Bharat Sanchar Nigam Limited Vs Telecom Regulatorys131180COM291900

MANU/SC/1264/2013
Equivalent Citation: 2013XII AD (S.C .) 457, (2014)1C ompLJ229(SC ), JT2013(15)SC 516, 2013(14)SC ALE643, (2014)3SC C 222, 2014 (2) SC J
301
IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 5253 of 2010, 951-952, 3298, 3299, 4529, 5834-5836, 5837, 6049
of 2005, 802, 2731, 2794, 3504 of 2006, 4965-4966 of 2007, 177, 598-599 of 2008,
5184, 5873, 6068, 6255, D28298 of 2010, 271-281 of 2011 and T.C. (C) No. 39 of
2010
Decided On: 06.12.2013
Appellants: Bharat Sanchar Nigam Limited
Vs.
Respondent: Telecom Regulatory Authority of India and Ors.
Hon'ble Judges/Coram:
G.S. Singhvi, B.S. Chauhan and F.M. Ibrahim Kalifulla, JJ.
Case Note:
Media and Communication - 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 - Scope of Section 36 of the Act - Held, under the unamended Act,
the Authority had the three types of functions, namely, recommendatory
functions, regulatory functions and adjudicatory functions - 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 - Use of the term 'ensure' implies that the Authority
can issue directions on the particular subject - For effective discharge of
functions under various clauses of Section 11(1) (b), the authority can
frame appropriate regulations - 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 - 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) - 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) - Under sub-Section (1) of Section 36 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 - Exercise of power
under Section 36(1) is hedged with the condition that the regulations must
be consistent with the Act and the words "without prejudice to the
generality of the power under subsection (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
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meetings, the transaction of business at the meetings and the register to
be 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 approve, modify or
annul the same - Section 36(2), which begins with maintained by the
Authority - 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) - It is settled law that if power is conferred upon an authority/body
to make subordinate legislation in general terms, the particularization of
topics is merely illustrative and does not limit the scope of general power in
exercise of power under Section 36(1) - Authority can make regulations
which may empower it to issue directions of general character applicable to
service providers and others and it cannot be said that by making
regulations under Section 36(1) the Authority has encroached upon the
field occupied by Sections 12(4) and 13 of the Act - 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 - 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 - Power vested in the
Authority under Section 36(1) to make regulations is wide and pervasive -
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 - Under the
unamended Section 14(1), the Authority could decide disputes among
service providers and between service providers and a group of consumers -
In terms of Section 14(2) (unamended), the bench constituted by the
Chairperson of the Authority can exercise powers and authority which were
exercisable earlier by the Civil Court on technical compatibility and inter-
connections between service providers, revenue sharing arrangements
between different service providers, quality of telecommunication services
and interest of consumers - However, the disputes specified in clauses (a),
(b) and (c) of Section 14(2) could not be decided by the Bench constituted
by the Chairperson. Since the mechanism provided for settlement of
disputes under - Section 14 of the unamended Act since was not
satisfactory, Parliament substituted that section and facilitated
establishment of an independent adjudicatory body known as TDSAT -
Clause (a) of amended Section 14 confers jurisdiction upon TDSAT to
adjudicate any dispute between a licensor and licensee, between two or
more service providers and between a service provider and a group of
consumers - Three exceptions to the adjudicatory power of TDSAT relates to
the cases which are subject to the jurisdiction of Monopolies and
Restrictive Trade Practices Commission, the complaint of an individual

consumer which could be maintained under the consumer forums
established under the Consumer Protection Act, 1986 and dispute between
Telegraph Authority and any other person referred to in Section 7B(1) of
the Indian Telegraph Act, 1885 - In terms of clause (b) of Section 14
(amended), TDSAT is empowered to hear and dispose of appeal against any
direction, decision or order of the Authority - In exercise of the power
vested in it under Section 14(b) of the Act, TDSAT does not have the
jurisdiction to entertain the challenge to the regulations framed by the
Authority under Section 36 of the Act
JUDGMENT
G.S. Singhvi, J.
1 . By an order dated 6.2.2007 passed in Civil Appeal No. 3298 of 2005 Telecom
Regulatory Authority of India (Authority) v. Bharat Sanchar Nigam Limited (BSNL)
and connected matters, a two Judge Bench made a reference to the larger Bench for
determination of the following substantial questions of law of public importance:
1 . Whether in the event of any inconsistency between the terms and
conditions of the licenses issued under Section 4 of the Indian Telegraph Act,
1885 and the provisions of the Telecom Regulatory Authority of India Act,
1997 (for short, 'the Act'), the provisions of the Act would prevail in view of
the purpose and object for which the Act has been passed, i.e., for ensuring
rapid development of telecommunications in the country incorporating the
most modern technology and, at the same time, protecting the interests of
the consumers and the service providers?
2 . Whether Authority has powers to fix the terms and conditions of inter
connectivity between service providers, in respect of all the licenses,
irrespective of the fact whether licenses issued before or after 24.1.2000-
especially in view of the non-obstante clause in Sub-section (1) of Section
11 and Sub-clause (ii) of Clause (b) of Sub-section (1) of Section 11 of the
TRAI (Amendment) Act of 2000?
3 . Whether Authority has no power to fix terms and conditions of
interconnectivity between service providers in respect of licenses issued after
24.01.2000 including terms and conditions of interconnection agreements-in
view of, inter-alia, the scheme laid down in the provisos to Section 11(1) of
the TRAI Act, 1997 as amended on 24.01.2000 and if it does not have any
such power what would be the harmonious construction of the amended
Clause 11(1)(b)(ii) and the new scheme more specifically embodied in the
provisos?
4. Whether under the amended provisions of the TRAI Act, 1997 introduced
w.e.f. 24.01.2000-the harmonious construction of Section 11(1)(b)(ii) and
the scheme of the provisos to Section 11(1) would allow the Authority to
have the power to fix the terms and conditions of interconnectivity with
respect to licenses issued before 24.1.2000, only to the extent the licensor
(Govt. of India) accepts the recommendations of the Authority for
incorporation in the new licenses, so as to achieve level playing field
between the service providers granted licenses before and after the
amendment of the TRAI Act?
5. Whether the appeals are maintainable in the present form?

2 . The larger Bench heard the arguments on various dates but released the cases
vide order dated 19.10.2011. Thereafter, by mistake the Registry listed all the
matters before a two Judge Bench. During the course of hearing, Shri A.S.
Chandhiok, learned senior advocate appearing for BSNL invited the Court's attention
to orders dated 6.2.2007 and 21.10.2010 and pointed out that the cases were earlier
heard by the larger Bench. Thereupon, the two Judge Bench directed that the cases
be posted before the larger Bench.
3 . When the cases were listed before this Bench, learned Counsel for the parties
agreed that a preliminary issue relating to jurisdiction of the Telecom Disputes
Settlement Appellate Tribunal (TDSAT) to entertain challenge to the Regulations
framed by the Authority may be decided before the questions framed vide order dated
6.2.2007 are taken up for consideration. Thereupon, the Court decided to hear the
arguments on the following question:
Whether in exercise of the power vested in it under Section 14(b) of the Act,
TDSAT has the jurisdiction to entertain challenge to the Regulations framed
by the Authority under Section 36 of the Act.
4 . For better appreciation of the arguments advanced by learned Counsel for the
parties, we may notice the facts borne out from the records of different appeals.
Civil Appeal Nos. 5253, 5184, 5873, 6068, 6255 of 2010 and Civil Appeal No.
D28298 of 2010
5.1 The delay in filing and re-filing C.A. No. D28298 of 2010 is condoned.
5.2 These appeals have been filed by Bharat Sanchar Nigam Limited (BSNL), Cellular
Operators Association of India (COAI), Association of Unified Telecom Service
Providers of India (AUSPI), the Authority, M/s. Sistema Shyam Teleservices Limited
and Mahanagar Telephone Nigam Limited (MTNL), respectively, against order dated
28.5.2010 passed by TDSAT whereby the appeal preferred by BSNL against the
Telecommunication Interconnection (Port Charges) Amendment Regulation (1 of
2007) was allowed and the Authority was directed to give fresh look at the
Regulations and BSNL was directed not to claim any amount from any operator
during the interregnum, i.e., from the date of coming into force of the Regulations
and the date of the order.
5.3 A perusal of the record shows that port charges came to be prescribed in
Schedule 3 of the Telecommunication Interconnection (Charges and Revenue
Sharing) Regulations, 1999, which came into force on 28.5.1999. By virtue of Clause
8, the Regulations were given overriding effect qua the interconnection agreements.
MTNL challenged the 1999 Regulations before the Delhi High Court in Civil Writ
Petition No. 6543/1999, which was allowed by the Division Bench of the High Court
vide order dated 17.1.2000 [MTNL v. TRAI MANU/DE/0141/2000 : AIR 2000 (Del)
208] and it was held that the Regulations framed under Section 36 of the Act could
not be given overriding effect. Thereafter, the Authority framed the
Telecommunication Interconnection (Port Charges) Amendment Regulations
(6/2001). The port charges were specified in the schedule to the amended
Regulations. The amended Regulations were challenged in Appeal Nos. 11/2002 and
31/2003, which were allowed by TDSAT vide orders dated 27.4.2005 and 3.5.2005
respectively.
5.4 In view of the aforesaid orders of TDSAT, the Authority sought response of
various service providers for review of port charges. In that process, BSNL raised
objection to the jurisdiction of the Authority to vary the terms and conditions of

interconnection agreements or the contractual rates. On 2.2.2007, the Authority
issued Telecommunication Interconnection (Port Charges) Amendment Regulation (1
of 2007) reducing the port charges required to be paid by private telecom operators
to BSNL by about 23-29%. BSNL challenged Notification dated 2.2.2007 in Appeal
No. 4/2007. By an order dated 28.5.2010, TDSAT allowed the appeal of BSNL and
issued directions to which reference has been made hereinabove.
Civil Appeal Nos. 951-952/2005
6.1 Civil Appeal No. 951/2005 has been filed by the Authority against order dated
21.4.2004 by which TDSAT allowed Appeal No. 2/2004 filed by BSNL questioning
direction dated 31.12.2003 issued under Section 13 read with Section 11(1)(b) of the
Act. Civil Appeal No. 952/2005 has been filed by the Authority against order dated
10.8.2004 by which TDSAT dismissed Petition No. 2/2004 for review of order dated
21.4.2004.
6.2 On receiving information that some operators were disconnecting Points of
Interconnection (PoI) for the reason of non payment of Interconnection Usage
Charges and other such reasons, the Authority issued direction dated 31.12.2003
under Section 13 read with Section 11(1)(b) conveying to all service providers that
disconnection of PoIs was not desirable because the subscribers would be
inconvenienced and all disputes should be resolved through mutual negotiations. It
was also provided that if the dispute could not be resolved, then 10 days' notice of
disconnection should be given to the erring party with a copy to the Authority. In the
event of non-intervention by the Authority, the aggrieved party could disconnect the
PoI or approach the Authority for determination of the matter.
6.3 BSNL filed Appeal No. 2/2004 for striking down the aforesaid direction on the
ground that only TDSAT was vested with the jurisdiction to decide the disputes and
the Authority had no jurisdiction in the matter. TDSAT allowed the appeal and held
that the Authority did not have the jurisdiction to entertain dispute between the
service providers. TDSAT noted that the words "dispute" and "determination" have
been used in the direction issued by the Authority, referred to the judgment of this
Court in Cellular Operators Association of India v. Union of India
MANU/SC/1368/2002 : (2003) 3 SCC 186 and held that the jurisdiction of TDSAT is
quite wide and is circumscribed only by the three instances, i.e., disputes before the
MRTP Commission, Consumer Forums and those under Section 7B of the Telegraph
Act.
6.4 The Authority filed Review Petition No. 2/2004 and argued that while the
Authority can be faulted for the use of words "dispute" and "determination", its
power to intervene cannot be questioned. Another plea taken by the Authority was
that the Regulations framed under Section 36 are in the nature of subordinate
legislation and validity thereof cannot be questioned before TDSAT. The review
petition was dismissed by TDSAT vide order dated 10.8.2004 reiterating that it had
jurisdiction to entertain dispute relating to validity of Regulations.
Civil Appeal Nos. 3298 and 4529 of 2005
7.1 These appeals are directed against order dated 27.4.2005 passed by TDSAT in
Appeal Nos. 11 and 12 of 2002 filed by BSNL and MTNL respectively, challenging
Clause 3.1 of the Telecommunication Interconnection (Reference Interconnect Offer)
Regulation, 2002 (2 of 2002).
7.2 In exercise of its powers under Section 36 read with Section 11(1)(c) and (d) of
the unamended Act, the Authority prescribed revenue sharing for service providers

under the Calling Party Pays regime on 17.9.1999. This was challenged before the
Delhi High Court. In its judgment [MTNL v. TRAI (supra)], the High Court observed
that the Authority has no power to change or vary rights of parties under contracts or
licenses.
7.3 After the judgment of the High Court, the Act was amended by Ordinance dated
24.1.2000 and Section 11(1)(b)(ii) was inserted to enable the Authority to fix the
terms and conditions of interconnectivity between the service providers.
7.4 In exercise of the power vested in it under Section 36 read with Section 11(1)(b)
(ii), (iii) and (iv), the Authority framed the 2002 Regulations. Under Clause 3.1 of
these Regulations, the service providers with significant market share were required
to publish their Reference Interconnect Offer (RIO) within 90 days of the issue of the
Regulations with prior approval of the Authority. The 2002 Regulations stipulate the
broad framework, structure and provisions on which the service provider is to make
an offer of interconnection with other service providers. BSNL submitted the
proposed RIO on 12.7.2002. MTNL also submitted proposed RIO sometime in 2002.
The RIOs of BSNL and MTNL were approved with certain changes effected vide
identically worded letters dated 9.10.2002.
7.5 BSNL and MTNL filed Appeal Nos. 11 and 12/2002 challenging letters dated
9.10.2002 issued by the Authority. It was contended inter alia that the Authority did
not have the power to frame such a Regulation. They argued that the changes
suggested in the RIO were non transparent and under the garb of the Regulations,
the Authority cannot be conferred power to fix the terms and conditions of
interconnectivity which BSNL and MTNL can offer to other service providers. Clause
3.1 was challenged insofar as it had been interpreted to take away the statutory right
to appeal as granted under the Act.
7.6 TDSAT disposed of both the appeals vide order dated 27.4.2005. TDSAT
extensively referred to the orders passed in Review Petition No. 2/2004 in Appeal No.
2/2004 (BSNL v. TRAI) and Appeal No. 3/2005 as also the order passed by the Delhi
High Court wherein it was held that TDSAT is empowered to hear appeals involving
challenge to the validity of the Regulations framed under Section 36. TDSAT then
held that even after amendment of the Act, the Authority does not have the power to
amend or override the terms and conditions of the interconnect agreements executed
by the service providers.
Civil Appeal Nos. 3299, 6049 of 2005 and 802 of 2006
8.1 These appeals have been filed against order dated 3.5.2005 of TDSAT whereby it
allowed Appeal No. 31/2003 and partly allowed Petition No. 20/2004 and quashed
direction dated 22.7.2003 issued by the Authority on the premise that it did not have
the power to override and make direct interconnectivity mandatory.
8.2 Direct connectivity between different service providers was introduced in light of
NTP 1999 and the same was provided for in the license agreements of existing
licensees through an amendment on 29.1.2001 as per DoT letter dated 9.8.2000
which stated that direct connectivity was permitted for the purpose of terminating
traffic on the basis of mutual agreements. In the meanwhile, on 29.9.2000 BSNL was
granted license to provide cellular mobile services and it commenced its Cellone
Cellular Services in October 2002.
8.3 The Act was amended vide Ordinance dated 24.1.2000 to include the power to fix
the terms and conditions of interconnectivity between service providers (Section
11(1)(b)(ii) of the amended Act).

