S. B. Sinha
All these petitions being inter-related were taken up for hearing together and are being disposed of by this common judgment.
The petitioners were granted licenses by the respondent in terms of the provisions of Section 4 of the Indian Telegraph Act, 1885 (The 1885, Act). They were initially granted licenses on a fixed fee basis. In the year 1999, the Government of India adopted a policy decision to the effect that license fee would be payable on revenue sharing basis. A migration package was offered and accepted by the existing licensees. It is, however, not in dispute that licenses had been granted to some of the petitioners also on later dates.
The said license contained the definition of ‘Gross Revenue’ (GR) and ‘Adjusted Gross Revenue’ (AGR) in the following terms.
“The Gross Revenue shall be inclusive of installation charges, late fees, sale proceeds of handsets (or any other terminal equipment etc.), revenue on account of interest, dividend, value added services, supplementary services, access or interconnection charges, roaming charges, revenue from permissible sharing of infrastructure and any other miscellaneous revenue, without any set-off for related item of expense etc.
(i) PSTN related call charges (access charges) actually paid to Bharat Sanchar Nigam Limited (BSNL)/Mahanagar Telephone Nigam Limited (MTNL) or other telecom service providers within India.
(ii) Roaming revenues actually passed on to other telecom service providers, and
(iii) Service Tax on provision of service and Sales Tax actually paid to the Government if gross revenue had included the component of Service Tax/Sales Tax.”
Relying on or on the basis of the said definition of ‘Adjusted Gross Revenue’, the respondent included various items therein which had nothing to do with the ‘Telegraph Services’ within the meaning of the provisions of the 1885 Act or the licensed activities of the licensees.
Various petitions before this Tribunal were filed not only by the individual operators but also by their associations namely Association of Unified Service Providers of India (AUSPI) and Cellular Operators Association of India (COAI).
Whereas AUSPI filed a petition before this Tribunal on or about 19.05.2003, marked as Petition No. 7 of 2003, COAI filed a petition before this Tribunal on or about 16.08.2005. Some licensees, who have been granted licenses for international long distance calls, national long distance calls and internet service providers as also V-SAT, also filed petitions. V-SAT Association also admittedly had filed petitions questioning the mode and manner of calculation of AGR by the Licensor.
By reason of a judgment and order dated 7th July, 2006, the said petitions were allowed. This Tribunal inter alia noticed the contention of the respondent that it had determined the ‘Adjusted Gross Revenue’ in exercise of its special privileges as envisaged under Section 4 of the 1885 Act and, thus, the same is unassailable . It, furthermore contended that the licensees having obtained the licenses with their eyes wide open and having obtained the benefits thereunder were estopped and precluded from questioning the validity or otherwise of levy of ‘Adjusted Gross Revenue’.
This Tribunal in its aforementioned judgment opined:
1. The power of the Central Government to demand a share from the revenue of the licensees could not have been irrespective of the fact as to whether such revenue is derived from licensed activities or not and as only an option to the licensees was granted to accept the offer or not, it would be too wide a proposition to be accepted that all its activities would come within the purview of licensed activities.
2. Total Gross Revenue of the Licensee Company, in the context in which it is found in the clause of the migration package, must be only from the total Gross Revenue of the licensee company derived from the licensed activities.
3. What would be the licensed activities need not be determined at that stage and the matter may be considered by TRAI on the basis of the materials which may be relied upon by the respondent.
It is not in dispute that appeals preferred thereagainst by the respondent herein were dismissed by the Supreme Court of India by an order dated 19.01.2007.
It is furthermore not in dispute that pursuant to or in furtherance of the directions issued by this Tribunal in the aforementioned Petition No. 7 of 2003 on 7.7.2006; TRAI considered various aspects as to what would constitute AGR.
After the decision of the TRAI, the matter again came up for consideration before this Tribunal, whence once more having regard to the order of the Supreme Court of India, a contention was raised by the respondent that it was entitled to argue the matter de novo but the same was rejected.
This Tribunal thereafter considered the question as to whether various items mentioned therein, namely :-
“1.Income from dividend.
2. Interest income.
3. Capital gains.
4. Gains from Foreign Exchange Rate Fluctuations.
5. Reversal of provisions and vendors credits.
6. Income from property rent.
7. Income from sell/lease of passive infrastructure like towers, dark fiber etc.
8. Other income including miscellaneous income.
9. Inclusion of Revenue from one licensed activity in the revenue of another licensed activity.
10. Revenue from sale of equipment including sale of handsets.
11. Receipts from USO funds.
12. Receipts from ADC (Access Deficit Charges).
13. Deductions from leased line charges, port charges, interconnection setup costs, signaling charges.
14. Bad debts, waivers, discounts from AGR; and
15. Inclusion of items of revenue on actual basis but exclusion of item of costs on actual payment basis; were not the activities which would come within the purview of Section 4 of the 1885 Act”, etc. would fall within the purview of ‘licensed activities’ or not.
This Tribunal furthermore considered the question as to whether the recommendations of TRAI should be accepted with prospective effect or not, but the same was negatived, stating :-
“The TRAI made its recommendations which we have considered in the light of arguments advanced by the parties and we have given our conclusions about the same. The result of this entire exercise is that so far as this Tribunal is concerned the issue has been finalized. The declaration of what should constitute gross revenue by this Tribunal means that at all times gross revenue should have been calculated on this basis. The present decision will be effective in finding out the figures of gross revenue. There is no reasonable basis to make this order effective from a prospective date. The matter has been pending determination for all these years for which nobody can be blamed. The respondent should not reap the benefit of the time lag in completing the legal process. We reject the recommendation of the TRAI for making its recommendations effective prospectively.”
The Tribunal however, opined:-
“The next question is from what date they should be made effective. We are dealing with specific cases filed before us by various petitioners. The date when a petitioner approached this Tribunal is the date on which it registered its grievance and sought redressal. Therefore, we make this order effective for each petitioner from the date it approached the Tribunal.”
Indisputably, the respondents have preferred appeals before the Supreme Court of India thereagainst and the matters are pending consideration before it.
It is furthermore not in dispute that various licensees including their associations have also preferred appeals before the Supreme Court of India against that part of the order which had directed that the same would be given effect to from the date of filing of the petitions by the respective Petitions.
We may, however also place on record that a Review Petition was also filed by the Petitioners therein before this Tribunal which was marked as RA No.11 of 2007 but the same was dismissed by reason of an order dated 14th September, 2007.
Mr. Vaidyanathan and Mr. Ramji Srinivasan the learned senior counsel appearing on behalf of the appellants would, in support of these petitions, contend :-
1. The principal contentions of the respondent having been rejected by this Tribunal, the respondent should not be permitted to re-agitate the same once over again.
2. The Association having filed a petition on behalf of its members, only because all their members had not joined therein, the same would not mean that they would be deprived from the benefit thereof.
3. The doctrine of level playing field should be applied for conferring the same benefit upon all the petitioners.
Mr. Malhotra, the learned counsel appearing on behalf of the respondent, on other hand, urged:-
1. As the matters are pending before the Supreme Court of India, it is open for the respondent to argue that the licensor having been conferred a special privilege in the matter of grant of license on the petitioners herein neither in law nor on fact they should be permitted to question the correctness or otherwise of the definition of the AGR in the license and/or are otherwise estopped and precluded from doing so having taken the benefit thereunder.
2. The Petitioners having filed a review petition before this Tribunal wherein a contention was raised that the same benefit may be granted to the Members of the Association, having been rejected, the said question can not be permitted to be re-opened.
3. The licensees who have been granted license subsequent to the rendition of judgement by this Tribunal can only be granted relief from the date of filing of their respective petitions.
Section 4 of the 1885 Act reads as under:
“4. Exclusive privilege in respect of telegraphs, and power to grant licences. – Within India, the Central Government shall have the exclusive privilege of establishing, maintaining and working telegraphs:
Provided that the Central Government may grant a licence, on such conditions and in consideration of such payments as it thinks fit, to any person to establish, maintain or work a telegraph within any part of India;
Provided further that the Central Government may, by rules made under this Act and published in the Official Gazette, permit, subject to such restrictions and conditions as it thinks fit, the establishment, maintenance and working –
a) Of wireless telegraphs on ships within Indian territorial waters and on aircraft within or above India, or Indian territorial waters, and
b) Of telegraphs other than wireless telegraphs within any part of India.
The Central Government may, by notification in the Official Gazette, delegate to the telegraph authority all or any of its powers under the first proviso to sub-section (1).
The exercise by the telegraph authority of any power so delegated shall be subject to such restrictions and conditions as the Central Government may, by the notification, think fit to impose.”
The Central Government in terms of the provisions contained in the 1885 Act as would appear from the preamble thereof were only entitled to exercise its jurisdiction as conferred thereby and not beyond the same.
