2013 (12) TMI 1637 - SC - Indian Laws

Event of inconsistency between the terms and conditions of the licenses issued by TRAI - Permission of direct connectivity to terminate traffic - Power of TRAI to fix the terms and conditions of inter connectivity between service providers - Power under sub-ordinate legislation - overriding effect - Power to Regulate versus Power to prohibit - HELD THAT - the Authority can make regulations on various matters specified in other sections including Sections 8(1), 8(4), 11(1)(b), 12(4) and 13. Further that the regulations made under Section 36(1) and (2) are in the nature of subordinate legislation and are required to be laid before each House of Parliament in terms of Section 37 and Parliament can approve, modify or annul the same. Further that a restrictive interpretation of Section 36(1) with reference to Clauses (a), (b) and (d) of Section 36(2) will make the provision otiose and the Court should not adopt that course Further stated that the power conferred upon the Authority to issue an order fixing the rates at which the telecommunication services are to be provided within and outside India including the rates at which messages are required to be transmitted to any country outside India and the power vested in the authority under Section 12(4) and 13 to issue directions to the service providers cannot be controlled by making regulations under Section 36(1). Power to Regulate versus Power to prohibit - HELD THAT - The question essentially is one of degree and it is impossible to fix any definite point at which regulation ends and prohibition begins. - the term regulate is elastic enough to include the power to issue directions or to make regulations and the mere fact that the expression as may be provided in the regulations appearing in clauses (vii) and (viii) of Section 11(1)(b) has not been used in other clauses of that sub-section does not mean that the regulations cannot be framed under Section 36(1) on the subjects specified in clauses (i) to (vi) of Section 11(1)(b). Power of the Authority / TRAI - Section 36 - HELD THAT - there is nothing in the language of Section 36(2) from which it can be inferred that the provisions contained therein control the exercise of power by the Authority under Section 36(1) or that Section 36(2) restricts the scope of Section 36(1). Power under sub-ordinate legislation - Power to issue directions - HELD THAT - the power vested in the Authority under Section 36(1) to make regulations is wide and pervasive. The exercise of this power is only subject to the provisions of the Act and the Rules framed under Section 35 thereof. There is no other limitation on the exercise of power by the Authority under Section 36(1). It is not controlled or limited by Section 36(2) or Sections 11, 12 and 13. The cases may now be listed before an appropriate Bench for deciding the questions framed vide order dated 6.2.2007 passed in Civil Appeal No.3298/2005 and some of the connected matters

Issues Involved
1. Inconsistency between terms of licenses and TRAI Act provisions.
2. Authority's power to fix interconnectivity terms for licenses.
3. Authority's power to fix interconnectivity terms for post-2000 licenses.
4. Harmonious construction of amended TRAI Act provisions.
5. Maintainability of appeals.

Detailed Analysis

Issue 1: Inconsistency between Terms of Licenses and TRAI Act Provisions
The Supreme Court addressed whether the terms and conditions of licenses issued under Section 4 of the Indian Telegraph Act, 1885, would prevail over the provisions of the Telecom Regulatory Authority of India Act, 1997 (TRAI Act) in case of any inconsistency. The Court emphasized the purpose and object of the TRAI Act, which aims to ensure the rapid development of telecommunications in the country, incorporating modern technology while protecting the interests of consumers and service providers.

Issue 2: Authority's Power to Fix Interconnectivity Terms for Licenses
The Court examined whether the Authority has the power to fix the terms and conditions of interconnectivity between service providers for all licenses, regardless of whether they were issued before or after January 24, 2000. The non-obstante clause in Section 11(1) and sub-clause (ii) of Clause (b) of Section 11(1) of the TRAI (Amendment) Act of 2000 was a focal point. The Court held that the Authority does possess such power, reinforcing the regulatory framework established by the TRAI Act.

Issue 3: Authority's Power to Fix Interconnectivity Terms for Post-2000 Licenses
The Court considered whether the Authority has no power to fix terms and conditions of interconnectivity for licenses issued after January 24, 2000, including interconnection agreements. The Court analyzed the provisos to Section 11(1) of the TRAI Act as amended in 2000, concluding that the Authority does have the power to fix such terms and conditions, ensuring a level playing field between service providers granted licenses before and after the amendment.

Issue 4: Harmonious Construction of Amended TRAI Act Provisions
The Court delved into the harmonious construction of Section 11(1)(b)(ii) and the scheme of the provisos to Section 11(1) of the amended TRAI Act. It was determined that the Authority's power to fix interconnectivity terms for pre-2000 licenses extends only to the extent the licensor (Government of India) accepts the Authority's recommendations for incorporation in new licenses. This construction ensures fairness and uniformity in the regulatory landscape.

Issue 5: Maintainability of Appeals
The Supreme Court addressed the maintainability of appeals in the present form. It was clarified that the appeals are maintainable, and the Court provided guidance on the procedural aspects of how such appeals should be handled.

Jurisdiction of TDSAT
The Court also addressed a preliminary issue regarding whether the Telecom Disputes Settlement Appellate Tribunal (TDSAT) has the jurisdiction to entertain challenges to the regulations framed by the Authority under Section 36 of the TRAI Act. It was concluded that TDSAT does not have such jurisdiction, and any aggrieved party must approach the High Court to challenge the validity of the regulations.

Conclusion
The Supreme Court provided a comprehensive interpretation of the TRAI Act, ensuring that the regulatory framework promotes the development of telecommunications while protecting stakeholders' interests. The Court's judgment clarified the Authority's powers and the appropriate forum for challenging the regulations, thereby reinforcing the statutory scheme established by the TRAI Act.

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