8.4 The Authority issued Telecommunication Interconnection (Reference Interconnect
Offer) Regulation, 2002 on 12.7.2002 and mooted the idea of an Interconnect
Gateway Switch. On 15.5.2003, the Authority issued a consultation paper stating that
if one of the parties demands direct connectivity it needs to be made mandatory
through Regulations. On 30.6.2003, the Authority called upon stakeholders to discuss
the issue of direct connectivity. Thereafter, the Authority issued direction dated
22.7.2003 under Section 13 of the Act to all service providers directing that direct
connectivity be made between service providers at the earliest and not later than
three months from the issue of the direction so as to promote network efficiency and
consumer interest.
8.5 BSNL filed Appeal No. 31/2003 challenging direction dated 22.7.2003 on the
ground that the same was contrary to the terms and conditions of the license
agreements of basic and cellular operators.
8.6. The Authority issued IUC Regulations dated 29.10.2003 mandating direct
connectivity between service providers. As per Clause (b) of Schedule II, charges
could be levied through mutual negotiations but they were to be lower than Rs. 0.20.
BSNL issued Circular dated 28.1.2004 levying charge of Rs. 0.4 per minute for a call
from cellular mobile network to another cellular network transited by BSNL. This
charge included Rs. 0.30 towards call termination and Rs. 0.19 towards transit.
8.7 The Authority released Consultation Paper on Interconnect Exchange cum Inter-
Carrier Billing Clearance House for Multi-Operator Multi-Service Scenario on
13.4.2004 mooting Interconnect Exchange as an alternative to direct connectivity.
8.8 COAI filed Petition No. 20/2004 seeking a direction against BSNL CellOne to
directly connect to the Cellular Service Providers and to strike down the BSNL
Circular requiring payment of Rs. 0.19 transit charges which BSNL Basic Services
Division was demanding and collecting.
8.9 TDSAT allowed Appeal No. 31/2003 and partly allowed petition No. 20/2004 and
quashed direction dated 22.7.2003 on the ground that the Authority cannot issue
direction resulting in modification of the licence issued after 2000 amendment.
TDSAT held that fixation of the terms and conditions of interconnectivity and
ensuring effective interconnectivity is part of the legislative mandate of the Authority
under Section 11(1)(b)(ii) and (iii). TDSAT referred to its earlier order dated
27.4.2005 passed in Appeal Nos. 11 and 12/2002 and held that the amendment of
the Act does not override the law laid down by the Delhi High Court in MTNL v. TRAI
(supra). TDSAT further held that the power vested in the Authority could be exercised
in harmony with the terms of interconnectivity of licenses issued after the 2000
amendment and the principles laid down in the High Court judgment. With regard to
the claim of COAI, TDSAT held that though BSNL was justified in collecting Rs. 0.19
transit charges from Level I TAX to termination of calls in PSTN network or for
providing interconnectivity to networks of other service providers, it was not justified
in charging transit charges to the extent of Rs. 0.19 for transit calls from, Level I TAX
to Cellone's Gateway MSC. TDSAT held that it cannot direct BSNL to implement direct
connectivity as the Authority did not have the power to override license terms and
conditions for making the same mandatory either by direction under Section 13 or by
Regulation under Section 36.
Civil Appeal Nos. 5834-5836 and 5837 of 2005
9.1 These appeals are directed against order dated 27.4.2005 passed by TDSAT
whereby it allowed Petition No. 9 of 2001 filed by Association of Basic Telecom
Operators and Ors. and Petition No. 3/2001 filed by Cellular Operators Association of

India, dismissed Petition No. 12/2003 filed by private BSOs as withdrawn and
dismissed Appeal No. 5/2002 filed by BSNL.
9.2 Access charges to be paid by the Basic Licensees to the DoT (now BSNL) were
provided for in tender document issued on 16.1.1995 at the rate of Rs. 0.64 per MCU
for STD calls and Rs. 0.87 per MCU for ISD calls. Clarification was issued on
27.5.1996 reducing the charges to Rs. 0.50 per MCU for STD calls and Rs. 0.70 per
MCU for ISD calls.
9.3 In 1997-98 interconnect agreements were signed between Basic Operators and
the then DoT providing for payment of interconnect charges including port charges at
a minimum of Rs. 54,000/- per PCM termination per annum for a period of 3 years
and then actual/full cost based rates, and access charges at Rs. 0.50 per MCU for
STD calls and Rs. 0.70 per MCU for ISD calls. By 1.8.1999 all BSOs migrated to the
revenue sharing regime instead of the fixed license fee regime. Port charges in
respect of Cellular Mobile Service Providers were prescribed by the DoT vide Circulars
dated 27.9.1996 and 5.6.1998 which extended that arrangement for computation of
port charges which was incorporated in interconnection agreements signed with
private BSOs to CMSPs.
9.4 The Authority issued Telecommunication Interconnection (Charges and Revenue
Sharing) Regulation, 1999 (hereinafter 'Interconnection Regulations 1999') vide
notification dated 28.5.1999 by which the port charges as also the access charges
were reduced. Clause 8 of the Regulations provided that the Regulations would have
an over-riding effect on the interconnect agreements entered into between the
operators and DoT/BSNL. Consequent to the issuing of Interconnect Regulations
1999, DoT issued circulars dated 1.10.1999, 12.10.1999 and 25.10.1999 altering the
post charges and access charges. That clause was struck down by Delhi High Court in
MTNL v. TRAI (supra).
9.5 After its creation on 1.10.2000, BSNL issued communications dated 28.4.2001
and 31.5.2001 requesting an increase in the access charges, making the regime of
payment dependent on actual work done by the concerned operator. The BSOs made
a representation to the Authority objecting to this increase.
9.6 AUSPI filed Petition No. 9/2001 before TDSAT challenging communications dated
28.4.2001 and 31.5.2001. Vide interim order dated 10.7.2001, AUSPI was directed to
continue paying the admitted amounts. AUSPI paid the port charges and access
charges under Interconnect Regulations, 1999 and hence BSNL issued circulars dated
2.11.2001 and 21.11.2001 for recovery of the amounts calculated on the basis of the
interconnect agreements stating that in light of the Delhi High Court judgment, letter
dated 12.10.1999 issued by DoT on the basis of Interconnection Regulations 1999
had become null and void. As per this circular, BSNL revised retrospectively w.e.f.
1.5.1999 port charges to be levied from CMSPs at rates prevailing prior to 1.5.1999.
Thereupon, AUSPI amended Petition No. 9/2001 and challenged circular dated
2.11.2001 apart from the applicable rates of port charges. COAI separately filed
Petition No. 3/2002 for quashing circular dated 2.11.2001.
9.7 During the pendency of those petitions, the Authority issued Telecommunication
Interconnection (Charges and Revenue Sharing) Regulation, 2001 on 14.12.2001
which dealt only with access charges. These Regulations were challenged by BSNL in
Appeal No. 5/2002, the Authority thereafter issued Telecommunication
Interconnection (Port Charges) Regulation, 2001 fixing rates of port charges w.e.f.
28.12.2001. These Regulations were accepted and adopted by all the parties.
9.8 Private BSOs filed Petition No. 12/2003 challenging the applicable rate of port

charges for period till issuance of Port Charges Regulation dated 28.12.2001. By an
order dated 27.4.2005, TDSAT allowed Petition Nos. 9/2001 and 3/2002 and quashed
circular dated 2.11.2001 by observing that the demands raised therein are without
basis. It held that the BSOs and CMSPs were liable to pay charges as per the DoT
letter dated 12.10.1999 till the coming into effect of the Authority Port Charges
Regulations, 2001. TDSAT dismissed Petition No. 12/2003 filed by private BSOs as
withdrawn. It also dismissed Appeal No. 5/2002 filed by BSNL and upheld the validity
of the Interconnection Regulations, 2001 on the ground that they had become
necessary to bring about certainty in the access charges regime and it could not be
said that the Authority acted unfairly or arbitrarily to enrich private operators.
Civil Appeal Nos. 2731, 2794 and 3504 of 2006.
10.1 The Authority issued direction dated 22.7.2003 under Section 13 of the Act to
all service providers directing that direct connectivity be made between service
providers at the earliest and not later than three months from the issue of the
direction so as to promote network efficiency and consumer interest.
10.2 BSNL filed Appeal No. 31/2003 challenging direction dated 22.7.2003 on the
ground that the same was contrary to the terms and conditions of the license
agreements of basic and cellular operators.
10.3 In October 2003, the Authority issued Telecom Interconnection Usages Charges
Regulations (IUC Regulations) mandating direct connectivity between service
providers. As per Clause (b) of Schedule II, charges could be levied through mutual
negotiations subject to the condition that they shall not exceed Rs. 0.20 per minute.
BSNL issued Circular dated 28.1.2004 levying charge of Rs. 0.4 per minute for a call
from cellular mobile network to another cellular network transited by BSNL. This
charge includes Rs. 0.30 towards call termination and Rs. 0.19 towards transit.
10.4 BSNL issued Circular dated 2.7.2004 to its telecom circles informing them of its
decision to permit direct connectivity with the BSNL Cellular Network. Reliance
Infocom was one of the UASL operators who had sought such connectivity. NLD and
ILD operators were permitted to establish direct connectivity with CellOne network
vide BSNL Circular dated 4.8.2004. Vide Circular dated 23.8.2004, Reliance was
given direct interconnect as NLDO/ILDO on the same terms and conditions as Bharti
Televentures Ltd.
10.5 COAI filed Petition No. 20/2004 seeking a direction against BSNL CellOne to
directly connect to the Cellular Service Providers and to strike down the BSNL
Circular requiring payment of Rs. 0.19 as transit charges which BSNL Basic Services
Division was demanding and collecting.
10.6 Vide order dated 3.5.2005, TDSAT allowed Appeal No. 31/2003 and quashed
direction dated 22.7.2003 holding that the direction mandating direct connectivity
resulted in modification of license conditions of licenses issued after the 2000
amendment and as such this was not in accordance with the provision of the Act.
TDSAT partly allowed Petition No. 20/2004 and held that BSNL was not justified in
charging transit charges to the extent of Rs. 0.19 for transit calls from, Level I TAX to
Cellone's Gateway MSC. Relief of refund of amounts already collected was not
granted.
10.7 In compliance of TDSAT's order, the Authority issued Telecom Regulatory
Authority of India (Transit Charges for Bharat Sanchar Nigam Limited's CellOne
Terminating Traffic) Regulation, 2005 (10 of 2005) dated 8.6.2005 under Section 36
read with Section 11(1)(b)(ii), (iii) and (iv) clarifying that no transit charges shall be

levied by BSNL on cellular operators for accessing CellOne subscribers wherever
MSCs of both CellOne and private CMSPs are connected to the same BSNL switch.
10.8 Bharti Televentures Ltd. made representation dated 18.5.2005 to BNL to extend
the benefit of Tribunal's order dated 3.5.2005. It also submitted representation dated
13.6.2005 to the Authority to amend Regulations dated 8.6.2005 extending the
waiver to fixed line service providers. Thereupon, fresh Addenda II was inserted into
the Interconnect Agreement between Bharti and BSNL on 5.7.2005 which deals with
the issue of direct connectivity and payment of transit charges.
10.9 BSNL extended benefit of the judgment dated 3.5.2005 to Tata Teleservices
Limited in May 2005 on the ground that it was similarly situated as the cellular
operators. However, in October 2005 it withdrew the benefit and demanded that Tata
pay transit charges at Rs. 0.19 on the ground that Tata could not avail of the benefit
of the judgment as it was a UAS licensee and not a CMSP.
10.10 BSNL forwarded a draft Addenda to the Interconnect Agreement to Reliance
Infocom Limited on 14.3.2005. The same was signed by the parties on 17.11.2005
for NLD services and on 6.1.2006 as UASL operator. Reliance filed representation
before the Authority dated 30.8.2005 to extend Regulation date 8.6.2005 to UAS
licensees also. This request was declined by the Authority on 6.9.2005. In light of
decision dated 11.11.2005 passed by TDSAT mandating level playing filed and
reciprocity between service providers and the subsequent the Authority directive
dated 16.11.2005 applying this judgment to all service providers although the
Petitioners had been only cellular operators, Reliance filed another representation
dated 12.12.2005 but did not get any response from the Authority.
10.11 Bharti Televentures Limited filed Appeal No. 8/2005 seeking extension of the
benefit of order dated 3.5.2005 and also for modification of the Regulations and for
extension of the benefit to similarly situated UAS Licensees.
10.12 By an order dated 10.2.2006, TDSAT dismissed the appeal and held that the
transit charges would be determined by the interconnect agreement voluntarily
entered into between Bharti and BSNL post judgment dated 3.5.2005. However,
TDSAT did not go into the issue of whether basic service providers can be construed
as similarly situated to cellular operators.
10.13 Bharti Televentures Limited challenged the aforesaid order in Review
Application No. 1/2006, which was dismissed vide order dated 3.5.2006.
10.14 Tata Teleservices Limited filed Petition No. 132/2005 praying for extending the
benefit of order dated 3.5.2005, setting aside the demands of BSNL for Rs. 0.19 as
transit charges and modification of the Regulations. That petition was dismissed by
TDSAT vide order dated 3.5.2006 on the ground that similar appeal filed by Bharti
Televentures Limited had been dismissed. Appeal No. 7/2006 filed by Reliance
Infocom Limited was also dismissed by TDSAT by relying upon the orders passed in
the cases of Bharti Televentures Limited and Tata Teleservices Limited.
Civil Appeal Nos. 4965-66 of 2007, 177 and 598-599 of 2008
11.1 The Authority issued the 4th amendment to the IUC Regulations on 6.1.2005.
Soon thereafter, BSNL issued circular dated 29.1.2005 for implementation of the
Regulations stating in Annexure 2 that revenue shall be shared between BSNL and the
private operator in the ratio of 50:50 for international roaming calls. COAI filed
representations dated 31.1.2005, 7.2.2005, 8.2.2005 and 14.2.2005 against this
circular. The Authority issued letter dated 31.1.2005 to BSNL inviting it to attend a
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discussion on the implementation of IUC Regulations with regard to separate trunk
group for handing over roaming calls. In light of this, BSNL issued Circular dated
1.2.2005 deferring the formation on trunk group to 14.2.2005 for national roaming
calls and to 7.2.2005 for international roaming calls. The matter was deferred further
to 14.2.2005 and then to 28.2.2005 vide Circulars dated 8.2.2005 and 14.2.2005.
11.2 However, by some further correspondence, the Authority sought comments from
all service providers on 11.3.2005 on the issues of levy of ADC and revenue sharing
on roaming subscriber traffic. It moved a consultation paper on 17.3.2005 to address
the issue of revenue share arrangement between terminating network and visiting
network. BSNL submitted its comments on this paper on 10.5.2005. In the
meanwhile, the Authority issued 5th amendment to the IUC Regulations on 11.4.2005
making ADC applicable to national calls at Rs. 0.30 per minute and international
roaming calls at Rs. 3.25 per minute. The amendment was implemented by BSNL vide
Circular dated 9.5.2005. The amendment as it related to application of ADC was
challenged by COAI in Appeal No. 7/2005 which was allowed vide order dated
21.9.2005. Thereafter, BSNL withdrew circular dated 9.5.2005 vide circular dated
13.10.2005.
11.3 On 23.6.2006, the Authority issued 6th amendment to IUC Regulations. BSNL
issued Circular dated 28.2.2006 for implementation of the 6th amendment and
provided for higher termination charges for roaming calls. Thereupon, COAI filed
complaints before BSNL and also before the Authority regarding higher termination
charges for roaming calls. The Authority issued letter dated 20.4.2006 to BSNL along
with complaints filed by COAI and M/s. BPL. Complaint of Bharti was also forwarded
vide letter dated 24.4.2006. Despite agreeing to discuss the matter with the private
operators, BSNL started raising bills as per the circular. COAI and Ors. made
representations dated 24.5.2006 and 12.6.2006 against thee demands. BSNL replied
to the Authority's letter vide letter dated 28.4.2006 stating that the license
agreements provide for revenue share and the circular was strictly in accordance with
the same.
11.4 Vide decision dated 11.9.2006, the Authority rejected the claim of BSNL for
revenue sharing in respect of roaming calls and directed BSNL to charge Rs. 0.30 per
minute for termination of national and international roaming calls as prescribed in
IUC Regulations.
11.5 BSNL filed Appeal No. 14/2006 challenging the Authority's decision dated
11.9.2006 on the ground of lack of jurisdiction. COAI also filed Appeal No. 16/2006
challenging the decision of the Authority insofar as it was made prospective.
11.6 During the pendency of the appeals, the Authority notified Telecommunication
Tariff (forty fourth amendment) Order, 2007 on 24.1.2007 fixing maximum
permissible charges for national roaming calls.
11.7 After hearing the parties, TDSAT vide order dated 24.8.2007 dismissed Appeal
Nos. 14 and 16 of 2006 and Petition No. 319/2006 and held that the decision taken
by the Authority was legally correct and justified.
11.8 The Authority filed MA No. 121/2007 for correction of order dated 24.8.2007 for
deletion of the words "admitted" from para 6 line 12 and "and is recommendatory"
from para 9 line 24. MA was allowed vide impugned order dated 12.9.2007 and the
words "and is recommendatory" were deleted. TDSAT held that functions enumerated
in Section 11(1)(b) cannot be said to be part of the recommendatory power which is
contained in Section 11(1)(a).

