The opinion given by the Supreme Court on allocating natural resources has been termed as balanced by legal experts.
“The judgment is a correct and a balanced judgment. Whilst the court rejected that auction was the only method of allocation of natural resources,(for various reasons), it appears that the court has expanded the scope of judicial review. Under this judgment, the court has expanded the scope of judicial review to hold that even though the allocation of natural resources is a policy decision, it must be guided by a social and welfare purpose.
“The policy itself could be reviewed on the touchstone of Article 14. This is a departure from the complete hands off policy. And finally the court will also be able to review the implementation of the policy on a case-by-case basis,” said Pallavi Shroff, Senior Partner, Amarchand Mangaldas.
Primacy of executive
Asim Abbas, Partner, Khaitan & Co, said that the opinion that auction is not the only permissible method for disposal of all natural resource, reiterates the prerogative or primacy of executive’s role, in formulating policy.
“It is a welcome opinion as it provides flexibility to the Government to decide the policy on various parameters rather than limiting it only to revenue maximisation. This verdict clarifies the roles of the executive and judiciary on policy framing,” he said.
Sidharth Birla, Vice-President, FICCI, said this could lead to a more predictable policy environment.
In the affidavit filed in the Supreme Court, FICCI had submitted that auctions can play a valuable role in the price discovery process when price discovery is the sole consideration in making such sale of resources.
“However, we had also said that while auctions are indeed a valuable method of allocating natural resources but they are not the only methods and can be complemented with various other allocation methods,” Mr Birla.
“We hope that subsequent to this judgment, irrespective of the method followed, essential criteria namely transparency, clear regulatory and licensing framework, non-discretionary procedures are adhered to so as to obtain the maximum benefit arising from the allocation of nation's wealth of natural resources,” Birla said.