New Delhi: The Supreme Court today clarified to the government that its February judgement on following a competitive bidding process for allocating national resources applied only to 2G spectrum in the current context and not necessarily to all natural resources. It had earlier observed that all natural resources must be auctioned by the government, which had sought clarification.
In February this year, the court cancelled 122 telecom licenses issued by former minister A Raja in 2008 on the basis of a first-come-first-serve policy which he allegedly manipulated. In its landmark judgement, the court said that a get-in-line policy was fundamentally flawed and that all natural resources must be auctioned by the government.
The government, however, argued that it was not always possible to auction natural resources. It also said that the verdict impedes upon the executive's right to decide policy. It then sought the clarification from the Supreme Court on whether its stand on an auction, as expressed in the telecom or 2G verdict, applies to other national resources.
Commenting on the court's observations, senior advocate Harish Salve said today that the policy making power of the government has been upheld. "There is nothing wrong in any method. If you have a valid policy, and the method you follow is transparent, it is valid," he said.
The Supreme Court's 2G reference is an advisory opinion and is not binding on the government, which may choose to accept or reject it. Legally, the opinion is also not binding on other courts, but will have a persuasive effect on their judgements.
The government has been recently indicted by the national auditor or CAG who said that because coal blocks were not auctioned from 2004-2009, the country lost upto
Rs. 1.86 lakh crore. Though the government has challenged that estimate, the auditor's conclusion has added to the debate over how resources should be given away to private firms. In the case of both airwaves for telecoms and coal blocks, the government has argued that an auction would have led to increased costs which would have adversely impacted consumers and the industry.