11.9 COAI and Ors. filed EA No. 21/2007 seeking implementation of TDSAT's order
dated 24.8.2007 and claiming benefit of the Authority order from 11.9.2006 when it
was issued and refund of the amounts collected contrary to the same. EA was allowed
vide impugned order dated 28.11.2007 and BSNL was directed to refund the amounts
collected in excess of the Authority decision dated 11.9.206. Tribunal held that by
virtue of its order, the Authority decision would be operative prospectively from the
date on which it was issued and especially in light of the absence of stay, BSNL was
not entitled to collect any sum contrary to the Authority decision and cannot now take
advantage of its wrong.
Civil Appeal Nos. 271-281 of 2011
12.1 These appeals have been filed for setting aside final judgment and order dated
29.9.2010 passed by TDSAT whereby it disposed off Appeal Nos. 4/2006; 6/2006;
5/2007; 5/2008; 2-8/2009 and remanded the matter to the Authority with a direction
to consider the matter relating to IUC Regulations afresh.
12.2 The Authority issued Telecommunication Interconnection (Charges and Revenue
Sharing) Regulation (No. 5 of 2001)-basic framework for regulating access charges
on 14.12.2001. Separate Regulation for regulating port charges was issued by the
Authority in Dec 2001. On 24.1.2003, the Authority issued Telecom Interconnection
Usage Charges Regulation, 2003 according to which termination charges were fixed
at Rs. 0.30 per minute (metro) and Rs. 0.40 (circle). The concept of Access Deficit
Charge (ADC) was also introduced at 30% of the total sectoral revenue-fee paid by
private operators to cross subsidies BSNL for deploying its fixed network in non-
lucrative areas.
12.3 On receipt of representation dated 4.2.2003 by COAI about the anomalies in the
2003 IUC Regulations, the Authority undertook a review on 29.10.2003 and reduced
the termination charges to a uniform rate, i.e., Rs. 0.30 per minute for all types of
calls and the ADC was made 10%. The representation made by COAI for further
reduction in the amount of termination charges was, however, rejected by the
Authority.
12.4 Between 2005 and 2008, 5 amendments were made and in the matter of
payment of ADC on 9.3.2009, the Authority notified IUC (Amendment Regulations,
2009) fixing termination charge at Rs. 0.20 per minute for local and national long
distance calls and mobile telephone services. These Regulations were challenged by
BSNL and various private operators by filing separate appeals, the details of which
are given below:

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 Anr., which was filed before the
Division Bench of the Delhi High Court against order dated 23.12.2005 passed by the
learned Single Judge in Writ Petition No. 2838/2005.
13.2 The Authority enacted the Telecommunication Interconnection Usage Charges
Regulation 2003 (4 of 2003) on 29.10.2003 under Section 36 read with Section 11(1)
(b)(ii), (iii) and (iv). These Regulations were amended vide notifications dated
25.11.2003, 12.12.2003 and 31.12.2003 and 6.1.2005. By the last amendment,
provision was made for modification of the method and manner of charging Access
Deficit Charges.
13.3 MTNL filed Appeal No. 3/2006 for quashing the amendment made in 2005 on
the premise that its entitlement to Access Deficit Charges had been arbitrarily
reduced. On notice by TDSAT, the Authority raised a preliminary objection to the
former's jurisdiction. TDSAT relied upon various provisions of the Act, the judgments
of this Court in Clariant International Limited v. Security Exchange Board
MANU/SC/0694/2004 : (2004) 8 SCC 524, Cellular Operators Association of India v.
Union of India MANU/SC/1368/2002 : (2003) 3 SCC 186 and West Bengal Electivity
Regulatory Commission v. CESC Ltd. MANU/SC/0859/2002 : (2002) 8 SCC 715 and
held that the Authority is empowered to frame Regulations circumscribed by the
statutory provisions and that it has no authority to frame Regulations in respect of
matters not specifically provided for and in such matters only TDSAT had the
jurisdiction to issue directions.
14. Before proceeding further, we may notice the background in which the Act was
enacted. In India, the first telegraph link was established in 1939 between Calcutta
and Diamond Harbour. In 1851, the telegraph line was opened for traffic but it was
largely confined to the work of East India Company. The Indian Telegraph Act was
enacted in 1885. It gave exclusive privilege of establishing, maintaining and working
of telegraphs to the Central Government, which was also empowered to grant licence
to private persons to establish telegraph network in any part of India.
1 5 . After Independence, the Government of India took complete control of the
telecom sector and brought it under the Post and Telegraph Department. One major
step taken for improving telecommunication services in the country was the
establishment of a modern telecommunication manufacturing facility at Bangalore
under the public sector, in the name of "Indian Telephone Industries Ltd". 1984
represents an important milestone in the development of telecommunication sector.
In that year, the Centre for Development of Telematics ("C-DoT") was set up for
developing indigenous technologies and licences were given to the private sector to
manufacture subscriber-equipment. In 1986, Mahanagar Telephone Nigam Ltd. and
Videsh Sanchar Nigam Ltd. ("VSNL") were set up. In July 1992 a decision was taken
to allow private investment for the services like electronic mail, voicemail, data
services, audio text services, video text services, video conferencing, radio paging
and cellular mobile telephone.
1 6 . In February 1993, the Finance Minister in his Budget speech announced
Government's intention to encourage private sector involvement and participation in
Telecom to supplement efforts of Department of Telecommunications especially in
creation of internationally competitive industry. On 13.5.1994, National Telecom
policy was announced which was placed in Parliament saying that the aim of the

policy was to supplement the effort of the Department of Telecommunications in
providing telecommunications services. The main objectives of that policy were:
(i) affording telecommunication for all and ensuring the availability of
telephone on demand;
(ii) providing certain basic telecom services at affordable and reasonable
prices to all people and covering all villages;
(iii) giving world standard telecom services; addressing consumer
complaints, dispute resolution and public interface to receive special
attention and providing the widest permissible range of services to meet the
customers' demand and at the same time at a reasonable price;
(iv) creating a major manufacturing base and major export of telecom
equipment having regard to the country's size and development; and
(v) protecting the defence and security interests of the country.
17. With the entry of private operators into telecom sector, proper Regulation of the
sector was considered appropriate. An important step in the institutional reform of
Indian telecom sector was setting up of an independent regulatory authority, i.e.,
Telecom Regulatory Authority. Initially, it was proposed to set up the Authority as a
non-statutory body and for that purpose, the Indian Telegraph (Amendment) Bill,
1995 was introduced and was passed by Lok Sabha. However, when the matter was
taken up in Rajya Sabha, the members expressed the view that the Authority should
be set up as a statutory body. Keeping that in view as also the 22nd Report of the
Standing Committee on Communications, the Telecom Authority of India Ordinance,
1996 was promulgated. In Delhi Science Forum v. Union of India
MANU/SC/0360/1996 : (1996) 2 SCC 405, this Court took cognizance of some of the
provisions contained in the Ordinance and observed:
The existence of a Telecom Regulatory Authority with the appropriate powers
is essential for introduction of plurality in the Telecom sector. The National
Telecom Policy is a historic departure from the practice followed during the
past century. Since the private sector will have to contribute more to the
development of the telecom network than DoT/MTNL in the next few years,
the role of an independent Telecom Regulatory Authority with appropriate
powers need not be impressed, which can harness the individual appetite for
private gains, for social ends. The Central Government and the Telecom
Regulatory Authority have not to behave like sleeping trustees, but have to
function as active trustees for the public good.
(emphasis supplied)
18. The 1996 Ordinance was replaced by the Act. The main purpose of establishing
the Authority as a statutory body was to ensure that the interest of consumers are
protected and, at the same time, to create a climate for growth of
telecommunications, broadcasting and cable services in such a manner which could
enable India to play leading role in the emerging global information society. The
goals and objectives of the Authority are as follows:
i. Increasing tele-density and access to telecommunication services in the
country at affordable prices.
ii. Making available telecommunication services which in terms of range,
price and quality are comparable to the best in the world.

iii. Providing a fair and transparent policy environment which promotes a
level playing field and facilitates fair competition.
iv. Establishing an interconnection regime that allows fair, transparent,
prompt and equitable interconnection.
v. Re-balancing tariffs so that the objectives of affordability and operator
viability are met in a consistent manner.
vi. Protecting the interest of consumers and addressing general consumer
concerns relating to availability, pricing and quality of service and other
matters.
vii. Monitoring the quality of service provided by the various operators.
viii. Providing a mechanism for funding of net cost areas/public telephones
so that Universal Service Obligations are discharged by telecom operators for
spread of telecom facilities in remote and rural areas.
ix. Preparing the grounds for smooth transition to an era of convergence of
services and technologies.
x. Promoting the growth of coverage of radio in India through commercial
and noncommercial channels.
xi. Increasing consumer choice in reception of TV channels and choosing the
operator who would provide television and other related services.
1 9 . The Preamble and Sections 3, 11 to 14, 18, 33, 35, 36 and 37 of the Act
(unamended) read as under:
Preamble
An Act to provide for the establishment of the Telecom Regulatory Authority
of India to regulate the telecommunication, and services, and for matters
connected therewith or incidental thereto.
Section 3-Establishment and incorporation of Authority-(1) With effect from
such date as the Central Government may, by notification appoint, there shall
be established, for the purposes of this Act, an Authority to be called the
Telecom Regulatory Authority of India.
(2) The Authority shall be a body corporate by the name aforesaid, having
perpetual succession and a common seal, with power, subject to the
provisions of this Act, to acquire, hold and dispose of property, both
movable and immovable, and to contact, and shall, by the said name, sue or
be sued.
(3) The authority shall consist of a Chairperson, and not less than two, but
not exceeding six members, to be appointed by the Central Government.
(4) The head office of the Authority shall be at New Delhi.
Section 11. Functions of Authority
(1) Notwithstanding anything contained in the Indian Telegraph Act, 1885
the functions of the Authority shall be to-

a. recommend the need and timing for introduction of new service
provider;
b. recommend the terms and conditions of licence to a service
provider;
c. ensure technical compatibility and effective interconnection
between different service providers;
d. regulate arrangement amongst service providers of sharing their
revenue derived from providing telecommunication services;
e. ensure compliance of terms and conditions of licence;
f. recommend revocation of licence for non-compliance of terms and
conditions of licence;
g. laydown and ensure the time period for providing local and long
distance circuits of telecommunication between different service
providers;
h. facilitate competition and promote efficiency in the operation of
telecommunication services so as to facilitate growth in such
services;
i. protect the interest of the consumers of telecommunication
service;
j. monitor the quality of service and conduct the periodical survey of
such provided by the service providers;
k. inspect the equipment used in the network and recommend the
type of equipment to be used by the service providers;
l. maintain register of interconnect agreements and of all such other
matters as may be provided in the Regulations;
m. keep register maintained under Clause (I) open for inspection to
any member of public on payment of such fee and compliance of
such other requirements as may be provided in the Regulations;
n. settle disputes between service providers;
o. render advice to the Central Government in the matters relating to
the development of telecommunication technology and any other
matter reliable to telecommunication industry in general;
p. levy fees and other charges at such rates and in respect of such
services as may be determined by Regulations;
q. ensure effective compliance of universal service obligations;
r. perform such other functions including such administrative and
financial functions as may be entrusted to it by the Central
Government or as may be necessary to carry out the provisions of
this Act.
(2) Notwithstanding anything contained in the Indian Telegraph Act, 1885,

the Authority may, from time to time, by order, notify in the Official Gazette
the rates at which the telecommunication services within India and outside
India shall be provided under this Act including the rates at which messages
shall be transmitted to any country outside India;
Provided that the Authority may notify different rates for different persons or
class of persons for similar telecommunication services and where different
rates are fixed as aforesaid the Authority shall record the reasons therefor.
(3) While discharging its functions under Sub-section (1), the Authority shall
not act against the interest of the sovereignty and integrity of India, the
security of the State, friendly relations with foreign States, public order,
decency or morality.
(4) The Authority shall ensure transparency while exercising its powers and
discharging its functions.
12. Powers of Authority to call for information, conduct investigations, etc.-
(1) Where the Authority considers it expedient so to do, it may, by order in
writing,-
(a) call upon any service provider at any time to furnish in writing such
information or explanation relating to its affairs as the Authority may require;
or
(b) appoint one or more persons to make an inquiry in relation to the affairs
of any service provider; and
(c) direct any of its officers or employees to inspect the books of account or
other documents of any service provider.
(2) Where any inquiry in relation to the affairs of a service provider has been
undertaken under Sub-section (1),-
(a) every officer of the Government Department, if such service provider is a
department of the Government;
(b) every director, manager, secretary or other officer, if such service
provider is a company; or
(c) every partner, manager, secretary or other officer, if such service
provider is a firm; or
(d) every other person or body of persons who has had dealings in the
course of business with any of the persons mentioned in Clauses (b) and (c),
shall be bound to produce before the Authority making the inquiry, all such
books of account or other documents in his custody or power relating to, or
having a bearing on the subject-matter of such inquiry and also to furnish to
the Authority with any such statement or information relating thereto, as the
case may be, required of him, within such time as may be specified.
(3) Every service provider shall maintain such books of account or other
documents as may be prescribed.
(4) The Authority shall have the power to issue such directions to service
providers as it may consider necessary for proper functioning by service
providers.

