But alienating scarce natural resources by other means for private gain may be arbitrary
Auction, despite being a more preferable method of alienation/allotment, cannot be held to be a constitutional requirement or limitation for alienation of all natural resources, the Supreme Court said in its advisory opinion on the ‘2G Presidential Reference’ matter.
A five-judge Constitution Bench, including Chief Justice S.H. Kapadia and Justices D.K. Jain, Dipak Misra and Ranjan Gogoi, on Thursday held that every method other than auction “cannot be struck down as ultra vires the constitutional mandate.” Justice J.S. Khehar, in his concurring opinion, gave additional reasons on two issues.
The Bench answered five of the eight questions and declined to answer the other three (relating to 2G spectrum) following the submission made by Attorney-General G.E. Vahanvati that the government had accepted the court directions in the judgment.
Writing the opinion for the Bench, Justice Jain said: “Auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives.
“However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private entrepreneurs, adoption of means other than those that are competitive and [will] maximise revenue may be arbitrary and may face the wrath of Article 14 [equality before law].”
The methodology of disposal of natural resources “is clearly an economic policy. It entails intricate economic choices and the court lacks the necessary expertise to make them. It cannot, and shall not, be the endeavour of this court to evaluate the efficacy of auction vis-à-vis other methods. The court cannot mandate one method to be followed in all facts and circumstances. Therefore, auction, an economic choice of disposal of natural resources, is not a constitutional mandate.”
Keywords: Natural resources allocation, Presidential Reference, Supreme Court ruling, 2G spectrum scam, 2G scam
Auction can't be the sole route for allocation of natural resources is the right judgement proscribe by supreme court .Though some points must be kept in the SC judgement before giving executive prerogative .
1.There would be chances that under the fair means of allocation the natural resources guise of corruption would prosper as we had seen in A Raja case.
2.The social and welfare backing should be given priority without the breach of Article 14.
3.If we are following an alternative route other than auction ,we must have track record and would be accessible to RTI.
4.Proper planning and forecasting must be ensured to avoid future misunderstanding as we had seen in coal gate and 2G .Nothing should be left out from the reach of government.
5.Supreme court is one of the respected and responsible pillar of the government and whatever steps taken by government should be scrutinize and model must be clearly studied to give a better judgement where the country shouldn't run in loss.
The reaction of Mr. Mohandas Pai (ex-Infosys)to one of the English TV
channels (NDTV) confirms that he is more a politician by virtue of
holding status of a Minister of State. When even Cabinet Ministers like
PC or Sibal were very cautious, Mr. Pai went hammer and tongs attackin
CAG by saying that the CAG should confine to the limits enshrined in the
Constitutions but without explaining why he is saying s. Let us remind
Mr. Pai that he has been conferred a Ministerial status but not a
Minister.
I am not surprised by the judgement. It is not a victory for this or that political party. It is a simple interpretation of the provisions in the basic law. Sale by auction need not always be the preferred method. If any other method is followed in the disposal of public resources in the interests of public good then certain things need to be done. The public good that is to be achieved needs to be defined clearly and in detail. The amount of public revenues that would be foregone in achieving this public good must be estimated professionally. There must be total transparency and disclosure in the process of allocating scarce resources. If these principles are not followed, the decision of the government can be challenged as violative of article 14 of the Constitution. Really this is old wine in an old bottle.
Things are getting quite clear now. I think it's the most valuable judgment the SC has ever made.
I would welcome Supreme courts take on this issue. In general publics looks into these polices wearing a scam goggles. Even some have an opinion that govt should function like corporate with only profit motive. Policies should be evaluated based on its conceptual acceptance and fairness, in this terms Coal policy is clean. But the whole issue of scam arises only during implementation, people implementing these policies are/ not fair (any party for that case). Present society to max has accepted nepotism and use of power & authority for personal gains. Everyone does that to the possible extent within his area. We indians need to improve our values and work ethics, only then any policy implementation at any level will remain clean. Only way to start imparting value and ethics into the society is through schools. We teach computers in kinder gardens, we teach horse riding even. But need of the society is to impart value and ethics in young minds, so that atleast future india is clean
The SC bench must be congratulated for bringing our country's economic management from the brink of a severe crisis. Upholding auction to be the only constitutional method would have thrown open all previous actions of giving land, mines, industrial licences, water and anything that can remotely be covered by the term 'national resource'. One hopes in its detailed judgment why 2G case was different and not covered by the conditions of "social or welfare purpose" and came under the condition of "commercial pursuits of profit maximising private entrepreneurs, adoption of means other than those that are competitive and [will] maximise revenue may be arbitrary" and hence non-auction route was bad in law. Logically, granting coal mine to a private sector applicant putting up a power plant to earn profit will be in the same category of 2G licence. The victory the government senses in this SC judgment can turn out to be a Pyrrhic one.
Correct and a laudible judgement. The government must however show that
its actions are fully in public interest and not change rules to serve
friends and relatives as Raja did in preponing the date and getting the
bank drafts ready the previous day. Neither the government nor the
court can wipe out all allotments in coal gate but will have to go
case by case and see which allotment has not in public interest and
whether the beneficiary has passed on the benefit to the public.Only
after that, allotments can be cancelled. This judgement may be used to
review the 2G case also since it is likely, that some allotments may be
been beneficial to the public and cancelling those would be unjust But
every case has to be examined individually. Ofcourse, this will not
take the noose out of Raja!! for the crimes he committed.
Auction is one of the proven methods todate and any other method was not tested by the courts and the parliament in the past. Whenever government find itself cornered they come up with explanations such as they took the action in the larger interest of the public and not explaining what formula was used or debated in the parliament and approved by two thirds majority.How would the government explain selling coal blocks to those who were close to them and who have no previous experience in the field? Supreme courts verdict is not going to help UPA in defending their past actions and the burden of proof that their actions without auctioning helped the larger interest of the people and not certain segments of the people is still the governments responsibility.
