All natural resources can't be auctioned: Govt

The Centre has reiterated before the Supreme Court that the auction of natural resources in every situation would be counter-productive and go against the interest of the economy.

In its written argument, the Union government pointed out alleged inherent drawbacks in the apex court’s judgment in the 2G case, cancelling 122 licences and recommending auction of all natural resources for its distribution.

The apex court had in a significant order on February 2 cancelled 122 licences of 2G spectrum granted to 11 companies in 2008, noting the “flaw” in the government’s first-com-first-serve policy for use of natural resources.

In April, a Presidential reference was sent to the apex court seeking its opinion on issues emerging out of its 2G verdict, including whether auctioning of natural resources across all sectors was mandatory and the verdict be given retrospective effect for radio waves granted since 1994.

The reference wanted the apex court to clarify among other points whether there could be judicial interference in policy matters, vis-a-vis disposal of natural resources and investments made by foreign investors under multi and bilateral agreements.

In the matter of special reference under Article 143(1) of the constitution, the Centre said: “It is submitted that a simplistic method of auction alone cannot be applied for disposal of all types of natural resources. Such a simplistic method of auction of all natural resources in all circumstances and in all sectors, apart from being impractical in certain situations, can also be counter-productive and can impact the growth and economy of the country.”

A five-judge Constitution bench had on May 11 issued notices to various parties including to all state governments and that of Union Territories on the Presidential reference.

In its response, the Centre claimed that the determination of methods for allocation of a natural resource was a complex exercise which had to keep in mind several competing interests and factors so that such a policy subserved the common good as enshrined in the Constitution.

“The doctrine of public trust does not enjoin the state to only dispose of natural resources by way of auction…It is submitted that the utilisation and distribution of natural resources by the state would depend on varied nature and characteristics of each natural resource.”

“It is further submitted that maximisation of revenues alone or financial gain by way of allocation is not the only guiding factor for allocation of a natural resource but is definitely a relevant factor,” the Centre said.

The government claimed that there were several judgments of the apex court which clearly laid down that the route of auctions was not the only route permissible for disposal of natural resources.

“It is also respectfully submitted that this court has repeatedly stated that courts do not interfere with the policy decision on the ground that another policy would be better,” the Centre said.

An NGO, pursuing the legal battle in the 2G scam, has opposed the Presidential reference before the Supreme Court, saying that it was an act of forum shopping by the government which wanted to continue with opaque and corrupt system of allocation of natural resources.
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