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‘2G spectrum allocated distorting FCFS policy’

Chief Justice of India S H Kapadia remarked on Wednesday that 2G spectrum was allocated by distorting ‘first-come-first- served policy’ (FCFS).

Published: 02nd August 2012 10:31 AM  |   Last Updated: 02nd August 2012 10:31 AM   |  A+A-

Chief Justice of India S H Kapadia remarked on Wednesday that 2G spectrum was allocated by distorting ‘first-come-first- served policy’ (FCFS).

Heading a five-judge Constitution Bench, comprising himself, Justice D K Jain, Justice J S Kehar, Justice Dipak Misra and Justice Ranjan Gogoi, which is hearing the submissions on the Presidential Reference on 2G verdict, he told Attorney General G E Vahanvati: “We find the ‘first-come-first served’ policy is fine, but the implementation is flawed.”

Justice Kapadia also asked the AG about the telecom policy in allotting spectrum from 2001 to 2007.

To this, the AG said that FCFS policy was there from 2001, but telecom players were limited. In 2007, along with applications, an entry fee of `1,600 crore was insisted and the allocation was done on the basis of who paid first. This was not done earlier. “Then it’s ceased to be ‘first-come-first- served policy’. If you say at the last minute - payment instead of date of application - then it is not FCFS, it is out of turn. It not only changed the modality but criteria also,” the Chief Justice pointed out.

The AG told the Bench that the Prime Minister had suggested auction to sell 2G spectrum based on a note sent to him by the Finance Secretary. Later, senior advocate Ravindra Shrivastava, appearing for Chattisgarh, told the Bench that his state was endowed with natural resources like coal, iron, bauxite and forests. He told the Bench that Articles 39(b) and 48 A of the Constitution provide sufficient guidelines as to the public duty of the state with regard to distribution of material resources so as to best subserve the common good.

“This necessarily implies that the respective state has to evolve a method for distribution of natural resources which achieves the purpose of public good. In elected parliamentary democracy, it is the function and province of the legislature,” he submitted. “Auction is not the only permissible method for disposal of all natural resources across all sectors and in all circumstances,” Shrivastava added. Additional Advocate General of Rajasthan Dr Manish Singhvi told the Bench that the state’s natural resources must be distributed to subserve the common good of the people. The state’s power to earn revenue is either through taxation or through partaking of natural resources.

Therefore, the cardinal principle of maximisation of revenue comes and if any natural resource is to be parted by the state, then it must earn maximum revenue so that the money earned could be used by the government for public welfare.



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