The Supreme Court's opinion should now desist members of the parliament in collecting trophies at the slightest whiff of alleged corruption. Even the fairest of selection processes in recruitment in our country invite derisive comments from those who do not qualify. There is lack of sportsman's spirit to borrow a phrase from the sporting field in accepting executive decisions in our country with an open mind. The tendency to smell a fish in every issue is becoming a favorit pastime besides unfair comparisons between unrelated issues. It is more like a traditional mother in law finding fault with whatever the daughter in law does and the daughter in law not accepting the well natured advice of a mother in law in the right spirit. Sanity should now prevail thanks to the far sighted vision of the legal luminaries who adorn the highest court in our country which is a saving grace.
We respect Courts judgement not because it is infallible but its final.
Yes the loss is notional in this case, But its govt's responsibility to
save the natural resources of the country and let the modern thug's
siphon off the wealth of nation.
Govt should seriously ponder over the use prudential policies where the
benefit can be reaped by every one, in hhis facet government we feel is
lacking somewhere.
CAG never claimed auction is a constitional requirement. They said auction would maximize the revenue. The government has to prove the mehtod they use is actually does better public good than auction. That is not going to be an easy task and the government actions will be more exposed to litigation with the new ruling than before. The ruling essentially forcing the government to take the auction route to allocate the natural resources. Otherwise, the burden of proof is on the government.
This judgment is misinterpreted by Media as if SC has approved and
accepted govt decisions in coalgate.Main essence of Judgement is that
whatever recourse Govt may chose that should not put nation in
financial loss.Problem is that Media is not understanding decision in
correct perspective or purposefully misguiding. Whole issue has come
up mainly due to financial loss incurred due to allotment of national
wealth , otherwise, there is no other issue.No one Court can provide
hard line bracketed decision as decision has to be judicious and
flexible , but same time nation would not accept a decision which may
caused financial loss and indicate rampant corruption.
respected minister should also consider following part of the judjement"=
“There cannot be a dissipation of material resources free of cost or at a consideration lower than their actual worth. One set of citizens cannot prosper at the cost of another set of citizens, for that would not be fair or reasonable,” Justice Khehar said."
this is exactly what has happened in 2G case, as argued in S.C. by the public interest litigants??!! keeping in view the fact, some companies sold the part of spectrum at a huge profit!!?
What the SC bench hs said is that "auctions may be the best way of maximizing revenue, but
revenue maximization may not always be the ultimate motive of the policy and natural
resources can be allocated to private companies by other methods for the purpose to
subserve public good". Now the Manmohan Singh government will have to explain to the
people how the mthod it has adopted in the coal blocks allotment subserve public good more
than if auctions were adopted. Politically the government is still in trouble.
.The SC bench has said that "auctions may be the best way of maximising revenue
but revenue maximisation may not always be the ultimate motive of the policy and
natural resources can be allocated to private companies by other methods for the
purpose to subserve public good". Now the government will have to explain to the
people how the method it has used in the coal block allotment is better than
auctions in serving public good". Can it do that?
After this verdict, which is vague in the sense that it does not define
'common good', govt. can find a way to justify 2G scam, saying that it
leads to better teledensity. This can be also used in other allocations,
even in coal. This is a dangerous ruling.
The Supreme Court did not say that resources should be allocated
unfairly or non-transparently.
A vague judgment to the core. The simple and straight judgment should have mandated a process maximising revenue for the allocation of natural resources for commercial purposes, and a process accomplishing the auditable objectives for others.
Selling public resources to private companies for a song is as bad as violating the edict: "No part of the natural resource can be dissipated as a matter of largess, charity, donation or endowment, for private exploitation" as quoted by the supreme court. Is there any other method that ensures competitive price for items of precious public resources than auction with a true upset price and liberty to cancel the auction if does not fetch competitive price?In the absence of illustrations of what can replace, and under what circumstances, a well meant open auction hedged in by proper pricing and the kindred mechanism it is rather difficult to discern where and when the Government can give a go by to public auction of valuable resources. Alternatively it is important that solid guidelines should be spelt out in the matter of making an exception to the procedure of public auction and the scrutiny and review there of.
The opinion given is excellent.But the parties given the power should not drag it to their
benefits under the guise of doing good to the public.The auction is the best method of getting
the maximum revenue to the government and the money so received can be apportioned for
the purpose of the auction to go to the mass. instead leaving it to corporate to amaze wealth
A separate committee and financial regulator can be formed so that the system can deliver
the goods instead of the scam. by the political parties and corporates having no ethics and
principles evident for the decades .The parties in power should not exploit the
Option to their motives and crying as if they are doing good to the public
At least now evolve a system and follow in letter and sprit instead of shedding crocodile
tears.
How is it a relief to Congress govt? Supreme Court clearly says that
“If any natural resource is given for commercial exploitation to
private entities, then it has to be by the method of auction. Any
other method adopted in this regard will be considered
unconstitutional and arbitrary.” and coal allocation is exactly that,
even CAG clearly says it as Rs.186000 crore illegal benefit to private
companies and just not loss to govt exchequer. Its pro congress media
only who can call this a relief to government. Infact it is a relief
for Arun Shorie when he rightfully allocated spectrum in 2003 public
interest during NDA rule for increasing tele-density which allowed
India to progress in telecom until congress came and looted it.
This is an important judgement. It is also a reminder that Legislature is authorised to come with directives that help control allocation of resources to suit its policies. This puts a seal on debates on losses because of absence of auctions in coal block allocations. The IMG anyway has recommended cancellation of some blocks. Time for govt. to finish IMG scrutiny and get through with cancellations fast.
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