SC sets tone for course correction

The court ruled that alienation of scarce natural resources like spectrum must be non-discriminatory.

The Supreme Court judgement, scrapping the entire tranche of 122 telecom licences issued for 2G spectrum allocation by the Central Government in 2008, is possibly a landmark judgement of the decade. The judgement is significant as it gives finality to judicial recognition of the fact that spectrum is a scarce, finite and renewable natural resource, which is susceptible to degradation in case of inefficient utilisation.

In this landmark judgement, the apex court, while looking at the 2G scam, has held that the state is the legal owner of the natural resources as a trustee of the people and although it is empowered to distribute the same, the process of distribution must be guided by constitutional principles, including doctrine of equality and larger public good.

The present judgement has got huge long-term ramifications as it has categorically held that given the intrinsic valuable nature of spectrum, auction should be the only rational transparent method for distribution of national wealth. The Supreme Court, while examining the peculiar facts and circumstances of the case, further held that if the method of auction had been adopted for grant of licences for 2G bandwidth, the Indian nation would have been enriched by many thousand crores of rupees.

The Supreme Court was categorical in coming to its conclusion that the recommendations made by Telecom Regulatory Authority of India (TRAI) were flawed in many respects and implementation thereof by the Department of Telecommunications resulted in gross violation of the objectives of the National Telecom Policy,1999.

Flawed policy

Seen from another perspective, the Supreme Court’s decision is historic as it has categorically held that there is a fundamental flaw in the first come, first served policy  in as much as it involves an element of pure chance or accident. The Supreme Court has further gone ahead to proclaim the law of the land, by holding that in matters involving award of contract or grant of licence or permission to use public property, the invocation of first come, first served policy has inherently dangerous implications. The Supreme Court judgement has recognised the fundamental fact that when it comes to alienation of scarce natural resources like spectrum etc, it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest.

The judgment is likely to have a huge impact on the industry. It will help clear the law once and for all , on how the spectrum of the country, being a scarce natural resource, has to be allocated.
The Supreme Court judgement brings far more clarity to the existing policies and has paved the way for a much more transparent, fair and reasonable procedure for allocation of spectrum. The said judgement will be a leading light for future government policy in this regard. Telecom policy in India in the past has been a subject generating a lot of controversy. This judgement is likely to usher in a new chapter, in the growth of telecom sector and their consolidation in India.
The impact of the said judgement will also be that the future government policy will be bound by the parameters of the present judgement. For the foreign players who are already in and those who want to enter the telecom sector in India, the judgement has a message that no amount of influence or power can subvert the constitutional principles of equality governing the distribution of scarce natural resources like spectrum, in India.

Guardian of the law

The 2G judgement is also a reminder of the reality that factors like the high economic value of spectrum and the tremendous growth of the telecom sector in India, have to be harmoniously blended with the principles of constitutional protection, so as to serve the doctrine of equality and larger public good. The Supreme Court judgement paves the way for a new future, for a new telecom policy and for a new telecom revolution in India. The  judgement will enable looking afresh at telecom regulation in India and connected policy, regulatory and legal aspects associated there with.

The judgement underlines the basic principle that it is the duty of the court to exercise its jurisdiction in larger public interest and ensure that institutional integrity is not compromised by those, in whom the people have reposed trust and who have taken oath to discharge duties in accordance with the Constitution and the law without fear or favour, affection or ill will. The people’s representatives, as any other citizen, enjoy fundamental rights and, at the same time, are bound by duties enunciated in Article 51A of the Constitution of India.

The Supreme Court judgement has come at a historically transient time in the country's  economic growth. The judgement has once again reiterated the basic principle that in case the executive fails to fulfill its statutory duties, the judiciary would not hesitate to step in and set aside decisions of the executive, which  are contrary to public interest or are violative of  constitutional principles.

(The writer is a Supreme Court advocate and mobile law expert, specialising in telecom and cyberlaw.)

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