IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:23rd December, 2005
WRIT PETITION (CIVIL) NO.2838/2005
23.12.2005
Telecom Regulatory Authority of India...Petitioner
through Mr.G.L.Sanghi,Sr.Advocate
with Mr.Meet Malhotra and
Mr.Raghvinder Singh,Advocates
VERSUS
The Telecom Disputes and Settlement
Appellate Tribunal and Anr. ...Respondents
through Mr. C.S.Vaidyalingam, Sr.Advocate with Mr.Arun
Kathpalia
and Mr.Anant Kumar, Advocates for
respondent no.2.
CORAM:
HON'BLE MS. JUSTICE GITA MITTAL.
1.Whether reporters of local papers may be allowed to see the Judgment?
yes
2.To be referred to the Reporter or not? yes
3.Whether the judgment should be reported in the Digest? yes
GITA MITTAL, J.
1. By this writ petition the Telecom Regulatory Authority of India
(hereinafter referred to as TRAI) has impugned a decision dated 31st
January,
2005 of the Telecom Disputes Settlement and Appellate
Tribunal(hereinafter
referred to as TDSAT). An appeal was filed by the Mahanagar Telephone
Nigam
Limited - respondent no.2 (hereinafter referred to as the MTNL)
challenging a
regulation framed by TRAI in exercise of its powers under Section 36 of
the
Telecom Regulatory Authority of India Act(hereinafter referred to as
the Act).
The TRAI had called into question the jurisdiction of TDSAT to
entertain the
appeal which objection was rejected by the impugned decision.
2. In order to appreciate the issues raised in this petition, it is
necessary to examine the statutory scheme as also the spirit,
intendment and
purpose of creation of TRAI and the TDSAT. The TRAI Act 1987 was
enacted to
regulate the telecommunication services, adjudicate disputes, dispose
of appeals
and to protect the interests of service providers and consumers of the
telecom
sector, promote and ensure orderly growth of the telecom sector and for
matters
incidental thereto. The TRAI was established under the statute to
regulate the
telecommunication services. However during the functioning of the said
authority, certain issues which were hindering the growth of the sector
cropped
up. These issues agitated the minds of the executive and the
legislature.
Consequently amendments were proposed with the object of strengthening
and
increasing investor confidence and creating a level playing field
between
public and private operators. It appears that the Central Government
constituted a Group on the telecom and IT convergence under the
Chairmanship of
the Finance Minister on 13th December, 1999 with inter alia a brief to
consider
and make recommendations to the Central Government with regard to
strengthening
the TRAI through suitable statutory amendments. Recommendations made by
this
Group were accepted by the Central Government. Initially in view of the
urgency
in the need to remove the impediments in the growth of the telecom
sector, which
is a major infrastructure sector, the President of India promulgated
the
Telecom Regulatory Authority of India (Amendment) Ordinance 2000 on
24th
January, 2000.
3. Major amendments effected by this Ordinance inter alia included a
distinction between the recommendatory, advisory and the regulatory
function of
the authority as envisaged under sub-section 1 of Section 11 of the
Act. This
amendment also made it mandatory for the Central Government to seek
recommendations of the TRAI in respect of matters specified in sub
clause (i),
(ii) of Section 11(1)(a) of the enactment.
4. Composition of the TRAI was changed and additional functions were
required to be performed by the authority. These inter alia included:-
(i)fixing terms and conditions of the interconnectivity between the
service
providers;
(ii)laying down standards of quality of service to be provided by the
service
providers and ensuring quality of service.
(iii)making of recommendations on efficient management of the available
spectrum.
(iv)the tariff setting function of the TRAI was brought under the
purview of
sub-section 3 of Section 11.
(v)A major amendment brought about by this ordinance was that the
decisions
taken by the TRAI in discharge of its functions under Section 11(1)(b),
11(2)
and Section 13 which are appealable to the TDSAT, the Appellate
Tribunal, shall
not be subject to audit by the Comptroller and Auditor General of
India.
(vi) An appellate tribunal which was known as Telecom Disputes
Settlement and
Appellate Tribunal for adjudicating the disputes between a licensor and
licensee, between two or more service providers, between a service
provider and
a group of consumers, was provided for in the amended provisions. This
Tribunal
was also empowered to hear and dispose of any appeals from the
direction,
decision or orders of the TRAI.
5. The Bill was placed before the Parliament seeking to replace the
earlier Ordinance and amendment to the TRAI Act of 1997 which received
the
assent of the Parliament and came into force on 24th of January, 2000.
6. The respondent no.2 before this Court the Mahanagar Telephone Nigam
Limited, is a State owned Company in the business of providing
telecommunication
services while the respondent no.1 is the statutory appellate tribunal
constituted under Section 14 of the TRAI Act, 1997.
7. According to the petitioner, in exercise of its powers under Section
36
of the Act, the TRAI in January, 2003, October, 2003 and January, 2005
made
certain regulations regarding telecommunications interconnection, usage
charges.
It is averred that these were determined after an elaborate
consultation process
and data collection.
8. At this stage it would be appropriate to examine a few facts which
gave
rise to the proceedings before the TDSAT in order to really appreciate
the
nature of the controversy. In the year 1994, the Government of India
framed the
National Telecom Policy with inter alia an objective of provision of
access to
all people for certain basic telecom services at affordable reasonable
prices.
In view of the mandate of the telecom policy of 1994 and 1999 to
provide
affordable telecom services within the reach of all, rental and local
call
charges were fixed at below cost. The resultant deficit, which was
substantial,
was subsidised by the high tariff fixed for long distance calls. In the
year
2001-02, long distance telecommunication sectors were also opened up
and private
players started providing long distance services in the domestic as
well as the
international sector. The consequential intense competition had the
effect of a
steep fall in the tariff for long distance calls both national and
international. In order to compensate for the below cost rentals in
rural and
urban areas, an ?Access Deficit Charge?('ADC' for brevity) was
introduced
through regulatory interventions. Pursuant to an elaborate consultative
process
and consideration of representations from various stake holders in the
industry,
meeting and discussions, the telecommunication Interconnection Usage
Charges(IUC) Regulation 2003 was notified by the TRAI on 24th January,
2003. So
far as the MTNL was concerned, there was thus recognition of the
requirement to
pay ADC to it due to the deficit in rentals for the free calls which it
was
required to provide to its users and for the below cost local call
charges. In
supersession of the IUC Regulation of January, 2003, the petitioner has
notified
the Telecommunication Interconnection Usage Charges Regulation 2003 on
29th
October, 2003 which covers further Access Deficit Charges. By this
process, it
was contended that there was a phenomenal growth in the mobile
subscriber base
without any corresponding growth in the subscriber base of the basic
service
operators as the MTNL.
As the access deficit could not still be recouped, the matter was being
re-looked at and data was sought from the MTNL in a call data record
format.
The respondent has contended that on 6th of January, 2005, the
petitioner
notified an Interconnect Usage Charges (4th Amendment) 2005 without
considering
the data submitted by the respondent and in violation of the principles
of
natural justice. The respondent MTNL was aggrieved by the fixation of
the ADC
on the ground that it had been effected by examining traffic to only
one service
provider; had been effected in violation of principles of natural
justice and
had resulted in aggravation of the deficit which had enured to the
MTNL.
9. The respondent no.2 MTNL challenged the regulations dated 6th
January,
2005 by way of an appeal bearing no. 3 of 2005 before the TDSAT
invoking its
jurisdiction under Section 14 of the Act.
10. The contention of the petitioner is that the regulations were
statutory regulations and the tribunal was a creation of the statute.
The
Appellate Tribunal had no jurisdiction to declare the regulations
invalid as an
Appellate Forum.
11. This objection was decided against the petitioner by the order
dated
31st January, 2005 made by the TDSAT which after detailed consideration
of the
matter and the law cited before it, held thus:
(i)?The questions which arise for consideration would be:
(a) If TRAI can make Regulations in the discharge of its functions
under sub-
clauses(ii), (iii) and (iv) of clause (b) of sub section (1) of Section
11?
(b) Can Regulations under sub clauses (ii), (iii) and (iv) be framed
under
general powers of sub Section (1) of Section 36 when read with
sub-section (2)
thereof??
(ii) We put it to Mr.Sanghi if any dispute arises under the Regulations
framed
by the TRAI could it be that shall be adjudicated by TRAI and
jurisdiction of
TDSAT to determine that dispute would be barred. His answer was in
affirmative.
That looks rather strange to us.
(iii) Can Regulations which are in the nature of a subordinate
legislation
overtake the provision of the Principal Act? If Regulations under
sub-clauses
(i) to (ix) of clause (b) of Section 1 of the Act and also under clause
( c )
are all framed by the TRAI there will be no direction, decision or
order of the
TRAI which could be subject matter of appeal to TDSAT and that would in
effect
mean repealing clause (b) of Section 14 of the Act.
(iv) We also put it to Mr.Sanghi that if there is contravention of any
direction
issued by TRAI it is punishable under Section 29 and what will happen
if there
is contravention of any Regulation. He said it was for the Parliament
to amend
the law. There was no clear answer to our question as to what was the
procedure
which would have to be gone into before issuing direction or
Regulation. It
appears to us that procedure for issuing direction or Regulation has to
be the
same. As to what is the difference between a direction and Regulation,
it was
the submission of Mr.Sanghi that direction can be given to a particular
service
provider and Regulation can be of general applicability. This is not
correct as
we have found in number of cases that directions have also been issued
which are
applicable generally e.g. that what was in Appeal no.2 of 2004 It does
not
appear to us the right approach of the TRAI to clothe a direction in
the garb of
Regulation and then tell the TDSAT that it has no appellate power.
(v) Both the lower authority and the appellate authority have to
exercise their
respective jurisdiction as defined in the Act constituting them. We
could not
get any answer which expert body will consider if the reduction in ADC
by TRAI
as claimed by the MTNL, is factually and legally correct if not TDSAT.
As a
matter of fact in West Bengal Electricity case the Supreme Court itself
commended the creation of TDSAT by recommending a similar expert
appellate body
be created under the Electricity Commission Act dealing with the type
of factual
and technical matters and that High Court was not an appropriate
appellate body
for that purpose. The question of exclusive jurisdiction of an expert
body like
TDSAT has recently been discussed in the decision of the Supreme Court
in the
case of Clariant International Limited vs. Security Exchange Board
(2004) 8 SCC
524.
(vi) Supreme Court in the case of Cellular Operators Association of
India vs.
