TMI Blog2000 (1) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 regulate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate growth in such services; (i) protect the interest of 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 includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Section 18 provides that any person aggrieved by any decision or 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 from the Authority. 12. Section 25 vests in the Central Government the power to issue, from time to time, directions to 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if it was held that the Authority did not have powers to ensure and/or regulate, the Authority would become redundant and would have no function to perform. 20. To consider these rival submissions one has to look at Section 11 Section 11(1) can be divided thus :- (a) Recommendatory Functions :- (i) Under Section 11(1)(a), the Authority is to recommend the need and timing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de for framing of regulations whilst the others do not. 25. Not only from the above Judgment but from the provisions of the said Act, it is Therefore clear that in matters such as the need and timing for introduction of new service provider, terms and conditions of license to a service provider, revocation of licence, equipment to be used in the network by the service providers and in matters relating to the development of telecommunications technology or in any 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 Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, vary terms and conditions of licence. They submitted that the recommendatory functions of the Authority are restricted to what is to be done by the Central Government in future. By way of example they submitted that the recommendatory function under Section 11(1)(b) is to recommend terms and conditions of future licenses. They submitted that looked at from this point of view there is no clash and the Authority can exercise all its non-recommendatory functions unfettered by the recommendatory 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, unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government in a license to a service provider. What it cannot do directly, it cannot do indirectly. 31. In this behalf, it is very pertinent to note that even though Section 11 starts with a non-obstante clause which provides that the functions are to be exercised Notwithstanding anything contained in the Indian Telegraph Act, 1985 the Section nowhere provides that the functions are to be exercised notwithstanding any contract or any decrees or orders of Courts . It is well settled 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity is a creature of a Statute. It can, Therefore, only exercise such functions as are conferred on it by to Statute. Secondly, in our view, the powers to make recommendations and/or advice the Central Government are not ordinary powers. These powers which are substantial power. The Authority has obviously been established so that it would independently consider what is necessary and make recommendations. Whether the recommendations are to be accepted or not is for the Central Government to decide. However, we are 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 com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder which is to be Notified in the Official Gazette. Significantly, under section, 11(1), the functions are to be normally exercised by issuing directions under Section 13. As seen under Section 13 such directions could only be to the service providers. If arguments of Mr. Andhyarujina and Dr. Singhvi are to be accepted it would amount to saying that if the functions under Section 11(1) were to be performed by issuance of directions, it could only be qua service providers, but by way of regulation the functions could be enforced against 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of sharing of revenue. It was submitted that there cannot be effective interconnection or technical compatibility, unless and until there was an arrangement regarding sharing of revenue. It was submitted that Therefore, it was absolutely essential that the Authority provides for the manner in which revenue is to be shared by the service provider. It was submitted that if the Authority did not have the power to regulate such arrangements, it would not be able to ensure an effective interconnection. It must be noted that the Government permitted Cellular operators 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rators.......... 43. Similarly, in the consultation paper issued by the Authority on 9th September, 1998, it is inter-alia provided as follows:- 19. Though the general principle is to propose cost based inter- connection charges, it is further proposed that interconnection charges for ancillary and supplementary services should be settled among the operators (ancillary and supplementary services include, for example, directory enquiries, operator assistance, charging and billing and complaint and emergency services. 20. ........ 21. Similar to the practice in a number of other jurisdictions, the TRAI proposes to determine guidelines for interconnection. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and that the service provider is free to fix any charge for such service. 46. Thus, it is clear that the Authority itself understood that its own function under Section 11(1)(d) was only to intervene in the event of the service providers not being able to arrive at an arrangement. It is clear that an arrangement does not necessarily imply an agreement. However, these are matters in which the service provider must be first given an opportunity to arrive at an arrangement amongst themselves. The question of regulation would only arise if the service providers are not able to arrive at an arrangement. The Authority may lay down guidelines regarding those arrangement, provided the guidelines are not contrary to the terms of a license 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse fee structure (introduced by the Government i.e. from a fixed license fee to a revenue sharing arrangement) there is a substantial reduction in the license fees payable by the Cellular Operators to the Government. The Authority has also noted that it was introducing a Calling Party Pay Regime and that there would thus be some loss of revenue to the Cellular Operators Off setting the definite benefit against the expected loss, if any, the Authority had fixed the monthly rental fixed at ₹ 475/-per month and the Air time charge have been reduced from ₹ 6/- to 4/- for outgoing calls. Now, that the Regulation is set aside the Regime cannot be introduced in its present form. The Cellular Operators are continuing to charge even for incoming calls. The license fee structure has been changed w.e.f. 1st August, 1999. Thus Cellular Operators are not paying fixed license fee but are now paying as per the revenue sharing arrangement. Admittedly, the license fees paid by them are much less than what they were paying earlier. Thus there is no loss of revenue as expected but the gain is certainly there. In our view, it is the duty and function of the Authority to ensure that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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