BHARAT SANCHAR NIGAM LTD. & ANR Vs TRAI

These two Appeals being interconnected were taken up for hearing together and are being disposed of by this common judgment.

The basic fact of the matter, however, is not much in dispute. Telecom Regulatory Authority of India (TRAI) in purported exercise of its power conferred upon it under Section 11 read with Section 36 of the Telecom Regulatory Authority of India Act, 1997 (hereinafter called and referred to for the sake of brevity as ‘the said Act’), as amended in the year 2000, framed Interconnect Usage Regulations, 2003 (The Regulations). The Regulation was amended in the year 2006 by reason of the th Telecommunication Interconnection Usage Charges (6 Amendment) Regulation (1 of 2006).

Pursuant to or in furtherance of the 2003 Regulations, carriage charges were stipulated on a ‘distance-based-work done’ principle.

Section 4 of the said Regulations, inter alia, provided as under:- “4. Interconnection Usage Charges (IUC)

The Interconnection Usage Charges are specified in Schedules hereto.

Schedule I – Termination Charges Schedule II – Carriage Charges Schedule III – Access Deficit Charge (ADC)

(i) Unless specifically provided in the Schedules to this Regulation, the Authority forbears with respect to other Interconnection Usage Charges.

(ii) The date of effect for actual implementation of IUC shall be 1st December 2003.

(iii) The existing Interconnection Usage Charges arrangement between the Interconnecting networks in respect of the items as specified in this Regulation shall hold good till the date on which this Regulation comes in force.

(iv) All existing interconnect agreements/ arrangements as on date shall stand amended on the date of actual implementation of this Regulation so as to conform to the present framework of the IUC regime and these shall be submitted to TRAI for registration within 15 days of implementation of this Regulation, and for subsequent changes as per reporting requirement.

(v) IUC values specified in ‘the Regulation’ shall also be applicable for all Reference Interconnect Offers by Significant Market Powers (SMPs).”

Section 7 of the said Regulations provides for Explanatory Memorandum in the following terms:- “7. Explanatory Memorandum

This Regulation contains at Annex A, an explanatory memorandum to provide clarity and transparency to matters covered under ‘the Regulation’.”

Schedule-I appended thereto stipulates termination charges for calls from basic service to WLL and WLL with limited mobility and cellular network at the uniform rate of 30 paise per minute. So far as the origination charges are concerned, forbearance was prescribed.

Clause 3 of Schedule-I provided that carriage charges would be as specified in Schedule-II, which as noticed hereinbefore, were to be distance-based being in the following terms:- “Table I (Amount in Rupees per minute) Carriage Distance Slab charges per Below 50 Kms 50 – 200 Kms 200–500 Kms Above 500 minute for Kms Long Distance calls within 0.20 0.65 0.90 1.10 India

Table-II appended to the said Schedule provides inter alia for traffic within SDCA and intra-Circle and inter SDCA.

We would also refer to the relevant provisions contained in the intra-Circle portion of Table-II which reads as under:- “Table II Applicability of Carriage Charge (F = Fixed or WLL(Fixed); W = WLL(M); C = Cellular Mobile) Type of Carriage Charge Carrier (Handover at) Traffic Within SDCA F/ W ßà F / W Nil for direct connectivity/ BSO1/ BSO2 (Tandem) Applicable tandem usage as in Schedule II (b) F / W ßàC Nil (Tandem: Metro)/ TAX usage BSO (Tandem: Metro)/ BSO carriage charge (Level II TAX) (Level II TAX) F/ W/ C ßàILD As above since ILDO handover BSO (TAX) is at LDCC TAX Intra Circle i.e. Inter (SDCA) F ßàF Carriage as per details in BSO1/ BSO2 Depending Schedule II on Near end or Far end F ßàW Carriage as per details in BSO1/ BSO2 Handover Schedule II F/W ßàC Same as Intra SDCA except TAX BSO (Level II/ I TAX) charge is “applicable” charge since more than one TAX may be involved. C ßàILD No carriage/ tandem in case MSC (Direct connectivity traffic is picked up or delivered cases) at MSC

F / W ßàILD Carriage as per Schedule II BSO (TAX) Inter Circle F/ W ßàF/ W Carriage as per Schedule II NLDO (TAX) F ßàC Carriage as per Schedule II NLDO (TAX) W ßàC Carriage as per Schedule II NLDO (TAX) F/W/C ßàILD Carriage as per Schedule II NLDO (TAX)

This has a direct reference to the following entry:- Nil (Tandem: Metro)/ TAX usage BSO (Tandem: Metro)/ BSO F / W ßàC carriage charge (Level II TAX) (Level II TAX)

According to the respondent-TRAI, the words ‘same as intra SDCA’ as mentioned therein, refer to Clause (b) of the Second Schedule appended to the said Regulations, which reads as under:- “b) Transit Charges for intra-SDCA calls : Forbearance, subject to the following condition: Direct interconnection between Access Providers is mandatory. For exceptional cases of Intra-SDCA transit, operators may decide the charges through mutual negotiation. However this should be lower than Rs. 0.20 per minute.”

Admittedly, Clause (c) refers to carriage charges for international long distance calls with which we are not concerned for the present.

We may, however, notice that what would be a long distance call, has been explained in Note (b)(I) of the said Regulation, which reads thus :- “I. In cases where the access deficit charge amount is to be collected by the terminating network or by BSNL (as per the Table III in Schedule III) the access deficit charge amount shall be passed on by the Carrier to the relevant service provider who has to be provided the access deficit amounts, as mentioned in Schedule III.”

Indisputably, while issuing the said Regulations, TRAI had issued an Explanatory Memorandum, para 84 whereof reads as under:- “84. Based on the above review of the IUC regime, the Authority has decided to specify a revised IUC regime. The basic principles underlying this regime address ease of collection and transfer of the IUC charges, facilitating the implementation of the IUC regime by the service providers, maintaining affordable tariffs for local calls and short distance calls likely to have major community of interest, and reducing the incentives for call bypass. Thus, the IUC regime has the following characteristics:

· The Authority has decided to specify IUC only as termination charge and carriage charge.

· The IUC termination charge is specified as Rs. 0.30 per minute for fixed line, cellular mobile and WLL(M).

· The carriage charge for the distances have been specified as Rs. 0.20 per minute for up to 50 kms, Rs. 0.65 per minute for 50 to 200 kms, Rs. 0.90 per minute for 200 to 500 kms, and Rs. 1.10 per minute for beyond 500 kms.

· Traffic hand-over for or from Cellular Mobile Networks shall normally take place at Level II TAX POIs and a carriage charge of Rs. 0.20 per minute would be applicable. If hand-over is at any other TAX level, the relevant carriage charge must be paid.

· The calls from fixed line to WLL(M) would be treated as a local call or long distance call, depending upon whether the call is within or outside the SDCA. Similarly, the calls from WLL(M) to fixed line would be treated as a local call or long distance call, depending upon whether the call is within or outside the SDCA.

· In addition to these IUC amounts, the Authority has specified certain Access Deficit Charges (ADC).”

TRAI, as noticed hereinbefore, framed 2006 Regulations, specified carriage charge in the relevant portions of Table-I whereof, read as under:- “(a) Carriage charge for Long Distance calls within India

Table-I (Amount in Rupees per minute) Carriage charges per As per mutual agreement between the minute for Long service providers subject to a ceiling of Distance Calls within Rupees 0.65 per minute irrespective of India the distance.”

The private operators on the premise that despite clear stipulations contained in the aforementioned regulations contending that the appellant herein had arbitrarily started collecting the carriage charges on a distance-based manner in respect of the intra-circle calls, wherefor the maximum amount stipulated by TRAI was only 20 paise, filed a petition before this Tribunal. The said petition was registered as Petition No. 48 of 2004. The appellant in the said petition having been noticed filed its reply in great details, to which we would refer to a little later.

This Tribunal by a judgment and order dated 11.11.2005 inter alia held as under:- “48. We have taken note that the IUC Regulations of 24.1.2003 were implemented w.e.f. 1.5.2003 and IUC Regulations of 29.10.2003 w.e.f. 1.2.2004 and the present petition has been filed in November 2004 i.e. after a considerable lapse of time and many interconnect agreements have been entered into between the Petitioners and Respondent No. 1, which have not been challenged or called into question in the present petition. We feel that the approach of establishing reciprocity in the manner envisaged by us as indicated above should resolve the conflict between the Petitioners and Respondent No. 2 & 3. In the above approach of resolving this issue we do not consider it necessary to go into the question of any conflict between the interconnect agreements and the concerned Regulations.

49. On the issue of distance based Carriage Charges we notice that the petitioners are obliged to pay carriage charges to the respondents for handing over intra-circle calls at Level-II TAX in the terminating LDCAs. The IUC Regulations of October 2003 lay down applicability of these charges at Table-II in Schedule-II. Para 84 of the Explanatory Memorandum of the IUC Regulation of October lays down the carriage charge of only Re. 0.20 per minute for intracircle calls irrespective of the distance from Level-II TAX to the Terminating Tandem / Local Exchange. We, however, find that BSNL is charging additional amount based on the distance based charges, which is not in accordance with the stipulation of Table-II. The arguments based on the principle of work done are not of much merit in view of the clear stipulations in IUC Regulation of October 2003, which are not under challenge by BSNL………………”

Having regard to the above observations made in the said judgment, the appellant has preferred an appeal before this Tribunal impugning Para 84 of the Explanatory Memorandum appended to the Regulations dated 29.10.2003 so far as it purported to restrict it from charging distance-based carriage charges to cellular operators for all types of calls.

The appellant, however, by its letter dated 28.2.2006 addressed to all the operators stated as under:- “2.2 TRAI in its Regulation dated 23.2.2006 has specified a ceiling of Rs.0.65 per minute for carriage charges. For long distance calls handed over to BSNL by operators, a carriage charge of Rs.0.20 per minute for distances upto 50 km and Rs.0.65 per minute for distances beyond 50 km have been applied while calculating the applicable IUC charges as above in Annexure I. These rates for carriage charges can be negotiated by operators subsequently. In case of handover of calls by cellular operators to BSNL at terminating LDCC TAX a flat carriage charge of Rs.0.30 per minute has only been prescribed for termination of calls throughout the LDCA.”

In the meantime, some complaints were also made to TRAI by some of the private operators including the Cellular Operators Association of India (COAI).

TRAI by its letters dated 20.4.2006 and 24.4.2006 forwarded the said complaints to the Appellant inviting its comments thereupon. The appellant, in its reply, inter alia, contended that the TRAI had no jurisdiction in respect thereof. Allegedly, in a meeting held on 28.4.2006, some issues were raised by the appellant, which allegedly were not adverted to by TRAI.

