2G: Common good guiding factor for disposal of national resources

Last Updated: Thursday, July 19, 2012 - 22:01

New Delhi: Insisting that there cannot be a "straitjacket formula" for distribution of natural resources, Government on Thursday told the Supreme Court that auction cannot be made the only route as it can be counterproductive.

Attorney General G E Vahanvati, who commenced the arguments on the merits of the Presidential Reference arising out of the 2G spectrum verdict said, "I disagree that fairness and transparancy can be achieved only through auction".

Appearing before a Constitution Bench headed by Chief Justice S H Kapadia, he said "common good" is the sole guiding factor for distribution of natural resources.

He said this has to be done in accordance with sector- specific requirements in various ways as the route of auction can be "counter-productive" and can impact planned and coordinated growth of the economy.

He contended that natural resources must not be viewed only from the point of view of revenue generation.

The Februray 2 verdict on the 2G spectrum had held that all natural resources should be allocated through auction.

Disagreeing with the court's findings that the first-come -first-served (FCFS) policy was unconstitutional, the Attorney General said, "The touchstone for testing any policy of distribution of natural resources is whether it serves the common good."

"The norm of 'common good' has to be understood and appreciated in a holistic manner, keeping in mind the nature of the natural resource, the benefit to the country and the economy at large, and not merely by immediate financial gain by auction," he said.

Vahanvati said although financial gain to the State is relevant, it is not the only guiding factor to appreciate whether a policy of distribution serves the common good.

Further, gain cannot be measured only in terms of revenue. Revenue considerations may assume secondary consideration to developmental ones, he said.

The economic policy underlying the effective utilisation of natural resource has to be taken into account while dealing with the issue, he argued.

"The method of 'auction' alone cannot be insisted upon for disposal of all types of natural resources. Such an approach apart from being impractical in certain situations, can also be counter-productive and can impact planned and coordinated growth of the economy of the country," he submitted before the bench, also comprising justices D K Jain, J S Khehar, Dipak Mishra and Ranjan Gogai.

The Attorney General said the appropriate method for dealing with or alienating a resource would be to take into consideration the nature of the resource, its content, utility, end-use and its economic potential, as well as the ultimate usefulness of such resource for the community or society at large.

The Centre said while considering the question of sustainable management of natural resources, the multi-faceted aspects required to be taken into consideration do not justify a straitjacket formula.

"It is submitted that this broad based concept of 'distribution' of natural resources in Article 39(b) eliminates limitation only to one method, namely, auction. It envisages all such methods available for distribution / allocation of natural resources which ultimately subserve the common good," it said.

The reference covers various issues arising out of the apex court's 2G spectrum case verdict including whether auctioning of natural resources across all sectors is mandatory and whether the verdict in the 2G case can be given retrospective effect for radio waves granted since 1994.

The court had on May 11 issued notices and sought responses also from state governments and FICCI and CII on behalf of the private industries along with those of the NGO, Centre for Public Interest Litigation (CPIL) and Janata Party President Subramanian Swamy.

It was on the petitions by CPIL and Swamy that a bench of justices G S Singhvi and A K Ganguly (since retired) had delivered its February 2 verdict which cancelled 122 telecom licences holding that the first-come-first-served policy was illegal and unconstitutional.


First Published: Thursday, July 19, 2012 - 22:01
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