Saturday, 10 March 2012

Govt Ready For 2G Fight Round-II

NEW DELHI: The government will seek a presidential reference under Article 143 asking Supreme Court to clarify on the constitutionality of the 2G verdict that struck down the first-come-first-served (FCFS) policy for allocating natural resources like airwaves as arbitrary and inherently flawed.

The Cabinet is expected to approve the presidential reference on Saturday evening, with the government likely to seek a review of the SC order that auctions should be the only means by which precious resources like minerals or airwaves are allocated.

The government has filed a review petition in the SC challenging the constitutionality of the February 2 ruling scrapping 122 scam-tainted telecom licences issued during the tenure of jailed ex-telecom minister A Raja. Under Article 143 the president can seek the court's opinion on a matter of "public importance".

The Supreme Court's "advisory jurisdiction" can be invoked under Article 143 and in the past its opinion has been sought in cases like the Ayodhya dispute, which it refused to consider, and on aspects of the implementation of an India-Pakistan agreement on exchange of enclaves along the border with erstwhile east Pakistan.

Sources said the Cabinet will consider the presidential reference that is likely to raise questions over whether the apex court overstepped its jurisdiction in pronouncing on policy on the ground that this is the preserve of the executive. The Centre's review does not contest the decision to cancel licences but argues that ruling all options other than auctions will lead to absurd results.

The government's discomfort with the order is reflected in the review petition and the detailed presentation made to the parliamentary joint committee on telecom in which it has said that the SC violated the principle of "separation of powers" between the judiciary and the executive.

The order is "contrary to settled law" and it is "not permissible for the court to take this exercise upon itself and engage in policy-making, both for the reason that it is not its role to do so and it does not have the expertise to do so," the government told the JPC.

While it did to challenge the cancellation, the Centre has in its review petition sought a relaxation in the four-month deadline set by the court for the licences to be scrapped. The order has resulted in some foreign firms that bought equity threatening their Indian partners with litigation. Others have said they will invoke bilateral agreements.

The SC order is troublesome for the government as it spreads the 2G stain beyond Raja as the FCFS policy for spectrum allocation has been stoutly defended by the Centre. It has been felt that faulting the policy will put top figures in the government - not just an ally like DMK - in the dock as well. The government is keen that this part of the judgement be revised.

Earlier, telecom minister Kapil Sibal had said that the SC ruling has implications for other sectors like mining giving the example of a scenario where a private enterprise spends considerable money prospecting and then a decision is taken to auction the finds after the entity has shouldered the risks.

Policy making, the government insists, must take into account the "weighing and balancing of different values and considerations" and this remains the job of an elected executive that is accountable to Parliament.

On the practical aspects of the SC order, the government feels that gap in the cessation of licenses and completion of auctions may result in disruption of services to 69 million subscribers. It also feels it needs to be decided whether auction should determine both price and allotee in all cases or if other considerations like preventing monopolies, ensuring level playing fields and inter-se or priority among bidders can be taken into account.

The impact on tripartite agreements between licensor, licensee and banks and fallout on firms holding 3G spectrum whose 2G licences have been quashed, legalities of other licences are other issues that the government proposes to raise in course of the hearing on its March 2 review petition.


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