The question as to whether, a State can claim special privilege in respect of dealing with telegraph services is not a matter which requires our consideration in this petition. It is, however, beyond any controversy that a statutory authority is bound to act within the four corners of the statute. Licenses for dealing with telegraphs have been granted for carrying ‘telegraph activities and, thus, we have no doubt, in our mind that for the purpose of computation of ‘Adjusted Gross Revenue’, the licensor by no stretch of imagination could have included any item for the purposes thereof beyond the licensed activities of the operators. A statutory authority, it is trite, if acts in breach of a provisions of the statute under which it has derived jurisdiction, would do so without jurisdiction and, thus the same shall be coram non judice.
It is, furthermore, well settled that a ‘State’ within the meaning of Article 12 of the Constitution of India must act fairly and reasonably. Any decision taken by it, if is found to be violative of the constitutional scheme of equality as enshrined under Article 14 of the constitution of India or the level playing field as also the statutory provisions, shall also be coram non judice. (See Star India Ltd. Vs. Sea TV 2007 (4) SCC 656).
In Administrative Law by H.W.R. Wade and C.F. Forsyth (Eighth Edition), at page 35 the law is stated as under :
“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 contention raised by the respondent herein had categorically been rejected by this Tribunal in the earlier petitions. They, cannot, therefore, be permitted to be raised once over again.
Although the matter in pending consideration before the Supreme Court of India, the principles of ‘Res-Judicata’ shall apply so far as this Tribunal in concerned. It is well settled that principles of the Res-Judicata would apply even in different stages of the same proceeding.
In Arjun Singh Vs. Mahindra Kumar, reported in 1964 (5) SCR 946, the law is stated as under :-
”12.We agree that generally speaking these propositions are not open to objection. If the court which rendered the first decision was competent to entertain the suit or other proceeding, and had therefore competency to decide the issue or matter, the circumstance that it is a tribunal of exclusive jurisdiction or one from whose decision no appeal lay would not by themselves negative the finding on the issue by it being res judicata in later proceedings. Similarly, as stated already, though S. 11 of the Civil Procedure Code clearly contemplates the existence of two suits and the findings in the first being res judicata in the later suit, it is well established that the principle underlying it is equally applicable to the case of decisions rendered at successive stages of the same suit or proceeding. But where the principle of res judicata is invoked in the case of the different stages of proceedings in the same suit, the nature of the proceedings, the scope of the enquiry which the adjectival law provides for the decision being reached, as well as the specific provisions made on matters touching such decision are some of the material and relevant factors to be considered before the principle is held applicable………
14.………………..But what we are concerned with is slightly different and that is whether the same Court is finally bound by that order at later stages, so as to preclude its being reconsidered. Even if the rule of res judicata does not apply, it would not follow that on every subsequent day on which the suit stands adjourned for further hearing, the petition could be repeated and fresh orders sought on the basis of identical facts. The principle that repeated applications based on the same facts and seeking the same reliefs might be disallowed by the Court does not however necessarily rest on the principle of res judicata. Thus if an application for the adjournment of a suit is rejected, a subsequent application for the same purpose even if based on the same facts, is not barred on the application of any rule of res judicata, but would be rejected for the same grounds on which the original application was refused. The principle underlying the distinction between the rule of res judicata and a rejection on the ground that no new facts have been adduced to justify a different order is vital. If the principle of res judicata is applicable to the decision on a particular issue of fact, even if fresh facts were placed before the Court, the bar would continue to operate and preclude a fresh investigation of the issues, whereas in the other case, on proof of fresh facts, the court would be competent, nay would be bound to take those into account and make an order conformably to the facts freshly brought before the Court.
As it is well settled that the general principles of Res-Judicata shall apply in a proceeding before this Tribunal, we have no doubt in our mind that the respondents herein cannot be permitted to raise the aforementioned contentions again and again.
Furthermore the plea of estoppel would not apply in a matter governed by a statute. Even rules of res judicata or estoppels or waiver or res judicata would not have any application in a case where an order has been passed without jurisdiction (See Chief Justice of A.P. and Anr. Vs. L. V. A. Dikshitulu and Ors. - AIR 1979 SC 193 at 198). See also Raju Ramsing Vasave Vs. Mahesh Deorao Bhivapurkar and Ors. 2008 (9) SCC 54 and Behari Kunj Sahkari Avas Samiti Vs. State of U. P. and Ors. 2008 (12) SCC 306.
Despite observations of the Supreme Court of India in its order dated 19.01.2007 in the appeals preferred from the judgement and order of TRAI, this Tribunal by its order dated 30.08.2007 has clearly held that the respondents can not be permitted to raise the contention of estoppel.
