The President has sought an advisory opinion from the Supreme Court on 14 questions including whether, following its 2G spectrum judgment, “the only permissible method for disposal of all natural resources across all sectors and in all circumstances is by the conduct of auctions.”
The court on February 2 cancelled all 122 2G licences allotted on or after January 10, 2008 to 11 telecom companies during the tenure of the former Telecom Minister, A. Raja, declaring them illegal and an arbitrary exercise of power by the Congress-led United Progressive Alliance government. The court held that spectrum was a natural resource and it was the solemn duty of the state to protect the national interest. Natural resources must always be used in the interest of the country, not in private interest, and must be auctioned.
Aggrieved by the judgment, the presidential reference was sought. The reference, made under Article 143 (1) of the Constitution on Thursday, gave a background of the licensing and spectrum allocation framework from time to time since 1994. It said: “In view of the fact that the court had only considered the 122 licences (issued on or after January 10, 2008) and not addressed the other licences granted under a similar policy regime (of first come, first served), doubts now arise as to the status of the licences issued earlier under the FCFS regime which was held to be fundamentally flawed.”
Pricing of spectrum
Similarly, “in view of the court's reasoning and finding that natural resources of the state must be auctioned, doubts have now arisen inter alia regarding the pricing of spectrum historically granted to the earlier licensees and how that should be dealt with…”
The other questions raised in the reference are: whether a broad proposition of law that only the route of auctions can be resorted to for disposal of natural resources does not run contrary to several judgments of the Supreme Court including those of larger Benches; whether the enunciation of a broad principle, even though expressed a matter of constitutional law, does not really amount to formulation of a policy and has the effect of unsettling policy decisions formulated and approaches taken by successive governments over the years for valid considerations, including lack of public resources and the need to resort to innovative and different approaches for the development of various sectors of the economy;
What is the permissible scope for interference by courts with policymaking by the government including methods for disposal of natural resources?; whether, if the court holds, within the permissible scope of judicial review, that a policy is flawed, the court is not obliged to take into account investments made under the said policy including investments made by foreign investors under multilateral/bilateral agreements; and specifically whether the telecom licences granted in 1994 would be affected; whether the telecom licences granted by way of basic licences in 2001 and licences granted between the period 2003 and 2007 would be affected; whether it is open to the government of India to take any action to alter the terms of any licence to ensure a level playing field to all existing licensees; whether dual technology/licences granted in 2007 and 2008 would be affected and whether it is necessary or obligatory for the GoI to withdraw the spectrum allocated to all existing licensees or to charge for the same with retrospective effect and if so on what basis and from what date.