Vires of Access Promotion Rules 2004

Vires of Access Promotion Rules 2004 Access Promotion Contribution Case Laws Civil Law Constitutional Law Corporate Law Interpretation of Statutes Knowledge - Civil Law Knowledge - Constitutional Law Litigation & Arbitration Solutions - Civil Law Solutions - Constitutional Law Supreme Court Telecom TMT Ultra Vires Universal Service Fund Mr. Justice Ejaz Afzal Khan in his judgment has decided the issue regarding vires of Access Promotion Rules 2004 in Civil Appeals No. 139 of 2013 etc.

1. Vires of Access Promotion Rules, 2004 was challenged on the grounds that they are outside the orbit of Section 57 of the Pakistan Telecommunication (Re-organization) Act, 1996; that Access Promotion Contribution being insertion of Pakistan Telecommunication (Re-Organization) (Amendment) Act, 2006 (Act II of 2006) could not precede the amendment especially when the provision regulating it was also inserted in Section 4(k) through the above mentioned Amendment Act in 2006; that though the term Access Promotion Contribution was also defined by the Access Promotion Rules, 2004 but in the absence of any clear provision in the Act, it could not be exacted from the licencees; that Rules under Section 57 of the Act could be made for carrying out the purposes of the Act provided therein as the words “and where provided for herein before” clearly exclude what has not been provided by the Act; and that as the rules requiring payment of APC are ultra vires, no action could be taken against the appellants under Section 23 of the Pakistan Telecommunication (Re-Organization) Act, 1996 on account of their failure to pay APC. Even establishment of the USF, according to Mr. Ali Raza, ASC for appellants in Appeal No. 141 of 2013 which is required to be made by a notification in the Official Gazette under Section 33A of the Pakistan Telecommunication (Re-Organization) Act, 1996, cannot precede the insertion of the provision providing therefor, therefore, the USF exacted under the rules 2004 is also ultra vires. Functions and powers of the Authority have been listed in Section 4 and 5 of the Act respectively, therefore, performance of any other function or exercise of any other power according to the learned ASC shall be outside the scope of this Act.

2. Mr. Khalid Anwar, learned Sr. ASC appearing on behalf of the appellants in Appeals Nos. 139 to 140 of 2013 contended that the Authority did not have any power to levy fee, other charges and fix rates in respect of the services, before the passing of Pakistan Telecommunication (Re-organization) (Amendment Act), 2006, therefore, no amount in any form could be exacted from the appellants. Licence, the learned Sr. ASC contended, is subject to the terms and conditions of the Act, rules and regulations and that in the event of any conflict or inconsistency between the provisions of the lincence and provisions of the Act, rules or regulations, the latter shall prevail; that revenue could be shared from international calls, from LDI and LL licences according to the formulas specified by the Authority from time to time but it cannot remain static when the rates vary from time to time. The amount exacted in the form of APC for the USF cannot be spent anywhere but to promote the availability of a wide-range of high quality, efficient, cost-effective and competitive telecommunication services throughout Pakistan. The Federal Government, the learned Sr. ASC went on to argue is not always supposed to be on the receiving end as it is also required to credit sums mentioned in sub-Section 4 of Section 33A of the Act. The mainstay of the learned Sr. ASC was that Access Promotion Contribution could not be exacted just for the heck of it; that if it is a tax, it cannot be imposed without express provision of the statute and that in case it is a fee, some service should have been provided in lieu thereof; and that where it lacks the essential attributes of tax as well as fee it has no statutory foundation. The APC, the learned Sr. ASC maintained, could have been treated as a fee, had it been spent on the development of the infrastructure or on the welfare of the Contributors, but where it is not known where does it go and who spends it, not only proceedings against the petitioner under Section 23 of the Act be dropped but the amount received so far be restored to coffers it has come from. Another strange anomaly, the learned Sr. ASC argued, is that the Access Promotion Contribution has been made part of Federal consolidated fund vide notification dated 29.06.2013 which is not justified under any canons of law and the Constitution.

Arguing further, the learned Sr. ASC contended that if the amount exacted from the appellants is shown to have been spent on the purpose it is exacted for a greater part of his grievance shall stand redressed but where it has neither been audited nor accounted for in accordance with the relevant provisions of the Act and the rules, its retention by the Federation would be absolutely unjustified. He next contended that even Approved Account Rates which are the main sources of APC for the USF are also prescribed without considering the grave ground realities with the result that the licensees instead of gaining anything out of the business are loosing even what they have invested. The learned Sr. ASC further argued that the learned Single Judge erred by construing the word “and” as disjunctive without considering the justification therefor; that such conversion is justified only when it leads to absurdity or gives rise to a conflict. The learned Sr. ASC to support his contentions placed reliance on the cases of C. E. Gibbon, Deputy Speaker, National Assembly. Vs. Pakistan (through the Secretary Ministry of Law, etc (PLD 1957 (W.P.) Karachi 956), Imtiaz Ahmed Lali. Vs. Ghulam Muhammad Lali (PLD 2007 S.C. 369) and Salehon and others. Vs. The State (PLD 1969 SC 267). He lastly argued that notification enforcing the USF issued under the Pakistan Telecommunication (Re-Organization) Amendment Ordinance, 2005 would die with the death of the Ordinance and cannot continue unless another notification in terms of Section 33A of the Act is issued by the Federal Government soon after the commencement of the Pakistan Telecommunication (Re-Organization) Amendment Act, 2006, notwithstanding the provisions contained in Article 264(b) of the Constitution. The learned ASC to support his contention placed reliance on the case of Government of Punjab through Secretary, Home Department. Vs. Zia Ullah Khan and 2 others (1992 SCMR 602).

3. The learned Sr. ASC appearing on behalf of the USF contended that licencee cannot provide any telecommunication service or system, establish, maintain or operate in telecommunication system unless authorized by the Authority; that grant of licence is subject to fulfillment of terms and conditions stipulated in the licence and that no person has any locus standi to enter the realm of telecommunication without a license. The learned Sr. ASC next contended, that the appellants whose existence in the field of telecommunication is on account of the licence would stand nowhere if the licence which has its origin in the draft Rules of 2004 is withdrawn. Though the Rules, the learned Sr. ASC maintained, were given legal attire in 2004 nevertheless they being in draft form were accepted as such at the time of grant of licence. The learned Sr. ASC next contended that though the definition of Access Promotion Contribution was inserted in the Act through the Amendment Act, 2006, but it was all along present in the rules framed under Section 57 of the Act. The learned Sr. ASC went on to argue that Access Promotion Rules, 2004 are fully covered by Section 57 of the Act, even if the word “and” used therein is read conjunctively. The learned Sr. ASC, however, conceded that APC for the USF exacted from the contributors cannot be made part of consolidated fund nor can it be used for a purpose not mentioned in the statute. The learned Sr. ASC next contended that appellants cannot approbate the terms and conditions of licence as well as the rules where they benefit them and reprobate the same where they bring them under some obligation. The learned Sr. ASC contended that Section 33A of the Act provides for issuance of a notification after the commencement of the amendment Act, 2006 but it does not mean that the notification issued under the provision of the Ordinance which is in para materia with the above mentioned provision would cease to have effect. Such notification, the learned Sr. ASC added, would continue under Article 264(b) of the Constitution. The learned Sr. ASC by concluding his argument contended that the efficacy or legitimacy of the terms and conditions of the licence or even the rules cannot be challenged at such a belated stage when the very establishment of the appellants in the field owes its origin and whole existence to the said terms and conditions as well as rules.

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