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SC verdict on Presidential Reference gives UPA respite on sale of resources

28 Sep 2012 Evaluate

Responding to a presidential reference following the verdict on the 2G spectrum allocation, the Supreme Court (SC), in a big relief to the government, clarified that public auctions are not the only method for allocating natural resources. Besides this, the Apex court, also underscored that the allocation of such resources is a matter of policy, which courts cannot interfere with unless it is ‘arbitrary’ or ‘capricious’.

SC verdict on Presidential Reference comes as a big respite to Prime Minister Manmohan Singh's government, which off lately, has been flabbergasted by criticism of handing out telecom spectrum and coal fields at an alleged loss of Rs 3.6 lakh crore to private players instead of finding the highest bidders through an auction process, which the opposition termed as sheer corruption.

Meanwhile, a five-judge bench headed by Chief Justice S H Kapadia besides stating that the auction could be a better option where the aim is maximization of revenue also added that 'every method other than auction of natural resources cannot be shut down'.

Further proving its point, the court giving a hypothetical example of coal block allocation, said that natural resources could be allocated 'free of cost' if it sub serves the 'common good' like providing electricity at low tariff through use of coal. This example assumes significance in the backdrop of the controversy over the coal block allocation.

However, SC, while giving its verdict, cautioned that a legitimate policy too can become 'illegitimate' if pursued unfairly. Justifying this opinion, Justice J S Khehar in a separate but concurring judgment said that 'no part of the natural resource can be dissipated as a matter of largesse, charity, donation or endowment, for private exploitation'.

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