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Bharat Sanchar Nigam Ltd. & Etc. vs. M/S Tata Communications Ltd. - (Supreme Court) (22 Sep 2022)

Executive orders or circulars in the absence of any legislative competence cannot be made applicable with retrospective effect


Media and Communication

The instant batch of appeals has been preferred by the Appellant, Bharat Sanchar Nigam Ltd. assailing the judgment passed by the Telecom Disputes Settlement and Appellate Tribunal, New Delhi, followed with the order rejecting the application filed by the Appellant.

The limited question which has been raised for consideration is as to whether the rates prescribed by the Appellant under the circular dated 12th June, 2012 could be applied retrospectively w.e.f. 1st April, 2009 or be effective from 1st April, 2013, as observed by the Tribunal and whether the Appellant is entitled to claim 10% notional increase every year from 1 st April, 2009 to be applicable from 1st April, 2013.

It is a settled principle of law that, it is the Union Parliament and State Legislatures that have plenary powers of legislation within the fields assigned to them, and subject to certain constitutional and judicially recognized restrictions, they can legislate prospectively as well as retrospectively. Competence to make a law for a past period on a subject depends upon present competence to legislate on that subject. By a retrospective legislation, the Legislature may make a law which is operative for a limited period prior to the date of its coming into force and is not operative either on that date or in future.

The power to make retrospective legislations enables the Legislature to obliterate an amending Act completely and restore the law as it existed before the amending Act, but at the same time, administrative/executive orders or circulars, as the case may be, in the absence of any legislative competence cannot be made applicable with retrospective effect. Only law could be made retrospectively, if it was expressly provided by the Legislature in the Statute. In view of principles of law on the subject, applicability of the circular dated 12th June, 2012 to be effective retrospectively from 1 st April 2009, in revising the infrastructure charges, is not legally sustainable and to this extent, present Court is in agreement with the view expressed by the Tribunal under the impugned judgment.

The service provider is not under an obligation to pay any additional infrastructure charges which was prescribed by the Appellant under its circular dated 12th June, 2012 for the previous years, effective from 1st April, 2009, but at the same point of time, it was open for the Appellant to notionally fix the charges to be computed and became payable from 1st April, 2013, based on 10% annual increase every year or by any other mechanism which may have a reasonable justification.

The order of the Tribunal are modified and the Appellant is at liberty to revise the notional rates based on 10% increase every year in terms of circular dated 12th June, 2012 as applicable on 1st April, 2013 and to raise its additional demand/bills based on notional increase of infrastructure charges effective as on 1st April, 2013 to the service providers/respondents and if the service providers/ respondents fail to pay, consequences in terms of the agreements executed between the parties shall follow. Appeal partly allowed.


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