The Supreme Court, hearing the Presidential Reference on the ‘2G judgment,’ said the first come, first served (FCFS) policy for allotment of spectrum was fine but its implementation was flawed.
Chief Justice of India S.H. Kapadia, heading a five-judge Constitution Bench, made this observation on Wednesday while seeking a clarification from Attorney General G.E. Vahanvati on the distinction between the 2001 telecom policy and the 2007 policy, on the basis of which spectrum was allocated.
The AG said the FCFS policy had been there from 2001 but there were not many telecom players then. The applicant who fulfilled the eligibility criterion would be given a Letter of Intent. Thereafter he would have to pay the licence fee within a prescribed period. The object of the 2001 policy was to attract more players so that the people would get the benefit of lower charges. Under the 2007 policy, an applicant would have to pay an entry fee of Rs. 1,600 along with his application, which was not the case earlier. The AG also explained how the cut-off date for receipt of applications was changed in 2007.
The CJI, referring to a finding in the 2G judgment that the FCFS policy was per se violative of Article 14, told the AG: “The moment you change the criterion and distort the policy, it ceases to be FCFS policy. If you insist on making payment at the last minute after changing the cut-off date, then it is not FCFS, it is an out-of-turn policy. If you [government] are obliterating the FCFS queue and insist on those who make the payment first, then the FCFS policy is distorted. You have not only changed the modality but also the criterion. The FCFS policy can’t be faulted if you had not insisted on making payment first.”
When the CJI asked “What made the Prime Minister write a letter [to the then Telecom Minister, A. Raja] to suggest auction [of spectrum],” the AG said, “It was based on a note by the then Finance Secretary.”
Senior counsel Ravindra Shrivasta, appearing for the Chhattisgarh government, said the State was rich in natural resources and it must have the power to determine the method of their disposal. Auction could not and ought not to be the only permissible method. The ‘2G judgment’ laying down a broad proposition of law that only the auction route could be taken for disposal of natural resources was contrary to several earlier judgments of the court, counsel said.
Appearing for the Federation of Indian Mineral Industries, senior counsel T.R. Andhyarujina said there was no constitutional requirement in any law that natural resources must be disposed of necessarily by auction. It was a matter of state policy and unless the disposal of resources was not bona fide or totally untenable, it could not be the subject matter of judicial review. The state was the best judge of how the common good was subserved in distribution of material resources, he argued.
Arguments will continue on August 7 before the Bench, which includes Justices D.K. Jain, J.S. Khehar, Dipak Misra and Ranjan Gogoi.