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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

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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:

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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  

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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?

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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.

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4. For  better  appreciation  of  the  arguments  advanced by learned  

counsel for the parties,  we may notice the facts borne out from the  

records of different appeals.   

Civil Appeal Nos. 5253, 5184, 5873, 6068, 6255 of 2010 and Civil  Appeal No. D28298 of 2010

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

condoned.

5.2 These  appeals   have  been  filed  by  Bharat  Sanchar  Nigam  

Limited  (BSNL),  Cellular  Operators  Association  of  India  (COAI),  

Association of Unified Telecom Service  Providers of India (AUSPI),  

the  Authority,   M/s.  Sistema Shyam TeleServices   Limited   and  

Mahanagar   Telephone   Nigam   Limited  (MTNL),  respectively,  

against order dated 28.5.2010 passed by TDSAT whereby the appeal  

preferred  by  BSNL  against  the  Telecommunication  Interconnection  

(Port Charges) Amendment Regulation (1 of 2007) was allowed and  

the Authority was directed to give fresh look at the regulations and  

BSNL was directed not to claim any amount from any operator during  

the  interregnum,  i.e.,  from  the  date  of  coming  into  force  of  the  

regulations and the date of the order.

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5.3 A  perusal  of  the  record  shows  that  port  charges  came  to  be  

prescribed in  Schedule 3 of  the Telecommunication Interconnection  

(Charges and Revenue Sharing) Regulations, 1999, which came into  

force on 28.5.1999.  By virtue of Clause 8, the regulations were given  

overriding  effect  qua  the  interconnection  agreements.  MTNL  

challenged the 1999 regulations before the Delhi High Court in Civil  

Writ  Petition  No.  6543/1999,  which  was  allowed  by  the  Division  

Bench of the High Court vide order dated 17.1.2000 [MTNL v. TRAI,  

AIR 2000 (Delhi) 208] and it was held that the Regulations framed  

under  Section  36  of  the  Act  could  not  be  given  overriding  effect.  

Thereafter,  the  Authority  framed  the  Telecommunication  

Interconnection (Port Charges) Amendment Regulations (6/2001). The  

port  charges  were  specified  in  the  schedule  to  the  amended  

regulations.  The  amended  regulations  were  challenged  in  Appeal  

Nos.11/2002 and 31/2003, which were allowed by TDSAT vide orders  

dated 27.4.2005 and 3.5.2005 respectively.

5.4 In view of the aforesaid orders of TDSAT, the Authority sought  

response of various service providers for review of port charges. In  

that process, BSNL raised objection to the jurisdiction of the Authority  

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to vary the terms and conditions of interconnection agreements or the  

contractual  rates.  On  2.2.2007,  the  Authority  issued  

Telecommunication  Interconnection  (Port  Charges)  Amendment  

Regulation (1 of 2007) reducing the port charges required to be paid  

by  private  telecom  operators  to  BSNL  by  about  23-29%.  BSNL  

challenged Notification dated 2.2.2007 in Appeal No. 4/2007. By an  

order  dated  28.5.2010,  TDSAT  allowed  the  appeal  of  BSNL  and  

issued directions to which reference has been made hereinabove.

Civil Appeal Nos. 951-952/2005

6.1 Civil  Appeal  No.  951/2005  has  been  filed  by  the  Authority  

against  order  dated  21.4.2004  by  which  TDSAT  allowed  Appeal  

No.2/2004  filed  by  BSNL  questioning  direction  dated  31.12.2003  

issued under Section 13 read with Section 11(1)(b) of the Act. Civil  

Appeal No. 952/2005 has been filed by the Authority against  order  

dated 10.8.2004 by which TDSAT dismissed Petition No.2/2004 for  

review of order dated 21.4.2004.

6.2 On receiving information that some operators were disconnecting  

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

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Interconnection Usage Charges and other such reasons,  the Authority  

issued direction dated 31.12.2003 under Section 13 read with Section  

11(1)(b) conveying to all service providers that disconnection of PoIs  

was not desirable because the subscribers  would be inconvenienced  

and all disputes should be resolved through mutual negotiations. It was  

also provided that if the dispute could not be resolved, then 10 days’  

notice of disconnection should be given to the erring party with a copy  

to the Authority. In the event of non-intervention by the Authority, the  

aggrieved party could disconnect the PoI or approach the Authority for  

determination of the matter.