1 3 . Powers of Authority to issue directions-The Authority may, for the
discharge of its functions under Sub-section (1) of Section 11, issue such
directions from time to time to the service providers, as it may consider
necessary.
14. Authority to settle disputes-(1) If a dispute arises, in respect of matters
referred to in Sub-section (2), among service providers or between service
providers and a group of consumers, such disputes shall be adjudicated by a
bench constituted by the Chairperson and such bench shall consist of two
members;
Provided that if the members of the bench differ on any point or points they
shall state the point or points on which they differ and refer the same to a
third member for hearing on such point or points and such point or points
shall be decided according to the opinion of that member.
(2) The bench constituted under Sub-section (1) shall exercise, on and from
the appointed day all such jurisdiction, powers and authority as were
exerciseable immediately before that date by any civil court on any matter
relating to-
(i) technical compatibility and inter-connections between service
providers;
(ii) revenue sharing arrangements between different service
providers;
(iii) quality of telecommunication services and interest of
consumers;
Provided that nothing in Sub-section shall apply in respect of matters relating
to-
(a) the monopolistic trade practice, restrictive trade practice and
unfair trade practice which are subject to the jurisdiction of the
Monopolies and Restrictive Trade Practices Commission established
under Sub-section (1) of Section 5 of the Monopolies and Restrictive
Trade Practices Act, 1969;
(b) the complaint of an individual consumer maintainable before a
Consumer Disputes Redressal Forum or a Consumer Disputes
Redressal Commission or the National Consumer Redressal
Commission established under Section 9 of the Consumer Protection
Act, 1986;
(c) dispute between telegraph authority and any other person
referred to in Sub-section (1) of Section 7B of the Indian Telegraph
Act, 1885.
18. Appeal to High Court-Any person aggrieved by any decision or order of
the Authority may file an appeal to the High Court within thirty days from the
date of communication of the decision or order of the Authority to him;
Provided that the High Court may, if it is satisfied that the Appellant was
prevented by sufficient cause from filing the appeal within the said period,
allow it to be filed within a further period not exceeding sixty days.

33. Delegation.-The Authority may, by general or special order in writing,
delegate to any member, officer of the Authority or any other person subject
to such conditions, if any, as may be specified in the order, such of its
powers and functions under this Act (except the power to settle dispute
under Chapter IV and to make Regulation under Section 36) as it may deem
necessary.
35. Power to make rules.-(1) The Central government may, by notification,
make rules for carrying out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing
power, such rules may provide for all or any of the following matters,
namely;-
(a) the salary and allowances payable to and the other conditions of
service of the Chairperson and members under Sub-section (5) of
Section 5;
(b) the powers and functions of the Chairperson under Sub-section
(1) of Section 6;
(c) the procedure for conducting an inquiry made under Sub-section
(2) of Section 7;
(d) the category of books of accounts or other documents which are
required to be maintained under Sub-section (3) of Section 12;
(e) the period within which an application is to be made under Sub-
section (1) of Section 15;
(f) the manner in which the accounts of the Authority shall be
maintained under Sub-section (1) of Section 23;
(g) the time within which and the form and manner in which returns
and report are to be made to the Central Government under Sub-
section (1) and (2) of Section 24;
(h) any other matter which is to be, or may be, prescribed, or in
respect of which provision is to be made, by rules;
36. Power to make Regulations.-(1) The Authority may, by notification, make
Regulations consistent with this Act and the rules made thereunder to carry
out the purposes of Act.
(2) In particular, and without prejudice to the generality of the foregoing
power, such Regulations may provide for all or any of the following matters,
namely:
(a) the times and places of meetings of the Authority and the
procedure to be followed at such meetings under Sub-section (1) of
Section 8, including quorum necessary for the transaction of
business;
(b) the transaction of business at the meetings of the Authority
under Sub-section (4) of Section 8;
(c) 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-
(f) levy of fees and other charges under Clause (p) of Sub-section
(1) of Section 11.
37. Rules and Regulations to laid before Parliament.-Every rule and every
Regulation made under this Act shall be laid, as soon as may be after it is
made, before each House of Parliament, while it is in session, for a total
period of thirty days which may be comprised in one session or in two or
more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both
Houses agree in making any modification in the rule or Regulations or both
Houses agree that the rule or Regulation should not be made, the rule or
Regulation shall thereafter have effect only in such modified form or be of no
effect, as the case may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything previously
done under that rule or Regulation.
20. With a view to overcome the difficulties experienced in the implementation of the
Act, the Central Government constituted a Group on Telecom and IT Convergence
under the Chairmanship of the Finance Minister. The recommendations made by the
Group led to the issuance of the Telecom Regulatory Authority of India (Amendment)
Ordinance, 2000, which was replaced by the Telecom Regulatory Authority of India
(Amendment) Act, 2000. One of the important features of the Amendment Act was
the establishment of a Tribunal known as the Telecom Disputes Settlement and
Appellate Tribunal for adjudicating disputes between a licensor and a licencee,
between two or more service providers, between a service provider and a group of
consumers, and also to hear and dispose of any appeals from the direction, decision
or order of the Authority.
21. The provisions of the amended Act, which have bearing on the decision of the
question framed in the opening paragraph of this judgment are as under:
2. Definitions.-(1) xxx xxx xxx
(aa) "Appellate Tribunal" means the Telecom Disputes Settlement and
Appellate Tribunal established under Section 14;
(b) "Authority" means the Telecom Regulatory Authority of India established
(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 electromagnetic means but shall not include
broadcasting services:
Provided that the Central Government may notify other service to be
telecommunication service including broadcasting services.
11. Functions of Authority.--(1) Notwithstanding anything contained
in the Indian Telegraph Act, 1885 (13 of 1885), the functions of the
Authority shall be to-
(a) make recommendations, either suo motu or on a request
from the licensor, on the following matters, namely-
(i) need and timing for introduction of new service provider;
(ii) terms and conditions of licence to a service provider;
(iii) revocation of licence for non-compliance of terms and
(iv) measures to facilitate competition and promote
efficiency in the operation of telecommunication services so
as to facilitate growth in such services;
(v) technological improvements in the services provided by
the service providers;
(vi) type of equipment to be used by the service providers
after inspection of equipment used in the network;
(vii) measures for the development of telecommunication
technology and any other matter relatable to
telecommunication industry in general;
(viii) efficient management of available spectrum;
(b) discharge the following functions, namely--
(i) ensure compliance of terms and conditions of licence;
(ii) notwithstanding anything contained in the terms and
conditions of the licence granted before the commencement
of the Telecom Regulatory Authority of India (Amendment)
Act, 2000, fix the terms and conditions of interconnectivity
between the service providers;
(iii) ensure technical compatibility and effective
interconnection between different service providers;

(iv) regulate arrangement amongst service providers of
sharing their revenue derived from providing
telecommunication services;
(v) lay down the standards of quality of service to be
provided by the service providers and ensure the quality of
service and conduct the periodical survey of such service
provided by the service providers so as to protect interest of
the consumers of telecommunication service;
(vi) lay down and ensure the time period for providing local
and long distance circuits of telecommunication between
different service providers;
(vii) maintain register of interconnect agreements and of all
such other matters as may be provided in the Regulations;
(viii) keep register maintained under Clause (vii) open for
inspection to any member of public on payment of such fee
and compliance of such other requirement as may be
provided in the Regulations;
(ix) ensure effective compliance of universal service
obligations;
(c) levy fees and other charges at such rates and in respect
of such services as may be determined by Regulations;
(d) perform such other functions including such
administrative and financial functions as may be entrusted to
it by the Central Government or as may be necessary to
carry out the provisions of this Act:
Provided that the recommendations of the Authority
specified in Clause (a) of this Sub-section shall not be
binding upon the Central Government:
Provided further that the Central Government shall seek the
recommendations of the Authority in respect of matters
specified in Sub-clauses (i) and (ii) of Clause (a) of this
Sub-section in respect of new licence to be issued to a
service provider and the Authority shall forward its
recommendations within a period of sixty days from the date
on which that Government sought the recommendations:
Provided also that the Authority may request the Central
Government to furnish such information or documents as
may be necessary for the purpose of making
recommendations under Sub-clauses (i) and (ii) of Clause
(a) of this Sub-section and that Government shall supply
such information within a period of seven days from receipt
of such request:
Provided also that the Central Government may issue a
licence to a service provider if no recommendations are
received from the Authority within the period specified in the

second proviso or within such period as may be mutually
agreed upon between the Central Government and the
Authority:
Provided also that if the Central Government having
considered that recommendation of the Authority, comes to
a prima facie conclusion that such recommendation cannot
be accepted or needs modifications, it shall refer the
recommendation back to the Authority for its
reconsideration, and the Authority may, within fifteen days
from the date of receipt of such reference, forward to the
Central Government its recommendation after considering
the reference made by that Government. After receipt of
further recommendation if any, the Central Government shall
take a final decision.
(2) Notwithstanding anything contained in the Indian
Telegraph Act, 1885 (13 of 1885), the Authority may, from
time to time, by order, notify in the Official Gazette the rates
at which the telecommunication services within India and
outside India shall be provided under this Act including the
rates at which messages shall be transmitted to any country
outside India:
Provided that the Authority may notify different rates for
different persons or class of persons for similar
telecommunication services and where different rates are
fixed as aforesaid the Authority shall record the reasons
therefor.
(3) While discharging its functions under Sub-section (1), or
Sub-section (2) the Authority shall not act against the
interest of the sovereignty and integrity of India, the security
of the State, friendly relations with foreign States, public
order, decency or morality.
(4) The Authority shall ensure transparency while exercising
its powers and discharging its functions.
1 2 . Powers of Authority to call for information, conduct
investigations, etc.-(1) Where the Authority considers it
expedient so to do, it may, by order in writing,-
(a) call upon any service provider at any time to
furnish in writing such information or explanation
relating to its affairs as the authority may require;
or
(b) appoint one or more persons to make an inquiry
in relation to the affairs of any service provider; and
(c) direct any of its officers or employees to inspect
the books of account or other documents of any
service provider.
(2) Where any inquiry in relation to the affairs of a service

provider has been undertaken under Sub-section (1),-
(a) every officer of the Government Department, if
such service provider is a department of the
Government;
(b) every director, manager, secretary or other
officer, if such service provider is a company; or
(c) every partner, manager, secretary or other
officer, if such service provider is a firm; or
(d) every other person or body of persons who has
had dealings in the course of business with any of
the persons mentioned in Clauses (b) and (c), shall
be bound to produce before the Authority making
the inquiry, all such books of account or other
documents in his custody or power relating to, or
having a bearing on the subject-matter of such
inquiry and also to furnish to the Authority with any
such statement or information relating thereto, as
the case may be, required of him, within such time
as may be specified.
(3) Every service provider shall maintain such books of
account or other documents as may be prescribed.
(4) The Authority shall have the power to issue such
directions to service providers as it may consider necessary
for proper functioning by service providers.
1 3 . Power of Authority to issue directions.--The Authority
may, for the discharge of its functions under Sub-section (1)
of Section 11, issue such directions from time to time to the
service providers, as it may consider necessary:
Provided that no direction under Sub-section (4) of Section
12 or under this section shall be issued except on the
matters specified in Clause (b) of Sub-section (1) of Section
11.
14. Establishment of Appellate Tribunal.--The Central Government shall, by
notification, establish an Appellate Tribunal to be known as the Telecom
Disputes Settlement and Appellate Tribunal to-
(a) adjudicate any dispute-
(i) between a licensor and a licensee;
(ii) between two or more service providers;
(iii) between a service provider and a group of consumers;
Provided that nothing in this clause shall apply in respect of
matters relating to-
(A) the monopolistic trade practice, restrictive trade practice

and unfair trade practice which are subject to the jurisdiction
of the Monopolies and Restrictive Trade Practices
Commission established under Sub-section (1) of Section 5
of the Monopolies and Restrictive Trade Practices Act, 1969
(54 of 1969);
(B) the complaint of an individual consumer maintainable
before a consumer Disputes Redressal forum or a Consumer
Disputes Redressal Commission or the National Consumer
Redressal commission established under Section 9 of the
Consumer Protection Act, 1986 (68 of 1986);
(C) dispute between telegraph authority and any other
person referred to in Sub-section (1) of Section 7B of the
Indian Telegraph Act 1885 (13 of 1885);
(b) hear and dispose of appeal against any direction,
decision or order of the Authority under this Act.
A. Application for settlement of disputes and appeals to
Appellate Tribunal.-
(7) The Appellate Tribunal may, for the purpose of
examining the legality or propriety or correctness of any
dispute made in any application under Sub-section (1), or of
any direction or order or decision of the Authority referred to
in the appeal preferred under Sub-section (2), on its own
motion or otherwise, call for the records relevant to
disposing of such applications or appeal and make such
orders as it thinks fit.
M. 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.
N. Transfer of appeals.--(1) All appeals pending before the
High Court immediately before the commencement of the
Telecom Regulatory Authority (Amendment) Act, 2000, shall
stand transferred to the Appellate Tribunal on its
establishment under Section 14.