TRAI in exercise of its power conferred upon it under Section 11 of the Act, however, issued a communication dated 17.5.2006 inter alia stating that the carriage charges would be 20 paise per minute irrespective of the distance so far as intra- Circle calls from cellular network to fixed network at level-II TAX is concerned, the relevant portions whereof are as under:- th “3. The brief background of the decision taken in 29 October 2003 Regulation is given below:

th (i) TRAI in its IUC Regulation dated 29 October 2003 prescribed Rs.0.20 per minute carriage charge, irrespective of distance for intra circle calls from Cellular network handed over to BSNL at TAX level. In the th relevant portion of Para 84 of the Explanatory Memorandum of IUC Regulation dated 29 October 2003, it has been clearly mentioned that “Traffic hand-over for or from Cellular Mobile Networks shall normally take place at Level II TAX POIs and a carriage charge of Rs.0.20 per minute would be applicable. If handover is at any other TAX level, the relevant carriage charge must be paid.”

th (ii) BSNL vide its letter dated 29 December 2003 on ‘Implementation of Telecommunication Interconnection Usage Charge Regulation, 2003 in BSNL network” specified distance based carriage charges for call terminating in their Fixed Line Network handed over at Level II TAX. Authority felt that this was not in th accordance with IUC Regulation datd 29 October 2003 and therefore, TRAI vide its letter no.409-16/2003-th FN dated 20 January 2004 in para (c) had clarified to BSNL that “in case of Intra Circle call from Cellular Network handed over to BSNL at the TAX in which the call is to be terminated a carriage charge of only 0.20 paise per minute would be applicable irrespective of distance from that TAX to the terminating Tandem.”

th (iii) Hon’ble TDSAT in its judgment dated 11 November 2005 in Petition no.48 of 2004 directed BSNL not to levy the distance based carriage charges in case of intra circle calls from cellular network handed over to BSNL at the terminating LDCA TAX in which the call is to be terminated, as they are entitled to levy a carriage charge of only Rs.0.20 per minute for all such calls as per the said Regulation. TDSAT also dismissed the argument regarding this charge based on the principle of work done as there was a clear stipulation in the IUC Regulation of October 2003.

rd 4. The IUC Regulation dated 23 February 2006 is in the nature of an amendment of the IUC Regulation dated th rd 29 October 2003. Vide 23 February 2006 Regulation, the Authority has prescribed ceiling of Rs.0.65 per minute for carriage charges for long distance calls. However, the Authority did not amend the applicability for Rs.0.20 per minute carriage charge, irrespective of distance for intra circle calls from Cellular network handed over to BSNL at TAX level.

5. There were detailed meetings in the TRAI where BSNL was given full opportunity for hearing. In the meetings also, the Authority reiterated that the applicability of the carriage charge of Rs.0.20 for such special case rd exists even after the amendment dated 23 February 2006.”

Yet again, by a letter of the same date, TRAI inter alia, communicated its decision in respect thereof in the following terms:- “Decision of the Authority: Even after clarification in the meetings that the Carriage Charge specified in th relevant portion of para 84 of the explanatory memorandum of IUC Regulation dated 29 October 2003 and also th clarified vide TRAI’s letter No.409-16/2003-FN dated 20 January 2004 for the traffic handed over by the mobile rd operators at Level-II TAX are applicable in IUC regime dated 23 February 2006 also, BSNL continued to take the th position that since the charges specified for such traffic in IUC Regulation dated 29 October 2003 were not rd reiterated in the Amendment dated 23 February 2006, therefore, carriage charges for such traffic shall be rd governed by ceiling of carriage charges, i.e. Rs.0.65 per minute as specified in the IUC Regulation dated 23 February 2006.

In view of the above Authority felt it necessary to reconfirm that the flat charge of Rs.0.20 irrespective of the distance for intra circle calls from Cellular network handed over to BSNL at Level II TAX would continue to be applicable in the IUC Regime notified under “The Telecommunication Interconnection Usage Charges (Sixth rd Amendment) Regulation (1 of 2006) dated 23 February 2006”. Accordingly a clarification was issued to BSNL th vide TRAI’s letter of even number dated 17 May 2005. BSNL has also been advised to send compliance to TRAI.”

Appellant has inter alia questioned the legality and/or validity of the said communications, in Appeal No. 8 of 2008.

In the said Appeal, inter alia, the following relief has been sought for:- “(a) Pass orders quashing and setting aside both the impugned communications dated 17.05.2006 annexed as Annexure A-1 and Annexure A-2, seeking to adjudicate dispute between the service providers and further seeking to take away the right of the BSNL to demand and recover “Carriage Charges” in accordance with the actual work done principle, i.e. on the basis of the distance and in accordance with the IUC Regulations dated 29.10.2003 and 23.02.2006 and also in the light of agreed terms and conditions of Interconnection Agreements between the BSNL and other private service operators.”

The respondent, apart from dealing with the merit of the matter, had inter alia, raised a contention that the petition is barred by limitation so far as Appeal No. 1 of 2006 is concerned and furthermore questioned the maintainability of Appeal No. 8 of 2006 on the ground of it being barred under the principle of ‘Res Judicata’.

Mr. Maninder Singh, the learned senior counsel appearing on behalf of the appellant would contend:- (i) TRAI while making a regulation in purported exercise of its jurisdiction under Section 11 of the Act, cannot supercede an agreement.

(ii) An Explanatory Memorandum cannot over-ride the substantive provisions of the Regulations, in terms whereof, a distance-based charge on ‘work done’ principle had been accepted by TRAI.

(iii) In any event, this Tribunal having not decided the matter on merits on the question of the validity of 2003 and 2006 Regulations, the appellant is entitled in law to raise the said questions before TRAI and file appeals thereagainst.

(iv) The purported bar of limitation provided for in Sub-Section 3 of Section 14 (A) of the Act does not govern any appeal which is filed by a licensee in terms of Section 14 thereof and in that view of the matter Appeal No. 1 is not barred by limitation.

(v) Section 14 of the Act deals with the disputes between a licensor and a licensee and between two service providers and between the service providers and a group of consumers and having regard to the fact that the terms ‘licensor’, ‘licensee’ and ‘service providers’ have been defined in Section 2(ea), 2(ej) and 2(j) of the Act, it is evident that an original petition or an appeal envisaged under Section 14(A) of the Act contemplate original petition and/or appeal only at the instance of the Central Government (in its capacity other than licensor), State Government, Local Authorities and other persons aggrieved only.

(vi) Sub-Section 3 of Section 14(A) providing for the period of limitation in respect of filing an appeal, thus, applies only to an appeal preferred by a person other than the ‘licensee’, ‘licensor’ and the ‘service providers’ as envisaged in Section 14 of the Act and, thus, this Appeal is not barred by the limitation.

(vii) In any event, the impugned Para 84 of the Explanatory Memorandum, having affected adversely the rights of the appellant, the cause of action for questioning the validity thereof, if any, must be held to be a continuous one and in that view of the matter, the appellant could prefer this appeal even after expiry of a period of one month from the date of making of the Regulation by TRAI. A person aggrieved by a subordinate legislation must be held to be entitled to question the validity thereof when it affects it adversely either pursuant to a judgment rendered by a competent Court of Law or otherwise and not within a period of one month from the issuance of the regulation.

(viii) TRAI having not followed the procedure as are required to make a regulation could not have issued the impugned communication dated 17.05.2006.

(ix) Having regard to the fact that the complaints were made, responses from the appellant were sought for, opportunities of hearing were the impugned decision dated 17.05.2006, would amount to adjudication of a dispute and not merely a clarification of a Regulation as has been sought to be made out by TRAI in its impugned letter or otherwise and as admitted by it has not jurisdiction in respect thereof the same must be held to be wholly illegal.

(x) This Tribunal in Petition No. 48 of 2004 having not decided any question on merit and having rejected the contention of the applicant only on technical ground in para 49 of judgment, the principle of res judicata cannot be said to have any application whatsoever, in the facts and circumstances of the case.

Mr. Meet Malhotra, the learned Counsel appearing on behalf of Respondent No.1, on the other hand, would urge :- (a) From a bare perusal of the 2006 Regulations, it would appear that the 2003 Regulations having been amended thereby, the Explanatory Memorandum thereof cannot be said to have become non-existent.

(b)The appellant’s claim being not in respect of the carriage charges for long distance calls, Table-II of Schedule 2 would apply in the instant case and not the Table 1 thereof.

(c) In any view of the matter, the average distance of calls in question being less than 50 kms, the rate prescribed therefor in Table-I viz., 20 paise per minute shall apply.

(d)The judgment of this Tribunal rendered in Petition No. 48 of 2004 operates as Res judicata and/or Constrictive Res judicata.

(e) It is wrong to urge that while issuing the letter dated 17.5.2006, TRAI had undertaken any adjudicatory function but thereby merely a direction has been issued on the appellant so that it could correct itself in regard to interpretation of the relevant provisions of 2006 Regulations, and, thus, no illegality can be said to have been committed by it.

(f) Section 14 of the Act must be read in conjunction with Sec. 14 A thereof and so read Sec. 14 A(3) providing for limitation, must be held to be applicable.

(g) 2006 Regulations having superceded 2003 regulations, in the event, Table-2 is found to be missing from the former; the rate of 20 paise per minute for inter-Circular calls fixed by TRAI in the 2003 Regulations must be held to have become non-existent and, thus, the appellant even cannot claim any amount pursuant thereto or in furtherance thereof.

(h)The perception of the appellant that it was entitled to carriage charges on distance-based and work-done principles is not correct, in as much as although the said principle has been accepted by TRAI in respect of inter-Circle charges, fixed charges of 20 paise per minute has been provided for intra-circle calls.

Mr. C.S. Vaidyanathan, the learned senior counsel appearing on behalf of COAI, submitted:- (1) This Tribunal having been constituted for early resolution of disputes and also for the purpose of achieving some amount of certainty, it is wholly mis-conceived to contend that no period of limitation has been provided for in the said Act.

(2) In terms of the provisions of the said Act, the regulator being merely a facilitator, the industry is expected to know its stand and only for the said purpose, limitation of 30 days had been provided for preferring an appeal against an Order of TRAI.

(3) Section 14 merely provides for establishment of an Appellate Tribunal for the purpose of adjudication of disputes as specified therefor, but the same would not mean that it is exhaustive in nature, as only the classification of disputes had been provided in terms thereof.

(4) Whereas Section 14(a) provides for hearing of original petition, Section 14(b) provides for hearing of the appeals which does not specify any category of cases as contained in clause(a) thereof but merely provides for appeals from the decisions, orders or directions of the TRAI under the provisions of the Act, which clearly demonstrates the distinction between Clauses (a) & (b) of Section 14 of the Act.

(5) The term ‘in person’ contained in Section 14(A) of the Act merely refers to the category of persons and who would be entitled to prefer an appeal in terms of Section 14 of the Act and would, thus, include a licensee within the purview thereof.

(6) The scope of an appeal in terms of the Section 14(A) of the Act has been made wider so far as the same relates to Central Government, State Governments and Local Authorities, apart from ‘any other person’ who would come within the purview of the categories of persons mentioned in Section 14 thereof, namely, the licensor, licensee, the service providers and the group of consumers.

(7) It is true that the Central Government or the State Government or any person other than those mentioned in Section 14 of the Act would hardly affect any decision or occasion to have any decision or direction of the TRAI enabling them to prefer an appeal but the Parliament must be held to have considered even the extreme cases in as much as the telegraph activities can be taken over in case of an emergency in terms of Section 5 of the Indian Telegraphs Act, 1885 by the Central Government and the State Government, although the provisions thereof cannot be said to have any application in relation to Local Authority.

(8) However, it is possible that the TRAI in exercise of its regulation making power or otherwise may issue any direction upon the Central Government, State Government or the Local Authority or any other person, which would bind them. So far as the case of a new licensee to question the correctness or otherwise of any decision or order or direction of TRAI is concerned, they would be entitled to prefer appeals as only after license is granted to them, they would become the person aggrieved and in any event this Tribunal having been conferred with the power to condone the delay in preferring the appeal in terms of the proviso appended to the Section 14(A)(3) of the Act if sufficient cause is shown thereby, recourse thereto in appropriate cases may be taken.

(9) Any Regulation made or any direction issued cannot give rise to a ‘continuous cause of action’ as it cannot be said that the same can be challenged at any point of time. In any event, for the said purpose, reference to Section 14(a), in the facts and circumstances of this case, is not necessary. The appellant having not filed any application for condonation of delay in terms of the proviso appended to Section 14(A)(3) of the Act, this Tribunal suo motu cannot condone any delay.