6.3 BSNL filed Appeal No.2/2004 for striking down the aforesaid  

direction  on  the  ground  that  only  TDSAT  was  vested  with  the  

jurisdiction to decide the disputes and the Authority had no jurisdiction  

in the matter. TDSAT allowed the appeal and held that  the Authority  

did not have the jurisdiction to entertain dispute between the service  

providers. TDSAT noted that the words “dispute” and “determination”  

have been used in the direction issued by the Authority, referred to the  

judgment of this Court in Cellular Operators Association of India v.  

Union of India (2003) 3 SCC 186 and held that  the jurisdiction of  

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TDSAT is quite wide and is circumscribed only by the three instances,  

i.e.,  disputes before the MRTP Commission, Consumer Forums and  

those under Section 7B of the Telegraph Act.  

6.4 The Authority filed Review Petition No. 2/2004 and argued that  

while the Authority can be faulted for the use of words “dispute” and  

“determination”, its power to intervene cannot be questioned. Another  

plea  taken  by  the  Authority was  that  the  regulations  framed  under  

Section  36 are  in  the  nature  of  subordinate  legislation  and validity  

thereof cannot be questioned before TDSAT. The review petition was  

dismissed by TDSAT vide order dated 10.8.2004 reiterating that it had  

jurisdiction to entertain dispute relating to validity of regulations.  

Civil Appeal Nos. 3298 and 4529 of 2005

7.1 These appeals are directed against order dated 27.4.2005 passed  

by TDSAT in Appeal Nos.  11 and 12 of 2002 filed by BSNL and  

MTNL respectively, challenging Clause 3.1 of the Telecommunication  

Interconnection (Reference Interconnect Offer) Regulation, 2002 (2 of  

2002).  

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7.2 In  exercise  of  its  powers  under  Section  36 read  with  Section  

11(1)(c)  and  (d)  of  the  unamended  Act,  the  Authority prescribed  

revenue  sharing for  service  providers  under  the  Calling  Party  Pays  

regime  on  17.9.1999.  This  was  challenged  before  the  Delhi  High  

Court.  In  its  judgement  [MTNL v.  TRAI  (supra)],  the  High  Court  

observed that  the Authority has no power to change or vary rights of  

parties under contracts or licenses.  

7.3 After the judgment of the High Court, the Act was amended by  

Ordinance  dated  24.1.2000 and Section 11(1)(b)(ii)  was inserted  to  

enable  the  Authority to  fix  the  terms  and  conditions  of  

interconnectivity between the service providers.  

7.4 In exercise of the power vested in it under Section 36 read with  

Section  11(1)(b)(ii),  (iii)  and  (iv),  the  Authority  framed  the  2002  

Regulations.  Under  Clause  3.1  of  these  regulations,  the  service  

providers with significant market share were required to publish their  

Reference Interconnect Offer (RIO) within 90 days of the issue of the  

Regulations  with  prior  approval  of  the  Authority.  The  2002  

Regulations stipulate the broad framework, structure and provisions on  

which the service provider is to make an offer of interconnection with  

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other  service  providers.  BSNL  submitted  the  proposed  RIO  on  

12.7.2002.  MTNL also submitted  proposed RIO sometime in 2002.  

The RIOs of BSNL and MTNL were approved with certain changes  

effected vide identically worded letters dated 9.10.2002.

7.5 BSNL and MTNL filed Appeal Nos. 11 and 12/2002 challenging  

letters dated 9.10.2002 issued by the Authority. It was contended inter   

alia that  the  Authority did  not  have  the  power  to  frame  such  a  

regulation. They argued that the changes suggested in the RIO were  

non transparent and under the garb of the regulations,  the Authority  

cannot  be  conferred  power  to  fix  the  terms  and  conditions  of  

interconnectivity which BSNL and MTNL can offer to other service  

providers. Clause 3.1 was challenged insofar as it had been interpreted  

to take away the statutory right to appeal as granted under the Act.

