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TMI Blog2000 (1) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... India (hereinafter called the Authority) does not have any power to issue any Regulation which affect the rights of individuals under contracts or which seeks to override terms and conditions of licenses issued by the Central Government to various parties. 2. It must be mentioned that the tariffs and charges laid down by the Authority are also being questioned on various other grounds. However, all parties have agreed that the question whether the Authority has power, be first decided Parties have agreed that if this Court holds that the Authority has power then the Authority will consider all objections and suggestions of all the parties and thereafter decide afresh whether or not the impugned Regulations and Tariff Order require any variation. Therefore, for the present, all parties have restricted their arguments only on the Question as to whether or not the Authority has power to issue Regulations as set out hereinabove. 3. The Authority has been established under The Telecom Regulatory Authority of India Act, 1997 (the said Act). The statement of objections and reasons sets out that the Act is enacted for the establishment of Telecom Regulatory Authority of India to regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consumers of telecommunication and 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - matter of such inquiry and also to furnish to the Authority with all 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 property functioning by service providers." 8. Section 13 provides that the Authority may, from time to time, for discharge of its functions under sub-Section (1) of Section 11, issue such directions to the service providers, as it may consider necessary. 9. Section 14 gives to the Authority the power to settle disputes. It reads as follows :- 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Authority as the Central Government thinks necessary in the interest of the sovereignty and integrity of India, the security of the State friendly relations with foreign States, public order, decency or morality. This Section provides that the Authority would be bound by such directions on questions of policy as the Central Government may give it in writing from time to time. However, the Authority has to be given, as far as practicable, an opportunity to express its views before any direction is given by the Central Government. 13. Section 35 vests in the Central Government the power to make rules for carrying out all the purposes of this Act. 14. Section 36 vests in the Authority, the power to make regulations. However, the regulations have to be consistent with the Act and with the Rules made by the Central Government. 15. Section 37 provides that the Rules and Regulations which are made shall be laid before both the Houses of Parliament and that if both the Houses agree to make a modification and/or if both the Houses agree that the Rules and Regulations should not be made, the Rules and Regulations shall have effect only in the modified forum or have no effect. 16. Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iming for introduction of new service provider. (ii) Under Section 11(1)(b), it is to recommend the terms and conditions of license to a service provider. (iii) Under Section 11(1)(f), it is to recommend revocation of license for non-compliance of terms and conditions of licence. (iv) Under Section 11(1)(k), it is to inspect the equipment used in the network and recommend the type of equipment to be used by the service providers. (v) Under Section 11(1)(o), it is to render advice to the Central Government in the matters of development of telecommunication technology and any other matter relatable to telecommunication industry in general. 21. These are matters where the Authority can only make recommendations or give advise. 22. In earlier matters, before this Court, a question had arisen whether the recommendations of the Authority were binding on the Central Government and/or whether the Authority could issue directions to the Central Government. By a Judgment dated 12th October, 1999, in amongst others, I.P.A. No. 437 of 1998 a Division Bench of this Court has held (for detailed reasons given therein) that the Authority had no power to issue any direction to the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny matter relatable to the telecommunications industry in general, the function of the authority is merely recommendatory and/or advisory. The Government is not bound to either seek the recommendation or advise or to follow it even if it is tendered. Thus in these matters the authority cannot impose on the Central Government (which is the Licensing Authority) its views. 26. It is settled law that what cannot be done directly, cannot also be done indirectly. No authority is required for this proposition, but if any authority is required the authorities in the case of Jagir Singh Vs . Ranbir Singh and Another 1979CriLJ318 and the case of District Collector, Chittor and Others Vs . Chittoor District Groundnut Traders" Association, Chittoor and Others [1989]1SCR243 are sufficient in Jagir Singh's case the Supreme Court has held that what cannot be done directly, cannot be allowed to be done indirectly as that would be an evasion of the statute. The Supreme Court has held that it is a well known principle of law that the provisions of law cannot be evaded by shift or contrivance. The Supreme Court has held that in an indirect or circuitous manner the objects of a statute canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endatory functions. They submitted that to hold otherwise is to denude the Authority of any effective power or function and to reduce such a high powered Authority into a non-entity. 29. In our view, if such arguments were to be accepted then there would necessarily be a clash between the recommendatory powers and non-recommendatory powers given to the Authority. For example, under Section 11(a)(c), the Authority is to ensure technical compatibility and effective inter- connection. To ensure technical compatibility and effective interconnection, the Authority would have to decide what is the type of equipment or technology which is necessary to be used by the service provider. However, under Section 11(1)(o) the Authority is merely to render advice to the Central Government in matters relating to the development of telecommunication technology and matters relating to the telecommunication industry in general. If the Authority can only advice one fails to understand how it can impose on the Government the type of technology required by purporting to exercise a power under Section 11(1)(c). If Section 11(1)(c) was to be read as suggested then the purely advisory function under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led law that when the Legislature intends to confer on a body the power to vary contracts or existing private rights, it has to do so specifically. In the absence of any provision authorizing the Authority to vary private rights under existing contracts or licenses, no such power can be presumed or assumed. This is the law as laid down by the Supreme Court in the case of Indian Aluminium Company Vs. Kerala State Electricity Board reported in AIR (1975) SC 1976. 