IMPORTANT POINT
The Writ Petitions and Transferred cases questioning the power of the Central Government to grant licences under Section 4 of the Indian Telegraph Act, 1885 to different non-Government Companies with foreign aid to establish and maintain Telecommunications System in India and the validity of the procedure adopted by the Central Government for the said grant are liable to be dismissed subject to the directions given in this judgment.

Headnote:(i) Indian Telegraph Act, 1885-Sections 3(1) and 4-New Telcom Policy of Central Government-Privatisation by inviting tenders-Challenged on the ground that it shall endanger the National Security of the country, and shall not serve the economic interest of the nation-Primary stand that Central Government cannot part with the exclusive privilege it has under Section 4 to private companies by tenders-
       Held : Under the proviso to Section 4(1), the Central Government can grant licences in respect of establishing, maintaining and working of Telecommunications to private Indian Companies but such power should be exercised on well settled principles and norms which can satisfy the test of Art. 14 of the Constitution. (Paras 8 to 10)
       (ii) Constitution of India-Art. 32-Writ Petitions questioning the power of Central Government to grant licences to different non-Government Companies with foreign participation to establish and maintain Telecommunication System in the country and the validity of the procedure adopted by the Central Government for the said grant-Judicial review is on allegations that decision is taken in bad faith or is based on irrational or irrelevant considerations or that it has been in violation of any imperative procedure under any party aggrieved satisfies that the ultimate decision in respect of the selection has been vitiated on account of any of the above three allegations, normally the courts should be reluctant tointerfere with the same. (Para 10)
       (iii) Tender Documents for provision of telephone service invited for 20 Telecom Territorial Circles-Scrutiny by Tender Evaluation Committee-Attack on policy of capping not proper-No attack in respect of procedure for selection adopted by the Committee-No discrimination while awarding the licences in different service circles-Telecom Regulatory Authority of India constituted-Control on Tariffs charged by licensees-Challenged by Writ Petitions and Transferred cases-Whether liable to be dismissed? (Yes, with directions) (Telecom Regulatory Authority of India Ordinance, 1996).
       Held : With the establishment of the Telecom Regulatory Authority of India, it can be said that an independent Telecom Regulatory Authority is to supervise the functioning of different Telecom service providers and their activities can be regulated in accordance with the provisions of the said Ordinance. (Para 27)
       Section V of Tender Documents contains financial conditions. Clause 2.0 thereof says:
        TARIFF: Tariff for the SERVICE provided by the LICENSEE shall not be more than DOT s Tariff. Tariff is subject to regulation by Telecom Regulatory Authority of India, as and when such an authority is set up by the Government of India."
       The aforesaid condition provides that licensee shall not charge tariff for service more than DOT s tariff and such tariff shall be subject to regulation by Telecom Regulatory Authority of India. This condition shall safeguard the interest of the persons to whom services are provided by the licensees. (Para 28)
       The new Telecom Policy is not only a commercial venture of the Central Government, but the object of the policy is also to improve the service so that the said service should reach the common man and should be within his reach. The different licensees should not be left to implement the said Telecom Policy according to their perception. It has rightly been urged that while implementing the Telecom Policy the security aspect cannot be overlooked. The existence of a Telecom Regulatory Authority with the appropriate powers is essential for introduction of plurality in the Telecom Sector. The National Telecom Policy is a historic departure from the practice followed during the past century. Since the private sector will have to contribute more to the development of the telecom network than DOT/MTNL in the next few years, the role of an independent Telecom Regulatory Authority with appropriate powers need not be impressed, which can harness the individual appetite for private gains, for social ends. The Central Government and the Telecom Regulatory Authority have not to behave like sleeping trustees, but have to function as active trustees for the public good. (Para 29)
       Further held : Subject to the directions given above, the writ petitions and Transferred Cases are dismissed. However, there shall be no orders as to costs. (Para 30)

JUDGMENT

N.P. Singh, J.-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 Tele-communications in providing telecommun-ications services. Later, guidelines for induction of private-sector into basic telephone services were announced and a Commitee 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 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 inter-connectivity 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 nation

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