P L D 2009 Islamabad 41 (PLP)

MUHAMMAD MUNIR PERACHA, J.

This judgment shall dispose of Writ Petitions Nos. 705, 706, 763, 741 and 1526 of 2008 as well as F.A.Os Nos.7, 11 and 13 of 2008.

2. On 13-10-1996, Pakistan Telecommunication (Reorganization) Act, 1996 was promulgated. Section 57 of the Act empowers the Federal Government to make rules. Section 57 is reproduced:-- "Powers to make rules.--(1) For carrying out the purposes of this Act and where provided for hereinbefore, the Federal Government may, from time to time, by notification in the official gazette, make rules not inconsistent with this Act. (2) Without prejudice to the foregoing powers, the Federal Government may make rules:-- (a) extending the categories of telecommunication systems or telecommunication services for which a Licence is not required under section 20; (b)

(c) restricting or prohibiting the use of any public switched network for signalling purposes in circumstances in which charges otherwise payable may be avoided or reduced, or the advertising of means or services for such use. In exercise of the powers conferred by section 57 of the Act, Federal Government made rules called as "Access Promotion Rules, 2004". On 27-8-2005, Pakistan Telecommunication (Reorganization) (Amendment) Ordinance, 2005 was enacted. A new Chapter III-A was added in the Pakistan Telecommunication (Re-organization) Act, 1996. This Chapter contains sections 33-A to 33-E. Section 57 was also amended. In subsection (1) the words "and where provided for herein before" was omitted. In subsection (2) new clauses (ab), (ac), (ad), (ae), (at), (ag) and (ah) were added. The said amendment Ordinance stood repealed at the expiration of four (4) months in terms of Article 89(2) of the Constitution. However, in the year 2006, Act II of 2006 namely Pakistan Telecommunication (Re-organization) (Amendment) Act, 2006 was promulgated. Through the Amendment Act, Chapter III-A was added in the Act of 1996. Chapter III-A added through the Amending Act of 2006 was exactly the same as Chapter III-A added vide Amendment Ordinance, 2005. Similarly through this Amendment Act, section 57 of the Act of 1996 was amended exactly on the same line as was done by Amending Ordinance, 2005. On 1-11-2006, the Federal Government made Universal Service Fund Rules, 2006.

3. The petitioners and the appellants (some of the petitioners have also filed appeals) are Long Distance & International (LDI) licensees or Local Loop Licensees. Some of them hold both kind of licenses. The terms and conditions of the LDI licenses are almost common. The conditions 3.1.1, 3.5 and 3.6 are relevant for the present purpose and are being reproduced:-- 3.1.1. This Licence is subject to the terms and conditions contained herein and to the Act, Rules and Regulations respectively. In the event of any conflict or inconsistency between the provisions of this Licence, and the provisions of the Act, Rubs or Regulations, the provisions of the Act, Rules and Regulations shall prevail. 3.5 ACCESS PROMOTION CONTRIBUTION. 3.5.1. The sharing of revenues from incoming international calls, between LDI/LL licensees shall be determined through a formula specified by the Authority from time to time, however for the period up to the policy review the Licensee is permitted to retain a fixed share (up to 6 US cents per minute) of termination charge paid by international carriers for termination of international incoming calls. The remaining amount called "Access Promotion Contribution" (APC) shall be passed on to local loop licensees. 3.5.2. The APC derived from the formula would be reviewed and notified at least once every six months. 3.5.3. The APC shall be the PTA approved Total Accounting Rate (TAR) minus six (6) cents which shall not be changed without prior written approval of the authority. 3.6. UNIVERSAL SERVICE FUND CONTRIBUTION 3.6.1. In addition to the contribution under 3.4.1. the Licensee shall contribute to the Universal Service Fund in an amount calculated on the basis of 1.5% (or such lesser amount as determinated by the Rules) of the Licensee's annual gross revenue from, Licenced Services for the most recently completed Financial Year of the Licensee minus inter-operator payments and related PTA/FAB mandated payments. However, initial licence fee and initial spectrum fee shall not be deducted from the gross revenue.

4. So far as the local loop licenses are concerned, terms 3.1.1, 3.4 and 3.5 are relevant and being reproduced:-- 3.1.1. This Licence is subject to the terms and conditions contained herein and to the Act, Rules and Regulations respectively. In the event of any conflict or inconsistency between the provisions of this Licence, and the provisions of the Act, Rules or. Regulations, the provisions of the Act, Rules and Regulations shall prevail. 3.4 Universal Service Fund Contribution. 3.4.1. In addition to the contribution under 3.3.1, the Licensee shall contribute to the Universal Service Fund in an amount calculated on the basis of 1.5% (or such lesser amount as determined by the Rules) of the Licensee's annual gross revenue from Licensed Services for the most recently completed Financial Year of the Licensee minus inter-operator payments and related PTA/FAB mandated payments. However, initial license fee and initial spectrum fee shall not be deducted from the gross revenue. 3.5 ACCESS PROMOTION CONTRIBUTION. 3.5.1. LL Licensee will be entitled to receive Access Promotion Contribution (APC) from LDI Licensee for unsuccessfully terminated international in coming calls.

