The notification further provides that reference of a matter to the Trai for arbitration shall be made by the central government, the arbitration proceedings shall be conducted in accordance with the Arbitration and Conciliation Act, 1996 and the arbitration shall be held in New Delhi.

However, the notification constitutes excessive delegation of legislative power which exceeds constitutional limits and is thus invalid in law.

The notification is delegated legislation issued under a statutoryprovision, namely, Section 11 of the Trai Act which provides that the Trai may perform such other functions including administrative and financial functions as may be necessary to carry out the provisions of the Trai Act.

Delegated legislation is a means by which the legislature delegates part of its legislative function to an outside authority, in this case, the Centre. However, there are well-settled constitutional limits on the scope of delegated legislation. The legislature cannot delegate essential legislative functions such as the determination of legislative policy and cannot delegate its power to repeal a low or modify its essential features.

Instead, the legislature may, after laying down the legislative policy in the statute, confer discretion on an administrative agency to work out the details within the framework of the policy. In short, the delegate is supposed to (fill up the details) and not try to re-write the law.

In this case, the notification seeks to bring the Centre, in itscapacity as a licensor, under the arbitral jurisdiction of the Trai. However, this contradicts the legislative policy of the Trai Act as interpreted by the Delhi High Court in its 1998 judgment in Union of India vs Trai. The high court held that the intent of the legislature was Trai would not have jurisdiction over any disputes arising out of the government's role as a licensor of telecom services. In reaching this decision, the court relied on the standing committee's report which had suggested amendments to the Trai Bill. The committee, according to the court, knew that even after amendments in the Trai Bill, 1996, the licensing powers of the government had not been made subject to the Trai Act. The high court also relied on the Trai Act's language which provides that the Trai Act is in addition to the Indian Telegraph Act, 1885, which vests licensing powers on the central government and that nothing shall affect the jurisdiction, powers and functions of the telegraph authority under the 1885 act. Thesingle judge pointed out that the licensing powers of the government under the Telegraph Act have been kept intact, therefore, the government as a licensor is not under Trai's control. The court thus took the view that the plenary licensing powers of the government created under the Telegraph Act 1885 could not be curtailed, restricted or otherwise circumscribed by the Trai Act. The court accordingly held that only the government department which provides services is subject to Trai Act and not the government as a licensor of telecom services.

The notification seeks to accomplish precisely what the high court has stated to be against the legislative policy of the Trai Act. The notification brings the government in its capacity as licensor within the arbitral jurisdiction of Trai. However, the high court has stated that the government's plenary licensing powers are not subject to the Trai Act and that the government's licensing powers cannot be restricted or circumscribed by the Trai Act. In fact, thenotification seeks to repeal the legislative policy in the Trai Act as interpreted by the high court. By seeking the repeal of legislative policy set forth in the Trai Act, the notification transgresses the well-settled limits of permissible delegation of legislative power and must be struck down.

The notification also exceeds the constitutionally permissible limits of legislative delegation by conferring arbitrary power on the executive, that is, the central government. The notification provides that the central government shall refer matters to arbitration to Trai. This means that the licensee will have no power to refer matters to arbitration to the Trai and will have no remedy against any actions taken by the government as licensor if the government chooses not to make a reference to arbitration. The result of this unilateral reference of matters to arbitration is clearly a conferral of arbitrary power on the central government to determine whether a dispute will be arbitrated or not. However, it iswell-settled that the legislature cannot delegate uncontrolled and arbitrary power to the executive; instead, the delegate must act within the statutory guidelines laid down by the legislature.

In addition to exceeding the permissible limits of legislative delegation, the unilateral power to refer a matter to arbitration conferred on the central government also violates the provisions of the Arbitration and Conciliation Act, 1996. The Arbitration Act contemplates that either party to a dispute or a judicial authority may make a reference to arbitration. The Arbitration Act does not allow only one of the parties to be vested with the power to refer a matter to arbitration. The unilateral reference to arbitration by the government is also an arbitrary exercise of executive power in violation of Article 14 of the Constitution. It is the duty of the court to strike down any arbitrary power conferred on the executive by the legislature which would result from enforcement of the notification.

In sum, thenotification should be struck down as excessive delegation of legislative power which transgresses constitutional limits because -