SC directive is clear; focus on aam admi: Legal experts

Constitutional lawyer and former additional solicitor general, KTS Tulsi and corporate lawyer Gopal Jain explain to CNBC-TV18 that the Supreme Court judgment was issued with the clear focus on the socialist aspect of the Constitution that mandates the government to provide the basic essentials of life to the people.

The legal experts add that this restrains the government against adopting the process of auction for allocation of all natural resources. 

Below are edited transcripts of the experts' analyses on CNBC-TV18. 

Q: What is your reaction to the Supreme Court’s orders upholding that the Presidential Order is maintainable and restricting the order of auction only to telecom spectrum?

Tulsi: This is a very welcome decision. It is also important because if the previous judgment which directed that a competitive bidding process was a must for allocation of all natural resources, was implemented, it would have undermined the socialist aspect of the Constitution which mandates the provision of resources for the poor.

This judgment upholds the socialist principle and therefore is very important. Though very scanty information is available at this time about the Court's reasoning, it is a major relief for the government.

Q: The allocation of coal another case that deals with the auction of natural resources. Does this verdict strengthen those who were allocated coal mines and then had the coal-blocks taken away from them?

Tulsi: The coal-blocks were de-allocated is on the grounds of false representation and claims and documents. The coal blocks were also de-allocated after issuing show-cause notices on specific grounds. The coal-blocks were not de-allocated on the grounds that bidding process was not adopted.

Q: Does this directive strengthen the case of other allottees who hold the opinion that their mine allocations are not in danger because they were not obtained via competitive bidding?

Tulsi: The government is conscious that if it had adopted the bidding route for allocation of coal blocks, it might increase the price of coal which in turn would increase the price of power and power is essential for quality of life. The common man can't afford to pay more for power. So, therefore that is a matter of policy which the government consciously adopted. I am sure that this comes as a major relief to the government.

Q: Doesn't this reinstate the stability in the governmental distribution of resources?

Tulsi: Yes.

Q: What are your thoughts on the Supreme Court's directives- on the one hand it says that an auction is not the only route, while on the other, it allows the government a leeway by stating that resource-mobilisation will be secondary to public good?

Gopal Jain: I think this brings to rest a controversy that has refused to die. There is a lot of clarity and logic in the Supreme Court’s judgments. Firstly, so far as telecom and spectrum is concerned it is governed by the 2G judgment of February 2, 2012. This reference order has no effect on that.

Secondly, while an auction is not the only method for resources in every situation yet the government has to follow a credible mechanism which meets the mandate of Article 14. As the custodian of these resources, it must be in public interest. Broadly this will put pressure on government to take the auction or a market-determined route as opposed to a purely administrative form of allocation.

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As the existing system has to be ultimately improved, the Supreme Court has issued an indictment of the existing system, if you read between the lines. So there are riders and safeguards and to that extent the Supreme Court’s authoritative opinion brings clarity on the subject leaving the earlier judgment untouched, so that’s good so far as telecom is concerned.

Q: What is your view on the allocation of coal mines? Now that the government is not legally obliged or bound to allocate natural coal through the auction route, how do you think the allocation of coal mines will be conducted?

Gopal Jain: I think the government is bringing a new legislation while amending a previous legislation that has proposed the auction. So if the legislation is passed by mandate of Parliament, the allocation would be done via a public auction. The reference has to be viewed in the context of administrative allocation.

It does not broach on the requirement under a particular statute or a constitutional mandate. So it gives clarity to a roadmap. But if the government chooses to bring in legislation and decide the route of allocation, then that legislation obviously will hold supreme.

Q: Do you see any possibilities of litigation with this order?

Gopal Jain: I think litigation in India has never dipped, it has always been on the increase. Hopefully the order which is a form of advice given by the Supreme Court, should not lead to more litigation.  One can always view something in the judgment or in this advice to one’s benefit and make that a part of a litigation. But broadly, this should put an end to litigation.

Q: Does this come as an incremental piece of good news? Many have pointed out that the need for an advisory opinion did not arise because the Centre had already accepted this in principle. This fact was already corroborated by the Prime Minister as well. So was this already expected?

Gopal Jain: I think that when a constitutional bench of the Supreme Court gives its advice, it has its own weight. So though it is not incrementally good news, but it is an authoritative pronouncement or the endorsement of the Supreme Court in respect to specific questions. Even if there is a debate, the answers are to be found in the reference order. One doesn’t have to debate on the problems alone. We have solutions to those problems.