(2) Where any appeal stands transferred from the High Court
to the Appellate Tribunal under Sub-section (1),-
(a) the High Court shall, as soon as may be after such
transfer, forward the records of such appeal to the Appellate
Tribunal; and
(b) the Appellate Tribunal may, on receipt of such records,
proceed to deal with such appeal, so far as may be from the
stage which was reached before such transfer or from any
earlier stage or de novo as the Appellate Tribunal may deem
fit.
18. Appeal to Supreme Court--(1) Notwithstanding anything
contained in the Code of Civil Procedure, 1908 (5 of 1908)
or in any other law, an appeal shall lie against any order,
not being an interlocutory order, of the Appellate Tribunal to
the Supreme Court on one or more of the grounds specified
in Section 100 of that Code.
(2) No appeal shall lie against any decision or order made
by the Appellate Tribunal with the consent of the parties.
(3) Every appeal under this section shall be preferred within
a period of ninety days from the date of the decision or
order appealed against:
Provided that the Supreme Court may entertain the appeal
after the expiry of the said period of ninety days, if it is
satisfied that the Appellant was prevented by sufficient cause
from preferring the appeal in time.
33. Delegation.-The Authority may, by general or special order in
writing, delegate to any member, officer of the Authority or any
other person subject to such conditions, if any, as may be specified
in the order, such of its powers and functions under this Act (except
the power to settle dispute under Chapter IV and to make Regulation
under Section 36) as it may deem necessary.
3 5 . Power to make rules.-(1) The Central Government may, by
notification, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
following matters namely:
(a) the salary and allowances payable to and the other
conditions of service of the Chairperson and members under
(aa) the allowance payable to the part-time members under
Sub-section (6A) of Section 5;
(b) the powers and functions of the Chairperson under Sub-
(c) the procedure for conducting an inquiry made under

(ca) the salary and allowances and other conditions of
service of officers and other employees of the Authority
(d) the category of books of account or other documents
which are required to be maintained under Sub-section (3)
of Section 12;
(da) the form, the manner of its verification and the fee
under Sub-section (3) of Section 14A;
(db) the salary and allowances payable to and other terms
and conditions of service of the Chairperson and other
Members of the Appellate Tribunal under Section 14E;
(dc) the salary and allowances and other conditions of
service of the officers and employees of the Appellate
Tribunal under Sub-section (3) of Section 14H;
(dd) any other power of a civil court required to be
prescribed under Clause (i) of Sub-section (2) of Section
16;
(e) the period within which an application is to be made
(f) the manner in which the accounts of the Authority shall
be maintained under Sub-section (1) of Section 23;
(g) the time within which and the form and manner in which
returns and report are to be made to the Central Government
under Sub-sections (1) and (2) of Section 24;
(h) any other matter which is to be, or may be, prescribed,
or in respect of which provision is to be made, by rules.
3 6 . Power to make Regulations.-(1) The Authority may, by
notification, make Regulations consistent with this Act and the rules
made thereunder to carry out the purpose of this Act.
(2) In particular, and without prejudice to the generality of the
foregoing power, such Regulations may provide for all or any of the
following matters, namely:
(a) the times and places of meetings of the Authority and
the procedure to be followed at such meetings under Sub-
section (1) of Section 8, including quorum necessary for the
transaction of business;
(b) the transaction of business at the meetings of the
Authority under Sub-section (4) of Section 8;
(c) omitted by Act 2 of 2000
(d) matters in respect of which register is to be maintained

by the Authority under Clause (l) of Sub-section (1) of
Section 11;
(e) levy of fee and lay down such other requirements on
fulfilment of which a copy of register may be obtained under
sub Clause (b) of Sub-section (1) of Section 11;
(f) levy of fees and other charges under Clause (c) of Sub-
section (1) of Section 11.
37. Rules and Regulations to laid before Parliament.-
Every rule and every Regulation made under this Act shall be
laid, as soon as may be after it is made, before each House
of Parliament, while it is in session, for a total period of
thirty days which may be comprised in one session or in two
or more successive sessions, and if, before the expiry of the
session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any
modification in the rule or Regulations or both Houses agree
that the rule or Regulation should not be made, the rule or
Regulation shall thereafter have effect only in such modified
form or be of no effect, as the case may be; so, however,
that any such modification or annulment shall be without
prejudice to the validity of anything previously done under
that rule or Regulation.
2 2 . A comparative statement of the relevant provisions of the unamended and
amended Acts is given below:

23. We shall now deal with the question formulated by this Court, the first facet of
which relates to the scope of Section 36 of the Act.
24. Shri R.F. Nariman, learned Solicitor General argued that the power vested in the

Authority to make Regulations for carrying out the purposes of the Act is very wide
and is not controlled by Section 36(2), which provides for framing of Regulations on
specified matters. He submitted that if power is conferred upon a statutory authority
to make subordinate legislation in general terms, the particularization of the topics is
merely illustrative and does not limit the scope of the general power. Learned
Solicitor General further argued that for carrying out the purposes of the Act, the
Authority can make Regulations on various matters specified in other sections
including Sections 8(1), 8(4), 11(1)(b), 12(4) and 13. He submitted that the
Regulations made under Section 36(1) and (2) are in the nature of subordinate
legislation and are required to be laid before each House of Parliament in terms of
Section 37 and Parliament can approve, modify or annul the same. He further
submitted that a restrictive interpretation of Section 36(1) with reference to Clauses
(a), (b) and (d) of Section 36(2) will make the provision otiose and the Court should
not adopt that course.
2 5 . Shri A.S. Chandhiok, learned senior counsel appearing for BSNL argued that
Sub-section (1) of Section 36 should not be construed as conferring unbridled power
upon the Authority to make Regulations, else other provisions like Sections 12(4) and
13, which empower the Authority to issue directions on certain matters would
become redundant. Shri C.S. Vaidyanathan, learned senior counsel appearing for the
Appellants in C.A. Nos. 6049/2005, 802/2006, 4523/2006 and 5184/2010 argued
that Section 36(1) should be construed consistent with other provisions of the Act
and Regulations cannot be made on the matters covered by other provisions. He
referred to Section 11(2) and argued that the power conferred upon the Authority to
issue an order fixing the rates at which the telecommunication services are to be
provided within and outside India including the rates at which messages are required
to be transmitted to any country outside India and the power vested in the authority
under Section 12(4) and 13 to issue directions to the service providers cannot be
controlled by making Regulations under Section 36(1). Shri Vaidyanathan
emphasized that if Parliament has conferred power upon the Authority under Section
11(2) to notify the rates by a transparent method, the power under Section 36(1)
cannot be used for framing Regulation on that topic. Learned senior counsel referred
to Section 62 of the Electricity Act, 2003, which, according to him, is pari materia to
Section 11(2) and argued that in view of paragraph 15 of the judgment in PTC India
Limited v. Central Electricity Regulatory Commission MANU/SC/0164/2010 : (2010) 4
SCC 603, Regulations cannot be framed on the subject specified in that section. Dr.
A.M. Singhvi, learned senior counsel appearing for the Appellants in C.A. Nos. 271-
281/2011 argued that the operation of Section 36(1) of the Act is controlled by
Section 36(2), which provide for framing of Regulation in respect of some ministerial
acts required to be performed under the Act and argued that the Authority cannot
make Regulations on the subjects specifically covered by other provisions. Dr.
Singhvi submitted that the Court should not give an interpretation to Section 36(1)
which will make the Authority an unruly horse and enable it to style every instrument
as a Regulation and thereby exclude the same from challenge before TDSAT. An
ancillary argument made by Dr. Singhvi is that if Regulations are framed on the
topics covered by other provisions of the Act, then TDSAT will be denuded much of
its jurisdiction and the purpose of creating an independent adjudicatory body will be
defeated. Shri Mukul Rohatgi, learned senior counsel argued that the scope of Section
36(1) should be confined to the topics specified in Sub-section (2) thereof, else the
same will become inconsistent with other provisions of the Act including Sections
11(2), (4), 12(4) and 13. Shri Ramji Srinivasan, learned Counsel appearing in some
of the appeals, argued that the Regulation making power under Section 36(1) cannot
be used for nullifying the power of the Authority to issue directions on the topics
specified in Sections 11(1)(b), 11(2), 12(4) and 13.

26. We have considered the respective arguments. Under the unamended Act, the
Authority had the following three types of functions:
RECOMMENDATORY FUNCTIONS
Under Section 11(1)(a) of the TRAI Act 1997, the Authority is required to
make recommendations either suo motu or on a request from the licensor,
i.e., Department of Telecommunications or Ministry of Information &
Broadcasting in the case of Broadcasting and Cable Services.
TRAI has powers to make recommendations either suo motu or on request
from the licensor on the following matters as per Section 11(1)(a):
(i) need and timing for introduction of new service provider;
(ii) terms and conditions of licence to a service provider;
(iii) revocation of licence for non-compliance of terms and
(iv) measures to facilitate competition and promote efficiency in the
operation of telecommunication services so as to facilitate growth in
such services;
(v) technological improvements in the services provided by the
service providers;
(vi) type of equipment to be used by the service providers after
inspection of equipment used in the network;
(vii) measures for the development of telecommunication technology
and any other matter relatable to telecommunication industry in
general;
(viii) efficient management of available spectrum.
REGULATORY FUNCTIONS
The Authority also had regulatory and tariff setting functions, like ensuring
compliance of terms and conditions of licence, laying standard of Quality of
Service (QoS) to be provided by service providers and notifying the rates at
which telecommunication has to be provided and ensuring effective
compliance of USOs. It also had the power to call upon any service provider
at any time to furnish in formation or explanation, in writing, relating to its
affairs. It was required to ensure transparency while exercising its powers
and discharging its functions. It was given powers to punish for violation of
its directions.
Another approach was through feedback/representations received from
consumers/consumer organizations, experts etc.
These functions could be discharged by the Authority through a multipronged
approach. One of these approaches was by analyzing the reports received
from the service providers. In certain cases, the Authority could on its own
initiative take action for ensuring compliance of terms and conditions of
license.

ADJUDICATORY FUNCTIONS
Originally, TRAI was also empowered to adjudicate upon disputes among
Service Providers or between the Service Providers and a group of
Consumers on matters relating to technical compatibility and interconnection
between the Service Providers, revenue sharing arrangement between Service
Providers, quality of telecommunication services and interests of consumers.
27. After the amendment of 2000, the Authority can either suo motu or on a request
from the licensor make recommendations on the subjects enumerated in Section
11(1)(a)(i) to (viii). Under Section 11(1)(b), the authority is required to perform
nine functions enumerated in Clauses (i) to (ix) thereof. In these clauses, different
terms like 'ensure', 'fix', 'regulate' and 'lay down' have been used. The use of the
term 'ensure' implies that the Authority can issue directions on the particular subject.
For effective discharge of functions under various clauses of Section 11(1)(b), the
authority can frame appropriate Regulations. The term 'regulate' contained in Sub-
clause (iv) shows that for facilitating arrangement amongst service providers for
sharing their revenue derived from providing telecommunication services, the
Authority can either issue directions or make Regulations.
28. The terms 'regulate' and 'Regulation' have been interpreted in large number of
judgments. We may notice few of them. In V.S. Rice and Oil Mills v. State of A.P.
MANU/SC/0044/1964 : AIR 1964 SC 1781, agreements for a period of ten years had
been executed for supply of electricity and the same did not contain any provision
authorising the Government to increase the rates during their operation. However, in
exercise of power under Section 3(1) of the Madras Essential Articles Control and
Requisitioning (Temporary Powers) Act, 1949, the State Government issued order
enhancing the agreed rates. The same was challenged on the ground that any
increase in agreed tariff was out of the purview of Section 3(1). Chief Justice
Gajendragadkar, speaking for the Constitution Bench, observed as under:
The word regulate is wide enough to confer power on the State to regulate
either by increasing the rate, or decreasing the rate, the test being what is it
that is necessary or expedient to be done to maintain, increase, or secure
supply of the essential articles in question and to arrange for its equitable
distribution and its availability at fair prices. The concept of fair prices to
which Section 3(1) expressly refers does not mean that the price once fixed
must either remain stationary, or must be reduced in order to attract the
power to regulate. The power to regulate can be exercised for ensuring the
payment of a fair price, and the fixation of a fair price would inevitably
depend upon a consideration of all relevant and economic factors which
contribute to the determination of such a fair price. If the fair price indicated
on a dispassionate consideration of all relevant factors turns out to be higher
than the price fixed and prevailing, then the power to regulate the price must
necessarily include the power to increase so as to make it fair. Hence the
challenge to the validity of orders increasing the agreed tariff rate on the
ground that they are outside the purview of Section 3(1) cannot be
sustained.
29. In State of Tamil Nadu v. Hind Stone MANU/SC/0394/1981 : (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.
MANU/SC/0315/1974 : (1975) 1 SCC 375: 'The word "Regulation" has no
fixed connotation. Its meaning differs according to the nature of the thing to
which it is applied.' In modern statutes concerned as they are with economic
and social activities, 'Regulation' must, of necessity, receive so wide an
interpretation that in certain situations, it must exclude competition to the
public sector from the private sector. More so in a welfare State. It was
pointed out by the Privy Council in Commonwealth of Australia v. Bank of
New South Wales (1949) 2 All ER--and we agree with what was stated
therein--that the problem whether an enactment was regulatory or something
more or whether a restriction was direct or only remote or only incidental
involved, not so much legal as political, social or economic consideration and
that it could not be laid down that in no circumstances could the exclusion of
competition so as to create a monopoly, either in a State or Commonwealth
agency, be justified. Each case, it was said, must be judged on its own facts
and in its own setting of time and circumstances and it might be that in
regard to some economic activities and at some stage of social development,
prohibition with a view to State monopoly was the only practical and
reasonable manner of Regulation. The statute with which we are concerned,
the Mines and Minerals (Regulation and Development) Act, is aimed, as we
have already said more than once, at the conservation and the prudent and
discriminating exploitation of minerals. Surely, in the case of a scarce
mineral, to permit exploitation by the State or its agency and to prohibit
exploitation by private agencies is the most effective method of conservation
and prudent exploitation. If you want to conserve for the future, you must
prohibit in the present. We have no doubt that the prohibiting of leases in
certain cases is part of the Regulation contemplated by Section 15 of the Act.
30. In K. Ramanathan v. State of Tamil Nadu MANU/SC/0034/1985 : (1985) 2 SCC
116, this Court interpreted the word 'Regulation' appearing in Section 3(2)(d) of the
Essential Commodities Act, 1955 and observed:
The word "Regulation" cannot have any rigid or inflexible meaning as to
exclude "prohibition". The word "regulate" is difficult to define as having any
precise meaning. It is a word of broad import, having a broad meaning, and
is very comprehensive in scope. There is a diversity of opinion as to its
meaning and its application to a particular state of facts, some courts giving
to the term a somewhat restricted, and Ors. giving to it a liberal,
construction. The different shades of meaning are brought out in Corpus
Juris Secundum, Vol. 76 at p.611:
'Regulate' is variously defined as meaning to adjust; to adjust, order,
or govern by rule, method, or established mode; to adjust or control
by rule, method, or established mode, or governing principles or
laws; to govern; to govern by rule; to govern by, or subject to,
certain rules or restrictions; to govern or direct according to rule; to
control, govern, or direct by rule or Regulations.
'Regulate' is also defined as meaning to direct; to direct by rule or
restriction; to direct or manage according to certain standards, laws,
or rules; to rule; to conduct; to fix or establish; to restrain; to
restrict.

See also: Webster's Third New International Dictionary, Vol. II, p.1913 and
Shorter Oxford Dictionary, Vol. II, 3rd Edn., p.1784.
It has often been said that the power to regulate does not necessarily include
the power to prohibit, and ordinarily the word "regulate" is not synonymous
with the word "prohibit". This is true in a general sense and in the sense that
mere Regulation is not the same as absolute prohibition. At the same time,
the power to regulate carries with it full power over the thing subject to
Regulation and in absence of restrictive words, the power must be regarded
as plenary over the entire subject. It implies the power to rule, direct and
control, and involves the adoption of a rule or guiding principle to be
followed, or the making of a rule with respect to the subject to be regulated.
The power to regulate implies the power to check and may imply the power
to prohibit under certain circumstances, as where the best or only efficacious
Regulation consists of suppression. It would therefore appear that the word
"Regulation" cannot have any inflexible meaning as to exclude "prohibition".
It has different shades of meaning and must take its colour from the context
in which it is used having regard to the purpose and object of the legislation,
and the Court must necessarily keep in view the mischief which the
legislature seeks to remedy.
The question essentially is one of degree and it is impossible to fix any
definite point at which "Regulation" ends and "prohibition" begins. We may
illustrate how different minds have differently reacted as to the meaning of
the word "regulate" depending on the context in which it is used and the
purpose and object of the legislation. In Slattery v. Nalyor LR (1888) 13 AC
446 the question arose before the Judicial Committee of the Privy Council
whether a Bye-law by reason of its prohibiting internment altogether in a
particular cemetery, was ultra vires because the Municipal Council had only
power of regulating internments whereas the Bye-law totally prohibited them
in the cemetery in question, and it was said by Lord Hobhouse, delivering the
judgment of the Privy Council:
A rule or Bye-law cannot be Held as ultra vires merely because it
prohibits where empowered to regulate, as Regulation often involved
prohibition.
31. In Jiyajeerao Cotton Mills Ltd. v. M.P. Electricity Board MANU/SC/0212/1988 :
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 MANU/SC/0281/1992 : 1992 Supp (1) SCC
684, this Court upheld classification of seats and fixation of rates of admission
according to the paying capacity of a cinegoer by observing that the same is an
integral part of the power to make Regulation and fixation of rates of admission
became a legitimate ancillary or incidental power in furtherance of the Regulation
under the Act.