However, indisputably the question as to whether the effective date from which the parties hereto would be entitled to obtain any relief was determined to be the date of filing of the Petition.
We may, however for the said purpose notice the prayers made in the Review Application being R A No. 11 of 2007 which were as under:-
“(a)review its Order and judgement dated 30.08.2007 in Petition No. 7 of 2003;
(b) direct that the said judgement dated 30.08.2007 is modified and the penultimate Paragraph as quoted herein above be deleted;
(c) clarify that the effect and benefits of the Judgement dated 07.07.2006 and 30.08.2007 would ensure to the benefit of the Applicants from the date when they migrated to a Revenue Share Regime and/or were required to pay licence fee on the basis of a Revenue Share Regime;
(d) direct DoT to refund all the excess amounts collected from the applicants together with interest @ 12% per annum from the date when the excess amounts were paid.”
Although it had been urged by Mr. Vaidyanathan that ordinarily the application of the doctrine of prospective overruling is within the exclusive domain of the Superior Courts of the country and not the Tribunals, in our opinion, the same need not be gone into by us as the matter is pending before the Supreme Court of India.
There cannot, however, be any doubt or dispute that ordinarily the benefit granted to a class of litigants should be extended to all who fall within the said class. If in the case some of the licensees of ‘AGR’ is to be calculated on one basis, the said principle should not be denied to be applied in the case of the others. This Tribunal in the aforementioned case laid down a principle, namely that the Government of India can not levy any charges in respect of the items which were beyond the purview of the licensed activities. It is one thing to say that the said decision would come w.e.f. the date of filing of the respective applications by the concerned licensees but only on the basis thereof it is difficult for us to arrive at a decision that the benefit thereof would not be available to the other licensees, irrespective of the fact as to whether they were members of any association or not.
It is not denied that most of the petitioners before us were members of the Associations. Mr. Malhotra urged that the question as to whether the Association can espouse the cause of its members in a case of this nature and, thus, could have maintained a petition before this Tribunal on their behalf had been raised but had not been decided. It may or may not be so but we do not find that the said contention received the approval of this Tribunal as we do not find any discussion on the said question in the decisions of this Tribunal dated 7.7.2006 or 30th August 2007. We would assume that the said question had been raised but the fact remains that the petitions were allowed which would imply that the purported objection in regard to the maintainability of the petitions at the hands of the association, had been rejected. In fact irrespective of the fact that the petitioners were members of the Association, and some of them from their very inception being not in controversy,applying the doctrine of level playing field as also Article 14 of Constitution of India, we have no doubt in our mind that the Petitioners herein are entitled to obtain the same benefit which have been granted to those in the earlier rounds of litigation.
In Reliance Energy Ltd. and Anr. Vs. Maharashtra State Road Development Corporation Ltd. and Ors. 2007(8) SCC Page 1, the Supreme Court of India held as under:-
“36.We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of “non-discrimination”. However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to “right to life”. It includes “opportunity”. In our view, as held in the latest judgment of the Constitution Bench of nine Judges in I.R. Coelho v. State of T.N., Articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life. “Level playing field” is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of “level playing field”. We may clarify that this doctrine is, however, subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of “level playing field” is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. “Globalisation”, in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of “globalisation”. Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of “level playing field” embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the principle of “equality” should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated doctrine of “level playing field”. According to Lord Goldsmith, commitment to the “rule of law” is the heart of parliamentary democracy. One of the important elements of the “rule of law” is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of “reasonableness”, then such an act or decision would be unconstitutional.”
Although, in the review application, it was urged that the said benefit may be granted to the members of the association but no decision appears to have been rendered with regard to the application of the doctrine of ‘level playing field’ and/or Article 14 of the Constitution of India. It is not the case of the respondent that the claims of the petitioners’ are otherwise bared by the law of limitation and/or their conduct is such which would disentitle them from obtaining any equitable relief.
It is also well known that the scope of a Review Petition is limited. A bare perusal of the order of this Tribunal would go to show that having regard to the limited scope thereof, no relief was granted. But the same would not mean that the petitioners would be denied the relief in their respective petitions to which they are, otherwise entitled to.
In a judgement and order dated 26.08.2008 in Petition No. 129 (C) of 2007 (Tata Sky Ltd. Vs. Union of India), this Tribunal opined that the earlier decision dated 7th July, 2006 shall be squarely applicable in respect of DTH activities also.
