Today, blogging live from 2pm on the presidential reference about Supreme Court Justice GS Singhvi’s 2 February judgment that cancelled all awarded 2G licences and said that all natural resources should be allocated by the government by auction.
What you need to know:
Mint published a good summary about the upcoming issues in the reference, as well as an FAQ on what’s at stake here.
We’ve uploaded the original 2G presidential reference here, which helpfully explains much of the 2G case background (12 pages).
And here’s a copy of Singhvi’s original 94-page judgment.
If you’re on Twitter, follow Legally India’s Supreme Court postcard writer and anonymous advocate @Courtwitness1 and @spreadlaw and several other lawyers to get live updates, probably before the TV stations flash the news.
@CourtWitness1 and @Spreadlaw both tweeted that CJI SH Kapadia (who retires tomorrow) won’t be delivering any opinion at 2pm today. Instead Justices DK Jain and Khehar will deliver their opinions.
Court Witness (CW) adds: “Obviously, DK Jain will be writing the majority opinion in the #2gscam prez reference. but interesting to see if Khehar will dissent...”
Kapadia has already said at the start of hearings that they won’t be looking into the issue of the 2G licences specifically, but only into the general principle expounded by the court about mandatory natural resource auctions. However, many lawyers already believe that those statements of Singhvi’s
We’ll see which way it will swing.
We’ll be back with this live blog from 2pm when the session is set to start and we’ll be monitoring Tweets.
2pm: The courtroom is packed and everyone is excited. CW tweets that the attorney general, lawyers for industry, Subramanium Swamy and the entire Supreme Court press corps are there...
213pm: Just received an SMS from a lawyer in court that DK Jain, for the majority, says that paragraphs 94 to 96 of Singhvi’s judgment that refer to allocation of natural resources were obiter. This of course opens the door for today’s bench to elaborate its own stance, if any.
217pm: Everything other than 2G licences needn’t just be auctioned, says my source.
248pm: There is no dissenting judgment, Khehar gave a concurring view.
2:50: Court Witness, who was without mobile reception in court and couldn't live tweet today, summarises that:
Main proposition: auction is not the only constitutional method of disposing natural resources.
Court cannot and will not prescribe any one economic policy as the only constitutionally permissible policy
As long as the resources are distributed in a fair manner that serves common good, court will not strike down such distribution.
However, if natural resources are being handed out for private commercial use, not using auctions may be unconstitutional.
Court refused to say anything about auction of spectrum and did not interfere with the #2g judgement
Court clarified the scope of the #2g judgement and says auction applies only to spectrum as per judgement.
Also, khehar did not dissent. It was a concurring opinion which offered separate reasons for same conclusions as majority
253pm: The opinion is now available for download but the SC website server has crashed for now. We will host a copy when we get it. For now, you can try to get it here.
That link now appears to point to a non-existent document. Maybe it'll still be a while...
15:28 The link is now working by the way. The interesting part of Jain's opinion is on page 143, half way down in paragraph 149:
Regard being had to the aforesaid precepts, we
have opined that auction as a mode cannot be conferred
the status of a constitutional principle. Alienation of
natural resources is a policy decision, and the means
adopted for the same are thus, executive prerogatives.
However, when such a policy decision is not backed by a
social or welfare purpose, and precious and scarce natural
resources are alienated for commercial pursuits of profit
maximizing private entrepreneurs, adoption of means
other than those that are competitive and maximize
revenue may be arbitrary and face the wrath of Article 14
of the Constitution. Hence, rather than prescribing or
proscribing a method, we believe, a judicial scrutiny of
methods of disposal of natural resources should depend
on the facts and circumstances of each case, in
consonance with the principles which we have culled out
above. Failing which, the Court, in exercise of power of
judicial review, shall term the executive action as
arbitrary, unfair, unreasonable and capricious due to its
antimony with Article 14 of the Constitution.
More to come...