Union of India (2003) 3 SCC 186 had clearly spelt out the functions of
TRAI as
well as of the TDSAT. It has been clearly held that TDSAT is an expert
body.
Supreme Court in this case examined the extent and parameters of the
jurisdiction of TDSAT under Section 14 of the Act. Supreme Court also
held that
TDSAT was the ?only forum for redressing the grievance of an aggrieved
party
inasmuch as the appellate jurisdiction to this Court is only on a
substantial
question of law and the jurisdiction of civil Court for filing a suit
is also
ousted. It has already been held by us that the tribunal has the power
to
adjudicate any dispute but while answering the dispute, due weight has
to be
given to the recommendation of the TRAI, which consists of experts.
(vii) A bare comparison of provisions of Section 14 which confers
jurisdiction
on the tribunal and Section 18 which confers jurisdiction on the
Supreme Court,
would unequivocally indicate that the Tribunal has much wider
jurisdiction than
the jurisdiction of this Court under Section 18, as this Court would be
entitled
to interfere only on a substantial question of law, which arises from
the
judgment of the Tribunal and not otherwise.
(viii) Even if the Regulations are valid piece of subordinate
legislation, the
jurisdiction of TDSAT is not barred if any dispute arises under the
Regulation.
For example, in the present case it is the contention of MTNL that its
entitlement to ADC has been wrongly reduced by TRAI on various
non-existent
grounds.
(ix) Jurisdiction which the High Court exercises under Article 226 and
227 of
the Constitution is not the same as is exercised by an expert appellate
body in
appeal.
(x) The present case before us which involves consideration of access
deficit
charge (ADC) a matter of highly complicated and technical nature.
Arguments by
TRAI is in complete variance with the observations of the Supreme Court
in the
West Bengal Electricity Regulatory Commission case.
(xi) The Supreme Court has also held that at least one right of appeal
be given
to the aggrieved party. Arguments advanced by TRAI would deprive the
aggrieved
party the MTNL of the right of appeal.
(xii) In the case of the West Bengal Electricity Regulatory Commission
the
Supreme Court has found subordinate legislation to be valid. That is
not so in
the present case before us.
(xiii) TRAI cannot frame Regulation under those sub-clauses which do
not provide
for framing of Regulations. It has certainly power to issue directions.
(xiv) Even if the Regulation in the present case is a subordinate
legislation,
validly made, any dispute arising thereunder is within the jurisdiction
of TDSAT
as conferred upon it by the Act and no subordinate legislation can take
away
that jurisdiction. Any clause in the Regulation which seeks to divest
the TDSAT
to adjudicate upon any dispute is non-est and has to be ignored.?
12. Aggrieved by this decision, the TRAI has filed the present writ
petition contending that the order of the respondent no.1 was erroneous
in law
and amenable to the writ jurisdiction of this Court. The challenge has
been
laid by the writ petitioner on the same grounds which were its
objection to the
maintainability of the appeal before the TDSAT.
13. This writ petition has been strenuously opposed by the respondent
no.2. Objection has been taken to the propriety of the TRAI filing a
writ
petition.
It has been urged by Mr.Vaidyalingam, learned senior counsel for the
respondent no.2 that the TRAI can frame regulations under Section 36(1)
only
with regard to the matters which are specifically provided for under
the
statute. It is contended that anything done by the TRAI in discharge of
its
functions under Section 11(1)(b), 1(ii), (iii)(iv) can be done only by
way of
'directions' and 'decisions'. The TRAI has been statutorily enjoined to
take
'decisions' in the matters relating to Telecommunication
Interconnection Usage
Charges( hereinafter referred to as IUC) and Access Deposit
Charges(hereinafter
referred to as ADC) and levy fees and other charges at different rates.
On the other hand, under Section 36 the TRAI is empowered to make
regulations by notification only in respect of the purposes
specifically set
out. The contention of the respondent is that merely because a decision
of the
TRAI is couched or notified as a 'regulation', the same does not change
its real
nature and such a 'decision' is assailable by way of an Appeal under
Section 14
of the statute. Notifying its 'decision' as a 'regulation' is merely a
procedure
adopted by the TRAI to give effect to its 'decision' while the real
purpose of
the same is to give effect to the 'decision' taken under Section
11(i)(b), (ii),
(iii) and (iv) of the Act.
14. Reliance has been placed on the pronouncement of the Constitution
Bench of the Apex Court rendered in L Chander Kumar Vs. Union of India
(1997) 2
SCC 261 (paras 91 to 94 on page 308) wherein it was held by the Supreme
Court
that the tribunals are competent even to hear the matters where the
vires of
statutory provisions are in question and would also have the
jurisdiction to
test the vires of subordinate legislation and rules.
15. The maintainability of the writ petition is further objected to by
the
respondent on the ground that under Section 18 of the TRAI Act, 1997 an
appeal
against any order, not being an interlocutory order of the appellate
tribunal,
lay to the Supreme Court on one or more of the grounds specified in
Section 100
of the Code of Civil Procedure. It is contended that in the instant
case, the
order passed on the preliminary issue relating to the jurisdiction of
the TDSAT
is not an interlocutory order and in fact constitutes a final
determination on
the issue of its jurisdiction. It adjudicates upon and decides rights
of
parties and consequently is appealable under Section 18 of the TRAI
Act, 1997.
With regard to this submission, support is sought to be drawn from the
principles laid down by the Apex Court in Shah Babu Lal Khimji Vs. Jaya
Ben D.
Kania and another AIR 1981 SC 1786.
16. Placing reliance on Amarnath vs. State of Haryana (1977) 4 SCC 137
and Central Government of India vs. Gokul Chand AIR 1967 SC 799. it is
further
contended that the orders which are relating to merely procedural
matters and do
not effect rights and liabilities of the parties or are steps taken
towards
final adjudication and for assisting parties in prosecution of cases as
they
only regulate procedure would be interlocutory orders.
17. On facts, according to learned senior counsel for the respondents,
it
is urged that the regulation 1 of 2005 which fixes the ADC is really in
the
nature of tariff fixation. In view of the statutory stipulation, there
is no
manner of doubt that tariff fixation is appealable under section 14.
18. The respondent no.2 has further submitted that assuming the
contention
of the petitioner was to be accepted that the regulation 1 of 2005 was
really a
statutory regulation, which partakes the main statute, then the
petitioner can
bye pass the provision for statutory appeal by expressing any 'order',
'direction' or 'decision' as a 'regulation', rendering the provision of
appeal
totally redundant and nugatory, which is impermissible.
19. According to the respondent, the prohibition upon a tribunal
hearing
a challenge to statutory provision is only to the extent that the
tribunal
cannot hear a challenge to a provision of the statute under which it
was
created. In the instant case there was no challenge to any provision of
the
TRAI Act or subordinate legislation creating it but only to the issue
of
correctness of the decision of the TRAI relating to levy of the ADC
which has
been undertaken in exercise of the powers and functions under Section
11(1)(ib)
of the Act.
20. The respondent no.2 further points out that the contention of the
petitioner that the Supreme Court as the Appellate Court under Section
18 of the
TRAI Act 1997 could not have also decided the issue of jurisdiction or
the
legality and validity of regulation 1 of 2005 on principles laid down
in the
West Bengal Electricity Regulatory Commission vs. EEC Limited 2002(8)
SCC 715 is
misconceived in law and that it is settled law that every Court and
Tribunal
must decide its jurisdiction. Upon a challenge by a party being
aggrieved by
such determination, the same could be impugned by way of a statutory
appeal. In
the instant case the decision of the TDSAT is appealable in terms of
Section 18
of the TRAI Act.
21. Respondent no.2 further submits that according to the petitioner,
the
regulation 1 of 2005 is delegated legislation which has been framed by
it under
Section 36 of the TRAI Act 1997. If such position was accepted, it
would be
wholly improper for the legislative authority to assail any orders
passed by the
competent forum while dealing with any legislation made by it.
22. Having heard learned senior counsel for the parties, the issues
which
arise for adjudication in the present case can be crystallized thus:-
(I) Whether the TDSAT being an Appellate Tribunal constituted under
provisions of the Telecom Regulatory Authority of India Act, 1997 has
the
jurisdiction to adjudicate upon the vires of any provisions of the
statute where
under it has been created or the vires of subordinate legislation
par-taking the
character of the statute which was in the nature of a regulation framed
in
exercise of statutory powers.
(II) Whether the Appellate Tribunal has the jurisdiction to examine the
question whether the impugned provision is subordinate legislation in
the nature
of a statutory regulation or a mere direction issued in exercise of the
executive powers of the specialised authority.
(III) What would be the appropriate forum for laying a challenge to the
adjudication on the aforestated issues that is to say, whether the same
would
be by way of an appeal statutorily provided or could be laid by
invoking the
writ jurisdiction of the High Court under Article 226 of the
Constitution of
India.
(IV) Propriety of the present challenge at the instance of the expert
authority which had framed the regulation or passed the impugned
decision or
direction.
23. Before dealing with the respective contentions of the parties, it
is
necessary to examine the scheme of the concerned statute. It would be
useful to
set out the relevant statutory provisions of the Telecom Regulatory
Authority of
India Act, 1997 which are as hereunder:-
?11. Functions of Authority
(1) Not withstanding anything contained in the Indian Telegraph Act,
1885, the
functions of the Authority shall be to -
(a) make recommendations, either suo motu or on a request from the
licensor,
(b) discharge the following functions, namely:-
xxx
(ii) notwithstanding anything contained in the terms and conditions of
the
licence granted before the commencement of the Telecom Regulatory
Authority of
India(Amendment) Act, 2000, fix the terms and conditions of
inter-connectivity
between the service providers;
(iii) ensure technical compatibility and effective inter-connection
between
different service providers;
(iv) regulate arrangement amongst service providers of sharing their
revenue
derived from providing telecommunication services;
xxx
(vii) maintain register of inter-connect agreements and of all such
other
matters as may be provided in the regulations;
xxx
(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;
( c ) levy fees and other charges at such rates and in respect of such
services
as may be determined by regulations.
(2) Nothwithstanding 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 th 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:
(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.
xxx
(4) The Authority shall have the power to issue such directions to
service
providers as it may consider necessary for proper functioning by
service
providers.
13. Power of Authority to issue directions
The Authority may, for the discharge of its functions under sub-section
(1) of
section 11, issue such directions from time to time to the service
providers, as
it may consider necessary.
