Mumbai, Sept. 27: Justice Jagdish Singh Khehar agreed with his fellow Supreme Court judges on the Constitution bench that handed down the main verdict on the presidential reference arising from the 2G case, but still decided to frame his own opinion to clarify “some other nuances on the subject”.
“There can be no question of any disagreement” on the main opinion “which is based on settled propositions of law declared by this court”, Justice Khehar said.
But he seemed to be mystified by the first question in the presidential reference: “Whether the only permissible method for disposal of all natural resources, across all sectors and in all circumstances, is by the conduct of auctions?”
He said it was of utmost importance to understand the “tenor” of the first question.
Take a hypothetical situation where the legality of 100 instances involving the disposal of natural resources are taken up for consideration. In 99 cases, an auction is determined to be the right option. But in one instance, it is not. In such a situation, “the answer to the first question would be in the negative”, he said.
“This answer in the negative would give the erroneous impression that it is not necessary to dispose of the natural resources by way of auction. Surely, the presidential reference has not been made to seek such an innocuous advice,” he added.
He said the government was alive to the fact that disposal of “some natural resources have to be made only by auction”.
The attorney-general had already informed the court that spectrum would henceforth be allotted only through competitive bidding by way of an auction. A mining lease for coal could also be only allotted through an auction process.
If that is so, Justice Khehar added, “The first question in the reference does not seek a literal response.”
He said the first question should then be understood as an exercise to seek the court’s opinion on “whether there are circumstances in which natural resources ought to be disposed of only by auction. Tendering an opinion without a response to this facet of the matter would not make the seeker of the advice any wiser.”
Justice Khehar said the concept of equality before the law and equal protection of the laws emerged from the fundamental right expressed in Article 14 of the Constitution.
“Equality is a definite concept…. It all started with a demand for basic rights for respectable human existence. Over the years, the concept of determination of societal rights has traversed in different directions and avenues…. Now rights in equity sometimes even present situations of conflict between individual rights and societal rights,” he said.
The present case was a dispute of such a nature.
“For a country like India, the pendulum must be understood to balance the rights of one citizen on the one side and 1,241,491,960 (the present estimated population of the country) on the other…. An individual citizen cannot be a beneficiary at the cost of the country i.e. the plurality,” he added.
Article 14 does not permit the “power of pick and choose arbitrarily out of several persons falling in the same category…. A criterion or procedure has to be adopted so that the choice… is based on reason, fair play and non-arbitrariness. Even if there are only two contenders falling in the zone of consideration, there should be clear, transparent and objective criteria to indicate which of the two is to be preferred”.
Justice Khehar said: “All powers vested in the state are meant to be exercised for (the) public good and in (the) public interest. Therefore, the question of unfettered discretion in an executive authority just does not arise.... A public authority is ordained... to act reasonably and in good faith and upon lawful and relevant grounds of public interest.”
He said that when the state wanted to hand out natural resources to private persons for commercial exploitation exclusively for individual gains, “the state’s endeavour must be towards maximisation of revenue returns. This alone would ensure that the fundamental right enshrined in Article 14 of the Constitution of India (assuring equality before the law and equal protection of the laws), and the directive principle contained in Article 39(b) of the Constitution of India (that material resources of the community are so distributed as best to subserve the common good) have been extended to the citizens of the country.”
In the main opinion, the judges had said that an auction was not a constitutional mandate. And therefore, an auction could not be read into Article 14.
Justice Khehar broadly agreed with the principle. “But it can surely be applied in some situations to maximise revenue returns, to satisfy legal and constitutional requirements. It is, therefore, that I have chosen to express the manner of disposal of natural resources by using the words ‘maximisation of revenue’ in place of the term ‘auction’,” he added.
In the main opinion, the four judges had concluded that an auction, which is just one of several price recovery mechanisms, “cannot be held to be the constitutionally recognised method for alienation of natural resources”.
However, Justice Khehar added: “That should not be understood to mean that it can never be a valid method for disposal of natural resources.”
He concluded by saying: “Each bit of natural resource expended must bring back a reciprocal consideration. The consideration may be in the nature of earning revenue or may be to ‘best subserve the common good’. It may well be the amalgam of the two.
“There cannot be a dissipation of material resources free of cost or at a consideration lower than their actual worth. One set of citizens cannot prosper at the cost of another set of citizens.”