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Welcome show of judicial muscle

February 10, 2012

The 2G judgment goes beyond telecom, spoiling the party for corrupt politicians, bureaucrats and big business. It is only after navigating through the anger of unrepentant telecom firms and the grief of stricken investors and employees facing an uncertain future that one encounters the real impact of the Supreme Court judgment cancelling 122 illegal telecom licences last week. Its immediate, most obvious impact is a strong judicial attack on the opaque spectrum allocation process used by the government since 2001, first on a subscriber-linked criterion and later, on a first come, first served basis, which was exploited in 2008 in the worst possible manner by jailed exTelecom Minister A. Raja. The uncertainties that follow will be confined to the medium term, culminating in the delivery of tangible justice the reassignment of licences and spectrum at a market-determined price. REVERBERATION IN OTHER SECTORS The reverberations of the judgment actually extend far beyond telecom, crushing the subjective power of the government to issue licences and contracts in any sector like power, coal, minerals, mines, land, and even special economic zones (SEZ), that allocates scarce national resources. This effectively attacks the fountainhead of all large corruption linked to government contracts. The first irrefutable principle of the judgment is on the issue of ownership and control of natural resources provided under Article 39(b) of the Constitution: The ownership and control of natural resources of a community should be distributed so as to best sub-serve the common good but no comprehensive legislation has been enacted to generally define natural resources and a framework for their protection. With the government dithering on such specific legislation, the judgment has become the de facto law in the matter. Recognising that while the state is deemed to have a proprietary interest in natural resources, it must act as a guardian and trustee, the judgment affirms that the people are the designated owners of natural resources in any country. Acknowledging the high economic value of natural resources, the judgment recognises that these national assets are scarce, finite, and susceptible to degradation in case of inefficient utilisation. Highlighting the issue of public trust, the judgment quotes from several international judgments, including the famous American one, of Illinois Central R. Co. vs Illinois, and the ones in India such asM.C. Mehta vs Kamal Nath to make the point that: Public interest doctrine enjoins upon the government to protect the resources for the enjoyment of the general public rather than permit its use for private ownership or commercial purposes. At the heart of the public trust doctrine is the limits and obligations upon government agencies as administrators on behalf of all people, especially future generations. HITS GOVERNMENT STAND This shatters the government's stand that the allocation of natural resources is its sole preserve, and such policy' decisions should not be open to public or legal scrutiny. Traditionally, courts have been reluctant to review government policies' as they are considered an exclusive prerogative of the executive and formed after considering expert opinion. Invoking the doctrine of equality deals the hardest blow to the opaque allocation procedures for natural resources that are in use for award of Central and State government contracts. The judgment states that the doctrine of equality which emerges from the concept of justice and fairness must guide the state in determining the actual mechanism of distribution of natural resources. This has two aspects: first, it regulates the rights and obligations of the state vis-a-vis its people and demands that the people be granted equitable access to natural resources and/or its products, and that they be adequately compensated for the transfer of resources to the public domain. This considerably debilitates the government's line in applying subjective criteria such as first come, first served or beauty parades when allocating natural resources in the future. Additionally, it requires the national exchequer to place a value on a natural resource before granting any party the privilege of using it. The second part of the equality doctrine is explained as the need to regulate the rights and obligations of the state vis-a-vis private parties seeking to acquire/use resources and demands that the procedure adopted for distribution is just, non-arbitrary and transparent and that it does not discriminate between similarly-placed parties. This specifically addresses legacy issues of changing the goalpost after the game has begun such as tampering with cut-off dates or altering the qualifying criteria after applications have been submitted or bids placed. Overall, it ensures that every party has an equal chance of transparently acquiring the asset, based on the rational value that it believes can be derived from the acquisition. The judgment specifically tears apart the first come, first served system, firmly re-establishing auctions as a preferred option.