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.
(b) hear and dispose of appeal against any direction, decision or order
of the
authority under this Act.
18. Appeal to Supreme Court
(1)Notwithstanding anything contained in the Cod 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.
36. Power to make regulations
(1) The Authority may, by notification, make regulations consistent
with this
Act and the rules made thereunder to carry out the purposes of this
Act.
(2) In particular, and without prejudice to the generality of the
foregoing
power, such regulations may provide for all or any of the following
matters,
namely-
(d) matters in respect of which register is to be maintained by the
Authority
under sub-clause (vii) of clause (b) of sub-section (1) of section 11;
(e) levy of fee and lay down such other requirements on fulfillment of
which a
copy of register may be obtained under sub-clause (viii) of clause (b)
of sub-
section (1) of section 11;
(f) levy of fees and other charges under clause ( c ) of sub-section
(1) of
section11.?
37. Rules and regulations to be 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 regulation 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.?
24. The reason for the Constitution of the TRAI is to be found in the
objects and reasons for the statute. The need thereof was realised long
before
the statute came into existence and was given effect to. The
qualifications
prescribed for the post of the Chairperson and other Members of the
authority
shows the requirement of specialized knowledge and specialised
experience in
telecommunication, industry, finance, accountancy, law, management or
consumer
affairs. There can be no manner of doubt that the authority has been
consciously and carefully created and constituted in order to
effectuate the
spirit, intendment and purpose of the statute.
The Appellate Forum(TDSAT) statutorily provided also consists of
persons
with similar expertise and ability. Section 15 of the TRAI Act excludes
the
jurisdiction of a civil court to entertain any suit or proceedings in
respect of
any matter which the Appellate Tribunal is empowered to determine.
Statutory
prohibition has been laid to grant of an injunction by any court or
other
authority in respect of any action taken or to be taken in exercise of
the
powers conferred under the enactment. Wide powers have been conferred
on the
TDSAT under statutory provisions which are exercisable by a civil court
under
the Code of Civil Procedure, 1908 while trying a suit in respect of
matters
stated. An appeal against an order passed by the TDSAT lies only to the
Apex
Court under Section 18 of the Act.
25. The conflict of jurisdiction between an expert appellate tribunal
as
the TDSAT vis-a-vis the expert board has arisen for consideration in
cases
hitherto before the Apex Court. It has been authoritatively held that
the
limitations on the jurisdiction of the Tribunal have to be found in the
statutory provisions whereunder it is created and the intention of the
legislature has to be gathered therefrom. Unless the jurisdiction of
the
appellate authority is fettered by the statute, it would have the same
authority
and jurisdiction as that of the expert board under the statute. It can
exercise
its discretionary jurisdiction in the same manner as the board.
26. Examination of the scheme of the TRAI Act shows that the statute
provides for integration of power in the TRAI under Section 11 of the
Act by
vesting legislative, executive and judicial powers in the same body.
The
petitioner, TRAI, exercises its legislative powers by making
regulations;
executive powers by administering the regulations framed by it, issuing
directions, taking decisions and further by taking action against any
entity
violating its regulations, decisions and directions. It exercises its
judicial
powers by adjudicating the disputes in the implementation thereof.
27. The Appellate Forum constituted under Section 14 of the TRAI Act
being
the TDSAT is also empowered to exercise its jurisdiction conferred by
statute
without any limitation and the scrutiny by this expert Appellate Forum
is of a
wide import, restricted only by the requirement to comply with the
constitutional mandate and the statutory provisions.
28. The conflict of jurisdiction between an expert appellat tribunal
constituted under a statute vis-a-vis the expert board whose
action/decision is
being examined by it, has also arisen for consideration before the Apex
Court.
This issue arose for consideration in the context of jurisdiction of
Securities
and Exchange Board vis-a-vis the Appellate Tribunal under the
Securities and
Exchange Board of India Act, 1992.
29. In its authoritative pronouncement in Clariant International
Limited
vs SEBI AIR 2004 SC 4236 entitled, it was held by the Apex Court:-
?69. The Board is indisputably an expert body. But when it exercises
its quasi
judicial functions; its decisions are subject to appeal. The appellate
Tribunal
is also an expert Tribunal. Only such persons who have the requisite
qualifications are to be appointed as members thereof as would appear
from sub-
section (2) of Section 15M of the said Act which reads thus:-
?15.M Qualification for appointment as Presiding Officer or Member of
the
Securities Appellate Tribunal---
(2) A person shall not be qualified for appointment as Member of a
Securities
Appellate Tribunal unless he is a person of ability, integrity and
standing who
has shown capacity in dealing with problems relating to securities
market and
has qualification and experience of corporate law, securities laws,
finance,
economics or accountancy:
Provided that a member of the Board of any person holding a post at
senior
management level equivalent to Executive Director in the Board shall
not be
appointed as Presiding Officer or Member of a Securities Appellate
Tribunal
during his service or tenure as such with the Board or within two years
from the
date on which he ceases to hold office as such i the Board?.
72. Throughout the world, specialized adjudicators are performing
numerous
roles. There are diverse specialized tribunals in America as also in
the Common
Wealth countries. In certain States, statutes have been enacted
authorizing
appeals to the Administrative Division which jurisdiction used to be
exercised
by the High Court alone. The appeals range from questions of law to
selected
questions of fact, to full rehearing of all issues. (see Stephen
Legomsky's
'Specialized Justice).
73. Had the intention of the Parliament been to limit the jurisdiction
of the
Tribunal, it could say so explicitly as it has been done in terms of
Section 157
of the Act whereby the jurisdiction of this Court to hear the appeal is
limited
to the question of law.
74. The jurisdiction of the appellate authority under the Act is not in
any way
fettered by the statute and, thus, it exercises all the jurisdiction as
that of
the Board. It can exercise its discretionary jurisdiction in the same
manner as
the Board.
75. The SEBI Act confers a wide jurisdiction upon the Board. Its duties
and
functions thereunder, run counter to the doctrine of separation of
powers.
Integration of power by vesting legislative, executive and judicial
powers in
the same body, in future, may raise several public law concerns as the
principle
of control of one body over the other was the central theme underlying
the
doctrine of separation of powers.?
30. Thus while considering the jurisdiction of an expert appellate
forum
which has been constituted under the provisions of the Securities and
Exchange
Board of India Act, 1992 in Clariant International Limited vs. SEBI AIR
2004 SC
4236, the Supreme Court held that expert regulatory bodies exercise a
wide
jurisdiction. They lay down the law, may prosecute, may punish.
Intrinsically,
they act like an internal audit. They may fix the price, area of
operation and
so on and so forth. While doing so, they may interfere with the
existing rights
of licencees. The court authoritatively held that the Appellate
Tribunal was
also like an expert body statutorily constituted and its powers were
wide and
circumscribed only by the restrictions contained in the Constitution
and by the
statute under which it is created.
31. Examination of the scheme of the TRAI Act, 1997 shows that there is
no
restriction in the powers of the TDSAT which is an expert forum
constituted
under Section 14 of the statute. However appeals against the orders
passed by
TDSAT lay only to the Apex Court under Section 18 of the Act whereby
the
jurisdiction of the Apex Court as the appellate court is restricted to
issues of
law arising from orders which are not in the nature of interlocutory
orders on
grounds specified in section 100 of the Code of Civil Procedure.
32. Section 100 of the Code of Civil Procedure provides a second appeal
against every decree passed in appeal by any court subordinate to the
High Court
only if the case involves a substantial question of law and from an
appellate
decree passed ex parte. The High Court is required to be satisfied that
a
substantial question of law is involved in the case and the appeal
shall be
heard on that question.
33. The jurisdiction of the TDSAT and its powers as an expert appellate
forum was considered by the Apex Court in 2003(3) SCC 186 entitled
Cellular
Operators Association of India and others vs. Union of India.
The Court considered the powers of the TDSAT as the Appellate Tribunal
empowered by and under the Act as contained in Section 15 and arrived
at a
conclusion that the power of the TDSAT as an Appellate Tribunal was
wide as has
been indicated in the statute itself. In this behalf the law laid down
by the
Apex Court reads thus:-
?8. ............................ 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, has been indicated
in the
statute itself and the decisions of the 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. By saying so, we may not be
understood to mean that the Appellate Tribunal while exercising power
under
Section 14 of the Act, will not give due weight to the recommendations
or the
decisions of an expert body like TRAI or in the case in hand, GOT-IT,
which was
specifically constituted by the Prime Minister for redressing the
grievances of
the cellular operators. We would, therefore, answer the question of
jurisdiction of the Appellate Tribunal by holding that the said
Tribunal has the
power to adjudicate any dispute between the persons enumerated in
clause (a) of
Section 14 and if the dispute is in relation to a decision taken by the
Government, as in the case in hand, due weight has to be attached both
to the
recommendations of TRAI which consists of an expert body as well as to
the
recommendations of GOT-IT, a committee of eminent experts from
different fields
of life, which had been constituted by the Prime Minister.
9. So far as the jurisdiction of this Court under Section 18 is
concerned, there
is no dispute from any quarter that the appeal would lie against any
order of
the Appellate Tribunal only on the ground specified in Section 100 of
the Code
of Civil Procedure and necessarily,therefore, it must be a substantial
question
of law. The question, therefore, that remains to be considered is,
whether from
the judgment of the Tribunal, the contentions raised by the appellants
can be
held to be a substantial question of law, which requires interference
with the
order of the Tribunal.
xxxxxxxxxxx
11. .............................At the outset, it may be stated that
the
Tribunal committed an error by holding that it exercises supervisory
jurisdiction. As has been stated earlier, the jurisdiction of the
Tribunal
under Section 14 cannot be held to be a supervisory jurisdiction, in
view of the
language of the statute as well as the fact that it is the only forum
for
redressing the grievance of an aggrieved party inasmuch as the
appellate
jurisdiction to this Court is only on a substantial question of law and
the
jurisdiction of a civil court for filing a suit is also ousted. It has
already
been held by us that the Tribunal has the power to adjudicate any
dispute but
while answering the dispute, due weight has to be given to the
recommendation of
TRAI, which consists of experts. The Tribunal also committed yet
another error
in holding that the jurisdiction of the Appellate Tribunal cannot be
wider than
that of the Supreme Court. A bare comparison of the provisions of
Section 14,
which confers jurisdiction on the Tribunal and Section 18, which
confers
jurisdiction on the Supreme Court, would unequivocally indicate that
the
Tribunal has much wider jurisdiction than the jurisdiction of this
Court under
Section 18, as this Court would be entitled to interfere only on a
substantial
question of law, which arises from the judgment of the Tribunal and not
otherwise.?
