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2009 DIGILAW 458 (GUJ)

BHARAT SANCHAR NIGAM LIMITED v. STATE OF GUJARAT

2009-07-13

K.M.THAKER, M.S.SHAH

body2009
MOHIT S. SHAH, J. ( 1 ) THESE Letters Patent Appeals are directed against the judgment and order dated 16. 12. 2008 of the learned Single judge in writ petitions filed by the present appellant- Bharat Sanchar Nigam Limited (hereinafter referred to as the 'b. S. N. L. ')challenging the Government Resolutions dated 4. 5. 2007 and 25. 4. 2008 in relation to the restoration charges and rental charges to be levied by the local Authorities like, municipalities and Municipal Corporations from B. S. N. L. and other service providers to lay down their telephone cables under the lands belonging to the local Authorities. ( 2 ) THE learned Single Judge disposed of the petitions after giving following directions: "25. In view of the above, following directions shall meet with the ends of justice: a) The petitioners may approach before the concerned Authority under Section 15 of the Act for final quantification of the amount of charges to be collected as prescribed by the Government Resolution annexure-A. B) If such an application is made by the petitioners within period of four weeks from today, the matter shall be considered by the concerned Authority in accordance with law as early as possible. Until such decision of the concerned officer, or in absence of any express order of the concerned officer, recovery by the concerned local Authority from the respective petitioners shall not be enforced, if respective petitioners deposits full amount chargeable after the date of the resolution and further deposits 50 percent of the amount chargeable prior to the date of resolution as per rate prescribed in the resolution both with the concerned local authority. The officer shall decide the matter, if required after hearing the State Government. C) However, so far as the direction of 50 percent of the amount is concerned, the amount already paid or deposited by the respective petitioners with such local authority prior to the date of the resolution shall be given set off and the petitioners would be required to pay only balance or remaining amount for total forming part of 50 percent. D) It is further observed that municipality shall keep the amount in separate bank account and shall not use the same except for maintenance or repairing of the road or restoration of the road. D) It is further observed that municipality shall keep the amount in separate bank account and shall not use the same except for maintenance or repairing of the road or restoration of the road. E) The aforesaid shall be subject to final order, if any, passed by the concerned authority under Section 15 of the Act. F) So far as the challenge to the action for collection of the charges/taxes by the municipality/corporation is concerned, it would be open to the petitioners to file separate petition for such purpose. If such proceedings are initiated, right and contention of both the sides, shall remain open. " ( 3 ) B. S. N. L. is in appeal against directions B and C by which B. S. N. L. is directed to pay the amounts as indicated in the said directions. ( 4 ) MS. Roopal Patel, learned Advocate for the appellant- B. S. N. L. states that b. S. N. L. is ready and willing to pay restoration charges on the basis of the criteria which were applied prior to issuance of the Government Resolution dated 4. 5. 2007 and that so far as payment of rent is concerned, B. S. N. L. is not liable to pay any rent to any local Authority. ( 5 ) ON the other hand, Mr. Nikunt Raval, learned AGP appearing for the State of gujarat and Mr. Mehul Sharad Shah, learned Advocate for the Nadiad municipality have opposed the appeals and have supported the order of the learned Single Judge. ( 6 ) AFTER hearing learned Counsel for the b. S. N. L. and the learned Government pleader for the State Government, this court had passed the following order on 27. 3. 2009:-"having regard to the fact that the main dispute is about the rates to be charged by municipalities/municipal Corporations from the companies including BSNL which is a Government Company laying down telephone cables/optical fiber cables, etc. under the lands belonging to the local authorities, and having regard to the fact that in ONGC v. Collector of Central excise, (1992) Supp. 2009:-"having regard to the fact that the main dispute is about the rates to be charged by municipalities/municipal Corporations from the companies including BSNL which is a Government Company laying down telephone cables/optical fiber cables, etc. under the lands belonging to the local authorities, and having regard to the fact that in ONGC v. Collector of Central excise, (1992) Supp. (2) SCC 432 and chief Conservator of Forests v. Collector, 2003 (3) SCC 472 , the Hon'ble Supreme court has also observed that such issues between the Government Authorities and government Companies need not be litigated, that