33. The term 'Regulation' was also interpreted in Quarry Owners' Association v. State
of Bihar MANU/SC/0504/2000 : (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 MANU/SC/0455/2004 :
(2004) 5 SCC 430. In that case, the Court interpreted the word 'Regulation' appearing
in U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 and observed:
" Regulate" means to control or to adjust by rule or to subject to governing
principles. It is a word of broad impact having wide meaning comprehending
all facets not only specifically enumerated in the Act, but also embraces
within its fold the powers incidental to the Regulation envisaged in good
faith and its meaning has to be ascertained in the context in which it has
been used and the purpose of the statute.
35. It is thus evident that the term 'regulate' is elastic enough to include the power
to issue directions or to make Regulations and the mere fact that the expression "as
may be provided in the Regulations" appearing in Clauses (vii) and (viii) of Section
11(1)(b) has not been used in other clauses of that Sub-section does not mean that
the Regulations cannot be framed under Section 36 on the subjects specified in
Clauses (i) to (vi) of Section 11(1)(b). In fact, by framing Regulations under Section
36, the Authority can facilitate the exercise of functions under various clauses of
Section 11(1)(b) including Clauses (i) to (vi).
36. We may now advert to Section 36. Under Sub-section (1) thereof the Authority
can make Regulations to carry out the purposes of the Act specified in various
provisions of the Act including Sections 11, 12 and 13. The exercise of power under
Section 36(1) is hedged with the condition that the Regulations must be consistent
with the Act and the Rules made thereunder. There is no other restriction on the
power of the Authority to make Regulations. In terms of Section 37, the Regulations
are required to be laid before Parliament which can either approve, modify or annul
the same. Section 36(2), which begins with the words "without prejudice to the
generality of the power under Sub-section (1)" specifies various topics on which
Regulations can be made by the Authority. Three of these topics relate to meetings of
the Authority, the procedure to be followed at such meetings, the transaction of
business at the meetings and the register to be maintained by the Authority. The
remaining two topics specified in Clauses (e) and (f) of Section 36(2) are directly
referable to Section 11(1)(b)(viii) and 11(1)(c). These are substantive functions of
the Authority. However, there is nothing in the language of Section 36(2) from which

it can be inferred that the provisions contained therein control the exercise of power
by the Authority under Section 36(1) or that Section 36(2) restricts the scope of
Section 36(1).
3 7 . It is settled law that if power is conferred upon an authority/body to make
subordinate legislation in general terms, the particularization of topics is merely
illustrative and does not limit the scope of general power. In Emperor v. Sibnath
Banerji AIR 1942 PC 156, the Privy Council considered the correctness of the
judgment of the Federal Court, which held that Rule 26 of the Defence of India Rules
framed under Clause (j) of Section 3(2) of the Defence of India Act, 1939 was ultra
vires the provisions of the Act. While reversing the judgment of the Federal Court,
the Privy Council observed:
In the opinion of their Lordships, the function of Sub-section (2) is merely
an illustrative one; the rule-making power is conferred by Sub-section (1),
and "the rules" which are referred to in the opening sentence of Sub-section
(2) are the Rules which are authorized by, and made under, Sub-section (1);
the provisions of Sub-section (2) are not restrictive of Sub-section (1), as,
indeed is expressly stated by the words "without prejudice to the generality
of the powers conferred by Sub-section (1).
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 MANU/SC/0042/1963 :
1964 (4) SCR 991, the Constitution Bench considered challenge to the validity of
bye-law No. 3 framed by Municipal Board, Tanda. The Appellant had questioned the
bye-law on the ground that the same was ultra vires the provisions of Section 241 of
the United Provinces Municipalities Act, 1916. The facts of that case were that the
Appellant had established a market for selling food-grains, vegetables, fruits, fish
etc. The Chairman of the Municipal Board issued a notice to the Appellant requiring
him to obtain a licence for running the market with an indication that if he fails to do
so, criminal proceedings will be initiated against him. On account of his failure to
take the required licence, the Appellant was tried by Tahsildar, Tanda in Criminal
Case No. 141 of 1960. The Tahsildar acquitted the Appellant on the ground that the
prosecution had failed to prove the fact that in the market established on the land
belonging to the Appellant, vegetables, fruits and fish were sold. The order of
acquittal was set aside by the High Court and the Appellant was convicted under
Section 299(1) of the 1916 Act read with Clause (3) of the relevant bye-laws. In the
appeal filed before this Court, it was argued that bye-law 3(a) and other bye-laws
passed by the Board are ultra vires the provisions of Section 241 of the Act. The
Constitution Bench referred to the provisions of Sections 241 and 298 of the Act and
various clauses of Section 298(2) which specify the topics on which bye-laws can be
framed and observed:
Even if the said clauses did not justify the impugned Bye-law, there can be
little doubt that the said Bye-laws would be justified by the general power
conferred on the Boards by Section 298(1). It is now well-settled that the
specific provisions such as are contained in the several clauses of Section
298(2) are merely illustrative and they cannot be read as restrictive of the
generality of powers prescribed by Section 298(1) (vide Emperor v. Sibnath
Banerji). If the powers specified by Section 298(1) are very wide and they
take in within their scope Bye-laws like the ones with which we are
concerned in the present appeal, it cannot be said that the powers
enumerated under Section 298(2) control the general words used by Section
298(1). These latter clauses merely illustrate and do not exhaust all the
powers conferred on the Board, so that any cases not falling within the

powers specified by Section 298(2) may well be protected by Section 298(1),
provided, of course, the impugned Bye-law can be justified by-reference to
the requirements of Section 298(1). There can be no doubt that the
impugned Bye-laws in regard to the markets framed by Respondent 2 are for
the furtherance of municipal administrate ion under the Act, and so, would
attract the provisions of Section 298(1). Therefore, we are satisfied that the
High Court was right in coming to the conclusion that the impugned Bye-laws
are valid.
(emphasis supplied)
39. In Rohtak Hissar District Electricity Supply Co. Ltd. v. State of Uttar Pradesh and
Ors. MANU/SC/0253/1965 : AIR 1966 SC 1471, this Court dealt with the rule making
power of the State Government under the Uttar Pradesh Industrial Disputes Act, 1947
and observed:
Section 15(1) confers wide powers on the appropriate Government to make
rules to carry out the purposes of the Act; and Section 15(2) specifies some
of the matters enumerated by Clauses (a) to (e), in respect of which rules
may be framed. It is well-settled that the enumeration of the particular
matters by Sub-section (2) will not control or limit the width of the power
conferred on the appropriate Government by Sub-section (1) of Section 15;
and so, if it appears that the item added by the appropriate Government has
relation to conditions of employment, its addition cannot be challenged as
being invalid in law.
(Emphasis supplied)
40. In K. Ramanathan v. State of Tamil Nadu (supra), a three-Judge Bench of this
Court considered the scope of Section 3(1), (2) and Section 5 of the Essential
Commodities Act, 1955. The Appellant and other agriculturists of Tanjavur District
had challenged the constitutional validity of Clause 3(1-a) of the Order issued by the
Central Government under Section 5 read with Section 3 of the Essential
Commodities Act, 1955 placing complete ban on the transport, movement or
otherwise carrying of paddy outside the districts. The High Court rejected their
challenge and dismissed the writ petitions. Before this Court, it was argued that the
delegation of power under Section 5 of the Act must necessarily be given a restricted
interpretation. While rejecting the argument, this Court referred to the judgment in
Sibnath Banerji's case, Santosh Kumar Jain v. State MANU/SC/0024/1951 : AIR 1951
SC 201 and observed:
Learned Counsel for the Appellant however strenuously contends that the
delegation of powers by the Central Government under Section 5 of the Act
must necessarily be in relation to 'such matters' and subject to 'such
conditions' as may be specified in the notification. The whole attempt on the
part of the learned Counsel is to confine the scope and ambit of the
impugned order to CL (d) of Sub-section (2) of Section 3 of the Act which
uses the word 'regulating' and take it out of-the purview of Sub-section (1)
of Section 3 which uses the words 'regulating or prohibiting'. That is not
proper way of construction of Sub-section (1) and (2) of Section 3 of the Act
in their normal setting. The restricted construction of Section 3 contended for
by learned Counsel for the Appellant would render the scheme of the Act
wholly unworkable as already indicated, the source of power to make an
order of this description is Sub-section (1) of Section 3 of the Act and sub's.
(2) merely provides illustration for the general powers conferred by Sub-
section (1). Sub-section (2) of Section 3 of the Act commences with the

words 'Without prejudice to the generality of the powers conferred by Sub-
section (1)'. It is manifest that Sub-section (2) of Section 3 of the Act
confers no fresh powers but is merely illustrative of the general powers
conferred by Sub-section (1) of Section 3 without exhausting the subjects in
relation to which such powers can be exercised.
41. The question was again considered in D.K. Trivedi and Sons v. State of Gujarat
MANU/SC/0099/1986 : 1986 (Supp) SCC 20. This Court was called upon to examine
the challenge to the constitutionality of Section 15 of the Mines and Minerals
(Regulation and Development) Act, 1957, the power of the State Governments to
make rules under Section 15 to enable them to charge dead rent and royalty in
respect of leases of mines and minerals granted to them and to enhance the rates of
dead rent and royalty. While repelling the argument that the 1957 Act does not
contain guidelines for exercise of power by the State Government under Section
15(1), this Court observed:
32. There is no substance in the contention that no guidelines are provided
in the 1957 Act for the exercise of the rule-making power of the State
Governments under Section 15(1). As mentioned earlier, Section 15(1) is in
pari materia with Section 13(1). Section 13, however, contains Sub-section
(2) which sets out the particular matters with respect to which the Central
Government may make rules "In particular, and without prejudice to the
generality of the foregoing power", that is, the rule-making power conferred
by Sub-section (1). It is well settled that where a statute confers particular
powers without prejudice to the generality of a general power already
conferred, the particular powers are only illustrative of the general power
and do not in any way restrict the general power. Section 2 of the Defence of
India Act, 1939, as amended by Section 2 of the Defence of India
(Amendment) Act, 1940, conferred upon the Central Government the power
to make such rules as appeared to it "to be necessary or expedient for
securing the defence of British India, the public safety, the maintenance of
public order or the efficient prosecution of war, or for maintaining supplies
and services essential to the life of the community". Sub-section (2) of
Section 2 conferred upon the Central Government the power to provide by
rules or to empower any authority to make orders providing for various
matters set out in the said Sub-section. This power was expressed by the
opening words of the said Sub-section (2) to be "Without prejudice to the
generality of the powers conferred by Sub-section (1)". In King Emperor v.
Sibnath Banerji the Judicial Committee of the Privy Council held:
In the opinion of Their Lordships, the function of Sub-section (2) is
merely an illustrative one; the rule-making power is conferred by
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 (1).
The above proposition of law has been approved and accepted by this Court
in Om Prakash v. Union of India MANU/SC/0431/1970 : (1970) 3 SCC 942
and Shiv Kirpal Singh v. V.V. Giri MANU/SC/0334/1970 : (1970) 2 SCC 567.
33. A provision similar to Sub-section (2) of Section 13, however, does not
find place in Section 15. In our opinion, this makes no difference. What Sub-

section (2) of Section 13 does is to give illustrations of the matters in
respect of which the Central Government can make rules for "regulating the
grant of prospecting licences and mining leases in respect of minerals and
for purposes connected therewith". The opening clause of Sub-section (2) of
Section 13, namely, "In particular, and without prejudice to the generality of
the foregoing power", makes it clear that the topics set out in that Sub-
section are already included in the general power conferred by Sub-section
(1) but are being listed to particularize them and to focus attention on them.
The particular matters in respect of which the Central Government can make
rules under Sub-section (2) of Section 13 are, therefore, also matters with
respect to which under Sub-section (1) of Section 15 the State Governments
can make rules for "regulating the grant of quarry leases, mining leases or
other mineral concessions in respect of minor minerals and for purposes
connected therewith". When Section 14 directs that "The provisions of
Sections 4 to 13 (inclusive) shall not apply to quarry leases, mining leases or
other mineral concessions in respect of minor minerals", what is intended is
that the matters contained in those sections, so far as they concern minor
minerals, will not be controlled by the Central Government but by the
concerned State Government by exercising its rule-making power as a
delegate of the Central Government. Sections 4 to 12 form a group of
sections under the heading "General restrictions on undertaking prospecting
and mining operations". The exclusion of the application of these sections to
minor minerals means that these restrictions will not apply to minor minerals
but that it is left to the State Governments to prescribe such restrictions as
they think fit by rules made under Section 15(1). The reason for treating
minor minerals differently from minerals other than minor minerals is
obvious. As seen from the definition of minor minerals given in Clause (e) of
Section 3, they are minerals which are mostly used in local areas and for
local purposes while minerals other than minor minerals are those which are
necessary for industrial development on a national scale and for the economy
of the country. That is why matters relating to minor minerals have been left
by Parliament to the State Governments while reserving matters relating to
minerals other than minor minerals to the Central Government. Sections 13,
14 and 15 fall in the group of sections which is headed "Rules for regulating
the grant of prospecting licences and mining leases". These three sections
have to be read together. In providing that Section 13 will not apply to
quarry leases, mining leases or other mineral concessions in respect of minor
minerals what was done was to take away from the Central Government the
power to make rules in respect of minor minerals and to confer that power
by Section 15(1) upon the State Governments. The ambit of the power under
Section 13 and under Section 15 is, however, the same, the only difference
being that in one case it is the Central Government which exercises the
power in respect of minerals other than minor minerals while in the other
case it is the State Governments which do so in respect of minor minerals.
Sub-section (2) of Section 13 which is illustrative of the general power
conferred by Section 13(1) contains sufficient guidelines for the State
Governments to follow in framing the rules under Section 15(1), and in the
same way, the State Governments have before them the restrictions and
other matters provided for in Sections 4 to 12 while framing their own rules
under Section 15(1).
(Emphasis supplied)
42. The same proposition has been reiterated in Academy of Nutrition Improvement
v. Union of India MANU/SC/0805/2011 : (2011) 8 SCC 274 [Para 66]. The