34. In this binding pronouncement, the Apex Court emphasised the
distinction between a judicial power in contrast to a reviewing power
in an
authority. While concurring with the aforenoticed conclusions,
additional
reasons were assigned for remitting the matter back to the tribunal in
the
judgment of S.B.Sinha, J. Referring to the observations by Amnon
Rubinstein in
'Jurisdiction and Illegalities', it was further stated that a :-
?A judicial power, on the other hand, denotes a process in which
ascertainable
legal rules are applied and which, therefore, is subject to an
objectively
correct solution. But that, as will be seen, does not mean that the
repository
of such a power is under an enforceable duty to arrive at that
solution. The
legal rules applied are capable of various interpretations and the
repository of
power, using his own reasoning faculties, may deviate from that
solution which
the law regards as the objectively correct one.
The regulatory bodies exercise wide jurisdiction. They lay down the
law.
They may prosecute. They may punish. Intrinsically, they act like an
internal
audit. They may fix the price, they may fix the area of operation and
so on and
so forth. While doing so, they may, as in the present case, interfere
with the
existing rights of the licencees.?
35. Also noticing the celebrated text on 'Judicial Review of
Administrative Law' by HWR Wade and CF Forsyth, it was further stated
thus:-
?31.The rule as regard deference to expert bodies applies only in
respect of a
reviewing Court and not to an expert Tribunal. It may not be the
function of a
Court exercising power of judicial review to act as a super-model as
has been
stated in Administrative Law by Bernard Schwartz, 3rd edition in para
10.1 at
page 625; but the same would not be a case where an expert Tribunal has
been
constituted only with a view to determine the correctness of an order
passed by
another expert body. The remedy under Section 14 of the Act is not a
supervisory one. TDSAT's jurisdiction is not akin to a Court issuing a
writ of
certiorari. The Tribunal although is not a Court. It has all the
trappings of
a Court. Its functions are judicial.?
36. In the light of this position and statement of the legal
principles,
so far as the jurisdiction of the TDSAT under Section 14A of the TRAI
Act it was
stated:-
?27. TDSAT was required to exercise its jurisdiction in terms of
Section 14-A
of the Act. TDSAT itself is an expert body and its jurisdiction is wide
having
regard to sub-section(7) of Section 14-A thereof. Its jurisdiction
extends to
examining the legality, propriety or correctness of a direction/order
or
decision of the authority in terms of sub-section (2) of Section 14 as
also the
dispute made in application under sub-section (1) thereof. The approach
of the
learned TDSAT, being on the premise that its jurisdiction is limited or
akin to
the power of judicial review is, therefore, wholly unsustainable. The
extent of
jurisdiction of a Court or a Tribunal depends upon the relevant
statute. TDSAT
is a creature of a statute. Its jurisdiction is also conferred by a
statute.
The purpose of creation of TDSAT has expressly been stated by the
Parliament in
the Amending Act of 2000. TDSAT, thus, failed to take into
consideration the
amplitude of its jurisdiction and thus misdirected itself in law.
33. The regulatory bodies exercise wide jurisdiction. They lay down the
law.
They may prosecute. They may punish. Intrinsically, they act like an
internal
audit. They may fix the price, they may fix the area of operation and
so on and
so forth. While doing so, they may, as in the present case, interfere
with the
existing rights of the licensees.
34. Statutory recommendations made by it are normally accepted by the
Central
Government, as a result of which the rights and obligations of the
parties may
seriously be affected. It was in the aforementioned premise Parliament
thought
of creating an independent expert tribunal which, if an occasion arises
therefor, may interfere with the finding of fact, funding of law or a
mixed
question of law and fact of the authority. Succinctly stated, the
jurisdiction
of the Tribunal is not circumscribed in any manner whatsoever.
37. There cannot be any doubt whatsoever that when jurisdiction upon a
court or
a tribunal is conferred by a statute, the same has to be construed in
terms
thereof and not otherwise. The power of judicial review of this Court
as also
of the High court, however, stand on a different footing. The power of
this
Court as also the High Court although is of wide amplitude, certain
restrictions
by way of self-discipline are imposed. Ordinarily, the power of
judicial review
can be exercised only when illegality, irrationality or impropriety is
found in
the decision-making process of the authority.
43.The learned TDSAT should have borne in mind that its decision on
fact and law
is final and appeal lies to this Court in terms of Section 18 of the
Act only on
substantial questions of law. It, therefore, was obliged to determine
the
questions of law and facts so as to enable this Court to consider the
matter if
any substantial question of law arises on the face of the judgment.
47.Even the scope of judicial review may also vary from case to case.
It
depends upon the nature of the matter as also the statute involved
therein which
is required to be dealt with by the Court.
49. Furthermore, the power of this Court under Section 18 of the Act
cannot be
equated with the power of judicial review. As this Court will be
concerned with
a substantial question of law arising in the case, its jurisdiction
would not be
restricted to illegality, irrationality or procedural impropriety in
the
decision-making process.?
37. The authority and jurisdiction of an appellate expert forum, its
importance and necessity, therefore, cannot be belittled or narrowed
down by
strict or a narrow interpretation of the statutory provisions. Its
importance
is to be found in the observations of the Apex Court in its earlier
judgment in
West Bengal Electricity Regulatory Commission vs. CESC Limited reported
at
2002(8) SCC 715. The three Judge Bench of the Apex Court was
considering the
extent of the jurisdiction of the High Court in exercise of its
appellate power
under Section 27 of the Electricity Regulatory Commission Act, 1998
which is
almost pari materia with Section 14 of the TRAI Act with which the
present case
is concerned. The court noticed the absence of an expert appellate
authority
in the Electricity Regulatory Commission Act, 1998 and observed thus:-
?We notice that the Commission constituted under Section 17 of the 1998
Act is
an expert body and the determination of tariff which has to be made by
the
Commission involves a very highly technical procedure, requiring
working
knowledge of law, engineering, finance, commerce, economics and
management. A
perusal of the report of the ASCI as well as that of the Commission
abundantly
proves this fact. Therefore, we think it would be more appropriate and
effective if a statutory appeal is provided to a similar expert body,
so that
the various questions which are factual and technical that arise in
such an
appeal, get appropriate consideration in the first appellate stage
also. From
Section 4 of the 1998 Act, we notice that the Central Electricity
Regulatory
Commission which has a Judicial Member as also a number of other
Members having
varied qualifications, is better equipped to appreciate the technical
and
factual questions involves in the appeals arising from the orders of
the
Commission. Without meaning any disrespect of the Judges of the High
Court, we
think neither the High Court nor the Supreme Court would in reality be
appropriate appellate forums in dealing with this type of factual and
technical
matters. Therefore, we recommend that the appellate power against an
order of
the State Commission under the 1998 Act should be conferred either on
the
Central Electricity Regulatory Commission or on a similar body. We
notice that
under the Telecom Regulatory Authority of India Act, 1997 in Chapter
IV, a
similar provision is made for an appeal to a special Appellate Tribunal
and
thereafter a further appeal to the Supreme Court on questions of law
only. We
think a similar appellate provision may be considered to make the
relief of
appeal more effective.?
38. In the light of the aforestated observations, there can be no
manner
of doubt that the TDSAT is an expert body and is statutorily empowered
to
exercise jurisdiction without any limitation and its powers are wider
than the
powers of the appellate court under Section 18 of the TRAI Act.
39. In order to answer the first issue as to the jurisdiction of a
tribunal constituted under a special statute to examine the
constitutional
validity of a statutory provision or delegated legislation thereunder,
it
becomes necessary to examine the constitutional scheme with regard to
the
vesting of the powers of judicial review to a statutory tribunal.
40. Judicial review in India comprises three aspects: judicial review
of
legislative action; judicial review of judicial decisions and judicial
review of
administrative actions.
41. The Supreme Court had an opportunity to state the law and its views
on the power of a tribunal to undertake judicial review of legislative
action.
It is well settled that under the Constitutional scheme in India,
legislative
acts of parliament are subject to judicial review particularly when
they purport
to infringe fundamental rights. There is no doubt that the Constitution
has
entrusted the jurisdiction in construing the provisions of the
Constitution of
India and of safeguarding the rights of citizens in courts. Challenge
may be
laid to an action or a statute passed by the legislature on the grounds
of the
same being without authority or it otherwise unconstitutionally
trespasses on
fundamental rights. It is for the courts to determine such disputes and
decide
whether the law passed by the legislature is valid or not. (Re: 1973
(4) SCC 225
His Holiness Kesavananda Bharati Sripadagalvaru vs. State of Kerala and
another); AIR 1956 SC 479 Bidi Supply Company vs. Union of India; AIR
1952 SC
196 State of Madras vs. V.G.Row).
42. The thirteen Judge Constitution Bench in His Holiness Kesavananda
Bharati Sripadagalvaru vs. State of Kerala and another reported at
1973(4) SCC
225 considered in detail the power of judicial review and held that
Article 32
and 226 of the Constitution of India vests the Supreme Court and High
Courts
with the jurisdiction to decide about the constitutional validity of
the
provisions of statute. If the provisions of the statute are found to be
violative of any articles of the Constitution, which is the touch stone
for the
validity of all the laws, the Supreme Court and the High Courts are
empowered to
strike down such provisions and that this is one of the basic features
upon
which hinges the system of checks and balances and separation of powers
recognised by the constitutional scheme.
43. In exercise of the power of judicial review into legislative
action,
it is well settled that the court has to ensure that the balance of
power
envisaged by the Constitution is maintained and that the legislature
and the
executive do not, in discharge of their functions transcript
constitutional
limitations. At the same time, the courts are required to oversee that
judicial
decisions rendered by those in the subordinate courts and tribunals do
not
violate the strict standards of legal correctness and judicial
independence.
The safeguards and protection available to the members of the superior
judiciary
are not available to those in the subordinate judiciary or to those
manning
tribunals created by ordinary legislations and for this reason they
cannot be
considered an effective substitute for the higher judiciary in
discharge of the
function of constitutional interpretation.
