The court upheld the Central Government's authority to grant telecommunications licenses to private entities under Section 4 of the Indian Telegraph Act, emphasizing legislative deference in economic regulations.

1 The petitioners in different writ petitions have questioned the power of the Central Government to grant licences to different non Government Companies to establish and maintain Telecommunications System in the country and the validity of the procedure adopted by the Central Government for the said grant.

2 In February 1993, the Finance Minister in his Budget speech announced Government's intention to encourage private-sector involvement and participation in Telecom to supplement efforts of Department of Telecommunications especially in creation of internationally competitive industry. May 13, 1994 National Telecom policy was announced which was placed in the Parliament saying that the aim of the policy was to supplement the effort of the Department of Telecommunications in providing telecommunications services. Later, guidelines for induction of private-sector into basic telephone services were announced and a Committee was set up to draft the tender documents for basic telephone services under the Chairmanship of G.S.S. Murthy. Ministry of Communications published the 'Tender Documents for Provision of Telephone Service. It specified and prescribed the terms and conditions for the basic services and it also conceived foreign participation but as a joint venture prescribing a ceiling on total foreign equity so far the Indian Company was concerned was not to exceed 49% of the total equity apart from other conditions.

3 Pursuant to the notice inviting tenders, tenders were submitted for different circles, but before licences could be granted by the Central Government, writ petitions were filed in different High Courts as well as before this Court. All writ petitions filed before different High Courts were transferred to this Court to be heard together.

4 Telecommunications has been internationally recognised as a public utility of strategic importance. The variety of Telecommunications services that has become available globally in the last decade is remarkable. It is being realised that economy is increasingly related to the way this Telecom infrastructure functions for purpose of processing and transmission of information, which has acquired central stage in the economic world today. The special aspect about Telecommunications is interconnectivity which is known as 'any to any requirement.' Because of the economic growth and commercial changes in different parts of the world, need for inter - connectivity means that communication systems have to be compatible with each other and have to be actually inter - connected. Because of this, there is a demand even in developing countries to have communication system on international standards. Even after several decades of the invention of the telephone system, in almost all countries Telecommunications was the subject of monopoly supplied with the public network operator normally being the State owned Corporation or Government Department. Then it was not thought due to different considerations that such right could be granted to private sectors denuding the right of the monopoly of the Government to maintain and run the system of Telecommunications. The developed countries first took decision in respect of privatisation of Telecom which amounted to giving up the claim of exclusive privilege over such system and this led to the transition from monopoly to a duopoly policy in many countries. India, although a developing country also faced a challenge in this sector. By and large it was realised that this sector needed acceleration because of the adoption of liberalised economic policy for the economic growth of the country. It appears that the policy makers were faced with the implications for public welfare vis-a-vis the sector being capital intensive. How the network is well maintained so as it reaches the largest number of people at a price to be paid by such users which can be held as reasonable? This issue was also inter related with the defence and national security of the nat