This article contains a brief note for the leading case of Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1 : (2012) 2 SCALE 180, which is a part of the paper “Leading Cases” for the Supreme Court Advocate on Record Examination 2015. This note was a part of my lecture delivered in 2013 to about 100+ Advocates who were preparing for the AOR examination. It is a part of the AOR series on leading cases.
Centre for Public Interest Litigation v. Union of India, (2012) 3 SCC 1 : (2012) 2 SCALE 180:
This PIL arose out of misallocation of licences / radio spectrum by Ministry of Communications and Information Technology in January 2008 to provide 2G services. The controversy arose because spectrum was allocated on first-come-first-served basis at the price prevailing in 2001 though the economic value of the spectrum in 2007-2008 was enormously more. There were several irregularities in the allocation process. Besides, some of the beneficiaries earned huge profits by getting spectrum at a throw-away price and then selling at much higher price. The entire process was perceived as a favour shown to some private parties at the cost to public exchequer. The Comptroller & Auditor General (CAG) had also made adverse comments in his audit report.
A 2-Judge Bench of Justice G.S. Singhvi and Justice A.K. Ganguli held as under:
- The exercise undertaken by the officers of DoT between September 2007 and March 2008, under the leadership of the then Minister of Communications and Information Technology was wholly arbitrary, capricious and contrary to public interest apart from being violative of the doctrine of equality.
- The licences granted to the private respondents on or after 10-1-2008 pursuant to two press releases issued on 10-1-2008 and subsequent allocation of spectrum to the licensees were declared illegal and were quashed. The above direction was to become operative after four months.
- Directions were issued for fresh grant of licences and allocation of spectrum for 2G services on the basis of fresh recommendations by TRAI.
- Natural resources belong to the people but the State legally owns them on behalf of its people and from that point of view natural resources are considered as national assets, more so because the State benefits immensely from their value.
- The State is empowered to distribute natural resources. However, as they constitute public property/national asset, while distributing natural resources the State is bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to public interest.
- As natural resources are public goods, the doctrine of equality, which emerges from the concepts of justice and fairness, must guide the State in determining the actual mechanism for distribution of natural resources.
- There is a fundamental flaw in the first-come-first-served policy inasmuch as it involves an element of pure chance or accident. In matters involving award of contracts or grant of licence or permission to use public property, the invocation of first-come-first-served policy has inherently dangerous implications.
- Wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. 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.
- While transferring or alienating the natural resources, the State is duty-bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process.
IMPORTANT: Read notes on other leading cases for the SC AOR Examination: AOR Series.