44. It was, therefore, held by the Apex Court in L.Chandra Kumar vs.
Union
of India reported at (1997)3 SCC 261 (in para 78 of the report) that
the power
of judicial review over legislative action vested in the Supreme Court
under
Article 32 and in the High Courts under Article 226 of the Constitution
is an
integral and essential features of the constitution, constituting part
of its
basic structure. Ordinarily, therefore, the powers of these Courts to
test the
constitutional validity of legislation cannot be ousted or excluded.
45. In para 79 of the pronouncement, the Apex Court held that the
powers
vested in the High Courts to exercise judicial superintendence over the
decisions of all Courts and Tribunals within their respective
jurisdictions is
also part of the basic structure of the Constitution.
46. It was further held that though the subordinate judiciary or
tribunals
created under ordinary legislations cannot exercise the power of
judicial review
of legislative action to the exclusion of the High Courts or the
Supreme Court,
there is no constitutional prohibition against their performing a
supplemental,
as opposed to a substitutional role in this report.(para 80 of the
report).
47. At this stage, it would be useful to notice the observations of the
Apex Court with regard to the jurisdiction of the tribunals to the test
validity
of the legislation against the constitutional provisions. In this
behalf the
Apex Court observed thus:-
?81. If the power under Article 32 of the Constitution, which has been
described
as the ?heart? and ?soul? of the Constitution, can be additionally
conferred
upon ?any other court?, there is no reason why the same situation
cannot subsist
in respect of the jurisdiction conferred upon the High Courts under
Article 226
of the Constitution. So long as the jurisdiction of the High Courts
under
Articles 226/227 and that of this Court under Article 32 is retained,
there is
no reason why the power to test the validity of legislations against
the
provisions of the Constitution cannot be conferred upon Administrative
Tribunals
created under the Act or upon Tribunals created under Article 323-B of
the
Constitution. It is to be remembered that, apart from the authorisation
that
flows from Articles 323-A and 323-B, both Parliament and the State
Legislatures
possess legislative competence to effect changes in the original
jurisdiction of
the Supreme Court and the High Courts. This power is available to
Parliament
under Entries 77, 78, 79 and 95 of List I and to the State Legislatures
under
Entry 65 of List II; Entry 46 of List III can also be availed of both
by
Parliament and the State Legislatures for this purpose.
xxx xxxx
90. We may first address the issue of exclusion of the power of
judicial review
of the High Courts. We have already held that in respect of the power
of
judicial review, the jurisdiction of the High Courts under Articles
226/227
cannot wholly be excluded. It has been contended before us that the
Tribunals
should not be allowed to adjudicate upon matters where the vires of
legislations
is questioned,and that they should restrict themselves to handling
matters where
constitutional issues are not raised. We cannot bring ourselves to
agree to
this proposition as that may result in splitting up proceedings and may
cause
avoidable delay. If such a view were to be adopted, it would be open
for
litigants to raise constitutional issues, many of which may be quite
frivolous,
to directly approach the High Courts and thus subvert the jurisdiction
of the
Tribunals. Moreover, even in these special branches of law, some areas
do
involve the consideration of constitutional questions on a regular
basis; for
instance, in service law matters, a large majority of cases involve an
interpretation of Articles 14, 15 and 16 of the Constitution. To hold
that the
Tribunals have no power to handle matters involving constitutional
issues would
not serve the purpose for which they were constituted. On the other
hand, to
hold that all such decisions will be subject to the jurisdiction of the
High
Courts within whose territorial jurisdiction the Tribunal concerned
falls will
serve two purposes. While saving the power of judicial review of
legislative
action vested in the High Courts under Articles 226/227 of the
Constitution, it
will ensure that frivolous claims are filtered out through the process
of
adjudication in the Tribunal. The High Court will also have the benefit
of a
reasoned decision on merits which will be of use to it in finally
deciding the
matter.?
48. So far as the instant case is concerned, it has been urged by
Mr.G.L.Sanghi, learned senior counsel for the petitioner, that the Apex
Court
has drawn a clear distinction between an ordinary tribunal constituted
under the
ordinary legislation and a tribunal as the Central Administrative
Tribunal which
is created under Article 323-B of the Constitution which draws its
authorisation from Articles 323-A and 323-B of the Constitution.
49. I find that the Apex Court has noticed that the Parliament and the
State Legislature possess the legislative competence to effect the
changes
in the original jurisdiction of the Apex Court and the High Court under
Article
323-A and 323-B of the Constitution respectively. The Apex Court, in
the L
Chandra Kumar case(supra), has noticed that such power to effect
changes in the
original jurisdiction of the Supreme Court and the High Court is also
available
to the Parliament under Entries 77 and 78, 79 and 95 of List-I and to
the State
Legislature under Entry 65 of List-II and Entry 46 of List-III and that
such
powers can be availed of both by the Parliament and the State
Legislature for
this purpose.
50. After a detailed analysis of the applicable laws, the Apex Court
however laid down the principles applicable in the following terms:-
?93. 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.
99. In view of the reasoning adopted by us, we hold that clause2(d) of
Article
323-A and clause 3(d) of Article 323-B, to the extent they exclude the
jurisdiction of the High Courts and the Supreme Court under Articles
226/227 and
32 of the Constitution, are unconstitutional. Section 28 of the Act and
the
?exclusion of jurisdiction? clauses in all other legislations enacted
under the
aegis of Articles 323-A and 323-B would, to the same extent, be
unconstitutional. The jurisdiction conferred upon the High Courts under
Articles 226/227 and upon the Supreme Court under Article 32 of the
Constitution
is a part of the inviolable basic structure of our Constitution. While
this
jurisdiction cannot be ousted, other courts and Tribunals may perform a
supplemental role in discharging the powers conferred by Articles
226/227 and 32
of the Constitution. The Tribunals created under Article 323-A and
Article
323-B of the Constitution are possessed of the competence to test the
constitutional validity of statutory provisions and rules. All
decisions of
these Tribunals will, however, be subject to scrutiny before a Division
Bench of
the High Court within whose jurisdiction the Tribunal concerned falls.
The
Tribunals will, nevertheless, continue to act like courts of first
instance in
respect of the areas of law for which they have been constituted. It
will not,
therefore, be open for litigants to directly approach the High Courts
even in
cases where they question the vires of statutory legislations (except
where the
legislation which creates the particular Tribunal is challenged) by
overlooking
the jurisdiction of the Tribunal concerned. Section 5(6) of the Act is
valid
and constitutional and is to be interpreted in the manner we have
indicated.?
51. In view of the above discussion, I have no manner of doubt that it
is
not open for a litigant to approach a tribunal constituted under a
statute to
question vires of a statutory legislation which created the particular
tribunal.
However it is open for the litigant to test the constitutional validity
of
statutory provisions and rules before a tribunal created under Article
323-A and
323-B of the Constitution.
52. In the light of the authoritative pronouncements of law by the Apex
Court, therefore, it has to be held that the TDSAT in the instant case,
which
has derived its jurisdiction under the specific statutory provisions of
the TRAI
Act and has not been created under any constitutional provisions does
not have
the jurisdiction or the competence to decide on the constitutionality
of a
statutory provision under which it has been created. For the same
reasoning, it
would not have the competence to adjudicate on the vires of the
subordinate
legislation framed and effectuated in exercise of power conferred under
the same
statute.
53. Having so held, the second issue which has been urged on behalf of
the respondent no.2 requires consideration. It is pointed out that in
the
instant case, the challenge relates to the legality and validity of
what has
been termed by the petitioner as ?regulations?. Their validity has been
assailed before the TDSAT in exercise of its jurisdiction as an expert
tribunal
having the expertise and the legal competence to decide the technical
issues.
The respondents contend that the TDSAT was fully competent to examine
the
legality and validity of these regulations inasmuch as even though the
petitioner has couched the same as regulations, however examination of
the same
would show that they were really in the nature of directions issued by
the TDSAT
resulting in reduction of the Access Deficit Charges.
54. It is well settled that a tribunal is fully empowered to examine an
issue relating to its jurisdiction. Such a question in the instant case
necessarily requires examination and determination as to whether the
challenge
relates to the statutory regulations or whether the same related to a
challenge
to directions issued by the petitioner in exercise of its
administrative or
executive jurisdiction under the provisions of the TRAI Act.
55. The distinction between rules, regulations and their effect fell
for
consideration before the apex court in its judgment reported at (1975)
1 SCC
421 Sukhdev Singh Vs. Bhagat Ram and it was held as follows:-
24. Broadly stated, the distinction between rules and regulations on
the one
hand and administrative instructions on the other is that rules and
regulations
can be made only after reciting the source of power whereas
administrative
instructions are not issued after reciting source of power. Second, the
executive power of a State is not authorised to frame rules under
Article 162.
This Court held that the Public Works Department Code was not a
subordinate
legislation (See G.J. Fernandez vs. State of Mysore). The rules under
Article
309 on the other hand constitute not only the constitutional rights of
relationship between the State and the government servants but also
establish
that there must be specific power to frame rules and regulations.
26. The character of regulations has been decided by this Court in
several
decisions. One group of decisions consists of S.R.Tiwari vs. District
Board,
Agra; Life Insurance Corporation of India vs. Sunil Kumar Mukherjee;
Calcutta
Dock Labour Board vs. Jaffar Imam; Mafatlal Naraindas Barot vs.
Divisional
Controller S.T.C.; The Sirsi Municipality vs. Cecelia Kom Francis; U.P.
State
Warehousing Corporation vs. C.K.Tyagi and Indian Airlines Corporation
vs.
Sukhdeo Rai.
33. There is no substantial difference between a rule and a regulation
inasmuch
as both are subordinate legislation under powers conferred by the
statute. A
regulation framed under a statute applies uniform treatment to every
one or to
all members of some group or class. The Oil and Natural Gas Commission,
the
Life Insurance Corporation and Industrial Finance Corporation are all
required
by the statute to frame regulations inter alia for the purpose of the
duties and
conduct and conditions of service of officers and other employees.
These
regulations impose obligation on the statutory authorities. The
statutory
authorities cannot deviate from the conditions of service.
xxxxx
This Court has repeatedly observed that whenever a man's rights are
affected by
decision taken under statutory powers, the Court would presume the
existence of
a duty to observe the rules of natural justice and compliance with
rules and
regulations imposed by statute.?
56. The question which was raised before the TDSAT was as to whether
the
impugned order 1 of 2005 par took the nature of subordinate legislation
as it
was a regulation framed framed under the provisions of TRAI Act, 1997
or was it
merely in the nature of administrative directions issued by the TRAI
under the
TRAI Act of 1997. It was open and certainly incumbent upon the tribunal
to
examine this issue in order to answer the objections raised by the
petitioner to
its jurisdiction.
