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Resource centre on India's rural distress
 
 

SC signals rethink on auction route for all natural resources-Dhananjay Mahapatra
-The Times of India
 
The Supreme Court on Tuesday agreed that the government had reasons to doubt its verdict laying down auction as the only way of allocating natural resources, in what is seen as an indication of a significant judicial rethink. 

"On cancellation of spectrum licences allotted without following a transparent system, there is no doubt about its correctness. But if one reads the judgment to mean that auction must be applied for allocation of all natural resources, then does it not create a doubt about the law laid down by the court?" said a five-judge constitution bench of Chief Justice S H Kapadia and Justices D K Jain, J S Khehar, Dipak Misra and Ranjan Gogoi.

The observation was interpreted to suggest that the court could be willing to revisit the issue of how to allocate natural resources, something that has become significant because of a spate of allegations that regimes both at the Centre and in states, bent rules to favour business houses at the expense of the public exchequer.

The February 2 verdict of the apex court had ordered cancellation of all 122 telecom licences awarded in January 2008 on the basis of tweaked first come-first served policy while observing that public trust doctrine warranted auction be the sole method for distribution of all natural resources.

The government had filed a review of the 2G judgment but withdrew it prior to the President sending a reference seeking the court's opinion on the correctness of applying a uniform auction method for allocation of all natural resources. It cited several earlier judgments which had allowed the government leeway to decide the mode of allotment of natural resources including mining leases.

Attorney general G E Vahanvati said public trust doctrine warranted unhindered enjoyment of natural resources by the public, like fresh air, water, sunlight and environment. "Can we keep all natural resources for enjoyment of general public? Can coal blocks be opened up for unhindered use by public? There has to be classification of method for allocation of natural resources," he said.

"I am not suggesting auction is not a good way to distribute natural resources. In some cases, it definitely helps in ascertaining the market value. Can the vast natural resource in fishery be auctioned? Japanese trawling companies would pay the highest value for the fish but it would spell doom for the local fishermen," Vahanvati said.

But former attorney general Soli Sorabjee, appearing for 2G scam petitioner NGO 'Centre for Public Interest Litigation', contested the AG's argument and said, "The entire Presidential Reference was aimed at reviewing the 2G spectrum judgment. It is impermissible for the executive to determine whether a court judgment was correct or not. Today, they are using Presidential Reference to question 2G judgment. Tomorrow, it might be the Vodafone judgment."

Vahanvati took it in a lighter vein and clarified that the government had no intention to send a Presidential Reference on the Vodafone judgment.

The apex court said it may not answer all the questions posed by the President. "But we want to know - if a doubt arises in large number of cases whether to apply auction route to environmental resources or to all natural resources, can the President not make a reference to the apex court for opinion?"

Sorabjee warned that if the Presidential Reference was entertained on this issue, it would subvert judicial discipline and rules where the judiciary alone referred legal doubts to a larger bench and not the executive seeking review of a judgment through reference.

But the bench reminded Sorabjee that in 1998, the court had entertained a Presidential Reference on doubts arising from an earlier judgment relating to the appointment and transfer of judges of Supreme Court and high courts. Arguments on maintainability of the Presidential Reference will continue on Wednesday.