Shortly thereafter, the ministry of communications issued a directive to the Trai to hold the new tariff rates in abeyance on the grounds that the Trai order dealt with questions of "policy" which, under the Trai Act, must be determined by the central government.

On March 26, however, the ministry announced that DoT and MTNL would set their rentals and local call charges below the ceilings set by Trai. Although the dispute between the ministry and Trai appears to be resolved, the language of the Trai Act relied upon by the ministry in issuing the directive is unconstitutional. The provisions of the Trai Act allowing the government to issue policy directions constitute an excessive delegation of legislative power to the executive branch inviolation of the constitution.

The Trai Act, 1997 provides that, notwithstanding anything contained in the Indian Telegraph Act, Trai may notify in the official gazette the rates at which telecommunication services within India and outside India shall be provided. The Act further provides that Trai shall, in exercise of its powers or the performance of its functions, be bound by such directions on questions of policy as the central government may give in writing to it from time to time.

The decision of the central government whether a question is one of "policy" or not shall be final. The ministry's directive to Trai to hold the new rates in abeyance was thus based on the grounds that the traiff order constituted a policy question. However, the provision in the Trai Act allowing the government to issue a policy directive exceeds well settled constitutional limits on the legislature's power to delegate its functions.

The constitution confers the power to make laws on the legislature. Since theconstitution entrusts the duty of law making to Parliament and the state legislatures, the legislature is not permitted, in turn, to delegate such power to some other authority.

The legislature cannot abdicate its "essential legislative functions" and thereby create a super parliamentary authority or parellel legislature or any other authority. It is a well-settled constitutional law that "essential legislative functions" consist of the determination of legislative policy and articulating that policy in binding rules.

The Supreme Court has repeatedly held that the legislature cannot delegate "uncanalised and uncontrolled power" but must set the limits of the power delegated by declaring the policy of the law and by laying down standards for implementation and execution of the law.

In other words, the legislature can delegate power only when the legislative policy and guidelines are adequately articulated in the statute and the delegate is limited to implementing the legislative policy within theguidelines provided. If a statute permits any other authority to articulate the policy itself, then such statutory provision will constitute a constitutionally invalid delegation of power by the legislature.

The Trai Act embodies the legislative policy that an independent statutory authority must regulate telecommunications services and not the central government. The Act expressly includes tariff setting within the functions of Trai. The legislature has thus articulated the policy in the Act that tariff setting exercise should be conducted by Trai. As the legislature has clearly revealed its mind, the decision of who should undertake tariff setting cannot be determined by an outside authority or the central government.

It would thus be an excessive and impermissible delegation of legislative power for the Act to provide that the tariff setting power conferred by law on Trai is subject to policy directives issued by the central government from time to time. The policy has already been articulated by thelegislature and cannot be abdicated, by the terms of the Act, to the executive branch of government.

The word "policy" in the Act must thus be interpreted as legislative policy embodied in the Act and not administrative policy determined by the central government from time to time. Trai, as a statutory body, can only be subject to legislative policy and not executive discretion. Otherwise, the entire statutory edifice created by the Trai Act would be nullified by a mere administrative order. This constitutes conferral of unlimited discretion on the executive and an abdication of the law making function. Since the constitution confers the law making power on the legislature and not on the central government, allowing the central government to stop the Trai from exercising its statutory powers by executive fiat would be unconstitutional.

The proposition that "policy" must mean legislative policy is further supported by the 1996 Supreme Court judgment in Delhi Science Forum vs Union of India. In that case,the telecom policy was challenged as violating the Telegraph Act. The apex court noted that telecom policy must be sorted out in the Parliament which has to approve such policies. The Supreme Court took the view that policies which have been adopted by the Parliament cannot be tested in a court of law.

As the new telecom policy was placed before the Parliament, it was deemed that Parliament had approved the same and the court refrained from expressing a view on the policy. It is important to note that the validity of the telecom policy was premised on that it was a "legislative policy" which had been laid before Parliament and was not merely an administrative decision.

In sum, the telecom policy must be approved by Parliament and cannot be solely the exercise of executive discretion. Moreover, statutory regulators are created by legislation which embody a particular legislative policy. The regulator is subject only to the legislative provisions and the policy incorporated therein.

The statutoryregulator cannot be made subject to any other "policy" decisions made by the executive branch of the government because this confers the law making function on an authority other than the legislature in excess of permissible consitutional limits.

Therefore, the language in the Trai Act that the central government will issue directions on questions of policy and the decision of the central government whether a question is one of policy or not shall be final must be struck down by the courts as excessive delegation of legislative power to the executive.

(The author works with Viswanathan & Co, Advocates)