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2012 (2) TMI 568 - SC - Indian LawsWhether the Government has the right to alienate, transfer or distribute natural resources/national assets otherwise than by following a fair and transparent method consistent with the fundamentals of the equality clause enshrined in the Constitution? Whether the recommendations made by the Telecom Regulatory Authority of India (TRAI) on 28.8.2007 for grant of Unified Access Service Licence (for short UAS Licence ) with 2G spectrum in 800, 900 and 1800 MHz at the price fixed in 2001, which were approved by the Department of Telecommunications (DoT), were contrary to the decision taken by the Council of Ministers on 31.10.2003? Whether the exercise undertaken by the DoT from September 2007 to March 2008 for grant of UAS Licences to the private respondents in terms of the recommendations made by TRAI is vitiated due to arbitrariness and malafides and is contrary to public interest? Whether the policy of first-come-first-served followed by the DoT for grant of licences is ultra vires the provisions of Article 14 of the Constitution and whether the said principle was arbitrarily changed by the Minister of Communications and Information Technology (hereinafter referred to as the Minister of C & IT ), without consulting TRAI, with a view to favour some of the applicants? Whether the licences granted to ineligible applicants and those who failed to fulfil the terms and conditions of the licence are liable to be quashed?
Issues Involved:
1. Whether the Government has the right to alienate, transfer or distribute natural resources/national assets otherwise than by following a fair and transparent method consistent with the fundamentals of the equality clause enshrined in the Constitution? 2. Whether the recommendations made by the Telecom Regulatory Authority of India (TRAI) on 28.8.2007 for grant of Unified Access Service Licence (UAS Licence) with 2G spectrum at the price fixed in 2001 were contrary to the decision taken by the Council of Ministers on 31.10.2003? 3. Whether the exercise undertaken by the Department of Telecommunications (DoT) from September 2007 to March 2008 for grant of UAS Licences to the private respondents in terms of the recommendations made by TRAI is vitiated due to arbitrariness and malafides and is contrary to public interest? 4. Whether the policy of first-come-first-served followed by the DoT for grant of licences is ultra vires the provisions of Article 14 of the Constitution and whether the said principle was arbitrarily changed by the Minister of Communications and Information Technology to favour some of the applicants? 5. Whether the licences granted to ineligible applicants and those who failed to fulfil the terms and conditions of the licence are liable to be quashed? Issue-wise Analysis: 1. Government's Right to Distribute Natural Resources: The Court emphasized that natural resources are public goods and the State acts as a trustee for the people. The distribution of these resources must be guided by constitutional principles, including equality and public trust. The State must ensure that the process is transparent, fair, and non-discriminatory. The Court held that the State is bound to act in consonance with the principles of equality and public trust while distributing natural resources. 2. Recommendations of TRAI and Decision of the Council of Ministers: The Court found that TRAI's recommendations for allocating 2G spectrum at 2001 prices were flawed and contrary to the decision taken by the Council of Ministers in 2003. TRAI's approach was deemed lopsided and contrary to public interest. The Court held that the recommendations made by TRAI were flawed in many respects and their implementation by the DoT resulted in gross violation of the objectives of NTP 1999 and the decision taken by the Council of Ministers on 31.10.2003. 3. Exercise Undertaken by DoT for Grant of UAS Licences: The Court found that the exercise undertaken by DoT under the leadership of the then Minister of C&IT was arbitrary, capricious, and contrary to public interest. The Minister of C&IT took several steps that favored certain companies at the cost of the public exchequer. These steps included not placing TRAI's recommendations before the full Telecom Commission, not consulting the Ministry of Finance, and changing the cut-off date for applications arbitrarily. The Court held that the entire exercise was vitiated due to arbitrariness and malafides and was contrary to public interest. 4. First-Come-First-Served Policy: The Court held that the first-come-first-served policy was fundamentally flawed as it involved an element of pure chance or accident. Such a policy could be misused by unscrupulous people to garner maximum financial benefit. The Court emphasized that the State must adopt a transparent and fair method for disposing of public property, and auction is the best method for ensuring non-discriminatory distribution of natural resources. The Court found that the policy was arbitrarily changed by the Minister of C&IT to favor certain applicants. 5. Licences Granted to Ineligible Applicants: The Court found that the licences granted to ineligible applicants and those who failed to fulfill the terms and conditions of the licence were liable to be quashed. The Court declared the licences granted on or after 10.1.2008 pursuant to the press releases issued on 10.1.2008 and subsequent allocation of spectrum to the licensees as illegal and quashed them. Conclusion: The Court allowed the writ petitions and declared the licences granted on or after 10.1.2008 as illegal and quashed them. The Court directed TRAI to make fresh recommendations for the grant of licences and allocation of spectrum in 2G band through auction. The Central Government was directed to consider TRAI's recommendations and take appropriate decisions within one month. The Court also imposed costs on certain respondents who benefited from the arbitrary and unconstitutional actions of the DoT. The judgment emphasized the need for transparency, fairness, and adherence to constitutional principles in the distribution of natural resources.
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