It was stated:-
“The judgment of this Tribunal referred to above was followed by another judgment of the Tribunal dated 30th August, 2007 to which I was a party. The Bench delivering the subsequent judgment respectfully followed the previous judgment and I believe that both the judgments still hold the field. These judgments are binding on the Government. Still such issues as in the present case are being raised by the Government. The Government cannot charge license fee on income earned from activities which are unrelated to the licensed activities. The use of the word ‘gross revenue’ in clause 3.1 of the license and in the clause 3.1.1 of the amending order dated 31st July, 2006 cannot in my view change the legal position. The Government cannot act contrary to the statutory provision contained in Section 4 of the Act. If it flows from Section 4 that the Government can issue license and charge license fee only for activities mentioned in Section 4 of the Act, any contrary agreement cannot be sustained. It is settled law that parties cannot enter into an agreement which is contrary to law. This is my answer to the argument raised on behalf of the respondent that the license is a contract and parties having agreed to the contract, the terms of the contract have to be enforced. If the terms of a contract violate a statutory provision the terms are invalid.”
The respondent for historical reasons adopted a new policy in the year 1999 in terms whereof the principle of fixed license fees was switched over to revenue sharing basis. The legality and/or validity of the definition of the term AGR was in question before this Tribunal. It was held that the condition of license should not go beyond the statutory scheme i.e. for which licenses are granted namely ‘Telegraph Services’. Which could not have been done directly, it is well settled, cannot be done indirectly.
For the purpose of calculation of license fees by way of AGR or otherwise the licensor could not have widened the scope and ambit of the terms ‘Telegraph Services’.
Observations have been made by this Tribunal that the respondent should not have travelled beyond the statute and was bound to confine its activities within the four corners of the Telegraph Act.
The respondent is ‘State’ within the meaning of the provision of Article 12 of the Constitution of India. It is, therefore, constitutionally obligated to give effect to the equality clause contained in Article 14of the constitution. Applying the said principle, there cannot be any doubt or dispute that effect of a judgment, subject of-course to just exceptions, should be given equally in favour of persons similarly situated.
The respondent for the purpose of acting as a licensor in terms of the provision of the 1885 Act was required to act strictly within the four orners thereof. It, in other words, was required to confine its prerogatives for giving effect to the telegraph services and not beyond the same. TRAI, a statutory and an expert body had made its recommendations as to what would constitute ‘telegraph services’, which have been accepted by this Tribunal. The respondent, therefore, in our considered view could not have taken into consideration any item of income of the licensees beyond the same. Once the legal principle is decided, the respondent was bound to give effect thereto at least from the date when it was directed to be given by the Tribunal for the first time in the cases filed by the respective Unions/Associations.
It is one thing to say as to what would be the effect of the judgment but it is another thing to say when it would come into force. This Tribunal has off-course had not granted the entire relief sought for by the operators, but the same would not mean that a judgment in rem, otherwise, would not be given effect to in respect of the individual case also from the date of filing of the respective petitions, even in subsequent cases.
However, the benefit of the said decision shall be available to the new licensees in terms of order dated 30.08.2007 i.e. from the dates of filing of petitions respectively as their causes of action arose on different dates subject to the following observations.
Therefore, we, are of the opinion that benefit of the said judgement should be given to the petitions who were members of AUSPI and COAI for the respective dates of filing their applications having regard to the letter and spirit thereof.
We appreciate that the matter is not free from difficulties but bound as we are, by the ratio of the said decision, we think that substance of a judgment should be given preference to the relief granted to individual operators. A decision, as is well known, in an authority for what it decides and not what can logically be deduced therefrom (Quinn v. Leathem 1901-1903 All England Reporter page 1 at page 6). In Uttranchal Road Transport Corpn. Vs. Mansaram Nainwal - 2006 (6) SCC 366) it is stated as under:
“The enunciation of the reason or principle on which a question before a court had been decided is alone binding as a precedent. (See State of Orissa v. Sudhansu Sekhar Misra and Union of India V. Dhanwanti Devi.) A case is a precedent and binding for what is explicitly decides and no more. The words used by judges in their judgments are not to be read as if they are words in a Act of Parliament.”
The ratio of the decision in the AGR matter relates to the principles discussed by us hereinbefore. It was required to be given full effect to, by the respondent not only having regard to constitutional scheme, but also having regard to different facets to the doctrine of “good governance”. A State cannot unduly enrich itself. It cannot act arbitrarily. Non-discriminatory action amongst the persons similarly situated is the avowed object of the constitutional framework.
For the reasons aforementioned, the impugned demands cannot be sustained and they are set aside accordingly.
These petitions are allowed with the aforementioned directions and observations. However, in the facts and circumstances of the case, there shall be no order as to costs.