the dispute is to be finally decided by the competent Authority under section 15 (1) of the Telegraph Act and in the present appeals, the only controversy is about the interim arrangement to be made during pendency of the matter before the officer under Section 15 (1) of the telegraph Act, we are of the view that it would be in the fitness of things if this issue is resolved at an appropriate administrative level. "hence, the officers of the appellant corporation shall have a meeting with the chief Secretary to the Government of gujarat, the Secretary, Urban Development and Urban Housing Department and secretaries to the Government of Gujarat in such other departments as the Chief secretary may consider it appropriate. A meeting for this purpose shall accordingly be convened as expeditiously as possible and preferably within two weeks from today. ( 7 ) THE Court is informed that in view of the above, a meeting was held between the officers of the State of Gujarat headed by the Chief Secretary and the Senior Officers of B. S. N. L. on 6. 5. 2009. There is some dispute as to what actually transpired at the said meeting. According to B. S. N. L. , the officers of the State of Gujarat had indicated that the local Authorities in the State may not have any right to collect rent, but the restoration charges will be levied for which a bank guarantee may be obtained from the service provider before commencing the work of laying down telephone cables. The case of the State of Gujarat, on the other hand, is that the State of Gujarat was ready to consider the question of waiver of rent to be levied from B. S. N. L. . The case of the State of Gujarat, on the other hand, is that the State of Gujarat was ready to consider the question of waiver of rent to be levied from B. S. N. L. . if B. S. N. L. gives an undertaking to the State of Gujarat that no such rent is being recovered from them in any other State in India. It is submitted that the minutes of the said meeting are produced at pages 16 to 20 of the paper book, but B. S. N. L. has not given any such undertaking so far. ( 8 ) IN view of the fact that B. S. N. L. and state of Gujarat are not able to arrive at an agreement during pendency of the appeals and in view of the fact that the dispute is only about interim arrangement during pendency of the application before the authority under Section 15 of the Act, union of India was directed to be joined as a party respondent. Mr. Chhaya, learned standing Counsel appearing for Union of india in the Ministry of Communication and information Technology Department of telecom has raised a preliminary contention that the Authority under Section 15 (1) of the Indian Telegraph Act, 1885 (hereinafter referred to as the 'act') will have no jurisdiction to decide the dispute between b. S. N. L. or any other service provider on the one hand and the State of Gujarat or the local Authorities on the other hand, because b. S. N. L. is not a telegraph Authority within the meaning of Section 3 (6) of the Act. It is contended that B. S. N. L. and other service providers are merely licensees under section 19b of the Act and that does not constitute such a licensee into a Telegraph Authority. ( 9 ) ON the other hand, the submissions made on behalf of B. S. N. L. , the State of gujarat as well as the local Authorities like nadiad Municipality are that the licensees under the Act are Telegraph Authorities within the meaning of Section 15 (1) of the Act. ( 10 ) IN view of the above controversy, we have examined the provisions of the Act. The dispute is to be decided by the authority under Section 15 of the Act which reads as under: "15. ( 10 ) IN view of the above controversy, we have examined the provisions of the Act. The dispute is to be decided by the authority under Section 15 of the Act which reads as under: "15. Disputes between telegraph authority and local Authority.- (1) If any dispute arises between the telegraph authority and a local Authority in consequence of the local Authority refusing the permission referred to in Section 10, clause (c), or prescribing any condition under Section 12, or in consequence of the telegraph Authority omitting to comply with a requisition made under Section 13, or otherwise in respect of the exercise of the powers conferred by this Act, it shall be determined by such officer as the Central government may appoint either generally or specially in this behalf. (2) An appeal from the determination of the officer so appointed shall lie to the central Government and the order of the central Government shall be final. " section 3 defines telegraph line, telegraph Authority and local Authority as under: 3. (1aa) "telegraph" means any appliance, instrument, material or apparatus used or capable of use for transmission or reception of signs, signals, writing, images and sounds. . . 