57. As noticed hereinabove, after a detailed consideration, the
Tribunal
found that the provisions of Section 14, creating and conferring
jurisdiction on
it, were much wider than the appellate jurisdiction of the Apex Court
under
Section 18 of the TRAI Act. The Appellate tribunal was of the view that
in the
instant case, it has been called upon to adjudicate upon a dispute
raised by the
MTNL that its entitlement to the access deficit charges has been
wrongly reduced
by the TRAI on non-existent grounds and in violation of principles of
natural
justice. Such a dispute, it was observed, was just the type of factual
and
technical matter which the Apex Court in the West Bengal Electricity
Regulatory
Commission case had held, could be appropriately and more effectively
adjudicated in a statutory appeal by an expert body so that the factual
and
technical questions which arose in such an appeal would get appropriate
consideration at the appellate stage as well.
58. It is an admitted position that the consideration of the Access
Deficit Charge is a matter of highly complicated and technical nature.
The
Tribunal arrived at a conclusion that the TRAI 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. In
such areas,
it only had a jurisdiction to issue directions.
59. According to the petitioner, the notification has been finalised
and
issued after an elaborate consultation process involving all stake
holders.
Such consideration and consultation is not required to be undertaken in
the
event of a legislative exercise being undertaken to either frame
statutes or
notify statutory rules and regulations.
60. Section 11(4) mandates that the TRAI shall ensure transparency
while
exercising its powers and discharging its functions. On behalf of TRAI
it has
been pointed out that the advertisements were issued and all stake
holders were
permitted participation while a public hearing was effected prior to
issuance of
the impugned notification. I find force in the contention that such
actions are
not consistent with discharge of legislative functions and powers which
do not
mandate compliance with provisions of natural justice and hearing while
discharging legislature functions.
61. In order to appreciate the manner in which the TRAI is to function,
it
becomes necessary to closely examine the provisions of Section 11 of
the TRAI
Act, 1997 which provides the source of statutory powers of the
authority.
In the instant case, it has been contended by the petitioner that it
has
framed Regulation I of 2005 in exercise of the powers conferred on it
under
Section 36 read with Section 11(1)(b) of the TRAI Act. Even the
regulation so
stipulates.
62. Access Deficit Charge which is the subject matter of the grievance
is
a deficit arising due to rental revenue being below cost based rental
minus any
net surplus revenue on local calls as well as minus any government
financial
support provided to operators. The power to do so is to be found in the
provisions of Section 11(1)(b) of the TRAI Act whereunder the TRAI is
empowered
to fix the terms and conditions of interconnectivity between the
service
provider, in short technical compatibility and effective
interconnection between
the service providers and ensures compliance of the terms and
conditions of the
licence. Perusal of the regulation which was impugned before the TDSAT
itself
shows that the TRAI has itself stated that by the ?regulation? it is
intended to
fix the terms and conditions of the interconnectivity and to ensure a
effective
interconnection between the different service providers, regulate
arrangement
amongst them of sharing their revenue derived from providing
telecommunication
services.
63. For this reason also, it would appear that the impugned decision of
the respondents is in the nature of an exercise of the executive
jurisdiction of
the respondents and is not a legislative exercise.
64. Examination of the provisions of Section 36 whereby the TRAI is
empowered to make regulations shows that it is specifically mentioned
therein
that regulations would be made by notification in respect of the
subjects set
out therein. Section 36(2)(e) empowers the TRAI to make regulations in
respect
of the subject matter of Section 11(1)(b)(viii) and Section 11(1)(c) of
the Act.
In this view of the matter, I have no manner of doubt that the TRAI can
validly
make regulations in respect of only such subject matters which have
been
specifically specified under Section 36 of the enactment. It is
necessary to
bear in mind the spirit, intendment and purpose of the TRAI Act, 1997
and the
functions which the authority is required to discharge. Both the
Appellate
Forum and the TRAI consist of experts who are required to go into
technical
questions which arise for consideration. The Appellate Authority is
specifically empowered to hear and dispose of appeals against
directions,
decisions and orders of the TRAI.
65. In this view of the matter, it cannot possibly be successfully
contended that an issue relating to the fixation of the access deficit
charges
cannot be agitated before the TDSAT which is specifically empowered to
hear such
grievance under the provisions of Section 14(b) of the TRAI Act, 1997.
66. It is the contention of the petitioner to the effect that TRAI can
make regulations in respect of all its functions under all statutory
provisions
and that the jurisdiction of the TDSAT to examine disputes in respect
thereof
would be barred. If this objection were to be sustained, it would not
be open
to any person to impugn any action of the petitioner on the ground that
the same
was an exercise of legislative powers under the statute. Such could
never has
been the intention of the legislature. The result, in case such a
contention
was to be sustained, would be that the jurisdiction of TDSAT to examine
the
disputes being raised by different persons including service providers
would be
ousted in almost all the cases inasmuch as the TDSAT has been held to
be legally
incapable of examining the vires of the statutory provisions and
subordinate
legislation which confer power and jurisdiction on the tribunal.
67. There is no dispute whatsoever that the questions raised by the
respondent MTNL are factual and technical matters. The issue relates to
the
fixation of an appropriate figure as the access deficit charge is based
on a
complicated matrix of facts and figures. Dispute has been raised by the
MTNL
that its entitlement to the access deficit charges has been wrongly
reduced. A
close examination of the statutory scheme would show that the
legislature has
clearly differentiated between statutory provisions which will require
framing
and notifications of regulations and those for which power has been
conferred to
issue directions.
68. Perusal of the statement of objects and reasons for the Bill which
sought to replace the TRAI(Amendment) Ordinance 2000 shows that it was
intended
to clearly lay down the functions of the TRAI which included fixation
of terms
and conditions of inter-connetivity between service providers and also
mandated
that decisions of the authority taken discharge of its functions under
Section
11(1)(b) and 11(2) and 13 which are appealable to the Appellate
Tribunal shall
not be subject to audit by the Comptroller and Auditor General of
India.
Section 11(1)(b) of the statute provides for the fixation of the terms
and
conditions of inter-connectivity between the service providers.
69. I find force in the submissions on behalf of the respondents to the
effect that the access deficit charges would be covered within the
ambit of the
expression ?terms and conditions of inter-connectivity? between the
service
providers and hence any direction or decision in respect thereof has to
be
appealable to the appellate tribunal constituted under Section 14 of
the
statute. The TDSAT specifically is even otherwise empowered to hear and
dispose
of appeals from any directions, decision or decision or order of the
TRAI by
virtue of the powers vested in it under Section 14(b) of the Act. The
challenge
made by the petitioner on this ground has therefore to be answered
against it.
70. In the instant case there is no manner of doubt that the TRAI was
fully competent to issue directions in respect of the access deficit
charges for
which it has been statutorily empowered. Therefore, I find force in the
contentions on behalf of the respondents to the effect that merely
because it
has notified its decision as a regulations and may even have followed
the same
procedure to give effect to the same, it cannot have the effect of
converting
such directions into statutory regulations. I find that the real
purpose of the
TRAI was to give effect to a decision taken under Section 11 of the Act
and,
therefore, there is no prohibition to the maintainability of the appeal
before
the TDSAT.
71. The respondents have strenuously contended that acceptance of the
submission of the petitioner would have the effect of denuding the
Supreme Court
of the appellate jurisdiction which has been statutorily conferred on
it.
Placing reliance on certain observations made by the Apex Court in
K.S.Venkataraman and company vs. State of Madras 1996(2) SCR 229 it has
been
pointed out that the Apex Court held thus:-
?It has been held by this Court that the jurisdiction conferred upon
the High
Court by s.66 of the Income tax Act is a special advisory jurisdiction
and its
scope is strictly limited by the section conferring the jurisdiction.
It can
only decide questions of law that arise out of the order of the
Tribunal and
that are referred to it. Can it be said that a question whether a
provision of
the Act is ultra vires of the Legislature arises out of the Tribunal's
order?
As the Tribunal is a creature of the statute, it can only decide the
dispute
between the assessee and the Commissioner in terms of the provisions of
the Act.
The question of ultra vires is foreign to the scope of its
jurisdiction. If an
assessee raises such a question, the Tribunal can only reject it on the
ground
that it has no jurisdiction to entertain the said objection or decide
on it. As
no such question can be raised or can arise on the Tribunal's order,
the High
Court cannot possibly give any decision on the question of the ultra
vires of a
provision. At the most the only question that it may be called upon to
decide
is whether the Tribunal has jurisdiction to decide the said question.
On the
express provisions of the Act it can only hold that it has no such
jurisdiction.
The appeal under s.66A(2) to the Supreme Court does not enlarge the
scope of the
said jurisdiction. This Court can only do what the High Court can.
The said machinery provisions cannot be construed in vacuum: they must
be
collated with the charging sections; that is to say, the Act provided
for a
machinery for deciding disputes that arise under the substantive
provisions of
the Act. To illustrate: suppose there is provision in the Act to the
effect
that the said Act does not apply to indivisible building contracts. Can
the
officer decide that the Act applies to such building contracts? Such a
decision, if given, will not be under but outside the Act. Take another
illustration: suppose this Court has held that a provision authorising
the
taxing of an indivisible building contract is ultra vires the power of
the State
Legislature and, therefore, void; in that event, how can an authority
functioning under the Act tax such a contract on the basis of a
provision
declared to be ultra vires and, therefore, non-existent? If it does, it
will be
assessing not under the Act but outside it. The same legal position
will flow
though there is no such previous declaration by a competent court, but
a
charging provision is in fact and in law ultra vires the Legislature.
Any
assessment made on the basis of such a void provision cannot be a
decision under
the provisions of the Act. Briefly stated, the procedural machinery
under the
Act can be utilized only to decide disputes that arise under the
substantive
provisions of the Act which are not ultra vires.
The proposition that an authority constituted under the Act cannot,
unless
expressly so authorised, question the validity of the Act or any
provisions
thereof, is sound and is also supported by authority.?(at pages
248-249)
?We agree with the said observation. There is, therefore, weighty
authority for
the proposition that a tribunal, which is a creature of a statute,
cannot
question the vires of the provisions under which it functions.(page
251)
The legal position that emerges from the discussion may be summarized
thus : If
a statute imposes a liability and creates an effective machinery for
deciding
questions of law or fact arising in regard to that liability, it may,
by
necessary implication, bar the maintainability of a civil suit in
respect of the
said liability. A statute may also confer exclusive jurisdiction on the
authorities constituting the said machinery to decide finally a
jurisdictional
fact thereby excluding by necessary implication the jurisdiction of a
civil
court in that regard. But an authority created by a statute cannot
question the
vires of that statute or any of the provisions thereof whereunder it
functions.
