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Genuine policy can become 'illegitimate' if acted unfairly: SC

Last Updated: Thursday, September 27, 2012 - 23:16

New Delhi: The Supreme Court, which Thursday held that auction is not the only permissible method for disposal of natural resources, cautioned that a legitimate policy too can become "illegitimate" if pursued unfairly.

Giving a hypothetical example of coal block allocation, the court said natural resources could be allocated "free of cost" if it subserves the "common good" like providing electricity at low tariff through use of coal.

"The legality and constitutionality of a policy is one matter and the manner of its implementation quite another. Even at the implementation stage a forthright and legitimate policy, may take the shape of an illegitimate stratagem," said Justice J S Khehar.

The example assumes significance in the backdrop of the controversy over the coal block allocation as the court explained that the natural resource need not necessarily be auctioned when it is given to companies for power generation.

It stated that the legislative policy incorporated in Section 11A of the Mines and Minerals (Development and Regulation) Act, in short MMDR Act, which provides that a firm can be awarded the coal block without any auction if it promises to generate power.

"If it intends to best subserve the common good, it may well be valid even in a situation where the material resource is being granted free of cost.

"What appears to be free of cost in the proviso in Section 11A of the MMDR Act, is in actuality consideration enmeshed in providing electricity at a low tariff. The aforesaid proviso may be accepted as fair, and may not violate the mandate contained in Article 14 of the Constitution of India," the court said.


First Published: Thursday, September 27, 2012 - 23:16
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