7.6 TDSAT disposed of both the appeals vide order dated 27.4.2005.  

TDSAT extensively referred to the orders passed in Review Petition  

No.2/2004  in  Appeal  No.2/2004  (BSNL  v.  TRAI)  and  Appeal  

No.3/2005 as also the order passed by the Delhi High Court wherein it  

was  held  that  TDSAT  is  empowered  to  hear  appeals  involving  

challenge to the validity of the regulations framed under Section 36.  

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TDSAT then held that even after amendment of the Act, the Authority  

does not have the power to amend or override the terms and conditions  

of the interconnect agreements executed by the service providers.  

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

8.1 These appeals have been filed against  order dated 3.5.2005 of  

TDSAT whereby it  allowed Appeal No.31/2003 and partly  allowed  

Petition No.20/2004 and quashed direction dated 22.7.2003 issued by  

the Authority on the premise that it did not have the power to override  

and make direct interconnectivity mandatory.  

8.2 Direct  connectivity  between  different  service  providers  was  

introduced in light of NTP 1999 and the same was provided for in the  

license  agreements  of  existing  licensees  through  an  amendment  on  

29.1.2001 as per DoT letter  dated 9.8.2000 which stated that direct  

connectivity was permitted for the purpose of terminating traffic on the  

basis of mutual  agreements.  In the meanwhile,  on 29.9.2000 BSNL  

was  granted  license  to  provide  cellular  mobile  services  and  it  

commenced its Cellone Cellular Services in October 2002.  

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8.3 The Act was amended vide Ordinance dated 24.1.2000 to include  

the power to fix the terms and conditions of interconnectivity between  

service providers (Section 11(1)(b)(ii) of the amended Act).

8.4 The  Authority issued  Telecommunication  Interconnection  

(Reference  Interconnect  Offer)  Regulation,  2002  on  12.7.2002  and  

mooted the idea of an Interconnect Gateway Switch. On 15.5.2003, the  

Authority issued a consultation paper stating that if one of the parties  

demands direct connectivity it needs to be made mandatory through  

regulations. On 30.6.2003,  the Authority called upon stakeholders to  

discuss  the  issue  of  direct  connectivity.   Thereafter,  the  Authority  

issued direction dated 22.7.2003 under Section 13 of the Act to all  

service providers directing that direct connectivity be made between  

service providers at the earliest and not later than three months from  

the  issue  of  the  direction  so  as  to  promote  network  efficiency  and  

consumer interest.

8.5 BSNL  filed  Appeal  No.  31/2003  challenging  direction  dated  

22.7.2003 on the ground that the same was contrary to the terms and  

conditions of the license agreements of basic and cellular operators.

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8.6. The  Authority issued  IUC  Regulations  dated  29.10.2003  

mandating  direct  connectivity  between  service  providers.  As  per  

clause  (b)  of  Schedule  II,  charges  could  be  levied  through  mutual  

negotiations  but  they were  to  be lower  than Rs.0.20.  BSNL issued  

Circular dated 28.1.2004 levying charge of Rs.0.4 per minute for a call  

from cellular mobile network to another cellular network transited by  

BSNL.  This  charge  included  Rs.0.30  towards  call  termination  and  

Rs.0.19 towards transit.  

8.7 The  Authority released  Consultation  Paper  on  Interconnect  

Exchange  cum  Inter-Carrier  Billing  Clearance  House  for  Multi-

Operator Multi-Service Scenario on 13.4.2004 mooting Interconnect  

Exchange as an alternative to direct connectivity.  

8.8 COAI  filed  Petition  No.  20/2004  seeking  a  direction  against  

BSNL CellOne to directly connect to the Cellular Service Providers  

and to strike down the BSNL Circular requiring payment of Rs 0.19  

transit charges which BSNL Basic Services Division was demanding  

and collecting.

8.9  TDSAT allowed Appeal No.31/2003 and partly allowed petition  

No.20/2004 and quashed direction dated 22.7.2003 on the ground that  

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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  

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conditions for making the same mandatory either by direction under  

Section 13 or by regulation under Section 36.  