ON AUCTIONS Auctions can do much more than just raising revenue. They are quicker, more efficient and more economical than administrative allocation; ensure equitable access to natural resources; protect public trust; and protect equality as upheld in Article 14 of the Constitution. The telecom experience shows us that those who pay a market price base it on their expectation of revenue generation. Therefore, they are the first to rollout networks, best serving the objectives of tele-density, affordability and competition. The judgment is unbending in its view that licences or natural resources given through devious and unconstitutional means cannot plead equities, investment or consumer interest even if they have not been a party to an unconstitutional and arbitrary allocation. Bidders with the slightest hint of ongoing mischief must now walk away, rather than participate. The fact that licences awarded illegally can be cancelled four years after they were allocated should send the fear of god in the minds of those who believe that investment and consumer interest will sway the courts once time has lapsed. Simply put, the judgment gives judicial muscle to the message that from now on, offenders will be punished irrespective of political status, financial power and the time or money that may have been invested in an act that was illegal to begin with. Striking a blow against corruption by empowering all those non-governmental organisations, enlightened citizens and activists fighting big corruption, this landmark judgment carries the potential of fast-tracking the pace of administrative reforms and governance in India in a manner not witnessed in the past

Private firms cant claim mining rights, rules court


NEW DELHI, August 3, 2012 Mines, minerals are community resources, should subserve common good Private companies cannot claim any right of exploitation of minerals and the state can impose a ban on private mining notwithstanding its being permitted earlier, the Supreme Court has held. If a decision is taken to ban private mining of a single minor mineral for conserving it, such a ban, if it is otherwise within the bounds of the authority given to the government by the statute, cannot be said to involve any change of policy, said a Bench of Justices R.M. Lodha and H.L. Gokhale. The Bench said mines and minerals constitute the material resources of the community. Article 39(b) of the Directive Principles [in the Constitution] mandates that the state shall, in particular, direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as to best subserve the common good. Article 39(c) mandates that state should see to it that operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. On the contention of mining companies, appellants in the instant case, that the state could not go back on its promise as they had legitimate expectations, the Bench said: The doctrine of promissory estoppel cannot be pressed into aid to compel the government or the public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the government or of the public authority to make. The case was filed by Monnet and several other companies, aggrieved over the withdrawal of the recommendations made by the Jharkhand government to grant them licence for exploitation of minerals. The Centre rejected the proposals on the ground that subject area was under reservation and not available for exploitation by private parties. Subsequently, the State withdrew the notifications issued in favour of the companies. The Jharkhand High Court upheld the decision. Dismissing the appeals against this judgment, the Supreme Court said, All that the State government has done is to act in furtherance of the policy of the statute and it cannot be faulted for the same. The ruling by the Supreme Court bench that Private companies cannot claim any right of exploitation of minerals and the state can impose a ban on private mining notwithstanding its being permitted earlier is a timely landmark judgement. Much of the environmental degradation in the country has occurred mainly do to mining. The mining mafia is all too powerful because they command the patronage of bureaucrats and politician. One of the major sources of black money in the country is mining, both legal and illegal. In many cases legal mining in a way illegal because permissions for mining is often granted in violation of rules and regulation because of rampant corruption. According to rough estimates, the Government of Tamil Nadu has lost nearly Rs.16,000/- crores due to illegal mining in Thirumangalam Taluk of Madurai district alone in the past few years.The situation is not better in other districts, particularly in regard to sand and granite quarrying. It is much worse in other states.

Let's talk about what Nandy really said

February 5, 2013

They say we live in a post-Darwinian world, and if you live in India, you would never doubt it. Here survival of the fittest has been replaced simply by survival of the richest. It is a dog-eat-dog world, which if Ashis Nandy and Tarun Tejpal are to be believed is a great thing, because every once in a while, the smaller dog succeeds in eating the larger one. But at the very outset, let me say three things. One, that the statements made by Nandy were meant to be absolutely un-casteist, and actually meant as arguments in favour of the oppressed classes (though in some warped, elitist kind of way). Second, if we are to even pretend to be a civilized society, then it would be monumentally stupid to debate whether he should be prosecuted for offending a section that he has spent his life defending. And finally, the truly interesting aspect of this whole fiasco is not what Nandy has a right to say (because that debate is quite one-sided), but it is what he actually said. Let me first acknowledge that there is a lot of merit in what Nandy and Tejpal said at the Jaipur literature festival. India has indeed been, and continues to be a deeply hierarchical, unequal society with very little class mobility. And for a majority, who are on the brink of survival, it is nearly impossible to cross over to the fairer side of the green after even a lifetime of hard work and toil. But Nandy and Tejpal are not the first ones to have noticed that caste itself is a form of corruption. Fortunately, our founding fathers were acutely aware of this when they drafted the constitution, which is why they evolved various provisions for safeguarding basic rights for all citizens, and according special protection for those sections that had been suppressed for centuries. This is also why they injected the constitution with an extremely progressive and egalitarian soul in the form of the directive principles of state policy, which go so far as to say: Article 38 (2): The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations. Article 39 (b): that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; Article 39 (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment; In spite of these glorious ideals being enshrined in the supreme document of this country, policies that serve exactly the opposite purpose have been adopted in the name of economic reforms. Inequalities have actually increased, and poverty still remains alarmingly widespread after 65 years of independence. And the primary cause of this continued mockery of our constitution is the same entity that Tejpal calls a class-equalizer- i.e. corruption. Nandy, while giving the example of Sorabjee and himself engaging in an exchange of favours, was absolutely right in saying that our society has a very narrow definition of corruption, and does not recognize many institutionalized forms of the same. However, instead of elaborating on how these forms of corruption should be recognized as such and weeded out, Nandy conveniently assumed that they cannot (in fact, should not) be weeded out, and that to strive for a corruption-free society would be to strive for a dystopia. He then proceeded to sermonize on why corruption should instead be celebrated as a desirable imperfection in our society and how the survival of this republic depends on it. But this was not the only statement that one of the most prominent sociologists of India made without any shred of empirical evidence. He started with his now infamous statement claiming that most people caught for corruption are from the backward classes, he denied the myth of dynastic politics in India, celebrated the rise of Madhu Koda, Mayawati, and even Mrs. Indira Gandhi by describing how they had fought their way to the top. He also said that the amassing of wealth by Mulayam Singh, Mayawati, etc is only borne out of the noble intentions of defending their families from the desperation that their ancestors have faced. For some inexplicable reason, Nandy then claimed that Singapore is the only corruption-free country in the world (even though Denmark, Sweden, Finland and New Zealand all rank above it in the 2011 and 2012 corruption perception index released by Transparency International), and went on to say that Singapore is a Draconian society and that he would not like to live there. Well, with all due respect Mr. Nandy, perhaps you would prefer to live in a society that gives the elite (i.e. people like you) a natural advantage over everyone else, but shall we ask the other 90% whether they would prefer to live in the imperfect utopia of India (as you call it), or the dystopia of a Singapore or a Sweden or a Finland? Since Nandy and Tejpal have graciously accepted that their statements were not based on any facts or research, and were simply ideas (how can you expect facts at a literary festival, folks!), I have just one simple question for both. Do they really think that the impoverished, oppressed masses of India think

of corruption as an equalizing force? The farmer on the brink of a suicide after being denied a loan by a bribe-seeking bank official, the street vendor forced to pay a hafta to the policeman to avoid being beaten, the tribal forced out of his/her land due to a politician-mining nexus, and the Dalit who has to pay a bribe to register an FIR after the rape of his daughter by upper-caste goons Do Nandy and Tejpal seriously think that all these people celebrate corruption, and think of it as an instrument for achieving equality? Corruption is the abuse of power, and it will always favor the person with deeper pockets. Hence to argue that the powerless are beneficiaries of corruption, rather than victims, is to add insult to the injuries inflicted by centuries of injustice. The essence of Nandy and Tejpals argument is very simple: The status quo suits us (the upper classes), and although we recognize that it is a form of corruption, we will not change it. So you (the lower classes) should stop complaining about corruption, and learn how to work the system. There is of course a clear reason why clever people like Nandy and Tejpal have chosen to advance such a specious argument- the fact that you need to take controversial and contrarian positions in order to stand out in the intellectual community in India and abroad. And for them, this statement has served its purpose. They will be invited to more talks, discussions and literary festivals, and there will be endless discussions on television about them. But we would not be serving any purpose if we chose to buy into such baseless rhetoric. A spade needs to be called a spade, and the Nandy-Tejpal argument needs to be called self-serving and completely irrational. Manav Bhushan is a final-year PhD student at Oxford University.