It must act under the Act and not outside it. If it acts on the basis
of a
provision of the statute, which is ultra vires, to that extent it would
be
acting outside the Act. In that event, a suit to question the validity
of such
an order made outside the Act would certainly lie in a civil
court.?(pages 251-
252).?
72. In view of Section 18 of the TRAI Act, 1997 an appeal would lie to
the
Apex Court against an order passed by the TDSAT on grounds which are
specified
under Section 100 of the Code of Civil Procedure. Section 100 of the
Code of
Civil Procedure provides a second appeal to the High Court from a
decree passed
in appeal by a court subordinate to it if the High Court is satisfied
that the
courts involves a substantial question of law. On such considerations
an appeal
may lie from an appellate decree passed ex parte. Therefore the statute
mandates that the appeal would lie only on a substantial question of
law.
73. Under Section 18 of the TRAI Act, the jurisdiction of the Apex
Court
as the appellate forum against orders of the TDSAT is restricted to
only
questions of law and the jurisdiction of the civil court for filing a
suit has
also been ousted.
It has also been stipulated that an appeal would lie if the order of
the
appellate tribunal was not an interlocutory order.
In Shah Babu Lal Khimji vs. Jaya Ben AIR 1981 SC 1786, the Supreme
Court
was required to consider an objection relating to maintainability of an
appeal
against the order passed by a Single Judge of the High Court. It was
held by the
Apex Court that an appeal would lie to the Division Bench against a
judgment of
a trial judge. Every interlocutory order cannot be regarded as a
judgment but
only those orders would be judgments which decided matters of moment or
effected
vital and valuable rights of the parties and which worked serious
injustice to
the party concerned. An interlocutory order in order to be a judgment,
must
contain the traits and trappings of finality. This may be either when
the
order decides the questions in controversy in an ancilliary proceedings
or in
the suit itself or in a part of the proceedings. Placing reliance on
AIR 1953
SC 196 Asrumati Dabi vs. Kumar Rupender Deb Raj Kot, the Apex Court
observed
that a judgment within the meaning of clause 15 of the Letters Patent
would have
to satisfy two tests. Firstly, the judgment must be a final
pronouncement which
puts an end to the proceedings as far as the court dealing with it is
concerned.
Secondly, the judgment must involve the determination of some right or
liability though it may not necessarily be a decision on merits.
74. In Shah Babu Lal Khimji, it was further held that in finding out
whether the order is a?judgment? it has to be found out as to whether
the order
effects the merits of the actions between the parties by determining
some right
or liability.
75. The Apex Court in Shah Babu Lal Khimji has specifically held that
orders deciding objections to the maintainability of the suit on
grounds such as
limitation; absence of notice under Section 80 of the Code of Civil
Procecdure;
bar against competency of the suit against the defendant even though
the suit is
kept alive amounts to a judgment against which the parties would have a
right
to prefer an appeal.
76. In Amarnath vs State of Haryana AIR 1997 SC 2185 the Apex Court
held
that interlocutory orders appealable must be those which effects the
rights and
liabilities of the parties concerning a particular aspect would be
assailed
before the superior courts.
77. In the instant case, the TDSAT has found that the petitioner has
couched its directions as 'regulations' to give it a semblance of an
exercise of
legislative function in order to urge that TDSAT had no jurisdiction to
entertain the challenge made by the respondents. The appellate tribunal
had as
a fact found that the appeal was maintainable before it. So far as the
objections to the maintainability of the appeal are concerned, the
appellate
tribunal had finally determined its jurisdiction.
78. It was further held that it was the charge of the
appellant(respondent no.2 herein) that its regulation was in the nature
of
subordinate legislation which par took the main legislation and that
the
proceedings before the tribunal were wholly without jurisdiction on the
ground
that a tribunal cannot decide the vires of the statutory provisions
under which
it was constituted. This objection went to the root of the jurisdiction
of the
tribunal and was decided against the petitioner. This Court has arrived
at a
finding that the Regulation 1 of January, 2005 though couched as a
regulation,
were really in the nature of a direction fixing the ADC under Section
11 sub-
Section (1b) of the TRAI Act.
79. At this stage, I am examining the objection raised by the
respondent
with regard to the maintainability of the present writ petition on the
ground of
availability of an alternative efficacious remedy.
In 1985(1) SCC 641 Indian Express Newspapers(P) Ltd. vs. Union of India
and others, it was held that a subordinate legislation may be
questioned on
grounds of (i) legislative competence on which the plenary legislation
which delegated the power is also subject; (ii)being ultra vires
appearance a
statute of the constitution in that it fails to take into account the
very vital
facts which either expressly or by necessary implication are required
to be
taken into consideration by the statute or the constitution or that it
does not
conforms to the statutory or constitutional requirements; (iii) being
in
conflict with any other statute; (iv) being so arbitrary that it could
not be
said to conform to the statute or be violative of Article 14 of the
Constitution
of India.
It was reiterated by the Court that subordinate legislation cannot be
questioned on grounds of violation of principles of natural justice
which
challenge is available against administrative action. It also cannot be
challenged merely on the ground that it is not reasonable or that it
has not
taken into account relevant circumstances which the court considers
relevant.
A distinction however was drawn between delegation of a legislative
function of which the question of reasonableness cannot be inquired
into and the
investment by statute to exercise particular discretionary powers. In
the later
case, the question may be considered on all grounds on which
administrative
action may be questioned, such as, non application of mind, taking
irrelevant
matters into consideration, failure to take relevant matters into
consideration,
violation of principles of natural justice etc.
80. In this context it becomes necessary to examine the jurisdiction of
the appellate forum to examine issues relating to vires of statutory
provisions.
The scope of consideration and limits of powers of the appellate
tribunal fell
for consideration before the apex court in the petition filed by the
West Bengal
Regulatory Commission. It is noteworthy that provisions similar to
those under
the TRAI Act, 1997 are to be found in the Electricity Regulatory
Commission
Act, 1998 which was examined by the Apex Court in The West Bengal
Electricity
Regulatory Commission case.
81. It would also be useful to set out in extenso the principles of law
laid down by the Supreme Court in its judgment reported at (2002) 8 SCC
715
West Bengal Electricity Regulatory Commission vs. CESC Limited Etc.
which read
thus:-
31. Being aggrieved by the said determination of tariff, the Company,
as
stated above, preferred the statutory appeal before the High Court,
making the
Commission alone the respondent. The High Court while rejecting the
impleadment
application of the appellant organizations, proceeded to re-fix the
tariff by
only following the principles of Schedule VI to the 1948 Act and to the
exclusion of other requirements of Section 29 of the 1998 Act. In the
said
process it re-fixed the average tariff for the year 2000-01 at Rs.3.96
per unit
and at Rs.4 per unit for the year 2001-02. In the course of its
judgment the
High Court also came to the conclusion that the Regulations framed by
the
Commission, especially the ones pertaining to the right of the
consumers to be
heard in the proceedings, as also applications of the principles to be
followed
in determining he tariff, were contrary to law and directed in no
uncertain
terms that these Regulations will have to be modified to bring them in
conformity with its observations in the judgment, and further stated
that
failure to do so might result in the invocation of the High Court's
power under
the Contempt of Courts Act. In deciding the validity of the
Regulations, the
High Court proceeded on the basis that while entertaining the power of
appeal
under Section 27 of the 1998 Act, it also has the power vested in it
under
Articles 226 and 227 of the Constitution of India. It also held that
the non-
obstante clause found in Section 29 of the 1998 Act and the other
overriding
provisions found in the 1998 Act could not come in the way of the
applications
of the Sixth Schedule to the 1948 Act alone, while determining the
tariff by the
Commission. On factual aspects, it reversed many of the findings of the
Commission to which separate references will be made by us when we take
up those
issues for consideration.
xxxxxxxxxxxx
42. The question for our consideration is whether the High Court
sitting
as an appellate court under Section 27 of the Act has the jurisdiction
to go
into the validity of the Regulations framed under the Act and if so,
factually
the Regulations as found by the High Court are contrary to the statute.
xxxxxxxxxxxx
44. Having held on merits that the Regulations are not arbitrary and
are
in conformity with the provisions of the Act, we will now consider
whether the
High Court could have gone into this issue at all in an appeal filed by
the
respondent Company. First of all, we notice that the High Court has
proceeded
to declare the Regulations contrary to the Act in a proceeding which
was
initiated before it in its appellate power under Section 27 of the Act.
The
appellate power of the High Court in the instant case is derived from
the 1998
Act. The Regulations framed by the Commission are under the authority
of
subordinate legislation conferred on the Commission in Section 58 of
the 1998
Act. The Regulations so framed have been placed before the West Bengal
Legislature, therefore they have become a part of the statute. That
being so,
in our opinion the High Court sitting as an appellate court under the
1998 Act
could not have gone into the validity of the said Regulations in
exercise of its
appellate power.
45. This Court in the case of K.S. Venkataraman and Co. (p) Ltd. v.
State
of Madras after discussing the judgment of the Calcutta High Court in
the cases
of (i) Raleigh Investment Co. Ltd. v. Governor General in Council, (ii)
United
Motors (India) Ltd. v. State of Bombay, and (iii) M.S.M.M. Meyyappa
Chettiar v.
ITO held :
?There is, therefore, weighty authority for the proposition that a
tribunal,
which is a creature of a statute, cannot question the vires of the
provision
under which it functions.?
46. From the above decision, we hold that the High Court while
exercising
its statutory appellate power under Section 27 of the 1998 Act could
not have
gone into the validity of the Regulations which are part of the statute
itself.
47. While deciding the above issue, the High Court also held that while
exercising the appellate power by it under any particular statute, it
also
simultaneously exercises its constitutional power of writ under
Articles 226 and
227 of the Constitution of India.
48. We do not think that the High Court was correct in this view of
its.
49. In the case of Dhulabai v. State of M.P. a Constitution Bench of
this
Court held :
?(3) Challenge to the provisions of the particular Act as ultra vires
cannot be brought before Tribunals constituted under that Act. Even the
High
Court cannot go into that question on a revision or reference from the
decision
of the Tribunals.?
