Presidential reference: SC restricts order to telecom allocation

September 27, 2012 | National News | Written by

New Delhi, Sep. 27: The Supreme Court on Thursday made it clear that the auction route should be adopted only for the allocation of telecom spectrum, and not for all natural resources.

The apex court gave its advisory opinion on the presidential reference moved by the Centre on whether all natural resources be auctioned in line with its 2G spectrum judgment, or the directive be confined to spectrum alone.

A five-judge Constitution Bench of the apex court, headed by Chief Justice S.H. Kapadia, and comprising of Justices D.K. Jain, J.S. Khehar, Dipak Misra and Ranjan Gogoi, ruled that auction is an economic choice, and not a constitutional one.

The apex court said that auction is “not the only route” for allocation of natural resources and maintained that public interest must be kept in mind.

The Supreme Court further said that it may undertake a judicial review of the government’s policies, but left the formulation of policies to the government’s discretion.

The government had on April 12 moved the reference signed by the then President Pratibha Patil in which eight questions have been raised, including whether there could be judicial interference in policy matters, vis-…-vis disposal of natural resources and investments made by foreign investors under multi and bilateral agreements.

“Whether the judgment lays down that the permissible method for disposal of all natural resources across all sectors and in all circumstances is by the conduct of auction,” the reference has stated.

“Whether the court holds that within the permissible scope of judicial review that the policy is flawed is the court not obliged to take into account investment made under the said policy including the investment made by foreign investors under the multi and bilateral agreements,” it said.

It sought the court’s opinion on “whether the judgment is required to be given retrospective effect so as to unsettle the licenses issued for 2G spectrum and allocated after 1994 till 2008.”

The reference also touched upon the 3G spectrum allocated through “auction” and wanted to know the implications of the judgment on it.

“Whether 3G spectrum acquired through the auction in 2010 by entities whose (2G) licenses have been quashed in the judgment stands withdrawn,” it asked.

A meeting of the Union cabinet, chaired by Prime Minister Manmohan Singh, had on April 10 cleared the telecom ministry’s proposal to seek the Supreme Court’s opinion on various issues arising out of the February 2 judgment.

The two-judge bench, in its verdict, had also observed that auction was best suited route for allocating natural resources like telecom spectrum because the policy of first-come-first-serve was flawed.

The bench had on May 11 issued notices to the state governments and industrial chambers FICCI and CII and sought their responses on behalf of the private industries.

The court had also issued notices to the NGO, Centre for Public Interest Litigation (CPIL) and Janata Party President Subramanian Swamy on whose petitions a bench comprising justices G.S. Singhvi and A.K. Ganguly (since retired) had delivered a judgment on February 2, cancelling all 122 telecom licenses by holding that the first-come-first-served policy was illegal and unconstitutional.

The bench headed by Justice Singhvi had held that all natural resources should be allocated through auction. (ANI)