(10) Appeal No. 8 of 2006 must be held to be barred under the principles of res judicata in as much as BSNL therein as a respondent had raised the same pleas and even questioned the correctness of Para 84 of the Explanatory Memorandum.

(11) In terms of Explanations 3 & 4 appended to Section 11 of the Code of Civil Procedure, which takes within its purview not only the grounds of attack but also the grounds of defence and the same having been enacted as a matter of public policy, the present Appeal preferred by BSNL must be held to be barred under Section 11 of the Code of Civil Procedure as evidently in Petition No.48 of 2004, the appellant had taken the same defence which are pleaded in this appeal as grounds for attacking the validity of the Regulations.

(12) With regard to the scheme of the Act, the provisions in respect of inter-circle carriage charges either must be found out in the Regulation itself. Schedule 3 of the Regulation having provided for forbearance, if the appellant does not levy any charge at the rates specified in Schedule E-2 of the Regulation, it must be held to be not entitled to levy any charge at all. Schedule 2, providing for carriage charges, must be read as a whole and the term used ‘transit charge’ should not be considered to be a different nature of charge vis-à-vis those providing for in Schedule 2 of the Regulations.

TRAI has been constituted in terms of the provisions of the said Act, the pre-2000 provisions specifying the functions of TRAI not only principally as a regulator, but also those of executor and adjudicators. The said Act, however, was amended in the year 2000; in terms whereof, the adjudicatory functions of TRAI had been conferred on this Tribunal. In terms of the provisions of Act, which were existing prior to the said amendment, an appeal against the decision, order or directions of TRAI used to be preferred before the High Courts concerned in terms of Section 18 of the Act.

We may, at the outset, notice Sections 14 and 18 of the Act as they stood prior to the amendment of the Act:

“Authority to settle disputes:

14. (1) If a dispute arises, in respect of matters referred to in sub-section (2), among service providers or between service providers and a group of consumers, such disputes shall be adjudicated by a bench constituted by the Chairperson and such bench shall consist of two members; Provided that if the members of the bench differ on any point or points they shall state the point or points on which they differ and refer the same to a third member for hearing on such point or points and such point or points shall be decided according to the opinion of that member.

(2) The bench constituted under sub-section (1) shall exercise, on and from the appointed day all such jurisdiction, powers and authority as were exerciseable immediately before that date by any civil court on any matter relating to- i.technical compatibility and inter-connections between service providers;

ii.revenue sharing arrangements between different service providers;

iii.quality of telecommunication services and interest of consumers;

Provided that nothing in sub-section shall apply in respect of matters relating to- a. the monopolistic trade practice, restrictive trade practice and unfair trade practice which are subject to the jurisdiction of the Monopolies and Restrictive Trade Practices Commission established under sub-section (1) of section 5 of the Monopolies and Restrictive Trade Practices Act, 1969;

b. the complaint of an individual consumer maintainable before a Consumer Disputes Redressal Forum or a Consumer Disputes Redressal Commission or the National Consumer Redressal Commission established under section 9 of the Consumer Protection Act, 1986;

c. dispute between telegraph authority and any other person referred to in sub-section (1) of section 7B of the Indian Telegraph Act, 1885. Appeal to High Court

18. Any person aggrieved by any decision or order of the Authority may file an appeal to the High Court within thirty days from the date of communication of the decision or order of the Authority to him; Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.”

However, after the Amendment of 2000 came into being, Chapter-4 was introduced by reason whereof provisions inter alia for appeal against orders, directions or decisions of the Authority as also the original jurisdiction in respect of the disputes between the licensor and the licensee, between two service providers and the group of consumers and a service provider, in our considered opinion, were made, which should be read harmoniously.

Although constituted in the year 1997, TRAI did not make any regulation regulating interconnection charges or for laying down the terms and conditions therefor till 2003. The licenses are granted by the Department of Telecommunication(DOT). As per the existing licensing conditions, as also the determination dated 8.1.2008, the cellular operators were required to hand-over the intra-circle calls to the appellant’s fixed line network at level-II TAX. The said category of calls were treated to be special ones. A charge of Re. 0.20 paise per minute had been prescribed therefor irrespective of the distance from the level-II TAX to the terminating Tandem. By reason of the Interconnection Usage Charges Regulations dated 29.10.2003, it was provided that even if a call was to be handed over at any other TAX, the relevant distance-based carriage charge would be payable. According to TRAI, at the instance of the appellant alone, a decision had been taken to compel the cellular mobile service provider to hand over intra-circle calls at not below level-II TAX. TRAI points out that all along the CMSPs had been desiring to hand over calls at the last SDCA.

According to the TRAI, a distinction has to be kept in mind so far as the carriage charges are concerned, viz., long distance calls which are inter-circle and short distance calls which are intra-circle ones. TRAI furthermore contends that on the basis of the datas supplied by the appellant itself, it was found out that the average distance of intra-circle calls is 40 Kms. For the aforementioned purpose, our attention has been drawn to determination of TRAI on 6 major issues in connection with signing of an interconnection agreement between CMSPs and DOT (now BSNL) dated 8.1.2001 wherein not only the views of the COAI but also those of the appellant were recorded in the following terms:- “3. According to DTS (now BSNL), interconnection at a level lower than that of LDCA or TAXs poses serious difficulties relating to operation and maintenance of a large number of Points of Interconnect. There are about 2650 SDCAs in the country. Interconnection at SDCA level will imply handling too many interconnection links and POIs. Some kind of technical regulation is required in regard to charging, revenue sharing and to ensure QoS at these POIs.

Presently, there are only two operators and there are 322 LDCAs. Even in the present arrangements, if BSNL provides POIs at all Level I and II TAXs at the LDCA level, the number of POIs will be around 600. This figure will be 1288, as soon as four cellular operators are licensed in each service area as per NTP 1999. This itself is a very large number. However, if POIs are provided at SDCA level, the number of POIs required for four operators would be 10,600. It will be a rather unmanageable task to operate and maintain such large number of POIs and provide for inter network accounting and settlement, as well as to manage the necessary technical arrangements at all these POIs. This highly decentralized type of interconnection will also violate the network hierarchy as Circle Cellular networks cover a large geographical area and as such should be interconnected only with the corresponding long distance network of the Circle. 4. Another point made by DOT (now BSNL) relates to the clock stability in the local exchanges below Level II TAXs. According to DOT (now BSNL), their accuracy is not of the same level as that of Level I TAX.

Therefore, BSNL pleaded that number of POIs should be limited to a maximum of 3 to 4 in a Circle, i.e., Level I and a few Level II TAXs which are of the new technology type having higher clock stability. Also Level II interconnections should be based on the justification of a high usage route between GMSC & the Level II TAX. According to them, such an arrangement will be manageable as it will enable building up of necessary capabilities whenever required, by appropriate upgradation of the limited number of gateway switches in order to meet all the future technical feasibility requirements such as intercarrier charge billing system based on CCS7 signalling. BSNL have further contended that the problem of bypassing STD networks of BSPs will also get aggravated with increased number of POIs as that could result in the mobile operators destinations becoming available on local call charge basis plus air time instead of STD call charges, as at present.”

Views of other players in the field had also been taken into consideration. It is in the aforementioned background, the TRAI opined:- “7……..TRAI is, therefore, of the opinion that whereas for metro cellular operators who provide service in the metro cities of Delhi, Mumbai, Chennai and Kolkata and its adjoining areas, the lowest level where interconnection (at the request of interconnection seeker) should mandatorily be provided by the BSNL/BSO is up to the level of tandem exchanges, for Cellular Telecom Circle operators covering a large geographical area, it should be with the long distance network of the circle i.e., at the TAX level. The normal routing hierarchy for all types of intercircle and internetwork calls is to hand over the call to a Level I TAX, which in turn routes the incoming traffic lower down the hierarchy i.e. to Level II and then to the local network at the SDCA level. This normal hierarchy should be followed for calls originating in mobile network and terminating in a fixed network. However, for traffic terminating in the LDCA, the Gateway MSCs may at the request of the interconnection seeker, be directly connected to Level II TAXs, i.e bypassing Level I TAX, in order to give the cellular operator greater flexibility and smoother flow of traffic. POIs below TAX and tandem level may also be provided with mutual agreement.”

We have noticed hereinbefore that Regulations of 2003 came into being on or about 29.10.2003. Clause-1 of the said Regulation reads as under:- “(i) This Regulation shall be called “The Telecommunication Interconnection Usage Charges Regulation 2003” (the Regulation) and supercedes the earlier Regulation dated 24th January 2003 (1 of 2003) and its amendments dated 27th March, 2003 (1st amendment) and 16th June, 2003 (2nd amendment).”

Section (iii) provides for Interconnection Charges. Section (iv) provides for Interconnection Usage Charges which are specified in Schedule appended thereto.

Carriage Charges contained in Schedule-II, Clauses (iii) and (iv) of Section (iv) of the said Regulations are as under:

st “(ii) The date of effect for actual implementation of IUC shall be 1 December 2003. (iii) The existing Interconnection Usage Charges arrangement between the Interconnecting networks in respect of the items as specified in this Regulation shall hold good till the date on which this Regulation comes in force.” Section (v) of the Regulation provides for the reporting requirement, clause (iii) thereof provides as under:- “(iii) In respect of matters covered by the provisions of ‘the Regulation’, they shall have an overriding effect over any Regulation, Direction, Determination and Order of the Authority, Reference Interconnect Offer and existing Interconnect agreement/arrangement between Service Providers.”

Section (vi) provides for the power of TRAI to review the charges from time to time in the following terms:- “(i) The Authority may, from time to time, review and modify Interconnection Usage Charge. (ii) The Authority may also at any time, suo-motu, or on reference from any affected party, and for good and sufficient reasons, review and modify any Interconnection Usage Charge.”

As noticed hereinbefore, Regulation 4 provides that the carriage charges shall be as specified in Schedule-2 of the said Regulation. Schedule-2 is in two parts. Clause (a) refers to carriage charges for long distance calls within India which reads as under:- “a) Carriage charges for Long Distance calls within India Table I (Amount in Rupees per minute) Carriage Distance Slab charges per Below 50 Kms 50 – 200 Kms 200–500 Kms Above 500 minute for Kms Long Distance calls within 0.20 0.65 0.90 1.10 India

The service providers are allowed to negotiate a spot value within +/ - 10% of the long distance calls carriage charge beyond 50 Kms. Forbearance for carriage charge for long distance calls will be introduced once carrier selection by customers is implemented.” What would be a long distance call had been stated in note (c) in the Notes appended to Schedule II appended thereto. It reads:- “c) The call from/ to fixed line to/ from WLL(M) would be treated as a local call,if the call destination is within the SDCA where the call originated. Calls from/ to fixed line to/ from WLL(M) would be treated as long distance calls if the call terminates outside the SDCA from where the call originated.”

Transit charges, appear to be denoting intra-SDCA calls. It is provided for in clause(b) of Schedule-II of the Regulations as under:- “b) Transit Charges for intra-SDCA calls : Forbearance, subject to the following condition:

Direct interconnection between Access Providers is mandatory. For exceptional cases of Intra-SDCA transit, operators may decide the charges through mutual negotiation. However this should be lower than Rs. 0.20 per minute.”

We may now refer to Table-2 appended to the said Regulation.

It is principally in three parts. The first part deals with the carriage charges within the SDCA, the second part deals with inter-Circle, i.e., inter-SDCA carriage charges and the third part deals with inter-circle carriage charge. So far as intra-Circle carriage charges are concerned, we may notice at the outset, the relevant portions thereof, i.e., intra-SDCA carriage charges which reads thus:- “F/W ßàC Same as Intra SDCA except BSO (Level II/ I TAX charge is “applicable” TAX)” charge since more than one TAX may be involved.