5. Through the present writ petitions, the petitioners have prayed for a declaration to the effect that Access Promotion Rules 2004 are ultra vires and that all the demands raised and money received by the Federation of Pakistan and Telecommunication Authority in respect of Access Promotion Contribution including APCL and APC for USF and contribution to the Universal Services Fund and Research and Development Fund have been raised and received without lawful authority and having no legal effect. The appellants have been proceeded against by the Pakistan Telecommunication Authority under section 23 of the Pakistan Telecommunication (Re-organization) Act, 1996 for contravention of the terms and conditions of the Licenses having failed to make the payments. The orders have been passed by the Authority against them under section 23 of the Ordinance. The appeals have been filed to challenge the said orders of the Pakistan Telecommunication Authority.

6. I have heard learned counsel appearing for the petitioners and also Barrister Mozeen Qureshi, learned counsel for the Federal Government was also heard.

7. Learned counsel appearing for the petitioners submits that the Access Promotion Rules 2004 are ultra vires because up till 27-8-2005 when Pakistan Telecommunication (Re-organization) (Amendment) Ordinance, 2005 was promulgated section 57 did not give power to the Federal Government to make said rules. According to learned counsel the amended section 57 and Chapter III-A inserted by Amendment Ordinance, 2005, conferred power on the Federal Government to frame Access Promotion Rules. Learned counsel further submit that the Pakistan Telecommunication (Re-organization) (Amendment) Ordinance, 2005 stood repealed after four (4) months of its enactment in terms of Article 89 of the Constitution. Thereafter in the year 2006, Pakistan Telecommunication (Re-organization) (Amendment) Act was enacted. When questioned, whether Access Promotion Rules, 2004 would become valid on the promulgation of Pakistan Telecommunication (Re-organization) (Amendment) Ordinance, 2005, all the learned counsel appearing for the petitioners and appellants replied in the negative. They were of the opinion that since the Ordinance itself stood repealed, after four months from its promulgation, Access Promotion Rules, 2004 cannot be treated to be valid. I inquired from them whether the said rules can be taken to be valid rules, after enactment of Pakistan Telecommunication (Re-organization) (Amendment) Act, 2006. Some of them replied in positive whereas the others in the negative. Those who held negative opinion were of the view that Access Promotion Rules, 2004 could be declared valid only if those were framed in the year 2006 after enactment of Pakistan Telecommunication (Reorganization) (Amendment) Act, 2006.

8. On the other hand, learned counsel appearing for the respondents submit that petitioners and the appellants were awarded licenses by the Pakistan Telecommunication Authority on certain terms and conditions. They are bound by the terms and conditions of the licenses and in case of violation, they are liable to be proceeded against by the Authority. Had they not accepted the terms and conditions of the licenses issued to them, Pakistan Telecommunication Authority would have declined licenses. After agreeing with the terms and conditions, they cannot be permitted now to say that the terms and conditions are illegal. According to them, the appeals filed by them are liable to be dismissed on the ground that the Authority was competent to proceed under section 23 of the Reorganization Act, 1996 against them for contravention of the terms and conditions of the licenses. According to learned counsel appearing for respondents, the writ petitions are liable to be dismissed, writ jurisdiction being discretionary and the petitioners having got the licences on agreed terms and conditions. Using the right of reply, learned counsel for the petitioners contended that any term and condition of the license, which is violative of Law or Rules has to be ignored in view of condition 3.1.1. of the terms and conditions of the License.

9. Let me first examine whether Access Promotion Rules 2004 when framed in the year 2004 are ultra vires of the Pakistan Telecommunication (Re-organization) Act, 1996 having no legal backing section 57 of the Act empowering the Federal Government to make rules has already been reproduced. The Federal Government can frame rules for carrying out the purposes of the Act. Learned counsel appearing for the petitioners were of the opinion that the power of the Federal Government to make rules is subject to two conditions. The Rules can be framed for carrying out the purposes of the Act, if provided for in the provisions contained in sections 1 to 56 of the Act. However, the view point of the learned counsel appearing for the respondents is that the word "and" is to be read as "or". He refers to section 29(4) of the Act which read was under:-- "The Federal Government may make rules requiring manufacturers, importers and dealers in terminal equipment to mark such equipment and indicate in advertising therefore whether or not the terminal equipment is approved for connection to a public switched network." I agree with the learned counsel for the respondents that the Federal Government has the power to frame rules for carrying out the purposes of the Act. Apart from this, the Federal Government is vested with a power to frame rules, if it is provided for in earlier sections to section 57 of the Act like section 29(4). I share the views of the learned counsel for the respondents that the word "and" is to be read as "or". There is abundant authority for the proposition that the words "and" and "or" are inter-changeable. The omission of the word "where provided for herein before" can be explained on the ground that the Legislature might have thought that if power to make rules for carrying out the purposes of the Act vests in the Federal Government, an additional power to frame rules, if provided for in the sections before section 57 is not required to be given because the power to frame rules to carry out the purposes of the Act would include the power to frame rules specifically mentioned in earlier sections of the Act than section

