioning

any public record or

document or a copy of

such record or document,

from any office;

(e) issuing commissions for

the examination of

witnesses or documents;

(f) reviewing its decisions;

(g) dismissing an application

for default or deciding it,

ex parte;

(h) setting aside any order of

dismissal of any

application for default or

76

Page 77 Criminal Procedure 1973 (2 of

1974).

any order passed by it, ex

parte; and

(i) 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

Orders passed by Authority or

High Court to be executable as a

decree.- Every order made by the

Authority under this Act or the

order made by the High Court in

any appeal against any order of the

Authority shall, on a certificate

issued by any officer of the

Authority or the Registrar of the

High Court, as the case may be, be

deemed to be decree of the civil

court and shall be executable in the

same manner as a decree of that

court.

Section 19.

Orders passed by Appellate

Tribunal to be executable as a

decree.-(1)An order passed by the

Appellate Tribunal under this Act

shall be executable by the Appellate

Tribunal as a decree of civil court,

and for this purpose, the Appellate

Tribunal shall have all the powers

of a civil court.

(2)Notwithstanding anything

contained in sub-section (1), the

Appellate Tribunal may transmit

any order made by it to a civil court

having local jurisdiction and such

civil court

shall execute the order as if it were

77

Page 78 a decree made by that court.

Section 20

Penalty for wilful failure to

comply with orders of Authority

or High Court.- If any person

wilfully fails to comply with the

orders of the Authority or any

order of the High Court, as the case

may be, he shall be punishable with

fine which may extend to one lakh

rupees and in case of a second or

subsequent offence with fine which

may extend to two lakh rupees and

in the case of continuing

contravention with additional fine

which may extend to two lakh

rupees for every day during which

the default continues.

Section 20

Penalty for wilful failure to

comply with orders of Appellate

Tribunal.-If any person wilfully

fails to comply with the order of the

Appellate Tribunal, he shall be

punishable with fine which may

extend to one lakh rupees and in

case of a second or subsequent

offence with fine which may extend

to two lakh rupees and in the case

of continuing contravention with

additional fine which may extend to

two lakh rupees for every day

during which such default

continues.]

Section 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 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

Section 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 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

78

Page 79 (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 (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 clause (m) of

sub-section (1) of Section 11;

(f) levy of fees and other charges

under clause (p) of sub-section

(1) of section 11.

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;

xxx

(d)matters in respect of which

register is to be maintained by the

authority under sub-clause (vii) of

clause (b) 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 (viii) of

clause (b) of sub-section (1) of

section 11;

(f)levy of fees and other changes

under clause (c) 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.

79

Page 80 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.

80

Page 81 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

81

Page 82 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

82

Page 83 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):

83

Page 84 (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.

84

Page 85 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

85

Page 86 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

86

Page 87 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

87

Page 88 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:

88

Page 89 “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

89

Page 90 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.”

90

Page 91 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.

91

Page 92 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:

92

Page 93 “ “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

93

Page 94 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

94

Page 95 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

95

Page 96 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:

96

Page 97 “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:

97

Page 98 “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

98

Page 99 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

99

Page 100 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

100

Page 101 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

101

Page 102 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

102

Page 103 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

103

Page 104 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

104

Page 105 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

105

Page 106 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.

106

Page 107 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

107

Page 108 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

108

Page 109 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

109

Page 110 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

110

Page 111 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

111

Page 112 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

112

Page 113 (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

113

Page 114 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

114

Page 115 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).

115

Page 116 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

116

Page 117 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

117

Page 118 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

118

Page 119 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

119

Page 120 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:

120

Page 121 “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

121

Page 122 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

122

Page 123 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-

123

Page 124 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:

124

Page 125 “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

125

Page 126 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

126

Page 127 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

127

Page 128 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

128

Page 129 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

129

Page 130 (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;

130

Page 131 (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--

131

Page 132 (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

132

Page 133 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

133

Page 134 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.

134