The apex court said the executive best knows its policies and the judiciary does not have the expertise to decide a suitable method for disposing a natural resource.
Union Law Minister Salman Khurshid said the court's opinion would give a breather to the UPA government, which has been cornered by the Opposition over a series of scams, including that involved with allocation of coal blocks. When asked about the court's thoughts on maximisation of revenue not being the only criterion and its effect on the national auditor's figures of loss to the government,
Khurshid said one had to also take into consideration the court's opinion if he/she took a note of the national auditor or CAG's report. The CAG report had revealed Rs 1.86 lakh crore loss in allocation of 2G spectrum and Rs 1.86 lakh crore loss in coal block allocations and accused the government of not auctioning.
Telecom Minister Kapil Sibal, who had countered the CAG's 2G report by saying there was 'zero loss' in the allocataion of the spectrum, welcomed the apex court's thought and said it helped in bringing some clarity about the issue. He said the way in which natural resources should be allocated should be decided by the government and the Supreme Court's opinion settled the larger issue. He also said that it was upto the CAG now to read the message.
The court said the policy of auction can not be declared as the only route for disposing of natural resources just because there is an opportunity for potential abuse of the process.
The apex court, however, upheld the auction route for granting a mining lease with regard to an area containing coal, implying that there has to be a competitive bidding. It also agreed that spectrum for mobile network licences should be auctioned, a position that the government already accepted.
The apex court was responding to a presidential reference following the verdict of the 2G spectrum allocation. The reference asked by the government sought the court's opinion on whether auction was the only method of allocating natural resources. The five-judge bench of the Supreme Court was headed by Chief Justice SH Kapadia.