6. "telegraph Authority" means the director General of Posts and Telegraphs and includes any officer, empowered by him to perform all or any of the functions of the telegraph Authority under this Act: 7. "local Authority" means any municipal committee, district board, body of port commissioners or other Authority legally entitled to, or entrusted by the central or any State Government with control of management of any municipal local fund. " there is no dispute about the fact that "telephone" falls within the meaning of "telegraph" as defined under Section 3 (1aa ). Section 4 confers upon the Central government power to grant license on such conditions and on such payments as it thinks fit to any person to establish, maintain or work a telegraph within any part of India. There is also no dispute about the fact that the Central Government has issued such license in favour of B. S. N. L. by notification dated 9. 9. 1997 which will be quoted hereinafter. Section 19b. There is also no dispute about the fact that the Central Government has issued such license in favour of B. S. N. L. by notification dated 9. 9. 1997 which will be quoted hereinafter. Section 19b. Power to confer upon licensee powers of telegraph Authority under this Part.- The Central Government may, by notification in the Official Gazette, confer upon any licensee under Section 4, in respect of the extent of his license and subject to any conditions and restrictions with the Central Government may think fit to impose and to the provisions of this Part, all or any of the powers which the telegraph authority possesses under this Part with regard to a telegraph established or maintained by the Government or to be so established or maintained, provided that the notice prescribed in Section 19a shall always be given to the telegraph Authority or officer empowered to receive notice under Section 19a (1 ). " section 10. Power for telegraph authority to place and maintain telegraph lines and posts: The telegraph authority may, from time to time, place and maintain a telegraph line under, over, along or across, and posts in or upon, any immovable property: Provided that (a) the telegraph Authority shall not exercise the powers conferred by this section except for the purposes of a telegraph established or maintained by the central Government, or to be so established or maintained; (b) the Central Government shall not acquire any right other than that of user only in the property under, over, along, across, in or upon which the telegraph authority places any telegraph line or post; and (c) except as hereinafter provided, the telegraph Authority shall not exercise those powers in respect of any property vested in or under the control or management of any local Authority, without the permission of that Authority; and (d) in the exercise of the powers conferred by this Section, the telegraph authority shall do as little damage as possible, and, when it has exercised those powers in respect of any property other than that referred to in Clause (c), shall pay full compensation to all persons interested for any damage sustained by them by reason of the exercise of those powers. Section 11. Section 11. Power to enter on property in order to repair or remove telegraph lines or posts: The telegraph authority may, at any time, for the purpose of examining, repairing, altering or removing any telegraph line or post, enter on the property under, over, along, across, in or upon which the line or post has been placed. Provisions applicable to property vested in or under the control or management of local Authorities. Section 12. Power for local Authority to give permission under Section 10, clause (c), subject to conditions. Any permission given by a local Authority under section 10, Clause (c), may be given subject to such reasonable conditions as that authority thinks fit to impose, as to the payment of any expenses to which the authority will necessarily be put in consequence of the exercise of the powers conferred by that Section, or as to the time or mode of execution of any work, or as to any other thing connected with or relative to any work undertaken by the telegraph Authority under those powers. ( 11 ) THE Government of India notification dated 9. 9. 1997 issuing license in favour of B. S. N. L. reads as under: s. O. 646 (E):- In exercise of the power conferred by the provisions of Section 19b of Part-III of the Indian Telegraph Act, 1885 (13 of 1885) (hereinafter referred to as the said Act) the Central Government hereby, confers the powers upon duly authorised Licensee (s), private basic telephone service operator (s) under Section 4 of the said Act (hereinafter referred to as the said Licensee) to seek way leave from a local Authority in the respective licensed service area for the following in respect of a property vested in or under the control or : management of that local Authority in connection with providing the telephone service by the said licensee (s) to its subscribers in the said licensed service area during the currency of its license namely:-1 (a) to place and maintain telephone lines under, over, along