It is provided for therein as compared to the carriage charges which are said to be within SDCA that is provided in the first part of the table-2. The difference between the two may be noticed. It reads as under:- “F / W ßàC Nil (Tandem: Metro)/ BSO (Tandem: TAX usage carriage Metro)/ BSO charge(Level II TAX) (Level II TAX)”

It is, therefore, evident that for the purpose of inter-Circle fixed/wireline calls to cellular calls, the charges would be the same as provided for in intra-SDCA which, in respect of carriage charges within SDCA, would mean a mid-charge for tandem/metro but that usage carriage charge at level-II TAX, which would, in turn, must be held to mean the one which has been provided as transit charges for intra-SDCA calls. Schedule-2 being referable to the carriage charges, in our opinion, the words ‘transit charges’ would only mean transit carriage charges and nothing else. In that view of the matter, we have no doubt in our mind that it is not correct to contend that the carriage charges in respect of intra-SDCA calls would also come within the purview of the table-1 thereof and not the table-2 thereof.

Table-5 of the regulation provides for apportionment of apex plus depreciation of apex to different network elements based on the BSNL’s annual account 2002-03, the item 9 whereof, reads as under:- Network Element Annual Annual apex Depreciation + Cost of Capital “9. SDCC-LDCC Tax 538 342” Transmission Length (Avg 40 Km)

This only goes to show that in fact the datas supplied by BSNL only had been taken into consideration for the purpose of arriving at the inter-circle charges. We may notice that even according to TRAI, some of the SDCAs may be located with LDCAs (level-II TAX) and some SDCAs may be located at a distance of a few kms. For the said purpose, it was considered that having regard thereto, the appellant shall not suffer any financial loss if on an average a carriage charge of 20 paise per minute for the calls handed over BSNL at terminating Level-II TAX is fixed. TRAI has also taken into consideration that if purely distance-based carriage charges are fixed, then mobile to fixed calls would lead to non-uniformity and calls rates would be higher for the remote SDCA.

It is in the aforementioned backdrop, we may notice the 2006 regulations. It came into force on or about 23.2.06, clause 2 of the short title of the said Regulation, provides for substitution of the existing entries relating to para ‘A’ in Schedule-2 of the 2003 Regulations in terms of the following:- “Table I (Amount in Rupees per minute) Carriage Distance Slab charges per Below 50 Kms 50 – 200 Kms 200–500 Kms Above 500 minute for Kms Long Distance calls within 0.20 0.65 0.90 1.10 India

It is, therefore, evident that by reason of 2006 Regulations, which was amended, was the carriage charges as provided for in Table-1 of 2003 Regulations which was a long-distance based ones by providing for a ceiling of Re. 0.65 paise in stead and place of the maximum of Rs.1.10.

It is, in our opinion, therefore, incorrect to contend that paragraph 84 of the Explanatory Memorandum lost its existence as it has not separately been mentioned.

It is, however, not in controversy that Explanatory Memorandum would not be a part of the main regulation. It is also beyond all controversies that an ‘Explanation’ cannot be read as a ‘Proviso’. It would, however, be one thing to say that the ‘Provisos’ and ‘Explanations’ form part of the main statute itself but it is another thing to say that interpretative processes of the main provisions are required to be taken into consideration by taking into consideration Explanatory Memorandums.

We have noticed heretobefore that the exercise for framing Interconnect Usage Charges began from the year 2001.

In the aforementioned context, it may be relevant to notice the determination of TRAI dated 08.01.2001.

The said determination contains the views of the Cellular Operators Association of India as also the views of the appellant herein.

We may notice the relevant paragraphs from the views of the appellant on which reliance was placed by TRAI and/or COAI/AUSPI:- “3. According to DTS (now BSNL), interconnection at a level lower than that of LDCA or TAXs poses serious difficulties relating to operation and maintenance of a large number of Points of Interconnect. There are about 2650 SDCAs in the country. Interconnection at SDCA level will imply handling too many interconnection links and POIs. Some kind of technical regulation is required in regard to charging, revenue sharing and to ensure QoS at these POIs. Presently, there are only two operators and there are 322 LDCAs. Even in the present arrangements, if BSNL provides POIs at all Level I and II TAXs at the LDCA level, the number of POIs will be around 600. This figure will be 1288, as soon as four cellular operators are licensed in each service area as per NTP 1999. This itself is a very large number. However, if POIs are provided at SDCA level, the number of POIs required for four operators would be 10,600. It will be a rather unmanageable task to operate and maintain such large number of POIs and provide for inter network accounting and settlement, as well as to manage the necessary technical arrangements at all these POIs. This highly decentralized type of interconnection will also violate the network hierarchy as Circle Cellular networks cover a large geographical area and as such should be interconnected only with the corresponding long distance network of the Circle.

4. Another point made by DOT (now BSNL) relates to the clock stability in the local exchanges below Level II TAXs. According to DOT (now BSNL), their accuracy is not of the same level as that of Level I TAX. Therefore, BSNL pleaded that number of POIs should be limited to a maximum of 3 to 4 in a Circle, i.e., Level I and a few Level II TAXs which are of the new technology type having higher clock stability. Also Level II interconnections should be based on the justification of a high usage route between GMSC & the Level II TAX. According to them, such an arrangement will be manageable as it will enable building up of necessary capabilities whenever required, by appropriate upgradation of the limited number of gateway switches in order to meet all the future technical feasibility requirements such as intercarrier charge billing system based on CCS7 signalling. BSNL have further contended that the problem of bypassing STD networks of BSPs will also get aggravated with increased number of POIs as that could result in the mobile operators destinations becoming available on local call charge basis plus air time instead of STD call charges, as at present.”

It may also be of some significance to notice that AUSPI (previously known as ABTO) had given its views that the stage of delivery of a call should be at Level-I only.

It is, therefore, not correct to contend that TRAI in its determination dated 08.01.2001 had considered the views of the appellant alone and made its regulations only on the basis thereof.

The said views of ours are fortified by the determination of TRAI itself. We may furthermore notice that the said determination was made at the time of signing of the interconnection agreement.

TRAI said:

“6. Taking account of the views expressed by both the parties, the Authority is of the view that while there is respective merit in arguments put forward by both the sides, in the interest of customers, multiple points of interconnect should be provided between the two networks. TRAI, however, appreciates the point that, if POIs are to be provided at the SDCA level, the number of POIs will become very large, which will be difficult to manage. The cellular network in circles cover a large geographical area and should therefore normally, be interconnected at the level of long distance network.

7. Further, maintaining the integrity of the network and conformance to fundamental technical plans are important considerations, which need to be kept in view. The Authority also considers that providing POIs at the SDCA level may result in an increase in the requirement of USO funding due to the likely adverse effect of such interconnection regime on intra-circle STD revenue of Basic Service providers. Nonetheless, the over all approach has to be one that gives greater operational flexibility by permitting a larger number of POIs than as at present. TRAI is, therefore, of the opinion that whereas for metro cellular operators who provide service in the metro cities of Delhi, Mumbai, Chennai and Kolkata and its adjoining areas, the lowest level where interconnection ( at the request of interconnection seeker) should mandatorily be provided by the BSNL/BSO is up to the level of tandem exchanges, for Cellular Telecom Circle operators covering a large geographical area, it should be with the long distance network of the circle i.e., at the TAX level. The normal routing hierarchy for all types of intercircle and internetwork calls is to hand over the call to a Level I TAX, which in turn routes the incoming traffic lower down the hierarchy i.e. to Level II and then to the local network at the SDCA level. This normal hierarchy should be followed for calls originating in mobile network and terminating in a fixed network. However, for traffic terminating in the LDCA, the Gateway MSCs may at the request of the interconnection seeker, be directly connected to Level II TAXs, i.e bypassing Level I TAX, in order to give the cellular operator greater flexibility and smoother flow of traffic. POIs below TAX and tandem level may also be provided with mutual agreement.” It is, therefore, evident that for the purpose of delivery of calls within the metros, the fixed operators as also the cellular operators were required to go to tandem whereas for circles the normal routing hierarchy for all types of calls, namely, intra circle as also inter circle, calls were to be delivered at Level-II TAX.

It is true that the appellant in its views referred to the question of clock suitability also, but evidently TRAI did not take the same into consideration. It is not denied or disputed that handing over of calls at Level-II TAX is a condition of license. It is well settled by reason of various decisions of this Tribunal that the TRAI is not entitled to change the conditions of licence. TRAI, therefore, must be held to have proceeded to make its determination on the basis of the conditions of licence and upon taking into consideration the views of all concerned.

We may furthermore notice that a large number of issues fell for determination of the TRAI, the details whereof are not in question. Carriage charge was one of them.

Another aspect of the matter also cannot be lost sight of. The point of entry to distribution as per determination of TRAI was to be based on actual distance. There was no discussion about the average distance. Submissions of Mr.Malhotra, therefore, are without any basis.

We, therefore, may conclude that so far as the determination of the TRAI is concerned, the same could not have been attributed to BSNL’s incapacity or lack of fulfillment of any obligations on its part. The said determination was made upon taking into consideration the views of all concerned as also the conditions of licence. TRAI has also referred to its Regulations made in 1999 wherein also the charges were determined on the basis of the ‘work done’ principle and in doing so, no discrimination was shown to any category of the service providers.

Another issue which has been raised by Mr.Vaidyanathan is that long distance calls for cellular mobile and fixed services are different. We, cannot subscribe to the said view. No basis has been laid therefor.

We may furthermore notice that even in the 1999 Regulations, no such difference was pointed out by TRAI. Long distance calls usually means calls from one SDCA to another. It was based on the pulse charge.

The Note 2 reads as under: “Notes to Schedule II : “a) The Originating Service Provider shall retain origination charges from the residual after payment of the charges for carriage, termination and access deficit.

b) The Carrier, as shown in Table II, would collect the applicable amounts for carriage and termination charge from the Originating Service Provider for various type of calls. The Carrier would pass on the termination charge for terminating the traffic to the Terminating Service Provider as per Schedule I. In cases where the access deficit charge amount is to be collected by the terminating network or by BSNL (as per the Table III in Schedule III) the access deficit charge amount shall be passed on by the Carrier to the relevant service provider who has to be provided the access deficit amounts, as mentioned in Schedule III.”

Our attention, however, has been drawn to the following: “c) The call from/ to fixed line to/ from WLL(M) would be treated as a local call, if the call destination is within the SDCA where the call originated. Calls from/ to fixed line to/ from WLL(M) would be treated as long distance calls if the call terminates outside the SDCA from where the call originated.”

Keeping in view the aforementioned backdrop we may analyse the impugned Regulations of 2003.

Schedule II refers to carriage charges. It is divided in three parts. Carriage charges are for long distance calls and it is calculated on the basis of the distance slabs provided for therein.

Clause (b), however, provides for transit charges for intra SDCA calls.

Mr.Vaidyanathan, as noticed hereinbefore, has contended that transit charges are a part of carriage charges. We would, however, notice that although the ‘transit’ forms part of a carriage, they have been treated differently.

We have noticed hereinbefore Table 2 also. Clause (b) of Schedule II has been referred explicitly in the first item of the table in regard to the applicability of carriage charge being f/w ßà/f/w.

The carriage charge provided for therein is for direct connectivity/applicable tandem usage as in Schedule II(b).

Evidently, therefore, whenever TRAI intended to refer to transit charges as contained in clause (b) of Schedule II of the Regulations, it did so explicitly.

Submission of Mr.Malhotra and Mr.Vaidyanathan were that the third item of the charges referred to intra circle i.e. inter SDCA calls would relate to clause (b) of Schedule II, which in our considered opinion, is not correct. Even otherwise transit charges are known differently from carriage charges. If TRAI as an expert body intended to treat them in the same manner, it was expected to have expressed itself in that behalf.

