2G mess: Can court really decide on spectrum pricing?

“We can have facilitative mediation in disputes in pricing natural resources, like the pricing of gas and oil, which are complicated matters. Judges do not have expertise to deal with these matters…The judgements delivered by judges could sometimes hit the economy of the country or a particular sector of the economy, which is not good,’’ said Chief Justice of India SH Kapadia , on Saturday. Coming two days before a five-member Supreme Court bench begins hearing a Presidential Reference which seeks clarification from the court on whether there could be judicial interference in policy matters, particularly in the case of disposal of natural resources and matters relating to investments made by foreign investors government by multilateral and bilateral agreements, Kapadia’s comments assume significance. He heads the bench hearing the reference. On earlier occasions, Chief Justice Kapadia has urged the judiciary to respect the principle of separation of powers provided by the Constitution and resist the temptation of encroaching upon the domains of the government and Parliament. Judicial activism stretched beyond a reasonable limit could jeopardise the entire system, he has been insisting for some time now. It is not difficult to catch the drift in his comments. These are words of caution for his colleagues in the judiciary: let’s not tread into territories we are not familiar with and let’s look at the wider consequences of our verdicts. [caption id=“attachment_371958” align=“alignleft” width=“380”] Agencies[/caption] Now let’s come to the core question, around which Justice Kapadia’s comments revolve. Should the courts have a say in policy matters? In other words, do they have the power to veto policy decisions taken by the government and Parliament? While the Constitution establishes no-go areas for the judiciary, the system of PILs and judicial review creates ample scope for the latter to overstep the boundary. While, in most cases, it has been beneficial to ordinary, powerless citizens, it has also meant a direct challenge to other institutions of democracy, such as the legislature and the executive. The trigger for the latest debate is the order of a Supreme Court bench cancelling all 122 telecom licences issued in 2008 by the then telecom minister Andimuthu Raja. In its February order, the bench had also rubbished the first-come-first-served practice in the allocation of spectrum and had approved of auctions as the best way to distribute natural resources. The job of the bench should ideally have been limited to establishing the act of criminality and fixing criminal culpability of the people involved in the allocation of 2G spectrum but it ended up setting the policy for the government to follow. Of course, the judgement was probably flawed. The system of auctions may not be ideal for all situations. It appears fairer but could also militate against the idea of making services cheaper. It also tilts the game in favour of players with deep pockets. It could also facilitate cartelisation and creation of monopolies. The worst part is it blocks the emergence of new players in the field, which the first-come-first-served policy allowed. This policy is open to manipulation for selfish ends, which we have seen in the 2G spectrum scandal, but managed by honest, efficient people it serves a good purpose – it’s handling by Arun Shourie is a case in point. Given the respect the courts command, one won’t say their decision was meant to favour particular sections in the telecom sector. But it effectively amounts to that. Its direction to the government to auction spectrum has left the latter in a state of indecision. It is no accident that minister after minister is wary of taking decisions on spectrum. If the government accepts the new spectrum pricing fixed by the Telecom Regulatory Authority of India, buying spectrum becomes much costlier for the players in the telecom sector. The eventual winners in the bidding process could pass the additional load to customers – if they take a short-term view of profitability. If the government sets a lower spectrum reserve price, the issue of loss to exchequer could be raised again. Given the situation, is it appropriate for the court to decide pricing? The answer cannot be a yes. What is, or is not, in public interest is the job elected governments must do. The court’s job is to see if the government has done its job in a transparent and impartial way. Or if anyone actually questions a government decision on the ground that the intent was malafide. The fact that courts have frequently ventured into policy-making due to the failure of government to do its job does not mean they should continue doing so. Justice Kapadia’s suggestion that the court could help mediate disputes is sensible in the context of the fact that it does not have expertise in many matters and also because it should not be trespassing into areas reserved for the executive and the legislatures. The real problem is that we live in an era when any and all political decisions are seen as suspect. This is because of the low credibility of the political class in India. But ultimately politicians cannot abdicate their responsibility.