Civil Appeal Nos.5834-5836 and 5837 of 2005

9.1 These appeals are directed against order dated 27.4.2005 passed  

by  TDSAT  whereby  it  allowed  Petition  No.  9  of  2001  filed  by  

Association of Basic Telecom Operators and others and Petition No.  

3/2001  filed  by  Cellular  Operators  Association  of  India,  dismissed  

Petition  No.  12/2003  filed  by  private  BSOs  as  withdrawn  and  

dismissed Appeal No. 5/2002 filed by BSNL.

9.2 Access charges to be paid by the Basic Licensees to the DoT  

(now  BSNL)  were  provided  for  in  tender  document  issued  on  

16.1.1995 at the rate of Rs 0.64 per MCU for STD calls and Rs 0.87  

per  MCU  for  ISD  calls.  Clarification  was  issued  on  27.5.1996  

reducing the charges to Rs 0.50 per MCU for STD calls and Rs 0.70  

per MCU for ISD calls.  

9.3 In 1997-98 interconnect agreements were signed between Basic  

Operators  and the then DoT providing for  payment  of  interconnect  

charges including port charges at a minimum of Rs 54,000/- per PCM  

termination per annum for a period of 3 years and then actual/full cost  

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based rates, and access charges at Rs 0.50 per MCU for STD calls and  

Rs 0.70 per MCU for ISD calls. By 1.8.1999 all BSOs migrated to the  

revenue sharing regime instead of the fixed license fee regime. Port  

charges  in  respect  of  Cellular  Mobile  Service  Providers  were  

prescribed by the DoT vide Circulars dated 27.9.1996 and 5.6.1998  

which  extended  that  arrangement  for  computation  of  port  charges  

which  was  incorporated  in  interconnection  agreements  signed  with  

private BSOs to CMSPs.

9.4 The  Authority  issued  Telecommunication  Interconnection  

(Charges  and  Revenue  Sharing)  Regulation,  1999  (hereinafter  

‘Interconnection Regulations 1999’) vide notification dated 28.5.1999  

by which the port charges as also the access charges were reduced.  

Clause 8 of the Regulations provided that the Regulations would have  

an  over-riding  effect  on  the  interconnect  agreements  entered  into  

between the operators and DoT/BSNL. Consequent to the issuing of  

Interconnect Regulations 1999, DoT issued circulars dated 1.10.1999,  

12.10.1999  and  25.10.1999  altering  the  post  charges  and  access  

charges.  That clause was struck down by Delhi High Court in MTNL  

v. TRAI (supra).

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9.5 After  its  creation on 1.10.2000, BSNL issued communications  

dated 28.4.2001 and 31.5.2001 requesting an increase in  the access  

charges,  making  the  regime  of  payment  dependent  on  actual  work  

done by the concerned operator. The BSOs made a representation to  

the Authority objecting to this increase.

9.6 AUSPI  filed  Petition  No.  9/2001  before  TDSAT  challenging  

communications  dated 28.4.2001 and 31.5.2001.  Vide interim order  

dated 10.7.2001, AUSPI was directed to continue paying the admitted  

amounts.  AUSPI  paid  the  port  charges  and  access  charges  under  

Interconnect Regulations, 1999 and hence BSNL issued circulars dated  

2.11.2001 and 21.11.2001 for recovery of the amounts calculated on  

the basis  of the interconnect  agreements  stating that  in  light  of  the  

Delhi High Court judgement, letter dated 12.10.1999 issued by DoT  

on the basis of Interconnection Regulations 1999 had become null and  

void.  As  per  this  circular,  BSNL  revised  retrospectively  w.e.f.  

1.5.1999 port  charges to  be levied from CMSPs at  rates  prevailing  

prior to 1.5.1999.  Thereupon, AUSPI amended Petition No. 9/2001  

and challenged circular dated 2.11.2001 apart from the applicable rates  

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

circular dated 2.11.2001.

9.7 During  the  pendency  of  those  petitions,  the  Authority  issued  

Telecommunication Interconnection (Charges and Revenue Sharing)  

Regulation, 2001 on 14.12.2001 which dealt only with access charges.  