Furthermore, transit charges for inter SDCA call is forbearance subject to the condition that direct interconnection between access providers was mandatory and the operators were required to fix intra SDCA transit charges through mutual negotiations. It would, therefore, may not be a case where the regulator intended to lay down any rate/charges. Having said so, TRAI has gone a step further and directed that even the charges fixed through mutual negotiation should be lower than 0.20 per minute. It, thus, cannot by any stretch of imagination, refer to clause (b) of Table 1 of the second Schedule appended to the Regulations which starts with the charges from 0.20 day to 1.10 paise.

The charges referred to in Table 1 indisputably have been calculated on actual distance. No distinction even in that behalf has been laid down between fixed service and the mobile service. If that be so, the long distance calls would be the same for both the service providers i.e. fixed service providers and cellular service providers i.e. between one SDCA to another SDCA.

We have noted heretobefore and it is beyond any controversy that the tables referred to in Schedule II are based on call by call basis. It may be true that BSNL had furnished the datas to show that ordinarily the distance between one SDCA and another

SDCA would not exceed 40 kilometers but it had all along been its contention that the same should be on the basis of the actual distance.

TRAI did not frame any regulations levying any charges on the basis of average distance. We, therefore, express our inability to accept the submission of Mr.Malhotra that the handing over all calls at Level-II TAX was brought down in terms of the request made by the appellant herein.

It is also not correct to contend that there is a difference in the long distance between cellular and fixed operators which have been treated in the same manner by TRAI as in all cases.

We may in this behalf notice the definition of ‘long distance call’ as has been considered by this Tribunal in Appeal No.1 of 2004 in its judgment dated 16.08.2004:

“2. It would help in achieving easy understanding of the technical complexities in this case if at the outset we take on board certain basic aspects relating to the telecommunications network in the country. As we understand, for the purpose of telecom operations the country has been divided into different “Circles” and each Circle is generally co-terminus with the geographical boundary of a State. Each Circle is further divided into Long Distance Charging Areas (LDCAs) which roughly correspond to what is known as a “District”. Each LDCA is further divided into Short Distance Charging Areas (SDCAs) which roughly correspond with a” Tehsil”. All calls originating from and terminating within a SDCA are known as local calls and therefore, SDCAs are called as “Local Area”. In a SDCA, there can be multiple exchanges and a Central Exchange which routes calls from one exchange to another exchange within the SDCA is known as “Tandem”. Normally the Tandem is located at the Centre of the SDCA which is generally the Headquarters of the Tehsil and this is known as “Short Distance Charging Centre (SDCC). A call between one SDCA and another SDCA is known as a long distance call and the charging is based on the distance between two SDCCs within a LDCA. For transiting a call from one SDCA to another SDCA either within the same LDCA or from one LDCA to another LDCA, there is requirement of an exchange which is known as “Trunk Automatic Exchange (TAX). In each LDCA, one TAX is designated as “Long Distance Centre Tax (LDCC – TAX). This is also referred to as Level-II TAX. The expression POI means the Point of Interconnection between two networks.”

Let us now consider the question as to whether the opinion of TRAI with regard to call charges for intra SDCA can be limited to 20 paise.

From our analysis made heretobefore it is evident that the main regulation or the substantive part thereof does not provide for different treatment between fixed service providers and cellular service providers.

It is now a well settled principle of law that regulation being ‘law’ within the meaning of Act 13 of the Constitution of India, must be interpreted on its own.

Explanatory Memorandum as contained in Section 7 of the regulation was to be made only to provide clarity and transparency in the matters covered under the regulations. The Explanatory Memorandum, thus, is not a part of the statute.

By reason of 2003 regulations, fiscal liabilities have been imposed on different parties. It provides for a civil liability. The provisions contained in the Regulation, therefore, must receive the golden rule of interpretation of statutes, namely, the literal rule. The literal rule of interpretation of statute is to be applied in this case for as the meaning of the terms are clear and explicit and, thus, no other principle of interpretation of statute need be resorted to.

Furthermore, we have also held heretobefore that the Schedule-II providing for carriage charges used two different terms, namely, carriage charge and transit charge. They, indisputably, carry different meanings. If different words carry different meanings and provide for different fiscal liabilities, it is well settled that they should be assigned their natural meaning. The terms ‘carriage’ and ‘transit’ having been used differently in different parts of the same regulations by TRAI, we are of the opinion they having been carrying different fiscal liabilities, they should be assigned the same meaning which have been given to them in other parts of the regulations.

It has further been noticed by us that word ‘transit’ has only been referred at only one place viz. at Table 2 and not any other places. There cannot, therefore, be any doubt whatsoever that in a case of this nature clause (b) of the second Schedule appended to the regulation would not apply in the instant case.

Explanatory Memorandum, it will bear repetition to state, is not a part of the statute. If paragraph 84 of the Explanatory Memorandum cannot be used for giving a restrictive meaning to Table 2, it is difficult to hold that by taking recourse thereto only, the fiscal liability of the cellular operators can be brought down.

We may take the note of 2006 Regulations. 6\

Although in the preamble thereof the word ‘amendment’ has been used therein, the substantive part thereof, namely, Section – 1, 1(i) states as under:

“(i) This Regulation shall be called “The Telecommunication Interconnection Usage Charges Regulation 2003” (the th th Regulation) and supercedes the earlier Regulation dated 24 January 2003 (1 of 2003) and its amendments dated 27 st th nd March, 2003 (1 amendment) and 16 June, 2003 (2 amendment).”

For levying new charges thereunder a new methodology has been used. A new principle has been followed. One regulation has been replaced by the other. It is in the aforementioned context interpretation of the words ‘substitute’ is required to be made. In G.P. Singh’s Principles of Statutory Interpretation (Eighth Edition):- “Substitution of a provision results in repeal of the earlier provisions and its replacement by the new provision. Substitution thus combines repeal and fresh enactment.”

Table-I contained in the 2003 Regulations were imperative in character. The service providers had to receive a call at TAX-II Level (by way of an exceptional measure calls were to be received at TAX-I Level also). The new provision contained in 2006 Regulations, however, is not imperative in character. It provides for mutual agreement. Only a ceiling of 65 paise irrespective of the distance has been provided for. The 2006 Regulations, therefore, must be held to have been framed on a different premise.

It was on the aforementioned situation, the question as to whether para 84 of the Explanatory Memorandum continues to be a part of the 2006 Regulations or not should be taken into consideration. The Explanatory Memorandum as noticed heretobefore in terms of Section 7 of 2003 regulations was to provide for clarity only. Table-1 of the 2006 regulations in our considered opinion does not require any clarification. We have anlaysed heretobefore and held that the Explanatory Memorandum 84 cannot be resorted to (even if this is assumed to be permissible) for the purpose of clarification of 2003 regulations. It lost its relevance, although technically it remains a part thereof.

Paragraph 84 of the Explanatory Memorandum appended to 2003 Regulation does not fit in with the substituted Table 1 of 2006 Regulation. TRAI, therefore, must be held to have consciously did not refer thereto in the 2006 Regulations.

Clarification of any regulation would be required if any provision of law is ambiguous. If there is no ambiguity, question of undertaking any interpretative exercise either by applying the principle of interpretation of a statute or resorting to the Explanatory Memorandum would not arise.

In any view of the matter in the changed situation, recourse to Explanatory Memorandum is not necessary.

It is also relevant to notice that TRAI in its impugned Orders has made a reference to Schedule-2 or Table-II for the purpose of arriving at a conclusion that the carriage charges shall be 20 paise per minute, irrespective of distance. It, for the aforementioned purpose, in its letter dated 20.6.2004, has referred to para 84 of the Explanatory Memorandum only. In the aforementioned contextual backdrop, we may notice that the appellant herein, in its letter dated 17.05.2006 stated as under:- “Decision of the Authority: Even after clarifications in the meetings that the Carriage Charge specified in th relevant portion of para 84 of the explanatory memorandum of IUC Regulation dated 29 October 2003 and also th clarified vide TRAI’s letter No.409-16/2003-FN dated 20 January 2004 for the traffic handed over by the mobile rd operators at Level-II TAX are applicable in IUC regime dated 23 February 2006 also, BSNL continued to take the th position that since the charges specified for such traffic in IUC Regulation dated 29 October 2003 were not rd reiterated in the Amendment dated 23 February 2006, therefore, carriage charges for such traffic shall be rd governed by ceiling of carriage charges, i.e. Rs.0.65 per minute as specified in the IUC Regulation dated 23 February 2006.

In view of the above Authority felt it necessary to reconfirm that the flat charge of Rs.0.20 irrespective of the distance for intra circle calls from Cellular network handed over to BSNL at Level II TAX would continue to be applicable in the IUC Regime notified under “The Telecommunication Interconnection Usage Charge (Sixth rd Amendment) Regulation (1 of 2006) dated 23 February 2006”. Accordingly a clarification was issued to BSNL th vide TRAI’s letter of even number dated 17 May 2005. BSNL has also been advised to send compliance to TRAI.”

The TRAI in its communication dated 20.1.2004 stated as under:- “(a) BSNL propose to implement a uniform Carriage Charge of 20 paise for Transit of calls originating and terminating within SDCA. As per IUC Regulation Clause (b) of Schedule 2 carriage charge within SDCA should be lower than 20 paise per minute and this may be decided through mutual negotiations. TRAI had calculated 20 paise/minute as the carriage cost from SDCA Tandem to LDCA TAX in which distance component of 40-50 KM was also involved. In local intra-SDCA calls, the transmission link of 40-50 KM is not involved and it involves only the cost of Tandem switch, BSNL may work out a reasonable transit charge through mutual arrangements with other Access Providers at rate lower than 20 paise per minute referred in the TRAI Regulation covering exceptional situations of no direct connectivity.

(c) In Schedule C of the BSNL’s letter, BSNL has specified distance based carriage charges for call terminating in their Fixed Line Network handed over at Level II TAX. Further for calls handed over at Tandem in a Metro BSNL is charging Rs.0.20 additionally as TAX charges. The IUC Regulation in Table II has prescribed Nil carriage charge in the case of Cellular Metro Circles where the call is handed over at Tandem. Similarly in the case of Intra- Circle call from Cellular Network handed over to BSNL at the TAX in which the calls it to be terminated a carriage charge of only 0.20 paise per minute would be applicable irrespective of the distance from that TAX to the terminating Tandem. In case call is handed over at any other TAX the relevant distance based carriage charge would be applicable.”

BSNL, however, in its letter dated 29.3.2004 stated as under:- th “1.1 TRAI earlier, vide its letter No.409-16/2003-FN dated 20 January 2004, has stated that TRAI had calculated 20 paise/minute as the carriage cost from SDCA Tandem to LDCA TAX in which distance component of 40-50 kms was also involved. Thus, TRAI has itself clarified that the carriage charge of 20 paise per minute includes transit within the same SDCA and the carriage upto 50 kms only. Therefore, there has to be some additional charges for carriage of a call beyond the distance of 50 kms.”

BSNL, therefore, had all along been contending that it intended to press for levy of the carriage charges so far as the same related to calls made inter SDCA and if the distance is more than 50 kms.

It may be true as has been contended by Mr. Srinivasan, that from a perusal of the said letter dated 29.3.2004, it may be evident that BSNL was aware of the stand taken by the TRAI at that point of time, but evidently, the records do not suggest that any reply was given by TRAI in response thereto. The contention of the BSNL, therefore, was not addressed at that point of time. It is also pertinent to notice some correspondences which had passed between the parties.

After the Order dated 11.11.2005 in Petition No. 48 of 2004 was passed by this Tribunal, the COAI, the AUSPI as also some private operators made complaints before TRAI.