50. From the above observations of this Court in the said judgment
extracted hereinabove, it is clear that even the High Court exercising
its power
of appeal under a particular statute cannot exercise the constitutional
power
under Articles 226 or 227 of the Constitution. The position of course
would be
entirely different if the aggrieved party independently challenges the
provision
by way of a writ petition in the High Court invoking the High Court's
constitutional authority to do so. Therefore, we are of the considered
opinion
that the High Court sitting as an appellate court under a statute could
not have
exercised its writ jurisdiction for the purpose of declaring a
provision of that
law as invalid when there was no separate challenge by way of a writ
petition.
In the instant case we notice that as a matter of fact none of the
parties had
challenged the validity of the Regulations, therefore the question of
the High
Court's suo motu exercising the writ power in a statutory appeal did
not arise.
For the reasons stated above we hold that the High Court could not have
gone
into the question of validity of the Regulations while entertaining a
statutory
appeal under the 1998 Act. We also hold that the Commission had the
necessary
statutory power.?
82. The principles which are applicable to a challenge before the
appellate court relating to vires of statutory provisions under which
it was
constituted would apply mutatis mutandis to a challenge to regulations
framed
under the authority of subordinate legislation conferred on the
appellate court
under the TRAI Act.
83. I am bound by the dicta laid by the Apex Court to the effect that
even
a High Court, sitting as an appellate court under the provisions of the
Electricity Regulatory Commission Act, 1998, could not have gone into
the
validity of the regulations framed thereunder in exercise of its
appellate
power.
This being the position in law, there can be no manner of doubt that
the
appellate court under the TRAI Act, 1997 cannot go into the validity of
the
regulations framed and notified by the TRAI in exercise of its powers
under
Section 36 of the TRAI Act.
In the light of such restriction on the jurisdiction of the appellate
court, it cannot possibly be urged with any success that the petitioner
has an
alternative, adequate, efficacious remedy and the writ petition
deserves to be
rejected for this reason.
84. It is well settled that refusal to hear a writ petition on the
ground
of availability of an alternative efficacious remedy is a rule of
convenience
and is not an absolute prohibition to hearing of issues raised by a
petitioner
under Article 226 of the Constitution of India.
In AIR 1969 SC 556 Babu Ram Prakash Chandra Maheshwari Vs. Anturim Zila
Parishad, Muzaffar Nagar, the Court observed that there are at least
two well
recognised exceptions to the doctrine with regard to the exhaustion of
statutory
remedies. Observing that existence of an adequate alternative legal
remedy is a
thing to be taken into consideration in the matter of granting writ. It
was
held that it should however be remembered that the rule of exhaustion
of the
statutory remedies before a writ is granted is a rule of self-imposed
limitation, a rule of policy and discretion rather than a rule of law
and the
court may therefore in exceptional cases issue a writ, such as a writ
of
certiorari, notwithstanding the fact the statutory remedies have not
been
exausted.
So far as the accepted exceptions to the rule are concerned it is well
settled that where proceedings are taken before a tribunal under a
provision of
law, which is ultra vires, it is open to a party aggrieved thereby to
move the
High Court under Article 226 for an appropriate writ quashing them on
the
ground that they are incompetent without his being obliged to wait
until those
proceedings run their full course. In the second place, the doctrine
would have
no application in a case where the impugned order has been made in
violation of
the principles of natural justice.
85. The principles governing consideration of an objection relating to
maintainability of a writ petition on the ground of availability of an
alternate
remedy are well settled by binding judicial precedents. The remedy has
to be
efficacious and adequate. In an appropriate case, the court may
entertain a
writ petition despite availability of such remedy. In this behalf, the
principles laid down by the Apex Court in (2003) 2 SCC 107 Harbans Lal
Sahnia
and Anr. vs. Indian Oil Corporation require to be noticed which read
thus:-
?7. So far as the view taken by the High Court that the remedy by way
of
recourse to arbitration clause was available to the appellants and
therefore the
writ petition filed by the appellants was liable to be dismissed is
concerned,
suffice it to observe that the rule of exclusion of writ jurisdiction
by
availability of an alternative remedy is a rule of discretion and not
one of
compulsion. In an appropriate case, in spite of availability of the
alternative
remedy, the High Court may still exercise its writ jurisdiction in at
least
three contingencies: (i) where the writ petition seeks enforcement of
any of the
fundamental rights; (ii) where there is failure of principles of
natural
justice; or (iii) where the orders or proceedings are wholly without
jurisdiction or the vires of an Act is challenged. (see Whirlpool
Corpn. vs.
Registrar of Trade Marks). The present case attracts applicability of
the first
two contingencies. Moreover, as noted, the petitioners' dealership,
which is
their bread and butter, came to be terminated for an irrelevant and
non-existent
cause. In such circumstances, we feel that the appellants should have
been
allowed relief by the High Court itself instead of driving them to the
need of
initiating arbitration proceedings.?
86. In the instant case, the challenge is to the levy of the ADC. The
statutory provision by which power is conferred to frame regulations
does not
include subjects mentioned in Section 11(1b). Examination of a
challenge to a
direction under Section 11(1)(b) can be laid before the TDSAT. However,
the
challenge to the jurisdiction of the TDSAT to examine an objection as
to the
jurisdiction based on a plea that the directions were in the nature of
a
statutory regulations and hence was subordinate legislation for all
purposes,
can certainly be examined in a writ petition before this court. The
petitioner
in the instant case has sought the issuance of a writ on the plea that
the
subordinate tribunal has usurped the jurisdiction which does not belong
to it.
When such a situation is shown, issuance of a writ would be as of right
and
would certainly not be beyond the discretionary powers of this court.
The issue raised by the petitioner in the instant case thus related to
the very jurisdiction and competency of the proceedings before the
TDSAT.
In view of the aforenoticed principles of law, in my view, the
objection
on the ground of availability of an alternative efficacious remedy
ought not to
be permitted as a bar to the maintainability of the present writ
petition.
87. Having thus answered questions posed as no.I, II, III, the last
issue
which remains for consideration relates to the objection raised by the
respondent on the propriety of the challenge by the TRAI by way of the
present
petition.
88. Reliance is placed on behalf of the respondent no.2 on AIR 1952
Bombay
165 Mohd Oomer, Mohd. Noorullah vs. S.M.Noorudin. In this matter, the
Bombay
High Court was considering a case where an order made by the Registrar
of Trade
Marks had been impugned before it. The Court commented on the propriety
of the
Registrar to have appeared before the Court for the purposes of
elucidating his
own judgment and pointing out errors in the judgments of the first
appellate
court. The court was of the view that the Registrar was nothing except
the court
of first instance and he had to submit the judgment of the lower
appellate
court.
In the instant case the TRAI has not exercised any judicial power and
the
Regulation I of 2005 assailed by the respondent is certainly not in the
nature
of judgment. The same has been held to be a decision in discharge of
the
executive functions of the TRAI under Section 11(1)(d) of the TRAI Act.
As
noticed by the Apex Court, TRAI is an expert body in the field of
regulation of
telecommunication services. For this reason the observations by the
Apex Court
in AIR 1952 Bombay 165 do not apply to the present case.
In AIR 1964 SC 477 Syed Yakoob vs. K S Radhakrishnan and others the
other
case relied upon by the respondent no.2, the Court was considering the
validity
of the order passed by the State Transport Authority, Madras under the
Motor
Vehicles Act which had been assailed before the High Court holding that
the
authority and the appellate tribunal were proper and necessary parties
but their
position was akin to that of courts or other tribunals against whose
decisions
writ proceedings are filed and they are not interested in the merits of
the
disputes in any sense. To my mind, nothing said in this precedent could
be
applicable in the instant case.
89. The petitioner has answered this objection placing reliance on the
pronouncements of the Apex Court wherein challenges have been made by
statutory
authorities. In 1993(3) SCC 24 Municipal Committee, Bhatinda vs Land
Acquisition Collector, a challenge was laid by the Municipal Committee
Bhatinda
to a judgment by the High Court whereby it has been held that it has no
locus
standi to file the writ petition. This case arose out of proceedings
under the
Land Acquisition Act. The Municipal Committee,Bhatinda was the
beneficiary of
the acquisition and the acquisition was being effected by the Land
Acquisition
Collector at its instance. It is well settled that the beneficiary of
the
acquisition is a necessary and proper party to all phases of the
acquisition as
it has a valuable stake in the matter. For this reason, the principles
laid
down by the Supreme Court in this case would have no application in the
instant
case.
In the pronouncement of the Apex Court in State of Orissa vs. Union of
India 1995 Supp(2) SCC 154, which has been relied upon by the
petitioner, the
State Government was the owner of the mines and minerals in question.
It had
challenged an order of the Central Government dated 10th May, 1978
directing it
to issue a mining lease in favour of a particular party. It could not
possibly
be contended that it had no locus standi to challenge an order which
was
directly effecting the mines and minerals of which it was an owner. The
TRAI
cannot possibly claim that it is effected by the challenge to the
Regulations of
2005 made by the respondent no.2. For this reason, this judgment is
also of no
assistance to the respondent.
90. I have held that the Regulation I of 2005 was in the nature of a
direction issued by the TRAI which has been statutorily enjoined to
consider all
relevant matters and make appropriate directions in respect of the
matters set
out in Section 11(1)(b) of the Telecom Regulatory Authority of India
Act, 1997.
The respondent has submitted that the Regulation 1 has been issued by
TRAI in
exercise of its executive fiat. The material, reasons and
considerations which
weighed with the authority in issuing the directions are necessarily to
be found
with the petitioner. There is no adversarial party on the other side
before the
TDSAT. The respondent has itself arrayed the TRAI as a party respondent
to its
appeal before the TDSAT. In these circumstances, there can possibly be
none
other than the authority whose direction has been challenged which
would be best
equipped to defend the same. In these circumstances, it is not possible
to hold
that it was not proper for the petitioner to make a challenge to the
orders
passed by the TDSAT by way of the present writ petition or that this
writ
petition deserves to be rejected on the ground of judicial impropriety.
91. For all the foregoing reasons, I find no infirmity with the
decision
dated 31st January, 2005 of the Telecom Disputes Settlement and
Appellate
Tribunal.
92. The present writ petition is devoid of legal merit and is hereby
dismissed.
GITA
MITTAL
JUDGE
December 23, 2005
JK