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

exercise of this power is only subject to the provisions of the Act and the Rules
framed under Section 35 thereof. There is no other limitation on the exercise of
power by the Authority under Section 36(1). It is not controlled or limited by Section
36(2) or Sections 11, 12 and 13.
46. The second and more important facet of the question framed by the Court is
whether TDSAT has the jurisdiction to entertain challenge to the Regulations framed
by the Authority.
4 7 . 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 MANU/SC/0261/1997 :
(1997) 3 SCC 261 and argued that whenever Parliament wishes to confer power of
judicial review on an adjudicatory body other than the regular Courts, it has enacted
a provision like Section 14 of the 1985 Act. He submitted that the language of
Section 14 of the Act, which was enacted after 12 years of the enactment of the 1985
Act and was amended in 2000 does not empower TDSAT to undertake judicial review
of subordinate legislation. Learned Solicitor General further argued that the words
'direction', 'decision' or 'order' used in Section 14(b) should not be given over-
stretched meaning to empower TDSAT to entertain challenge to the Regulations made
under Section 36 of the Act, which are in the nature of subordinate legislation. He
emphasized that if these words are interpreted to include the Regulations made under
Section 36, the same interpretation would hold good qua the rules framed under
Section 35 because they are also in the nature of subordinate legislation. Learned
Solicitor General submitted that it would be an extremely anomalous position if the
rules framed under Section 35 and the Regulations framed under Section 36 are
challenged before TDSAT and validity thereof is examined by a Bench comprising
non-judicial members. The learned Solicitor General relied upon the judgment of the
Constitution Bench in PTC India Ltd. v. Central Electricity Regulatory Commission
MANU/SC/0164/2010 : (2010) 4 SCC 603 and argued that even though in paragraph
94 of the judgment the Bench had observed that summary of findings and answer to
the reference shall not be construed as a general principle of law to be applied to
Appellate Tribunals vis-à-vis Regulatory Commissions constituted under other
enactments including the Act, the ratio of the judgment is clearly attracted in the
present case. He submitted that Section 79 of the Electricity Act, 2003 (for short, 'the
2003 Act') does not contain Clauses like 11(1)(b)(vii) and (viii) of the Act and
provision like Section 36(2) of the Act is not contained in the 2003 Act and further
that Section 111 of the 2003 Act contains only the word 'order' as against the words
'direction', 'decision' or 'orders' used in Section 14 but that these differences are
insignificant and there is no justification to ignore the ratio of the judgment of the
Constitution Bench. Shri Nariman submitted that distinction sought to be made by the
other side with reference to the language of Sections 79, 111 and 178(2)(ze) of the
Electricity Act, 2003 is illusory because after noticing Section 121 which uses the
words 'orders', 'instructions' or 'directions', the Constitution Bench has unequivocally
held that the said section does not confer power of judicial review on the Appellate
Tribunal.
48. S/Shri A.S. Chandhiok, C.S. Vaidyanathan, Dr. A.M. Singhvi, Ramji Shrinivashan
and Mukul Rohatgi, learned senior counsel relied upon the judgment of the larger
Bench in L. Chandra Kumar v. 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
MANU/SC/1368/2002 : (2003) 3 SCC 186, Hotel and Restaurant Association v. Star
India (P) Ltd. MANU/SC/5152/2006 : (2006) 13 SCC 753, Union of India v. TATA

Teleservices (Maharashtra) Ltd. MANU/SC/3396/2007 : (2007) 7 SCC 517, Union of
India v. Association of Unified Telecom Service Providers of India
MANU/SC/1252/2011 : (2011) 10 SCC 543 and argued that the validity of the
Regulations framed under Section 36 can be examined by TDSAT and in appropriate
cases the same can be struck down. They further argued that the Regulations framed
under Section 36 are essentially in the nature of a decision taken by the Authority
and the same can always be subjected to challenge under Section 14(b). Learned
senior counsel also referred to order dated 28.3.2006 passed by a three-Judge Bench
in Civil Appeal No. 6743/2003 Telecom Regulatory Authority of India v. BPL Mobile
Cellular Ltd. and argued that having taken the stand before this Court that a
'direction' includes 'Regulation', the Authority is estopped from adopting a different
posture before this Court on the issue of maintainability of appeal under Section
14(b) involving challenge to the Regulations. Dr. Singhvi and Shri Rohatgi argued
that one of the objectives of the amendments made in 2000 was to create a
specialised body for expeditious adjudication of disputes and appeals and that
objective will be totally defeated if the Regulations framed under Section 36 are
excluded from the ambit of Section 14(b). They also relied upon the judgment of this
Court in Madras Bar Association v. Union of India MANU/SC/0378/2010 : (2010) 11
SCC 1 and argued that once Parliament has conferred power of judicial review upon
TDSAT, there is no valid ground to whittle down the scope thereof by giving a
restrictive interpretation to Section 14(b) of the Act.
49. Before dealing with the respective arguments, we may revert back to Section 14
(unamended and amended). Under the unamended Section 14(1), the Authority could
decide disputes among service providers and between service providers and a group
of consumers. In terms of Section 14(2) (unamended), the bench constituted by the
Chairperson of the Authority can exercise powers and authority which were
exercisable earlier by the Civil Court on technical compatibility and inter-connections
between service providers, revenue sharing arrangements between different service
providers, quality of telecommunication services and interest of consumers. However,
the disputes specified in Clauses (a), (b) and (c) of Section 14(2) could not be
decided by the Bench constituted by the Chairperson.
50. Since the mechanism provided for settlement of disputes under Section 14 of the
unamended Act was not satisfactory, Parliament substituted that section and
facilitated establishment of an independent adjudicatory body known as TDSAT.
Clause (a) of amended Section 14 confers jurisdiction upon TDSAT to adjudicate any
dispute between a licensor and licensee, between two or more service providers and
between a service provider and a group of consumers. Three exceptions to the
adjudicatory power of TDSAT relates to the cases which are subject to the jurisdiction
of Monopolies and Restrictive Trade Practices Commission, the complaint of an
individual consumer which could be maintained under the consumer forums
established under the Consumer Protection Act, 1986 and dispute between Telegraph
Authority and any other person referred to in Section 7B(1) of the Indian Telegraph
Act, 1885. In terms of clause (b) of Section 14 (amended), TDSAT is empowered to
hear and dispose of appeal against any direction, decision or order of the Authority.
Section 14A(1) provides for making of an application to TDSAT for adjudication of
any dispute referred to in Section 14(a). Section 14A(2) and (3) provides for filing an
appeal against any direction, decision or order made by the Authority and also
prescribes the period of limitation. Sub-sections (4) to (7) of Section 14 are, by and
large, procedural. Section 14B relates to composition of Appellate Tribunal. Section
14C prescribes qualifications for Chairperson and Members. Section 14D speaks of
tenure of the Chairperson and every other Member of TDSAT. Section 14E speaks of
terms and conditions of service. Section 14F provides for filling up the vacancies.
Section 14G deals with removal and resignation of Chairperson or any Member of

TDSAT. Section 14H relates to staff of TDSAT. Section 14I empowers the Chairperson
to make provisions of distribution of business of TDSAT amongst different Benches
and their roster. Section 14J empowers the Chairperson to transfer cases from one
Bench to the other. Section 14K lays down that decision of any application or appeal
should be by majority. Section 14L treats the Chairperson and Members etc. of
TDSAT to be public servants. Sections 14M and 14N provide for transfer of pending
cases and appeals.
5 1 . 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 14A(2) and (7). This is because the proviso to Section 14M
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 14M to avoid a hiatus between the coming into force of the
2000 amendment and the establishment of TDSAT.
52. None of the words used in Section 14(b) have anything to do with adjudication
of disputes. Before the 2000 Amendment, the applications were required to be filed
under Section 15 which also contained detailed procedure for deciding the same.
While Sub-section (2) of Section 15 used the word 'orders', Sub-sections (3) and (4)
thereof used the word 'decision'. In terms of Sub-section (5), the orders and
directions of the Authority were treated as binding on the service providers,
Government and all other persons concerned. Section 18 provided for an appeal
against any decision or order of the Authority. Such an appeal could be filed before
the High Court. The amendment made in 2000 is intended to vest the original
jurisdiction of the Authority in TDSAT and the same is achieved by Section 14(a). The
appellate jurisdiction exercisable by the High Court is also vested in TDSAT by virtue
of Section 14(b) but this does not include decision made by the Authority. Section
14N provides for transfer to all appeals pending before the High Court to TDSAT and
in terms of Clause (b) of Sub-section (2), TDSAT was required to proceed to deal
with the appeal from the stage which was reached before such transfer or from any
earlier stage or de novo as considered appropriate by it. Since High Court while
hearing appeal did not have the power of judicial review of subordinate legislation,
the transferee adjudicatory forum, i.e., TDSAT cannot exercise that power under
Section 14(b).
53. In Cellular Operators Assn. of India v. Union of India (supra), Pattanaik, C.J.,
who authored main judgment of the three Judge Bench, referred to Section 14 and
observed:
Suffice it to say, Chapter IV containing Section 14 was inserted by an
amendment of the year 2002 and the very Statement of Objects and Reasons
would indicate that to increase the investors' confidence and to create a level
playing field between the public and the private operators, suitable
amendment in the Telecom Regulatory Authority of India Act, 1997 was
brought about and under the amendment, a tribunal was constituted called
the Telecom Disputes Settlement and Appellate Tribunal for adjudicating the
disputes between a licensor and a licensee, between two or more service
providers, between a service provider and a group of consumers and also to
hear and dispose of appeal against any direction, decision or order of the
Authority. The aforesaid provision was absolutely essential as the

organizations of the licensor, namely, MTNL and BSNL were also service
providers. That being the object for which an independent tribunal was
constituted, the power of that Tribunal has to be adjudged from the language
conferring that power and it would not be appropriate to restrict the same on
the ground that the decision which is the subject-matter of challenge before
the Tribunal was that of an expert body. It is no doubt true, to which we will
advert later, that the composition of the Telecom Regulatory Authority of
India as well as the constitution of GOT-IT in April 2001 consists of a large
number of eminent impartial experts and it is on their advice, the Prime
Minister finally took the decision, but that would not in any way restrict the
power of the Appellate Tribunal under Section 14, even though in the matter
of appreciation the Tribunal would give due weight to such expert advice and
recommendations. Having regard to the very purpose and object for which
the Appellate Tribunal was constituted and having examined the different
provisions contained in Chapter IV, more particularly, the provision dealing
with ousting the jurisdiction of the civil court in relation to any matter which
the Appellate Tribunal is empowered by or under the Act, as contained in
Section 15, we have no hesitation in coming to the conclusion that the power
of the Appellate Tribunal is quite wide, as has been indicated in the statute
itself and the decisions of this Court dealing with the power of a court,
exercising appellate power or original power, will have no application for
limiting the jurisdiction of the Appellate Tribunal under the Act. Since the
Tribunal is the original authority to adjudicate any dispute between a licensor
and a licensee or between two or more service providers or between a
service provider and a group of consumers and since the Tribunal has to hear
and dispose of appeals against the directions, decisions or order of TRAI, it
is difficult for us to import the self-contained restrictions and limitations of a
court under the judge-made law to which reference has already been made
and reliance was placed by the learned Attorney-General.
(Emphasis supplied)
54. In Union of India v. TATA Teleservices (Maharashtra) Ltd. (supra), the two Judge
Bench of this Court referred to the scheme of the Act and observed:
The conspectus of the provisions of the Act clearly indicates that disputes
between the licensee or licensor, between two or more service providers
which takes in the Government and includes a licensee and between a service
provider and a group of consumers are within the purview of TDSAT. A plain
reading of the relevant provisions of the Act in the light of the Preamble to
the Act and the Objects and Reasons for enacting the Act, indicates that
disputes between the parties concerned, which would involve significant
technical aspects, are to be determined by a specialised tribunal constituted
for that purpose. There is also an ouster of jurisdiction of the civil court to
entertain any suit or proceeding in respect of any matter which TDSAT is
empowered by or under the Act to determine. The civil court also has no
jurisdiction to grant an injunction in respect of any action taken or to be
taken in pursuance of any power conferred by or under the Act. The
constitution of TDSAT itself indicates that it is chaired by a sitting or retired
Judge of the Supreme Court or sitting or a retired Chief Justice of the High
Court, one of the highest judicial officers in the hierarchy and the members
thereof have to be of the cadre of Secretaries to the Government, obviously
well experienced in administration and administrative matters.
The Act is seen to be a self-contained code intended to deal with all disputes

arising out of telecommunication services provided in this country in the light
of the National Telecom Policy, 1994. This is emphasised by the Objects and
Reasons also.
Normally, when a specialised tribunal is constituted for dealing with disputes
coming under it of a particular nature taking in serious technical aspects, the
attempt must be to construe the jurisdiction conferred on it in a manner as
not to frustrate the object sought to be achieved by the Act. In this context,
the ousting of the jurisdiction of the civil court contained in Section 15 and
Section 27 of the Act has also to be kept in mind. The subject to be dealt
with under the Act has considerable technical overtones which normally a
civil court, at least as of now, is ill equipped to handle and this aspect cannot
be ignored while defining the jurisdiction of TDSAT.
55. In the aforementioned judgments, this Court has laid emphasis on the scope of
the jurisdiction of TDSAT but has not dealt with the question whether the words
'direction', 'decision' or 'order' include 'Regulations' framed under Section 36 of the
Act and the same could be subjected to appellate jurisdiction of TDSAT. Therefore,
those judgments cannot be relied upon for holding that in exercise of power under
Section 14(b) of the Act TDSAT can hear an appeal against Regulations framed under
Section 36.
56. We may now deal with the judgment of three Judge Bench in Civil Appeal No.
6743/2003 Telecom Regulatory Authority of India v. BPL Mobile Cellular Ltd. is
clearly distinguishable. The facts of that case were that in May, 2001 Respondent No.
1 offered a scheme as a promotional plan to its customers. Several thousand
subscribers accepted the offer. In October, 2001 the scheme was dropped. A public
interest litigation was filed by one subscriber challenging the unilateral dropping of
the scheme by Respondent No. 1. The High Court passed an order and directed the
Appellant to submit a report in that connection. No report having been submitted, by
a subsequent order dated 24.9.2002, the High Court directed the Appellant to take
steps after hearing the parties and submit a report of compliance within a period of
three months from the date of the order. Pursuant to this directive the Appellant
passed an order on 23.12.2002 holding, inter alia, that Respondent No. 1 had
violated the provisions of the Telecommunication Tariff Order, 1999 insofar as it had
failed to inform the Appellant either as to the introduction of the scheme or
subsequent withdrawal hereof. It was found that the action of Respondent No. 1 had
adversely affected the interest of the subscribers. Finally the Appellant opined that
the violation was of serious nature and to be dealt with in accordance with Section 29
read with Section 34 of the Act. Thereafter, a complaint was lodged before the
jurisdictional Magistrate. Respondent No. 1 filed an appeal against order dated
23.12.2002. TDSAT allowed the appeal and held that Section 29 could not be invoked
for any violation of an order issued by the Appellant. This Court referred to Sections
29 and 34 and formulated the following question:
Whether the word 'directions' would include the Telecommunication Tariff
Order, 1999 (hereinafter referred to as the 'Order') so that any violation
thereof would be punishable under Section 29 read with Section 34.
The Court then referred to Sections 11(1)(c), 11(2), 12(4), 13 and observed:
The order which has been passed in 1999 has in fact sought to and ensures
compliance of the terms and conditions of the licence granted by the
Government of India to the Respondent.
It appears to us on a reading of all these provisions that the word 'directions'