or across and posts in or upon property vested in or under the control or management of concerned local Authority. (b) to enter on that property under, over, along, across, in or upon which the line or post has been placed in order to examine, repair, alter or remove telephone lines or posts established or being maintained by the said licensee (s)Provided that the said licensee shall always comply with the provisions of the said Act or any other law time being in force and shall not exercise the powers conferred under this notification in respect of the said property vested in or under the control or management of the local authority, without the express permission of that Authority. (2 ). . . . (3) The powers conferred under this notification, shall be governed by the provisions of the said Act, as applicable to that property regarding which the local Authority may give permission to the said licensee and subject to such reasonable conditions as such Authority thinks fit to impose as to the payment of any expenses to which the Authority will necessarily be put in consequence of the exercise of the powers so conferred or as to the time or mode of execution of any work, or as to any other thing connected with or relating to any works undertaken by the said licensee under the said powers. (4) The powers conferred under this notification shall be enforceable by the said licensee only in the particular operational area/service area licensed to him from the date on which the said licensee signs a licence agreement and interconnect agreement with the President of India after payment of relevant consideration duly fixed and completion of other necessary formalities in respect of the licensed service area. (5) The enforceability of the powers conferred under this notification by the said licensee, shall be restricted to the extent of his licence for the purpose for which it is granted and subject to any other conditions and restrictions as the Central Government may determine from time to time. (6) This notification shall come into force on the date of its publication in the official Gazette, (emphasis supplied) ( 12 ) MR. Chhaya, learned Standing counsel for the Central Government submits that the aforesaid notification only confers limited powers of right of way upon the licensee like B. S. N. L. but it does not make the licensee a telegraph Authority so as to apply the provisions of Section 15 of the Act to the licensee. Chhaya, learned Standing counsel for the Central Government submits that the aforesaid notification only confers limited powers of right of way upon the licensee like B. S. N. L. but it does not make the licensee a telegraph Authority so as to apply the provisions of Section 15 of the Act to the licensee. ( 13 ) HAVING examined the provisions of the Act and the aforesaid license, we have no doubt that the Central Government has by virtue of the aforesaid license conferred upon the licensee the powers for establishing, maintaining and working a telegraph within India and also the powers to place and maintain telegraph lines as contemplated by Section 10 (C) of the Act and also powers to lay down the telegraph lines under Section 10 and 11 of the Act. Therefore, whenever the licensee intends to lay down the cables for the telephone line under the land belonging to the local authority, it will have to seek permission of the local Authority under Section 10 (C)read with Section 12 of the Act. There does not appear to be any other provision providing for permission to be granted by the local Authority to any person other than telegraph Authority to lay down cables under the land belonging to the local authority. It is only under Section 10 (C)read with Section 12 that the local authority has the power to impose reasonable conditions as to the payment of any expenses to which the local Authority will necessarily be put in consequence of the exercise of the powers so conferred relating to any work undertaken by the licensee. The disputes between the local authority and the licensee as to what should be the rates for payment of such restoration charges or whether the local Authority can charge any rent from licensee are all disputes which fall within the purview of section 15 of the Act which must be decided by the officer to be appointed by central Government under sub-Section (1)of Section 15 of the Act. Sub Clause (a) of section 10 in the Act as originally enacted has to be read subject to the provisions of section 19b which were later on inserted by the amendment Act 7 of 1914. Sub Clause (a) of section 10 in the Act as originally enacted has to be read subject to the provisions of section 19b which were later on inserted by the amendment Act 7 of 1914. ( 14 ) IF the contention of the learned standing Counsel were to be accepted, and if the licensee like B. S. N. L. or the other licensees are not considered as telegraph authority, no service provider getting the license under Section 19b read with Section 