32. If arguments of Mr. Andhyarujina and Dr. Singhvi were to be accepted, it would lead to a direct clash between the recommendatory functions and non-recommendatory or regulatory powers. It would also amount to conferring on the Authority a power to vary private rights which has not been specifically conferred on the Authority by the Statue. It is not possible to accept submission that the recommendatory powers only pertain to future events. If that were so the Statute would have specifically so provided. Also as see the non-recommendatory functions are not qua the Government but only service providers. To us, it appears that the only manner in which the non-recommendatory powers can be read in harmony with the recommendat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quite sure that recommendations when made, would always be considered by the Central Government and be given the due weight which they deserve. Further, it appears to us that the non-recommendatory powers including to power to ensure compliance of terms and conditions of license and to protect the interest of consumers of telecommunication services are important policing functions which enable the Authority to regulate among service providers and look after interest of consumers. A policy function is not an ordinary function. It is a very vital and important function. 35. It must also be mentioned that Section 11(1)(c) provides that the Authority is to ensure compliance of terms and conditions of licence. Significantly the said Act gives no power to the Authority to vary terms and conditions of licence. 36. Our above interpretation is also fortified by the fact that all the functions provided for under Section 11(1) and all the powers given to the Authority under Section 11(1) are only in respect of the service providers. Similarly, the powers given under Section 12 and the power to issue direction under Section 13 are also restricted only to a service provider. There is only one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst or imposed on even the Central Government. This would lead to an absurd situation and would clearly be a method of trying to do indirectly what could not be done indirectly. 38. There is one other reason why the arguments of Mr. Andhyarujina and Dr. Singhvi cannot be accepted. It is to be seen that the Authority also has adjudicatory function under Section 14. It is settled law that the same Authority/body cannot have both Legislative as well as Adjudicative functions. If the arguments of Mr. Andhyarujina and Dr. Singhvi are to be accepted then it would amount to saying that the Authority would adjudicate on dispute arising from or as a result of its own regulations/directions. This could never have been the intention of the Legislature. 39. Mr. Andhyarujina and Dr. Singhvi submitted that Section 36 conferred on the Authority the power to make regulations. It was submitted that the regulations, which can be made, were those which were necessary to carry out the purposes of the said Act. It was submitted that the instances given under Section 36(2) were merely illustrative and not exhaustive. It was submitted that the illustration did not detract or limit the general power un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perators to operate from 1994. Right from the beginning the Cellular Operators could only operate, if they had interconnection with the land lines. Thus for all these years, there has been interconnection. For all these years, there has been no sharing of the revenue. Thus, it is clear that there is no substance in argument that there could be no effective interconnection unless and until there is an arrangement regarding sharing of revenue. 42. Also in this behalf, the wording of Section 11(1)(d) become relevant Section 11(1)(d) does not provide that the function of the Authority is to ensure sharing of revenue amongst service providers. What Section 11(1)(d) provides is that the Authority is to regulate arrangement amongst service providers for sharing of revenue. This necessarily implies existence of some arrangement. The fact that there must be an arrangement before any power under 11(1)(d) could be exercised was also so understood by the Authority itself. In the Consultation Paper issued by the Authority on 4th November, 1997 it inter-alia stated as follows:- "Inter-connection charges 27. .......... 28. Basically interconnection charges are paid either through shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterconnection. The TRAI expects the operators to normally settle the interconnection rates through bi-lateral negotiations, with its guide-lines providing a framework for these negotiations. The TRAI will, in general, intervene only in the situation when the operators are unable to reach a mutually satisfactory solution. 25. Once interconnection charges and principles have been specified, the TRAI will follow its general principle of intervening only if the operators are unable to arrive at a mutually satisfactory solution on any matter relating to interconnection. 26. All interconnection charges mutually agreed among the service providers should be notified (together with an Explanation of the basis for those charges) to the TRAI at least 45 days prior to their implementation. The TRAI reserves its right to intervene ,if deemed necessary...." 44. That the Authority itself so understood is also clear from the Tele- communication Interconnection (Charges and Revenue Sharing) Regulation, 1999 which was issued by the Authority and Notified on 28th May, 1999. This Regulation provides for interconnection charges. Sub-clauses (vi) to (ix) read as follows:- "(vi) Unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse or a policy decision taken by the Government. 47. Section 14 is also relevant. One of the matters on which a dispute could be adjudicated upon by the Authority is revenue sharing arrangement between service providers. If the Authority had powers to issue regulations which were binding on service providers and/or upon the Central Government then everybody would be bound to follow those regulations. If such regulation could be issued in the absence of any arrangement then there may be no arrangement. In that case, there would be no question of adjudicating dispute on a matter relating to "revenue sharing arrangement". To be noted that the adjudication is not in respect of revenue sharing between service provider. The adjudication is in respect of "revenue sharing arrangements" between the service providers. 48. For all the above reasons, it would have to be held that the Authority has no power to issue any regulation which in any manner converts the merely recommendatory or advisory function into a directory function. The directions and regulations which the Authority may issue and/or frame must necessary be within the framework of the said Act. The Authorit ..... 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