334pm: In paragraph 79 and 80 of Jain's opinion, he says that for spectrum, auction is the only correct method:
79. Further, the final conclusions summarized in
paragraph 102 of the judgment (SCC) make no mention
about auction being the only permissible and intra vires
method for disposal of natural resources; the findings are
limited to the case of spectrum. In case the Court had
actually enunciated, as a proposition of law, that auction is
the only permissible method or mode for
alienation/allotment of natural resources, the same would
have found a
judgment.80. Moreover, if the judgment is to be read as
holding auction as the only permissible means of disposal
of all natural resources, it would lead to the quashing of a
large number of laws that prescribe methods other than
auction, e.g., the MMRD Act. While dealing with the merits
of the Reference, at a later stage, we will discuss whether
or not auction can be a constitutional mandate under
Article 14 of the Constitution, but for the present, it would
suffice to say that no court would ever implicitly,
indirectly, or by inference, hold a range of laws as ultra
vires the Constitution, without allowing every law to be
tested on its merits. One of the most profound tenets of
constitutionalism is the presumption of constitutionality
assigned to each legislation enacted. We find that the 2G
Case does not even consider a plethora of laws and
judgments that prescribe methods, other than auction, for
dispensation of natural resources; something that it would
have done, in case, it intended to make an assertion as
wide as applying auction to all natural resources.
Therefore, we are convinced that the observations in
Paras 94 to 96 could not apply beyond the specific case of
spectrum, which according to the law declared in the 2G
Case, is to be alienated only by auction and no other
method.
1130pm: Apologies for the lack of recent updates, we've experienced some internet connectivity issues at the worst time, plus of course Allen & Overy's insistence on sending out their press release about their break up with Trilegal in the middle of it all.
Mint, as ever, has a good summary and some comments on what the judgment means. Mint editor R. Sukumar meanwhile lauded the Supreme Court's stance:
The court’s response also suggests that it realizes there is a need to draw a line between any government policy, and the implementation of this policy. In both the 2G scam and the coal mines allotment controversy, the policy may have been sub-optimal and short-sighted, but the real issue was with the implementation.
Meanwhile, Court Witness has described Khehar's concurring opinion as "cheeky" ("with the fullest respect"):
Advocate Kartik Seth who also appeared in the case commented that [Khehar] clarified that just because it was ruled that "auction cannot be enunciated as a constitutional principle, [it] should not be understood to mean that auction can never be a valid method for allocation of natural resources".Khehar understood the sub-text of what the Government was trying to do with the #2g Presidential Reference. ...and in his concurring opinion, has gone and made the Government's life even more difficult in any upcoming challenge to #coalblock case
As @spread_law just pointed out, the govt is celebrating the #prezref opinion without reading it fully. esp khehar's cheeky "concurrence".
Quoth Khehar on page 206:
In a slightly changed factual scenario, the conclusion may well be
different. If before the holding the process of auction, for the award of a
power project (based on competitive bids for tariff), it is made known to the
contenders, that the successful bidder would be entitled to a mining lease
over an area containing coal, those competing for the power project would
necessarily incorporate the profit they were likely to make from such
mining lease. While projecting the tariff at which they would supply
electricity, they would be in a position to offset such profits from their costs.
This would result in an in an opportunity to the contenders to lower the
tariff to a level lower than would have been possible without the said lease.
In such a situation the gains from the coal mining lease, would be
enmeshed in the competitive bidding for tariff. Therefore, it would not be
just to assume in the instant sequence of facts, that the coal lot has been
granted free of cost. One must read into the said grant, a reciprocal
consideration to provide electricity at a lower tariff. In the instant factual
scenario, the allotment of the mining lease would be deemed to be aimed
at“subserving the common good” in terms of Article 39(b) of the
Constitution of India. Therefore even the allotment of such a mining lease,
which appears to result in the allocation of a natural resource free of cost,
may well satisfy the test of fairness and reasonableness contemplated in
Article 14 of the Constitution of India. Moreso, because a fair playing field
having been made available to all those competing for the power project,
by making them aware of the grant of a coal mining lease, well before the
bidding process. The question of favouritism therefore would not arise.
Would such a grant of a natural resource, free of cost, be valid? The
answer to the query, in the instant fact situation, may well be in the
affirmative.The policy of allocation of natural resources for public good can be
defined by the legislature, as has been discussed in the foregoing
paragraphs. Likewise, policy for allocation of natural resources may also
be determined by the executive. The parameters for determining the
legality and constitutionality of the two are exactly the same. In the
aforesaid view of the matter, there can be no doubt about the conclusion
recorded in the“main opinion” that auction which is just one of the several
price recovery mechanisms, cannot be held to be the only constitutionally
recognized method for alienation of natural resources. That should not be
understood to mean, that it can never be a valid method for disposal of
natural resources (refer to paragraphs 10 to 12 of my instant opinion).
Ok, and with that we'll conclude our 2G pres ref live blog for today. Thanks for following!
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