The COAI under its letter dated 01.03.2006 referred only to para 84 of the Explanatory Memorandum stating as under:- “2. In respect of intra circle calls, we would like to draw your kind attention to Para 84 of the Telecommunication IUC Regulation dated October 29, 2003, which clearly states that “traffic handover for or from cellular mobile networks shall normally take place at Level II TAX POIs and a carriage charge of Rs.0.20 per minute would be applicable.”

It is thus our understanding that in the new IUC regime notified by Authority; the carriage charge of Rs.0.20 per minute on intra-circle calls handover over at Level II TAX POIs will continue to be applicable.”

Bharti Telecom also in its representation made before TRAI stated as under:- “c. It may also be noted that although BSNL may have appealed against the TDSAT Order in the Supreme Court, the Hon’ble court has not granted any stay to BSNL.”

The concerned respondents, therefore, at no point of time, drew the attention of the TRAI with regard to the applicability of Schedule II or Table-2 of the Regulations but merely confined their cases to Para 84 of the Explanatory Memorandum.

It is from that angle that we may notice the impugned letters of TRAI dated 17.5.2006, TRAI also described its ‘decision’ as clarification. However, we may notice, it has communicated its decision only in the second letter and not the first one.

It is also of some significance to notice that TRAI in its communication of the minutes of the meetings as contained in its letter dated 03.05.2006 stated as under:- th th “3. Representative of BSNL submitted a letter dated 28 April 2006 in response of TRAI’s letter dated 20 April 2006 which has para-wise comments to the various points raised by the TRAI, various service providers, associations on their IUC implementation plan.”

BSNL, however, in its reply categorically not only referred to its submissions but also the points raised by TRAI which are as under:- “Points raised by TRAI:

(1) On 23.02.2006, TRAI has amended only its IUC Regulations of Oct’2003 and has not prescribed any new Regulations.

(2) Whenever TRAI amended its IUC Regulations, it never repeated the charges/issues/paragraphs etc. which are not altered by the Authority but only prescribed the amended/altered charges in the amended IUC Regulations.

(3) If a single instance of repetition is found on any of the issues than TRAI will accept the contentions of BSNL regarding ceiling of Rs.0.65 per minute for carriage charges in the case of intra-circle cellular calls handed over at terminating LDCC TAX.

(4) As per the para-84 of the explanatory memorandum in the Regulations of Oct’2003, a flat levy of Rs.0.20 per minute has been prescribed by the TRAI for carriage of intra-circle cellular calls handed over at terminating LDCC TAX.

(5) Para-84 of the IUC Regulations of Oct’2003 is imported in the amended IUC Regulations of Feb’2006 also.

(6) Thus BSNL should charge the flat carriage charges of Rs.0.20 per minute for the intra-circle cellular calls handed over at terminating LDCC TAX instead of carriage charges of Rs.0.30 per minute prescribed in its circular dated 28.03.2006.”

In response thereto, the appellant BSNL stated:- “BSNL’s Submissions:

(1) TRAI had amended its IUC Regulations on 23.02.2006.

(2) However as far as carriage charges are concerned, TRAI has completely changed its IUC regime.

(3) From the perusal of TRAI’s IUC Regulation of Oct’03, Jan’05 and Feb’06 it is concluded that whenever a component of IUC (ADC, Termination charges or carriage charges) was even partially amended by TRAI then in all such cases TRAI again completely reiterated in the amended Regulation) that particular component of IUC irrespective of the fact that it was partially modified.

th (4) For example when the Oct’03 Regulation were modified by the TRAI on 6 Jan’05 then it partially modified its ADC component of IUC only (per minute ADC for inter-circle calls and international calls was modified only and there was no change in per minute ADC w.r.t. local calls and intra-circle calls) but TRAI again reiterated the ADC charges for all type of call scenarios in its Jan’05 Regulation. Similarly, in case of collection and distribution of ADC also it again repeated/reiterated its 5 out of 10 components which were not altered/amended at all in the Jan’05 Regulations. These repetitions were explained/shown to all the participants during the meeting.

(5) From the perusal of IUC Regulations it is quite clear that TRAI has not prescribed any specific charges for domestic call carriages within India but has only prescribed a ceiling of Rs.0.65 per minute in respect of all distances, all destinations and all terminating networks. Some relevant portions of the Regulations of Feb’06 are as follows.”

We, therefore, are of the opinion that both TRAI as also the other respondents herein, principally relied upon Para 84 of the Explanatory Memorandum which, in our opinion, are not at all applicable in the instant case.

We may now consider the validity or otherwise of the impugned letters dated 17.5.2006 which are the subject matter of Appeal No. 8 of 2006.

The maintainability of these Appeals have been questioned by the respondents herein on two counts. The maintainability of Appeal No. 1 of 2006 is question on the ground of being barred by limitation whereas the maintainability of Appeal No. 8 of 2006 has been questioned on the ground of being barred by the principle of res-judicata.

The question of limitation would bring within its purview the interpretation of Section 14 vis-à-vis Section 14(A)(3) of the Act.

Submission of Mr. Maninder Singh is that Section 14 is a self-contained provision, whereas submission of Mr. Malhotra, Mr. Vaidyanathan and Mr. Srinivasan is that they have to be read together.

Section 14 provides for establishment of this Tribunal. It also provides for its jurisdiction. The terms used in Section 14 and 14(A) of the Act are ambiguous and vague. We may, however, before referring thereto, notice that the Parliament defined the term ‘licensee’, ‘licensor’ and ‘service provider’ in Section 2(e), 2(ea) and Sec. 2(k). Apart from the ‘Group of Consumers’, the aforementioned entities find mention in Section 14 of the Act. However, the same in our opinion, would not mean that Sec. 14(A) will have no application whatsoever in the cases of the said entities.

It may be true that whereas Sec. 14(A) refers to the jurisdiction of this Tribunal in respect of the matters specified in clause (a), but clause (b) with which we are concerned, does not contain any such power. By reason thereof, this Tribunal has the authority to hear and dispose of appeals against any direction/decision or order of TRAI under this Act. Indisputably, the impugned directions having been issued by TRAI under the Act, this Appeal is maintainable.

Curiously, however, Section 14(A) enlarges the scope and ambit of original jurisdiction as also the appellate jurisdiction of this Tribunal. It brings within its purview any dispute which may be brought before this Tribunal not only by the Central Government but also by the State Government or Local Authority or any person.

It is not clear as to how a ‘Local Authority’ or ‘any person’ may bring in any dispute before this Tribunal in terms of Sec. 14(A) of the Act being aggrieved by a decision or order of TRAI. Be that as it may, Sub-Section (ii) of Sec. 14(A) provides for an appeal to this Tribunal at the instance of the ‘Central Government’ or ‘State Government’ or a ‘Local Authority’ or ‘any person aggrieved’. It is true that whereas sub-sec. (1) of Sec.14(A) refers to clause (a) of Sec. 14, sub-sec (2) of Sec. 14(A) does not refer to clause (b) of Sec. 14.

Despite the same, we are unable to subscribe to the submission of Mr.Maninder Singh that so far as an appeal preferred by a service provider is concerned, the same would be maintainable before this Tribunal even if it is to be held that the provisions of Sec. 14(A) are deleted.

Chapter IV of the Act, we have noticed hereinbefore, substituted Chapter V of the Act as was existing prior to TRAI Amendment Act, 2000. Sections 14 & 14(A) for all intent and purport, substitute Sections 14 & 18 of the old Act.

Keeping in view the scheme of the Act, vis-à-vis the fact that this Tribunal has an exclusive jurisdiction to hear all disputes as also entertain an original application as a result whereof TRAI has been deprived of its jurisdiction to adjudicate any dispute, it is difficult to accept the contention that Sec. 14(A) should not be read with Sec. 14.

In our opinion, therefore, any ‘person aggrieved’ would include a licensee also. This view of ours is fortified by the fact that whereas clause (a) of Sec. 14 refers to four different entities, no such restriction has been placed in relation to filing of an appeal against the order of the TRAI by a person, which, in our opinion, would mean ‘person aggrieved’. The term ‘person aggrieved’ has to be given its natural meaning. Any Appeal, particularly by a licensee, thus, would attract the provisions of Sec. 14 and Sec. 14(A) of the Act. We are not deliberately taking into consideration the other provisions of the Act being wholly unnecessary.

If sub-sec. (2) of Sec. 14 is applicable, indisputably, sub-sec. (3) of Sec. 14 would be attracted. The proviso appended thereto empowers this Tribunal to condone the delay in preferring the appeal.

It is true that the appellant has not filed any application for condonation of delay. Mr. Vaidyanathan contends, and in our opinion, may be rightly that before the Tribunal condones the delay in preferring an Appeal, it must be satisfied with regard to the existence of a sufficient cause therefor.

This has been so held in Sneh Gupta v. Devi Sarup 2009 (6)SCC 194 in the following terms:- – “70. Even otherwise, we do not think that any error has been committed by the High Court in arriving at the finding that the appellant had knowledge of the passing of the compromise decree much earlier. She did not file any application for condonation of delay. She filed two more applications for recall of the order dated 6-11-2004 in other enacted appeals. Those applications were also filed after expiry of the period of limitation and none of those applications were also accompanied with an application for condonation of delay. In absence of any application for condonation of delay, the Court had no jurisdiction in terms of Section 3 of the Limitation Act, 1963 to entertain the application for setting aside the decree. (See Dipak Chandra Ruhidas v. Chandan Kumar Sarkar and Sayeda Akhtar v. Abdul Ahad.)”

The question in regard to an appeal being barred by limitation is a jurisdictional question. Unless and until, an original Petition and/or an Appeal is filed before this Tribunal, within the prescribed period of limitation, in absence of any sufficient cause, the delay in filing the same cannot be condoned, the consequence whereof would be that the Tribunal will have no jurisdiction to enter into the merit of the matter.

In Gannmani Anasuya v. Parvatini Amarendra Chowdhary – 2007(10) SCC 296, the Supreme Court has held as under:- “27. In terms of Section 3 of the Limitation Act, it is for the court to determine the question as to whether the suit is barred by limitation or not irrespective of the fact that as to whether such a plea has been raised by the parties. Such a jurisdictional fact need not, thus, be pleaded. In any event, the said evidence was admissible for the purpose of contradicting a witness, which being a relevant fact should have been considered in its proper perspective. If the contents of Ext. B-8 were accepted, it was not for the High Court to consider the consequences flowing therefrom, and, thus, but the fact whether the figure(s) contained therein could be verified from the books of account might not be very relevant. Whether, it would be in consonance with the pleadings of the appellants was again of not much significance if it can be used for demolishing the case of the plaintiffs and Defendant 1. If the figures contained in Ext. B-8 were accepted, it was for Defendant 1 to explain the same and not for the appellants. The High Court, in our opinion, thus, committed a manifest error in not taking into consideration the contents of Ext. B-8 in its proper perspective.”

The Supreme Court of India furthermore has held that there may not be any sufficient cause unless an application is filed.

It has been so held in SBI v. B.S. Agriculture Industries (I) - 2009(5)SCC 121 in the following terms:- “19. By no stretch of imagination, can it be said that the limitation came to be extended by the Bank’s reply dated 11-3-1997. As a matter of fact, the Bank had communicated to the complainant long back vide its letter dated 28-3- 1995 that the bills have been returned to B.M. Konar (Sales Manager of the complainant firm) on 10-5-1994 and the matter should be taken up with him (B.M. Konar). The complaint filed on 5-5-1997 is even beyond two years therefrom. There is no application for condonation of delay nor any sufficient cause shown and, therefore, the question of condonation of delay in filing the complaint does not arise. (Emphasis supplied)

21. Since the complaint is barred by time and liable to be dismissed on that count, it would be unnecessary to examine the other grounds of challenge.”