had been used in a wide sense to cover orders/Regulations which in effect
direct an action to be taken we were to limit Section 29 only to directions
which were not directory orders or/directory Regulations this would mean
that violation of such orders/Regulations would not carry any penal
consequence whatsoever. Consequently, the entire scheme of the Act would
become unworkable. Besides Section 11(1)(b) in respect of which directions
may be issued has itself also been widely framed. Indeed the order in
question pertains to the provisions of Section 11(1)(b)(i) as we have already
stated. It may be that Section 29 creates an offence and therefore, must be
strictly construed. However, that principle will not militate with the principle
that the interpretation of a word must be made contextually. We have to
ascertain the meaning of the word 'directions' in Section 29. The word
'directions' can take within its fold directory orders and Regulations in the
nature of directions as a matter of semantics. Besides in the context of the
Act there is no reason not to include the orders and Regulations containing
directions within the word 'directions.' This would also be a logical corollary
as such Regulations and orders have appended to them a more serious
mandate.
57. From the above extracted portion of the order it is evident that the Bench, which
decided the matter, felt that the view taken by TDSAT would encourage rampant
violation of the orders without any penal consequence and the entire scheme of the
Act would become unworkable. The word 'directions' used in Section 29 of the Act
was interpreted to include orders and Regulations in the context of the factual matrix
of that case and the apprehension of the Court that Section 29 would otherwise
become unworkable, but the same cannot be read as laying down a proposition of
law that the words 'direction', 'decision' or 'order' used in Section 14(b) would
include Regulation framed under Section 36, which are in the nature of subordinate
legislation.
5 8 . In PTC India Ltd. v. Central Electricity Regulatory Commission (surpa), the
Constitution Bench framed the following questions:
(i) Whether the Appellate Tribunal constituted under the Electricity Act, 2003
(the 2003 Act) has jurisdiction under Section 111 to examine the validity of
the Central Electricity Regulatory Commission (Fixation of Trading Margin)
Regulations, 2006 framed in exercise of power conferred under Section 178
of the 2003 Act?
(ii) Whether Parliament has conferred power of judicial review on the
Appellate Tribunal for Electricity under Section 121 of the 2003 Act?
(iii) Whether capping of trading margins could be done by CERC (the Central
Commission) by making a Regulation in that regard under Section 178 of the
2003 Act?
59. The Constitution Bench extensively referred to the provisions of the Electricity
Act, 2003 including Sections 73, 75, 79, 86, 111, 177, 178, 179, 181 and 182, and
observed:
4 7 . On the above submissions, one of the questions which arises for
determination is--whether trading margin fixation (including capping) under
the 2003 Act can only be done by an order under Section 79(1)(j) and not by
Regulations under Section 178? According to the Appellant(s) it can only be
done by an order under Section 79(1)(j), particularly when under Section
178(2) power to make Regulations is co-relatable to the functions ascribed to

each authority under the said 2003 Act.
48. In every case one needs to examine the statutory context to determine
whether a court or a tribunal hearing a case has jurisdiction to rule on a
defence based upon arguments of invalidity of subordinate legislation or
administrative act under it. There are situations in which Parliament may
legislate to preclude such challenges in the interest of promoting certainty
about the legitimacy of administrative acts on which the public may have to
rely.
49. On the above analysis of various sections of the 2003 Act, we find that
the decision-making and Regulation-making functions are both assigned to
CERC. Law comes into existence not only through legislation but also by
Regulation and litigation. Laws from all three sources are binding. According
to Professor Wade, "between legislative and administrative functions we have
regulatory functions". A statutory instrument, such as a rule or Regulation,
emanates from the exercise of delegated legislative power which is a part of
administrative process resembling enactment of law by the legislature
whereas a quasi-judicial order comes from adjudication which is also a part
of administrative process resembling a judicial decision by a court of law.
5 0 . 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. MANU/SC/0620/1971 : (1971) 2 SCC 747 and Indian Express
Newspapers (Bombay) (P) Ltd. v. Union of India MANU/SC/0406/1984 : (1985) 1
SCC 641 and held:
53. Applying the abovementioned tests to the scheme of the 2003 Act, we
find that under the Act, the Central Commission is a decision-making as well
as Regulation-making authority, simultaneously. Section 79 delineates the
functions of the Central Commission broadly into two categories--mandatory
functions and advisory functions. Tariff Regulation, licensing (including inter-
State trading licensing), adjudication upon disputes involving generating
companies or transmission licensees fall under the head "mandatory
functions" whereas advising the Central Government on formulation of
National Electricity Policy and tariff policy would fall under the head
"advisory functions". In this sense, the Central Commission is the decision-
making authority. Such decision-making under Section 79(1) is not
dependent upon making of Regulations under Section 178 by the Central
Commission. Therefore, functions of the Central Commission enumerated in
Section 79 are separate and distinct from functions of the Central
Commission under Section 178. The former are administrative/adjudicatory
functions whereas the latter are legislative.

54. As stated above, the 2003 Act has been enacted in furtherance of the
policy envisaged under the Electricity Regulatory Commissions Act, 1998 as
it mandates establishment of an independent and transparent Regulatory
Commission entrusted with wide-ranging responsibilities and objectives inter
alia including protection of the consumers of electricity. Accordingly, the
Central Commission is set up under Section 76(1) to exercise the powers
conferred on, and in discharge of the functions assigned to, it under the Act.
On reading Sections 76(1) and 79(1) one finds that the Central Commission
is empowered to take measures/steps in discharge of the functions
enumerated in Section 79(1) like to regulate the tariff of generating
companies, to regulate the inter-State transmission of electricity, to
determine tariff for inter-State transmission of electricity, to issue licences,
to adjudicate upon disputes, to levy fees, to specify the Grid Code, to fix the
trading margin in interstate 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.
5 5 . To regulate is an exercise which is different from making of the
Regulations. However, making of a Regulation under Section 178 is not a
precondition to the Central Commission taking any steps/measures under
Section 79(1). As stated, if there is a Regulation, then the measure under
Section 79(1) has to be in conformity with such Regulation under Section
178. This principle flows from various judgments of this Court which we
have discussed hereinafter. For example, under Section 79(1)(g) the Central
Commission is required to levy fees for the purpose of the 2003 Act. An
order imposing regulatory fees could be passed even in the absence of a
Regulation under Section 178. If the levy is unreasonable, it could be the
subject-matter of challenge before the appellate authority under Section 111
as the levy is imposed by an order/decision-making process. Making of a
Regulation under Section 178 is not a precondition to passing of an order
levying a regulatory fee under Section 79(1)(g). However, if there is a
Regulation under Section 178 in that regard then the order levying fees
under Section 79(1)(g) has to be in consonance with such Regulation.
The Constitution Bench then considered the question whether Section 121 of the
Electricity Act, 2003 can be read as conferring power of judicial review upon the
Appellate Tribunal. The Bench referred to the judgment in Raman and Raman Ltd. v.
State of Madras MANU/SC/0151/1959 : 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.
8 4 . Grid Code is a set of rules which governs the maintenance of the
network. This maintenance is vital. In summer months grids tend to trip. In
the absence of the making of the Grid Code in accordance with the Grid
Standards, it is open to the Tribunal to direct CERC to perform its statutory
functions of specifying the Grid Code having regard to the Grid Standards
prescribed by the Authority under Section 73. One can multiply these
illustrations which exercise we do not wish to undertake. Suffice it to state
that, in the light of our analysis of the 2003 Act, hereinabove, the words
"orders, instructions or directions" in Section 121 of the 2003 Act cannot
confer power of judicial review under Section 121 to the Tribunal, which,
therefore, cannot go into the validity of the impugned 2006 Regulations, as
rightly held in the impugned judgment.
6 0 . The summary of the findings of the Constitution Bench are contained in
paragraph 92, which is reproduced below:
92. (i) In the hierarchy of regulatory powers and functions under the 2003
Act, Section 178, which deals with making of Regulations by the Central
Commission, under the authority of subordinate legislation, is wider than
Section 79(1) of the 2003 Act, which enumerates the regulatory functions of
the Central Commission, in specified areas, to be discharged by orders
(decisions).
(ii) A Regulation under Section 178, as a part of regulatory framework,
intervenes and even overrides the existing contracts between the regulated
entities inasmuch as it casts a statutory obligation on the regulated entities
to align their existing and future contracts with the said Regulation.
(iii) A Regulation under Section 178 is made under the authority of delegated
legislation and consequently its validity can be tested only in judicial review
proceedings before the courts and not by way of appeal before the Appellate
Tribunal for Electricity under Section 111 of the said Act.
(iv) Section 121 of the 2003 Act does not confer power of judicial review on
the Appellate Tribunal. The words "orders", "instructions" or "directions" in
Section 121 do not confer power of judicial review in the Appellate Tribunal
for Electricity. In this judgment, we do not wish to analyse the English
authorities as we find from those authorities that in certain cases in England
the power of judicial review is expressly conferred on the tribunals
constituted under the Act. In the present 2003 Act, the power of judicial
review of the validity of the Regulations made under Section 178 is not
conferred on the Appellate Tribunal for Electricity.
(v) If a dispute arises in adjudication on interpretation of a Regulation made
under Section 178, an appeal would certainly lie before the Appellate
Tribunal under Section 111, however, no appeal to the Appellate Tribunal
shall lie on the validity of a Regulation made under Section 178.
(vi) Applying the principle of "generality versus enumeration", it would be
open to the Central Commission to make a Regulation on any residuary item
under Section 178(1) read with Section 178(2)(ze). Accordingly, we hold
that CERC was empowered to cap the trading margin under the authority of
delegated legislation under Section 178 vide the impugned Notification dated
23-1-2006.

(vii) Section 121, as amended by the Electricity (Amendment) Act 57 of
2003, came into force with effect from 27-1-2004. Consequently, there is no
merit in the contention advanced that the said section has not yet been
brought into force.
6 1 . 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 MANU/SC/0378/2010 : (2010) 11 SCC
1 are clearly distinguishable. In L. Chandra Kumar's case, this Court considered the
scope of Section 14 of the 1985 Act, which reads as under:
1 4 . Jurisdiction, powers and authority of the Central Administrative
Tribunal.-(1) Save as otherwise expressly provided in this Act, the Central
Administrative Tribunal shall exercise, on and from the appointed day, all the
jurisdiction, powers and authority exercisable immediately before that day by
all courts except the Supreme Court in relation to-
(a) recruitment, and matters concerning recruitment, to any All-India
Service or to any civil service of the Union or a civil post under the
Union or to a post connected with defence or in the defence services,
being, in either case, a post filled by a civilian;
(b) all service matters concerning-
(i) a member of any All-India Service; or
(ii) a person not being a member of an All-India Service or a
person referred to in Clause (c) appointed to any civil
service of the Union or any civil post under the Union; or
(iii) a civilian not being a member of an All-India Service or
a person referred to in Clause (c) appointed to any defence,
services or a post connected with defence, and pertaining to
the service of such member, person or civilian, in connection
with the affairs of the Union or of any State or of any local
or other authority within the territory of India or under the
control of the Government of India or of any corporation or
society owned or controlled by the Government;
(c) all service matters pertaining to service in connection with the
affairs of the Union concerning a person appointed to any service or
post referred to in Sub-clause (ii) or Sub-clause (iii) of Clause (b),
being a person whose services have been placed by a State
Government or any local or other authority or any corporation or
society or other body, at the disposal of the Central Government for
such appointment.
Explanation.-For the removal of doubts, it is hereby declared that
references to "Union" in this Sub-section shall be construed as
including references also to a Union territory.
(2) The Central Government may, by notification, apply with effect
from such date as may be specified in the notification the provisions

of Sub-section (3) to local or other authorities within the territory of
India or under the control of the Government of India and to
corporations or societies owned or controlled by Government, not
being a local or other authority or corporation or society controlled
or owned by a State Government:
Provided that if the Central Government considers it
expedient so to do for the purpose of facilitating transition
to the scheme as envisaged by this Act, different dates may
be so specified under this Sub-section in respect of different
classes of, or different categories under any class of, local or
other authorities or corporations or societies.
(3) Save as otherwise expressly provided in this Act, the Central
Administrative Tribunal shall also exercise, on and from the date
with effect from which the provisions of this Sub-section apply to
any local or other authority or corporation or society, all the
jurisdiction, powers and authority exercisable immediately before
that date by all courts (except the Supreme Court) in relation to-
(a) recruitment, and matters concerning recruitment, to any
service or post in connection with the affairs of such local or
other authority or corporation or society; and
(b) all service matters concerning a person other than a
person referred to in Clause (a) or Clause (b) of Sub-section
(1) appointed to any service or post in connection with the
affairs of such local or other authority or corporation or
society and pertaining to the service of such person in
connection with such affairs.
The larger Bench then dealt with the scope of the power of judicial
review vested in the Supreme Court and the High Courts and
proceeded to observe:
Before moving on to other aspects, we may summarise our
conclusions on the jurisdictional powers of these Tribunals.
The Tribunals are competent to hear matters where the vires
of statutory provisions are questioned. However, in
discharging this duty, they cannot act as substitutes for the
High Courts and the Supreme Court which have, under our
constitutional set-up, been specifically entrusted with such
an obligation. Their function in this respect is only
supplementary and all such decisions of the Tribunals will be
subject to scrutiny before a Division Bench of the respective
High Courts. The Tribunals will consequently also have the
power to test the vires of subordinate legislations and rules.
However, this power of the Tribunals will be subject to one
important exception. The Tribunals shall not entertain any
question regarding the vires of their parent statutes
following the settled principle that a Tribunal which is a
creature of an Act cannot declare that very Act to be
unconstitutional. In such cases alone, the High Court
concerned may be approached directly. All other decisions of
these Tribunals, rendered in cases that they are specifically

empowered to adjudicate upon by virtue of their parent
statutes, will also be subject to scrutiny before a Division
Bench of their respective High Courts. We may add that the
Tribunals will, however, continue to act as the only courts of
first instance in respect of the areas of law for which they
have been constituted. By this, we mean that it will not be
open for litigants to directly approach the High Courts even
in cases where they question the vires of statutory
legislations (except, as mentioned, where the legislation
which creates the particular Tribunal is challenged) by
overlooking the jurisdiction of the Tribunal concerned.
6 3 . In Union of India v. Madras Bar Association (supra) and State of Gujarat v.
Gujarat Revenue Tribunal Bar Association MANU/SC/0901/2012 : (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.
6 4 . In the result, the question framed by the Court is answered in the following
terms:
In exercise of the power vested in it under Section 14(b) of the Act, TDSAT
does not have the jurisdiction to entertain the challenge to the Regulations
framed by the Authority under Section 36 of the Act.
65. As a corollary, we hold that the contrary view taken by TDSAT and the Delhi High
Court does not represent correct law. At the same time, we make it clear that the
aggrieved person shall be free to challenge the validity of the Regulations framed
under Section 36 of the Act by filing appropriate petition before the High Court.
6 6 . 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.
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MANU/SC/1264/2013

IN THE SUPREME COURT OF INDIA

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