All Government decisions can`t be seen with suspicion: SC

Government functioning would come to a standstill if all its decisions are seen with suspicion, the Supreme Court has said while upholding Gujarat`s decision to develop an International Financial Services City in Ahmedabad in collaboration with a private company which was objected to by CAG.

PTI| Last Updated: Nov 29, 2013, 23:23 PM IST

New Delhi: Government functioning would come to a standstill if all its decisions are seen with suspicion, the Supreme Court has said while upholding Gujarat`s decision to develop an International Financial Services City in Ahmedabad in collaboration with a private company which was objected to by CAG.

The apex court said that although Comptroller and Auditor General of India (CAG) is a key figure in the parliamentary system, it is the government which runs the state and is accountable to the people.

A bench of justices KS Radhakrishnan and AK Sikri also said government`s action cannot be declared arbitrary or unreasonable just because of non-floating of tenders or absence of public auction.

"If every decision taken by the State is tested by a microscopic and a suspicious eye, the administration will come to a standstill and the decision-makers will lose all their initiative and enthusiasm," the bench said.

"In hindsight, it is easy to comment upon or criticize the action of the decision maker. Sometimes, decisions taken by the State or its administrative authorities may go wrong and sometimes it may achieve the desired results. Criticisms are always welcome in a Parliamentary democracy, but a decision taken in good faith, with good intentions, without any extraneous considerations, cannot be belittled, even if that decision was ultimately proved to be wrong," it said.

In this case, the state governemnt had come into joint venture agreement with Infrastructure Leasing & Financial Services Ltd (ILFS) in the name of Gujarat International Financial Tech City Limited (GIFT) on March 22, 2011 and the state allotted 412 acres of land to GIFT Company Ltd.

The state government`s decision was challenged in court alleging that allotting land to the company was illegal and CBI probe was sought. The CAG also in its report raised questions on the project.

The apex court, however, brushed aside all allegations of favouratism, saying "it cannot be said that the state has acted against public interest".