The said decision is, thus, a pointer to show that sufficient cause need not always be by way of application in writing.

This, however, does not necessarily mean that it precludes the respondent defendant to make an oral application. Mr. Maninder Singh very fairly stated that it was a mistake on the part of the counsel not to file such an application.

Would it be in the aforementioned circumstances fair on our part to dismiss the appeal on the ground of limitation alone, despite finding sufficient merit in the Appeal, is the question. We do not think so. A Court of Law in the context of Indian Judiciary is also a Court of Justice. It is well settled that justice is higher than the law although the same has to be administered in accordance with the law.

With a view to do complete justice, the courts may entertain also an oral application. The law laid down by the Supreme Court of India states about filing of an application containing sufficient ground for condoning the delay. The reason for condonation of delay as sought to be assigned in support of oral application made by Mr. Maninder Singh, is inadvertence on the part of the counsel.

The counsel proceeded on the basis that the prescribed period of limitation as contained in sub-section (2) of Sec. 14(A) would not be applicable.

We do not think, having regard to the manner in which Sections 14 and 14(A) have been drafted by the legislature, the same was wholly without substance. It is one thing to say that the advice of a learned counsel, having regard to the submissions made by the other side at the bar, may not be found to be acceptable, but the same by itself may not be held to be a ground to reject the contention as the appellant was not advised properly.

The contention of the learned counsel relates to interpretation of statute. Two views were possible. For a mistake on the part of the counsel, in our opinion, the party in a situation of the nature need not necessarily suffer.

It is in the aforementioned context we may notice a decision of the Supreme Court of India in M.K. Prasad v. P. Arumugam -2001(6) SCC 176 wherein it has been held as under:- 55/71 “8. In construing Section 5 of the Limitation Act, the court has to keep in mind that discretion in the section has to be exercised to advance substantial justice. The court has a discretion to condone or refuse to condone the delay as is evident from the words “may be admitted” used in the section. While dealing with the scope of Section 5 of the Limitation Act, this Court in Ramlal v. Rewa Coalfields Ltd. (AIR 1962 SC 361 at pp. 363-64) held :

“6. Section 5 of the Limitation Act provides for extension of period in certain cases. It lays down, inter alia, that any appeal may be admitted after the period of limitation prescribed therefor when the appellant satisfies the court that he had sufficient cause for not preferring the appeal within such period. This section raises two questions for consideration. First is, what is sufficient cause; and the second, what is the meaning of the clause ‘within such period’? With the first question we are not concerned in the present appeal. It is the second question which has been decided by the Judicial Commissioner against the appellant. He has held that ‘within such period’ in substance means during the period prescribed for making the appeal. In other words, according to him, when an appellant prefers an appeal beyond the period of limitation prescribed he must show that he acted diligently and that there was some reason which prevented him from preferring the appeal during the period of limitation prescribed. If the Judicial Commissioner has held that ‘within such period’ means ‘the period of the delay between the last day for filing the appeal and the date on which the appeal was actually filed’ he would undoubtedly have come to the conclusion that the illness of Ramlal on February 16 was a sufficient cause. That clearly appears to be the effect of his judgment. That is why it is unnecessary for us to consider what is ‘a sufficient cause’ in the present appeal. It has been urged before us by Mr Andley, for the appellant, that the construction placed by the Judicial Commissioner on the words ‘within such period’ is erroneous.

7. In construing Section 5 it is relevant to bear in mind two important considerations. The first consideration is that the expiration of the period of limitation prescribed for making an appeal gives rise to a right in favour of the decree-holder to treat the decree as binding between the parties. In other words, when the period of limitation prescribed has expired the decree-holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree-holder by lapse of time should not be light-heartedly disturbed. The other consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the court to condone delay and admit the appeal. This discretion has been deliberately conferred on the court in order that judicial power and discretion in that behalf should be exercised to advance substantial justice. As has been observed by the Madras High Court in Krishna v. Chathappan: ‘Section 5 gives the court a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words “sufficient cause” receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the appellant.’ ””

Mr. Maninder Singh has also drawn our attention to a decision of the Commercial Court of Queen’s Bench Division in Messer Griesheim GmbH Vs Goel MG Gases Pvt. Ltd. –[2006] 1 CLC 283, wherein it was held as under:- “The notes to the White Book state, as one would expect, that the discretionary power to set aside is unconditional and ‘the purpose of the power is to avoid injustice’. It is for that reason that, where a defendant does demonstrate a real prospect of defending the claim notwithstanding delay in seeking to set aside a default judgment, the court will nonetheless usually set aside such a judgment. The corollary, Mr.Foxton submits, is that a Claimant which demonstrates that it has a good, indeed in this case unanswerable, claim on the merits which will effectively be lost unless a default judgment is set aside, should be taken to have shown a good reason why the judgment should be set aside. I agree. There is obvious injustice to Messer if the judgment is not set aside.

The common law principle of ‘merger’, namely that a cause of action is merged in a judgment upon it, has the consequence that unless the judgment is set aside the cause of action which gave rise to it cannot be pursued. Indeed Goyal relies on this principle; the cause of action has been lost; the judgment is ineffective; it cannot or should not be set aside; and so Messer has deprived itself of a good claim.

In my judgment merger was not intended to have such a consequence. The policy underlying the principle is to avoid ‘double jeopardy’ and multiplicity of proceedings and perhaps to achieve finality; not to deprive a claimant of the claim, but rather to establish it by court order the better to enable the claimant to enforce it, and not to enable both claim and order to be ignored.

There may be circumstances in which the injustice to a defendant, if a default judgment were to be set aside, would outweigh any injustice to a claimant. Indeed Goyal submits this is such a case. In paragraphs 71 to 76 of his first witness statement, Mr.Dhar refers to ‘significant prejudice’ which he says will be suffered by Goyal were the judgment to be set aside. Much (if not all) of what he relies upon is dependent on the ‘agreements’ and need not be addressed again. In addition reliance is placed on the fact (as advised by counsel) that the INR 5 billion claims are statute-barred. But on my findings, that is not a consequence of any agreement, but the failure of Goyal to pursue these claims for whatever other reason. It is also said that Goyal would have to re-open its Accounts, which have been relief upon by others, and would be a step which could affect Goyal’s access to liquidity and damage the company’s reputation. It is also said it has paid, and could not recover, tax on the basis it has no liability to Messer.”

In that case, an ex parte decision given in favour of plaintiff was set aside at his instance although the law provided for setting aside of an ex parte decree only at the instance of the defendant.

The Supreme Court of India also in Grindlays Bank Ltd. Vs. The Central Government Industrial Tribunal & Ors. reported in AIR 1981 SC 606 has also held that Industrial Tribunal / Labour Court have the requisite jurisdiction to set aside an ex parte award, upon considering the provisions of Section 17 of the Industrial Disputes Act vis-à-vis Order IX of the Code of Civil Procedure to hold that an ex parte award can be set aside at the instance of a party to the industrial dispute.

There are instances where the Supreme Court of India as also various High Courts, for the purpose of condonation of delay, have entertained oral applications. We may notice a few:-

- In Mahabir Singh Vs. Chief of Army Staff - 1990 Supplementary SC Cases pg 89, the Supreme Court of India condoned the delay in filing an appeal before it on an oral application.

- The said rationale laid down by the Supreme Court was followed by the Kolkata High Court in State of West Bengal & Ors. Vs. Nripendra Nath Banerjee & Ors. - AIR 1992 Cal 179 in the following terms:

“11. It is now settled beyond doubt that if in a given case, the Court finds that a party had sufficient cause for not filing an appeal or application within time, it can always condone the delay even on a verbal prayer and without any application.”

- Yet again, the J&K High Court in Mehjabeen Simon and Anr. Vs. Fayaz Ahmad Simon and Ors. – AIR 2006 J&K 105, having noticed various decisions of different High Courts held as under:- “38. The Apex Court in Naik Mahabir Singh v. Chief of Army Staff reported in 1990 (Supp) SCC 89 has held as under:

1. Heard counsel for the petitioner. This petition is barred by limitation and no application for condonation of delay has been made. We have, however, accepted the oral prayer of the counsel to condone the delay and have proceeded to hear the matter on merits.”

We, therefore, having regard to the explanation offered by the learned counsel intend to condone the delay in filing the appeal particularly having regard to the fact that the parties have argued in great details before us the merit of the matter also.

This brings us to the question of maintainability of Appeal No. 8 of 2006.

Mr. Vaidyanathan relied upon a large number of decisions to contend that the principle of res judicata and/or constrictive res judicata would be applicable in a case of this nature.

Applicability of general principle of Res Judicata as also that of Constrictive Res Judicata is not in dispute. It is also not in dispute that the said principle would be applicable both against the plaintiff to a suit as also a defendant. There cannot, furthermore, be any doubt or dispute that the principle of res judicata may be applied even if no issue was specifically framed in that regard. In this case, however, the situation is different.

The principle of res judicata would apply provided a decision has been rendered on merits. We, a little later, intend to consider the question as to whether any decision has been rendered on merit by this Tribunal in our judgment dated 11.11.2005 in Petition No. 48 of 2004.

We may, however, at the outset, notice that the Supreme Court of India in Iftikhar Ahmed v. Syed Meharban Ali, (1974) 2 SCC 151 has held as under:- “13. Now it is settled by a large number of decisions that for a judgment to operate as res judicata between or among co-defendants, it is necessary to establish that (1) there was a conflict of interest between co-defendants; (2) that it was necessary to decide the conflict in order to give the relief which the plaintiff claimed in the suit; and (3) that the Court actually decided the question.”

The Tribunal in the aforementioned Petition had been considering certain acts on the part of the BSNL as also MTNL, which are said to be violative of the relevant provisions of the Regulations/Directions/ Guidelines of TRAI being discriminatory, arbitrary, unfair, unreasonable against the established principles of equity, justice and good conscience.

The relevant contention in respect thereof reads as under:- “(b) Imposition of distance based carriage charge (Re.0.65 for 50 – 200 Kms; Re.0.90 with effect from 01.02.2004 for Intra Circle Intra LDCA Calls from Cellular Network to PSTN handed over to BSNL at Level II TAX.”

It is true that in that case, BSNL, had raised various contentions. The contentions of the parties were also noticed in details by this Tribunal.

In answer to the contention of the respondent that BSNL cannot levy the distance-based carriage charges of Rs. 0.65, 0.90 or 0.10 for the distance slabs of 150 – 200 kms, 200 to 500 kms and above 500 kms in case of intra-circle call from cellular network handed over to BSNL at the trunk LDCA Tax in which the call is to be terminated and BSNL can levy carriage charge of only 20 paise per minute, BSNL had raised some contentions before this Tribunal. The said submissions have been recorded in paras 18 – 21, 34 & 36 respectively.

This Tribunal, however, so far as the present issue is concerned, was of the view that it was not necessary to go into the questions of any conflict between the Interconnect Agreements and the concerned Regulations, having regard to the considerable lapse of time and consequently the fact that in the mean while many Interconnect Agreements had been entered into between the petitioner and respondent No. 1.

The Tribunal, however, rejected the contention made on behalf of the appellant in respect of the IUC Regulations of October, 2003 on the premise that the same had not been challenged by BSNL. This Tribunal furthermore noticed that in that behalf, a clarificatory letter had been issued by TRAI on 20.1.2004. Having said so, it gave its findings in Paragraph 50 of its judgment, which we have noted heretobefore.

The said decision was rendered on 11.11.2005. The 2006 Regulation came into force on 28.2.2006. A sea-change was effected, as noticed heretobefore, by reason thereof. The methodology was changed. The principle was changed in as much as the concept of the principle of work done basis and distance-based concept was given a go-bye.