57. Functions of the Authority are enumerated in section 4 of the Act. The authority is to regulate the establishment, operation and maintenance of Telecommunication Systems in Pakistan. It is to promote the availability of a wide range of high quality, efficient, cost effective and competitive Telecommunication Services throughout Pakistan. One of the function of the authority is to promote rapid modernization of the Telecommunication Systems and Telecommunication services. Powers of the Authority are mentioned in section 5 of the Act. One of the power 2(h) is "to provide guidelines for, and determine, the terms of interconnection arrangements between licensees where the parties to those arrangements are unable to agree upon such terms". Section 6 of the Act provides for the responsibility of the Authority. One of the responsibility is to ensure that the rights of the licensees are duly protected. Keeping in mind the functions of the authority mentioned in clause (d) of section 4 "to promote the availability of a wide range of high quality, efficient, cost effective and competitive telecommunication services through out Pakistan" and the funds required to .achieve the said purpose, the Access Promotion Rules, 2004 were framed by the Federal Government making provision for Universal Service Fund created and maintained by the Federal Government. Rules 5 of the Access Promotion Rules, 2004 provided mechanism for determining contribution made by a LDI licensee to the Universal Service Fund. Similarly, power of the authority mentioned in clause (h) of section 5(2) already reproduced in the earlier part of the judgment necessitated Rule 4 of the Access Promotion Rules, 2004. The rest of the provisions of the Access Promotion Rules, 2004 were also required to be framed to achieve the above said two objects. In view of what has been said above, I am convinced that Access Promotion Rules, 2004 are intra vires of the Pakistan Telecommunication (Re-organization) Act, 1996. It is left to be explained that if the un-amended Pakistan Telecommunication (Re-organization) Act, 1996 gives power to the Federal Government to frame Access Promotion Rules, 2004, what necessitated the Legislature to enact Pakistan Telecommunication (Re-organization) (Amendment) Ordinance, 2005 or Pakistan Telecommunication (Re-organization) (Amendment) Act, 2006. In section 57 subsection (2), clauses (ab), (ac), (ad), (ae) (at), (ag) and (ah) have been added. Generally while empowering the government or any other functionary to make rules, the legislature uses the word "may make rules for carrying out the purposes of the Act". After giving power to frame rules in general terms, it has been the methodology adopted by the legislature to enumerate certain subjects on which the Government or the functionary may frame rules. The provisions enumerating the subjects after giving the general power to frame rules does not mean that the power is confined to only those subjects which are specifically mentioned. Exactly this methodology has been adopted in section 57 of the Act of 1996. Even otherwise out of the added clauses, Only clause (ab) would be relevant for the present purposes and clause (ab) deals with rules making power regarding administration of the USF and Research and Development Fund. It does not relate to creation of USF and Research and Development Fund or for determination of the contribution of the licensees. Similarly, Chapter III-A added by Pakistan Telecommunication (Re-organization) (Amendment) Ordinance, 2005 or Pakistan Telecommunication (Reorganization) Act, 2006 deals with the administration and utilization of the USF and Research and Development Fund. It contains provisions as to what amounts would go to USF and Research and Development Fund, apart from the contribution by the licensees, it, therefore, cannot be said that Chapter III-A was added to provide legal backing for the Access Promotion Rules, 2004. Access Promotion Rules, 2004 were validly promulgated in the year 2004. Since I have come to the conclusion that Access Promotion Rules, 2004 were validly promulgated, the arguments of the learned counsel appearing for the petitioners that any term and condition of the license which is violative of law or rules has to be ignored in view of condition 3.1.1 of the terms and conditions of the licence become irrelevant. Even otherwise condition 3.1.1 would be applicable only if there is a law or rule inconsistent with the terms and conditions of the license. If Access Promotion Rules, 2004 are excluded, there remains no law or the rules which can be said to be inconsistent with the terms and conditions of the licenses. The arguments raised by Mr. Afnan Karim Kundi, Advocate that APC for USF is not in nature of fee but akin to a tax has not impressed me. I am in agreement with learned counsel for the respondents that while getting the licenses, the petitioners and the appellants agreed with the terms and conditions of the licenses. If they while getting the licenses had not agreed with the terms and conditions, the Pakistan Telecommunication Authority, which has the power under section 21 of the Pakistan Telecommunication (Re-organization) Act, 1996 would not have awarded licenses to them. Section 21 of the Pakistan Telecommunication (Re-organization) Act, 1996 gives exclusive power to the authority to grant licenses and while granting licenses, could lay down the terms and conditions of the licenses.

12. For all these reasons titled writ petitions and appeals are dismissed with no order as to costs. S.A.K./W-5/Isl. Petitions and appeals dismisse