These regulations were challenged by BSNL in Appeal No. 5/2002.  

the  Authority  thereafter  issued  Telecommunication  Interconnection  

(Port  Charges)  Regulation,  2001 fixing  rates  of  port  charges  w.e.f.  

28.12.2001. These regulations were accepted and adopted by all the  

parties.  

9.8 Private  BSOs  filed  Petition  No.  12/2003  challenging  the  

applicable rate of port charges for period till issuance of Port Charges  

Regulation dated 28.12.2001.  By an order dated 27.4.2005, TDSAT  

allowed Petition Nos. 9/2001 and 3/2002 and quashed circular dated  

2.11.2001 by observing that  the demands raised therein are without  

basis.  It held that the BSOs and CMSPs were liable to pay charges as  

per the DoT letter dated 12.10.1999 till the coming into effect of the  

Authority Port Charges Regulations, 2001. TDSAT dismissed Petition  

No.12/2003 filed by private BSOs as withdrawn.  It  also dismissed  

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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  

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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.  

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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  

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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  

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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.

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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  

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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.

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11.3 On 23.6.2006, the Authority issued 6th amendment to IUC  

Regulations.  BSNL  issued  Circular  dated  28.2.2006  for  

implementation  of  the  6th amendment  and  provided  for  higher  

termination  charges  for  roaming  calls.   Thereupon,  COAI  filed  

complaints  before  BSNL  and  also  before  the  Authority  regarding  

higher  termination  charges  for  roaming  calls.  The  Authority  issued  

letter dated 20.4.2006 to BSNL along with complaints filed by COAI  

and  M/s  BPL.  Complaint  of  Bharti  was  also  forwarded  vide  letter  

dated  24.4.2006.  Despite  agreeing  to  discuss  the  matter  with  the  

private operators, BSNL started raising bills as per the circular. COAI  

and  others  made  representations  dated  24.5.2006  and  12.6.2006  

against  thee  demands.  BSNL  replied  to  the  Authority’s  letter  vide  

letter dated 28.4.2006 stating that the license agreements provide for  

revenue  share  and  the  circular  was  strictly  in  accordance  with  the  

same.  

11.4 Vide decision dated 11.9.2006, the Authority rejected the  

claim of BSNL for revenue sharing in respect of roaming calls and  

directed  BSNL  to  charge  Rs  0.30  per  minute  for  termination  of  

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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  

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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.

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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.   

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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.  

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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

Vodafone Seeking  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  

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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  

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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.

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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  

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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;

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

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

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

17. With the entry of private operators into telecom sector, proper  

regulation of the sector was considered appropriate. An important step  

in the institutional reform of Indian telecom sector was setting up of an  

independent regulatory authority, i.e., Telecom Regulatory Authority.  

Initially,  it  was proposed to set up  the Authority  as a non-statutory  

body and for that  purpose, the Indian Telegraph (Amendment) Bill,  

1995 was introduced and was passed by Lok Sabha.  However, when  

the matter was taken up in Rajya Sabha, the members expressed the  

view that the Authority should be set up as a statutory body. Keeping  

that  in  view as also the 22nd Report  of the Standing Committee  on  

Communications,  the  Telecom  Authority  of  India  Ordinance,  1996  

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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:

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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.

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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.

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(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  

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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;

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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,-

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(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.  

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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  

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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.

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(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.

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(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  

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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.

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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:

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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)  

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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:

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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.

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(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),-  

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(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  

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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.  

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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  

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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  

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(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:-

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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  

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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:

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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  

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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  

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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  

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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  

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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  

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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)  

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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,  

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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

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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  

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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  

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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  

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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  

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(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.    

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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.  

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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  

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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  

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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):

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(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.

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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  

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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  

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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  

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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:

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“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  

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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.”

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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.

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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:

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“ “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  

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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  

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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  

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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:

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“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:

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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  

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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  

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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  

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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  

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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  

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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  

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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.

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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  

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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  

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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  

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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  

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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  

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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  

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(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  

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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  

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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).

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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  

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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  

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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  

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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  

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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:

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“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  

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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  

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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-

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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:

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“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  

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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  

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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  

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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  

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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  

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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  

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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.

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