TRAI in our opinion cannot take a conflicting stand. According to it, 2006 Regulation is amendatory in nature. It, as noticed heretobefore, has used the term ‘substitute’ in the 2006 Regulations. If para 84 of the Explanatory Memorandum have no impact and had not been taken into consideration by this Tribunal on merit; only on the ground that the stipulations in the IUC Regulations of October, 2003 were not challenged by BSNL the same would not mean that they could never be challenged.

It, therefore, did not preclude the BSNL from challenging the validity of the Regulations. If we are correct in our finding that para 84 of the Explanatory Memorandum did not control the Schedule II appended to 2003 Regulations, which had been substituted by Table-1 of 2006 Regulations, in our opinion, TRAI, the law-making authority, must be held to be ultra vires. It had, therefore, no jurisdiction to levy any charges as is sought to be done by reason of the Explanatory Memorandum. Its decision contained in para 84 as also directions contained in its letter dated 10.1.2004 were therefore nullities.

th In Wade & Forsyth: Administrative Law, (8 Edition) at page 35, it has been held as follows:

“An act which is for any reason in excess of power (ultra vires) is often described as being ‘outside jurisdiction’. “Jurisdiction’, in this context, means simply ‘power’ though sometimes it bears the slightly narrower sense of ‘power to decide’, e.g. as applied to statutory tribunals. It is a word to which the courts have given different meanings in different contexts, and with which they have created a certain amount of confusion. But this cannot be explained intelligibly except in the particular contexts where difficulties have been made. Nor should the difficulties be exaggerated. For general purposes ‘jurisdiction’ may be translated as ‘power’ with very little risk of inaccuracy.

Any administrative act or order which is ultra vires or outside jurisdiction is void in law, i.e. deprived of legal effect. This is because in order to be valid it needs statutory authorization, and if it is not within the powers given by the Act, it has no legal leg to stand on. Once the court has declared that some administrative act is legally a nullity, the situation is as if nothing had happened. In this way the unlawful act or decision may be replaced by a lawful one. If a compulsory purchase order is quashed as being ultra vires, there is nothing to prevent another order being made in respect of the same land, provided that it is done lawfully. Thus a public authority or tribunal is often given locus poenitentiae and is able to correct an error by starting afresh – something which it might otherwise be unable to do.”

The principles of estoppel, waiver and res judicata are procedural provisions. They would have no application where an order is passed without jurisdiction.

In Chief Justice, High Court of Andhra Pradesh Vs. L.V.A. Dixitulu - (1979) 2 SCC 34, the Supreme Court of India stated the law as under:- “………….Moreover, this is a pure question of law depending upon the interpretation of Article 371-D. If the argument holds good, it will make the decision of the Tribunal as having been given by an authority suffering from inherent lack of jurisdiction. Such a decision cannot be sustained merely by the doctrine of res judicata or estoppel as urged in this case.”

If the principle of res judicata has no application, that of constrictive res judicata would also have no jurisdiction.

The general principle of constrictive res judicata would apply provided the contention by a plaintiff or a defendant might and ought to have been raised.

In Ferro Alloys Corpn. Ltd. v. Union of India, (1999) 4 SCC, the Supreme Court of India held as under:- “27. Under these circumstances, the question arises whether the appellant as one of the respondents might have raised the further question regarding its claim for further upward revision of its assessed requirement of chrome ore and also whether it ought to have raised such a question for consideration of this Court in those proceedings. It is obvious that in order to attract the bar of Explanation IV to Section 11 CPC and before it can be held that any subsequent contention on the point can be treated to be hit by the bar of constructive res judicata, it has to be seen whether such a contention might and ought to have been made the ground of defence or attack in such former proceedings. Only then such a matter can be deemed to have been a matter directly and substantially in issue in such former proceedings. It is difficult to appreciate how the appellant as a contesting respondent was of necessity required to raise the defence that the assessment by the Sharma Committee of its requirement of chrome ore was an underestimate and was required to be revised upwards and, hence, it could have been a valid ground of defence against the claim of the appellants, namely, TISCO and IDCOL before this Court. Without raising such a contention, the appellant could have defended and actually defended the decision of the Central Government dated 17-8-1995 treating the appellant to be one of the eligible claimants for a mining lease in the very same area in which TISCO and IDCOL were claiming such leases to the exclusion of the appellant amongst others. Equally, such a contention would not have been made a ground of attack by the appellant against the contesting respondents inter se or even against the State of Orissa and the Central Government, who were the other contesting respondents for getting TISCO and IDCOL non-suited in their appeals. In fact, all of them as respondents at that stage were interested in supporting the order of the Central Government dated 17-8-1995. That was their common defence against the claims of only contesting opponents, namely, TISCO and IDCOL who were the appellants before this Court. Consequently, Explanation IV to Section 11 CPC on the facts of the present case, cannot be said to be attracted at all.”

We have noticed heretobefore that in this case, the situation has undergone a sea-change. The subtraction of dispute between the parties has undergone a change. One Table-1 has been substituted by another Table-1. The entire scheme had been changed; different formula has been applied; the methodology applied also is different.

It is now well-settled that although a provision may not be subject to challenge in one situation, it may be permitted in a changed situation. An operator may not question the validity of a Regulation, if it was happy with rates fixed in Table-1 keeping in view the fact that the maximum rate prescribed therefor was Rs. 1.10 paise, but it may be held to be entitled to question when the principle had undergone sea-change and in stead and place of a rate statutorily fixed earlier, the same has been amended to a ceiling of 65 paise only.

In Motor General Traders & Anr. Vs. State of A.P. & Ors. - 1984(1) SCC 222, the Supreme Court of India had held as under:- “24. It is argued that since the impugned provision has been in existence for over twenty-three years and its validity has once been upheld by the High Court, this Court should not pronounce upon its validity at this late stage. There are two answers to this proposition. First, the very fact that nearly twenty-three years are over from the date of the enactment of the impugned provision and the discrimination is allowed to be continued unjustifiably for such a long time is a ground of attack in these cases. As already observed, the landlords of the buildings constructed subsequent to August 26, 1957 are given undue preference over the landlords of buildings constructed prior to that date in that the former are free from the shackles of the Act while the latter are subjected to the restrictions imposed by it. What should have been just an incentive has become a permanent bonanza in favour of those who constructed buildings subsequent to August 26, 1957. There being no justification for the continuance of the benefit to a class of persons without any rational basis whatsoever, the evil effects flowing from the impugned exemption have caused more harm to the society than one could anticipate. What was justifiable during a short period has turned out to be a case of hostile discrimination by lapse of nearly a quarter of century. The second answer to the above contention is that mere lapse of time does not lend constitutionality to a provision which is otherwise bad. “Time does not run in favour of legislation. If it is ultra vires, it cannot gain legal strength from long failure on the part of lawyers to perceive and set up its invalidity. Albeit, lateness in an attack upon the constitutionality of a statute is but a reason for exercising special caution in examining the arguments by which the attack is supported. We are constrained to pronounce upon the validity of the impugned provision at this late stage because the garb of constitutionality which it may have possessed earlier has become worn out and its unconstitutionality is now brought to a successful challenge.”

We, therefore, are of the opinion that principle of constructive res judicata will also have no application.

We may now consider the validity or otherwise of the impugned letters dated 17.5.2006 which are the subject matter of Appeal No. 8 of 2006.

Keeping in view the findings recorded by us, we are of the opinion that contention of Mr. Maninder Singh that TRAI had no jurisdiction to interfere with an interconnect agreement need not be gone into. We must, however, record that TRAI could not have resorted to the adjudicatory process in purported exercise of its power under Section 11 of the Act having regard to the decisions of this Tribunal. We may notice that in Appeal No.2 of 2004 (BSNL Vs. TRAI) dated 21.04.2004, it has been held:- “Difference in the provisions existing before the amendment of the Act and after is quite stark. While earlier Chairperson of TRAI was to be a person who is or has been a Judge of the Supreme Court or Chief Justice of High Court, now it is Secretary or who has been Secretary to the Government of India. TRAI is now ceased to be a judicial authority. Functions of the TRAI and that of the Appellate Tribunal are well defined and well focused. While Chapter-IV prior to amendment gave powers to TRAI for settlement of disputes and now Chapter-IV confers powers on the Appellate Tribunal. In fact, earlier before amendment TRAI could decide ‘dispute’, but now much wider powers have been conferred on the Appellate Tribunal to adjudicate any dispute while functions of the TRAI are prescribed under Section 11, the jurisdiction of the Appellate Tribunal is prescribed under Section 14.

Dispute in the present case arises out of interconnection agreement between the BSNL and the other service provider. Interconnection in simple terms is the commercial and technical arrangement under which service provider can connect their equipment, network and services to enable customers to have access to the customers, services and networks of other service providers. Interconnection may be described as a procedure by which telecommunication networks and services are linked in such a way that they can function as a coherent system so that a subscriber in any network may have access to any other subscriber in a different network. An interconnection arrangement is a legally binding agreement between interconnecting carriers. It is a contract that stipulates the obligations and responsibilities of each contracting party with regard to interconnect services. An interconnection agreement specifies commercial, technical, operational anddispute settlement terms. Interconnection is important. The need for interconnection results from the very nature of the telecommunication industry being a network industry. In the exercise of its powers conferred upon it by law, license and interconnection agreement, TRAI is to ensure that interconnection regime is fair and efficient.”

Yet again in Appeal No. 11 of 2002, BSNL v. TRAI, disposed of on 27.4.2005, this Tribunal has held as under:

“Section 11 (i)(b)(iii) (earlier Section ll(l)(c) of the unamended Act) and Section ll(i)(b)(iv) (Section (l)(d) of the unamended Act) provides that TRAI has to ensure compliance with the terms and conditions of the license and to regulate arrangement amongst service providers. Delhi High Court in the aforesaid Division Bench judgment said that these powers are to be exercised qua service providers. TRAI cannot frame regulations under these provisions as in that case functions could be enforced against or imposed on the Central Government. Under these provisions directions could be issued to only service providers and if regulations are framed then that would mean that functions of the TRAI could be enforced against or imposed on the Central Government as well which would lead to an absurd situation and would be clearly a method of trying to do indirectly what cannot be done directly. It is settled law that the same authority/body cannot have legislative as well as adjudicatory functions. Delhi High Court in the aforesaid judgment observed that if the arguments on behalf of the TRAI were to be accepted then it would amount to saying that TRAI would adjudicate upon dispute arising from or as a result of its own regulations/directions which could never have been the intention of the legislature. The High Court held this view prior to the amendment of the Act and now the adjudicatory functions have been conferred upon the TDSAT. We were dismayed with the argument on behalf of the TRAI in the case of MTNL vs TRAI (Appeal No.3/2005) when we wanted to know that if any dispute arises under the Regulations framed by TRAI, could it be that it would be adjudicated by TRAI and jurisdiction of TDSAT to determine that dispute would be barred. His answer was in the affirmative. That would mean that Regulations which are in the nature of subordinate legislation overtake the provisions of the principal Act. Regulations even if they are a valid piece of subordinate legislation cannot provide that if any dispute arises with regard to interpretation of any of the provisions of the Regulations, the decision of the TRAI shall be final and binding. Such submissions on behalf of TRAI have to be outrightly rejected.” In view of our findings aforementioned, other contentions, if any, need not be considered.

We are, therefore, of the opinion that the impugned orders of the TRAI cannot be sustained. They are set aside accordingly. The petition is allowed. In the facts and circumstances of the case, however, there shall be no order as to costs.

………………J (S.B. Sinha) Chairperson

..…………….. (G.D. Gaiha) Member

………………. (P.K. Rastogi) Member