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Updated: April 13, 2012 03:25 IST

Are auctions the only route, President asks Supreme Court

J. Venkatesan
Comment (9)   ·   print   ·   T  T  
A file photo of Sanchar Bhawan, the Telecom Ministry’s headquarters. The Union Cabinet had on April 10, 2012 cleared the Telecom Ministry’s proposal to seek Supreme Court’s opinion on issues arising out of its February 2, 2012 verdict cancelling 2G licences.
The Hindu A file photo of Sanchar Bhawan, the Telecom Ministry’s headquarters. The Union Cabinet had on April 10, 2012 cleared the Telecom Ministry’s proposal to seek Supreme Court’s opinion on issues arising out of its February 2, 2012 verdict cancelling 2G licences.

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 questions

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.

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Punish the guilty by all means, but why punish thousands of employees, vendors, distributors and their families who lost their livelidood by the judgement.A mechanism could have been evolved to protect the interest of the innocent individuals engaged in the industry.And in economic offences, penalty is more appropriate method to deter recurrence of such an offence.This could have saved the exit of investment climate in this vital sector which affects the common people.Now it is apprehended that the remaining telecom service providers will enhance their tariff rates thus again affecting the poor masses who were enjoying the benefits of stiff competition amongst the various service providers.

from:  Subodh Banke
Posted on: Apr 13, 2012 at 18:14 IST

''The President as the supreme commander of the allied forces kept tight upper lip,when so many movements of the army men inside court halls and outside Delhi streets took place.For such a long time she did not ask courts about sethu project,2G spectrum cases etc.The queen of England asked the London schools of economics to explain to her why they have not alerted on the economic crisis in UK recently.But our President never spoke to Delhi school of economics about the high prices in All the items in India.May be she knows where and when to open her mouth.

from:  doodu
Posted on: Apr 13, 2012 at 17:54 IST

SC cannot hold FCFS policy is right for licenses issued before 2007 and flawed for licenses issued in 2007 only. Also if every policy decision of Govt. can be questioned by SC, how Govts can function freely? Raja might have malafide intentions in granting 2G licenses. But summarily cancelling all the licenses without seeing the consequences seems to be not reasonable. Whatever the loss to the country should have been recoverd from such people.
So, Presidential reference to SC looks to be the right step.

from:  A.Ramaswamy
Posted on: Apr 13, 2012 at 14:53 IST

If powerful people are allowed to use natural wealth they will do so to amass wealth for themselves and their clan. In order to benefit all the citizens a popular government elected. A government is empowered by people to use natural wealth at an optimum gain so that the interest of all people are taken care of. The methods and its technicalities are only superficial actions but the underlying motto should be to gain maximum for the people. Without this motto at its strongest no method will be foolproof. We are in dire need of exemplary persons and not intelligent methods.

from:  M V Rangaraajan
Posted on: Apr 13, 2012 at 12:17 IST

Supreme court has the right to interfere the policies of government. In democracy there is division of power so that every authority work according to rules and regulations of constitution of India. It is simply understood that any contract which was signed in any year and has not followed the rules and regulations of the constitution are illegal. Our democratic instituions are there to cooperate with each other but to have a close look to control each other. Supreme court is fully right to observe the policies of government. Constitution of India allows a citizen of India to file a suit against the government of India. People of India are allowed to demonstrate and go to court for their grievances against Govt.

from:  Mahesh
Posted on: Apr 13, 2012 at 12:10 IST

I don't understand why the central govt arrested A Raja and why the govt
wants to go against auctioning. If the govt is against auctioning, Raja and the Central Congress govt stood for the same cause. It is a game; at the end of the game it will be proved that it's not 1.76 lakh crore rupees; it is just 1.76 times ZERO rupees. Somebody might have confused why 1.76 is multiplied with ZERO! Congress leaders are excellent in making everyone fool!

from:  Paranthaman
Posted on: Apr 13, 2012 at 00:28 IST

Another excellent article from Hindu/ Shalini. We know Supreme court decides based on the facts of the case. This reference seems like challenging SC. The arrogance of Sibal is showing, as a way to challenge the SC, unless there are new facts.
Snide remarks during launch of 4G , the statements of a foreign telecom investor about receiving letter even before the presidential reference is approved, DoT referring to AG etc, raises doubts as to what is happening behind the scenes and whether it is an attempt to pressure SC. The PM and cabinet is drawn into a process Mr Sibal is driving and will bring further bad name to the whole govt.
Given the public mood, if the Govt began to address the fundamental issues in managing natural resources transparently, than serve crony captalism, it could have recovered lost ground. First Come First Served is the least transparent and SC is right. If the goal is to get slap on the other cheek, who can help.

from:  Krishna
Posted on: Apr 12, 2012 at 22:27 IST

A wonderful article telling the peope how rediculous this presidential refference is . The country is wondering at the pains this govt is taking to squash the order of supreme court cancelling the the 2G licenses . Any sensible man can understand that by this SC order , some body highly placed in the govt must be loosing lots of money from their binami owned companies .

from:  nuthakki
Posted on: Apr 12, 2012 at 20:37 IST

The government's move to seek the apex court's opinion on national
natural resource allocation is a premeditated move as the government
does not want to venture on any further natural resource allocations
until and unless this contentious issue is resolved as it is
indirectly also responsible for indecision in policy formulation by
policy makers which has delayed many programmes. I anticipate the
court's opinion of auctioning of resources instead of "first come
first serve" would remain intact. But this decision would certainly
have impact on business government relations and would bring
transparency in the way business conduct themselves.

from:  Manish
Posted on: Apr 12, 2012 at 18:57 IST
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