Auction route to allot natural resources not acceptable: Govt

Presidential reference didnt overrule verdict on 2G; mandating auction could impact FDI, it tells Supreme Court

The government on Thursday told the Supreme Court that the Presidential reference did not seek to overrule the 2G verdict mandating auction route for spectrum allocation, but sought advice on the mode of distribution of other natural resources as the judgment could affect foreign direct investment (FDI) in the country.

In April, the 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. Making his submission before a five-judge Constitution bench on the maintainability of the Presidential reference, Attorney General G E Vahanvati said that the government was duty bound by the apex court’s February 2 order directing auction of spectrum.

“The 2G judgment allowed the writ petition (filed by NGO CPIL) in certain terms. That decision is not sought to be disturbed by the Presidential reference. Nobody is requesting the court for overturning the result in judgment,” he said.

“The difficulty is with regard to the principle of auction for other natural resources. In case of distribution of other natural resources, the state must adopt non-discriminatory method and only auction is not the option,” Vahanvati claimed.

In an attempt to brush aside the contentions that the Presidential reference sought to overrule the verdict, he said that it had been repeatedly made clear that the directions given in the said judgment had been accepted.

Auction as sole mode

“Doubts that have arisen are with regard to certain observations made in the judgement as a statement of law which require to be clarified,” he said.

“Thus, the far-reaching nature of this judgment may impact FDI and other investments in this country. This is the question of far-reaching importance. This, read with the immediately preceding recital, demonstrates generally speaking the reluctance of foreign investors to look at India as a safe place for investments. It is this question which is highlighted in the reference,” the government’s top law officer said.

He said auction cannot be accepted to be the sole procedure for allocation of all natural resources as the government could not act on the sole consideration of revenue maximisation.During the day-long proceeding, Vahanvati also termed as “misconceived”, the arguments terming Presidential reference as malafide.

NGO Centre for Public Interest Litigation (CPIL) challenged the maintainability of the reference being taken up by a Constitution bench headed by Chief Justice S H Kapadia saying that it sought to question the correctness of February 2 verdict in the 2G case, cancelling 122 licences and recommending auction of all natural resources for its distribution.

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