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In Appeal No. 3 of 2005 (MTNL v. TRAI), this Tribunal had also occasion to briefly consider whether TRAI can make regulations in the discharge of its functions in all the sub clauses of clause (b) of Section 11(1) and thereby divest jurisdiction of TDSAT as an appellate body conferred by the Act. This Tribunal has observed in its order dated 31st January 2005 as under:

"Can Regulations which are in the nature of a subordinate legislation overtake the provision of the Principal Act? If Regulations under sub clauses (i) to (ix) of clause (b) of Section 1 of the Act and also under clause (c) are all framed by the TRAI there will be no direction, decision or order of the TRAI which could be subject matter of appeal to TDSAT and that would in effect mean repealing clause (b) of Section 14 of the Act. We also put it to Mr Sanghi that if there is contravention of any direction issued by TRAI it is punishable under Section 29 and what will happen if there is contravention of any Regulation. He said it was for the Parliament to amend the law. There was no clear answer to our question as to what was the procedure which would have to be gone into before issuing direction of Regulation. It appears to us that procedure for issuing direction or Regulation has to be the same. As to what is the difference between a direction and Regulation, it was the submission of Mr Sanghi that direction can be given to a particular service provider and Regulation can be of general applicability. This is not correct as we have found in number of cases that direction also been issued which are applicable generally e.g. that what was in Appeal No. 2 of 2004. It does not appear to us the right approach of the TRAI to clothe a direction in the garb of Regulation and then tell the TDSAT that it has no appellate power. Both the lower authority and the appellate authority have to exercise their respective jurisdiction as defined in the Act constituting them."

It is settled law that the same authority/body cannot have legislative as well as adjudicatory functions. Delhi High Court in the aforesaid judgment observed that if the arguments on behalf of the TRAI were to be accepted then it would amount to saying that TRAI would adjudicate upon dispute arising from or as a result of its own regulations/directions which could never have been the intention of the legislature. The High Court held this view prior to the amendment of the Act and now the adjudicatory functions have been conferred upon the TDSAT. We were dismayed with the argument on behalf of the TRAI in the case of MTNL v. TRAI (Appeal No. 3/2005) when we wanted to know that if any dispute arises under the Regulations framed by TRAI, could it be that it would be adjudicated by TRAI and jurisdiction of TDSAT to determine that dispute would be barred. His answer was in the affirmative. That would mean that Regulations which are in the nature of subordinate legislation overtake the provisions of the principal Act. Regulations even if they are a valid piece of subordinate legislation cannot provide that if any dispute arises with regard to interpretation of any of the provisions of the Regulations, the decision of the TRAI shall be final and binding. Such submissions on behalf of TRAI have to be outrightly rejected. Again in the face of the principle enunciated by the Delhi High Court that the same authority/body cannot have both legislative as well as adjudicatory functions and that the Act itself had to be amended establishing TDSAT to hear and dispose of appeal against any direction, decision or order of the TRAI under the Act, for TRAI to say that it has still the power to adjudicate upon a dispute has no meaning. In this context observation of the Delhi High Court that "further, sub-clauses (l), (m), and (p) specifically provide for framing of regulations whilst other do not" becomes relevant. The Court was considering non-recommendatory functions of TRAI as given in Section 11 (1) (c), (d), (e), (g), (h), (i), (j), (m), (n), (p) and (q). The Court said: