CAG should take note of Supreme Court views: Govt

Written by fe Bureau | New Delhi | Updated: Sep 29 2012, 09:41am hrs
Armed with the Supreme Courts views that auction is not the only way to allocate natural resources and the government has the powers to decide the modalities of allocation so far the process does not violate Constitutional principles, the government on Friday hoped that the Comptroller and Auditor General (CAG) would take cognizance of the principle.

I sincerely hope that all Constitutional authorities in future will bear in mind (the observations of apex court) while discharging their constitutional functions, finance minister P Chidambaram said at a press conference organised where his colleague telecom minister Kapil Sibal and law minister Salman Khurshid were also present.

Since the Supreme Court while delivering its views on Thursday had said that it in no way affects its February order cancelling 122 licences granted by the government in January 2008 through a flawed first come first served criteria, the finance ministers reference seemed more aimed at the recent CAG's report on allocation of coal blocks.

The CAG in its reports had observed that faulty allocation of spectrum and coal blocks had caused a big loss to the exchequer. In case of captive coal block allocation, the CAG in its recent report questioned the government policy that delayed the auction process that resulted in providing windfall gains to private sector companies to the tune of R1.86 lakh crore.

We believe that the position of the government that has been articulated in the last few years regarding various issues is in complete consonance with the principles laid down by the court, the FM added.

A five-judge bench, headed by Chief Justice SH Kapadia had said in response to the governments Presidential reference that auctions do not have either a constitutional or economic mandate.

It had also said that the court does not have the expertise to assess which is the best criteria to allocate resources, however it has powers under judicial review to scrutinise any process adopted by the government if it is patently unfair and violative of article 14 of the Constitution.

Speaking at the conference, Sibal said that the judgment clearly states that policy issue is entirely within the domain of the executive, especially in the context of the economic policies.

As regards the irregularities in implementation of the policies, he said, we have maintained... that if there were any irregularities or illegalities in implementation of any policy, those must be corrected and those responsible be held to account.

To a question whether SCs observation on auction could impact contracts entered by the government under a different policy formulation earlier, Chidambaram said all contracts would stand if they were entered by the government of the day on the basis of prevailing policy. Unless there is illegality over the implementation of a policy measure, the question of reviewing or revoking contracts did not arise, he said.