Auction not only method to disperse natural resources: SC

New Delhi  : Responding to a presidential reference following the verdict on the 2G spectrum allocation, the Supreme Court Thursday said the auction route was not the only method for allocating natural resources.

The five-judge apex court bench headed by Chief Justice S.H. Kapadia said auction could be a better option where the aim is maximisation of revenue, but then “every method other than auction of natural resources cannot be shut down”.

The court was answering a presidential reference seeking its opinion on whether auction was the only method of allocating natural resources across the board.

Expressing the opinion that auction could not be the sole method of dispersing natural resources, Justice D.K. Jain said “auction could not be elevated as a constitutional mandate”.

Having said so, the opinion said the court cannot go into the wisdom of the executive in policy matters and decide on which is the suitable method of allocating natural resources. The court said it does not have the expertise to decide which method is suitable for the disposal of a particular natural resource.

The economic policy of the government can only be struck down if it is found to be arbitrary and capricious, the court said.

In a separate but concurring judgment, Justice J.S. Kehar gave his additional reasons in respect on question one and four of the presidential reference.

The court did not answer three questions relating to the 2G verdict of February 2012 by which it had cancelled 121 2G licences.

The presidential reference was filed April 12 and hearing on it began May 11.

Of the 12 questions raised in the reference, the government sought the court’s opinion on whether auctioning was the only permissible method for the disposal of all natural resources.

The reference asked whether following the auction route for the disposal of natural resources was not contrary to earlier judgments of the Supreme Court.

The reference was made in the wake of the 2G verdict Feb 2, wherein the apex court said if scarce natural resources like spectrum were to be alienated by the state, then the only legal method was transparent public auction.

The apex court, while holding that ‘first come, first served’ policy was flawed, cancelled the licences.