4 will get any Authority to lay down the cables under the land belonging to any local authority. Admittedly now the Central government itself does not provide the telephone services, but such services are provided by public sector undertakings like b. S. N. L. , M. T. N. L. and other private licensees. If the contention of the learned standing Counsel for the Central government were to be accepted, there will be no dispute to be decided by the officer under Section 15 (1) of the Act. Each and every licensee granted license under Section 4 read with Section 19b of the Act, like b. S. N. L. gets power of the telegraph authority and the question of appropriate amount of compensation to be paid by the licensee to the local Authority will have to be decided by the officer under Section 15 (1) of the Act. It is only where the dispute is between a licensee and any party other than local Authority that the question of granting permission will be considered by the District Magistrate and the dispute concerning the compensation to be paid under Section 10b of the Act will be considered by the District Magistrate under sub-Section (3) to (5) of Section 16 of the act. The scheme of the Act is, therefore, very clear that the dispute between the licensee which is granted the Authority of laying down the cables under the land belonging to a local Authority will be entertained under Section 15 (1) of the Act where the dispute is regarding refusal by the local Authority to grant such permission or about the conditions of granting such permission or about the compensation to be paid to the local Authority. On the other hand, where the dispute is between the licensee and persons other than local authority, such question of grant of permission is to be considered by the district Magistrate and the dispute concerning amount of the compensation shall be considered by the District Judge. ( 15 ) IN view of the above discussion, we over-rule the contention of Mr. Chhaya that the officer under Section 15 (1) of the Act will have no jurisdiction to decide the dispute between licensee and the local Authority. ( 16 ) COMING back to the question as to what should be the interim arrangement, in view of the disagreement between the parties on the question as to whether rent is being levied in any other State and B. S. N. L. is not in a position to make any statement that such rent is not being charged in other states, we dispose of these appeals in terms of the following directions:- (i) B. S. N. L. shall make an application under Section 15 (1) of the Act to the secretary, Government of India, department of Telecom in the Ministry of communication and Information technology within one month from today. The said application shall be forwarded by the Secretary to the officer appointed for deciding such disputes under Section 15 (1)of the Act within 15 days from the date of receipt of application by the Secretary. (ii) Such application shall be decided by the officer under Section 15 (1) of the act as expeditiously as possible and in any case within six months from the date on which the application is placed before the officer under Section 15 (1) of the Act. (iii) Till such application is decided, b. S. N. L. shall pay restoration charges in accordance with the Government resolution dated 4. 5. 2007 read with the subsequent Government Resolution dated 25. 4. 2008, and shall also pay 25% of the rental charges required to be paid under the aforesaid Government Resolution/s. (iv) The above payments shall be made without prejudice to the rights and contentions of the parties and the officer under Section 15 (1) of the Act shall decide the dispute in accordance with law without being influenced by the aforesaid interim arrangement. (v) While taking decision on the application the Authority under Section 15 (1) shall give an opportunity of filing reply and personal hearing to the local authorities which are respondents in these appeals and also to the State Government as the Government Resolutions in question are stated to have been issued by the State government for prescribing uniform rates to be charged by all the local Authorities within the State of Gujarat. (vi) The officer under Section 15 (1) of the Act shall be at liberty to give appropriate incidental directions regarding such payments to be made in the interregnum period. (vii) The interim payments shall be made in accordance with the above directions for the period from 4. 5. 2007 onwards till the application of B. S. N. L. is decided. For the period prior to 4. 5. 2007 the officer under Section 15 (1) of the Act shall decide the dispute, but we are not giving any direction for such prior period. ( 17 ) THE judgment and order of the learned Single Judge shall stand modified in terms of the above directions. The Letters Patent Appeals stand disposed of accordingly. ( 18 ) SINCE the appeals are disposed of, the Civil Applications do not survive and the same also stand disposed of. LPAs disposed of.