Citizens' Issues
Auction not the only route for resource allocation: SC

The apex court referred to various judgements delivered by it earlier while upholding government's decision to allocate natural resources through means other than auction

New Delhi: Auctions are not the only permissible method for disposal of natural resources across sectors, the Supreme Court of India on Thursday said holding that the 2G verdict was confined to allocation of spectrum and is not applicable to other resources, reports PTI.
Giving its opinion on the presidential reference arising out of 2G verdict, a five-judge constitution bench headed by Chief Justice SH Kapadia also ruled that common good is the touchstone for any policy and if it meets that then any means adopted is in accordance with the constitutional principles.
Auction despite being a more “preferable method” of allotment of natural resources cannot be held to be a constitutional mandate, observed the bench also comprising justices DK Jain, JS Khehar, Dipak Misra and Ranjan Gogoi.
“In our opinion, auction despite being a more preferable method of alienation/allotment of natural resources, cannot be held to be a constitutional requirement or limitation for alienation of all natural resources and therefore, every method other than auction cannot be struck down as ultra-vires the constitutional mandate,” the bench said.
The bench said that auctions may be the best way of maximizing revenue but revenue maximisation may not always be the ultimate motive of the policy and natural resources can be allocated to private companies by other methods for the purpose to subserve public good.
“Common good is the sole guiding factor under Article 39(b) for distribution of natural resources. It is the touchstone of testing whether any policy subserves the common good and if it does, irrespective of the means adopted, it is clearly in accordance with the principle enshrined in the Article,” the bench said.
The apex court referred to various judgements delivered by it earlier while upholding government's decision to allocate natural resources through means other than auction.
“It is manifest that there is no constitutional mandate in favour of auction under Article 14. The government has repeatedly deviated from the course of auction and this court has repeatedly upheld such actions,” the bench said.
It said “whenever the object of policy is anything but revenue maximization, the Executive is seen to adopt methods other than auction”.
Justice Khehar, who wrote a separate but concurring judgement, said that natural resource should not be dissipated as a matter of charity, donation or endowment, for private exploitation.
“No part of the natural resource can be dissipated as a matter of largess, charity, donation or endowment, for private exploitation. Each bit of natural resource expended must bring back a reciprocal consideration. The consideration may be in the nature of earning revenue or may be to best subserve the common good. It may well be the amalgam of the two.
“There cannot be a dissipation of material resources free of cost or at a consideration lower than their actual worth.
One set of citizens cannot prosper at the cost of another set of citizens, for that would not be fair or reasonable,” justice Khehar said.
The court disagreed with the contention that auction should be the only means of allocation as other methods can be abused by the private companies in connivance with government authorities as happened in 2G case.
“It may be said that even auction has a potential of abuse, like any other method of allocation, but that cannot be the basis of declaring it as an unconstitutional methodology either. These drawbacks include cauterisation, winners curse etc.
“However, all the same, auction cannot be called ultra vires for the said reasons and continues to be an attractive and preferred means of disposal of natural resources especially when revenue maximisation is a priority.
“Therefore, neither auction, nor any other method of disposal can be held ultra vires the Constitution, merely because of a potential abuse,” the bench said.
The court said that revenue maximisation cannot always be the primary consideration while allocating resources to private companies and assume secondary consideration when the development is the main consideration.
“Revenue maximization is not the only way in which the common good can be subserved. Where revenue maximization is the object of a policy, being considered qua that resource at that point of time to be the best way to subserve the common good, auction would be one of the preferable methods, though not the only method.
“Where revenue maximization is not the object of a policy of distribution, the question of auction would not arise.
Revenue considerations may assume secondary consideration to developmental considerations,” the bench said.
It said that the suggestion that disposal of a natural resource for commercial use must be for revenue maximization is based “neither on law nor on logic”.
“Economic logic establishes that alienation/allocation of natural resources to the highest bidder may not necessarily be the only way to subserve the common good, and at times, may run counter to public good.
“Hence, it needs little emphasis that disposal of all natural resources through auctions is clearly not a constitutional mandate," the 208-page opinion given by the apex court said. 


Religare to sell 49% stake in MF arm for around Rs1,000 crore

Without disclosing the deal value, Religare Enterprises said in a statement that Atlanta-based Invesco has entered into a definitive agreement to acquire 49% interest in RAMC

Mumbai: Financial services major Religare group is selling 49% stake in its mutual fund arm Religare Asset Management Company (RAMC)to US-based investment management firm Invesco for estimated Rs1,000 crore, reports PTI.
Without disclosing the deal value, Religare Enterprises said in a statement that Atlanta-based Invesco has entered into a definitive agreement to acquire 49% interest in RAMC.
While the companies did not mention the deal value, sources privy to the transaction said that it could be in the range of about Rs1,000 crore—translating into about 6.5%-7% of the total asset under management of RAMC.
RAMC is one of the top 15 asset management companies in India, with combined (onshore and offshore advisory) assets under management of over $2.6 billion (Rs14,600 crore) as of 31 August 2012, and is present in 53 cities across India.
Invesco has a presence in India through its affiliate WL Ross & Co and also operates an enterprise centre in Hyderabad with a headcount of more than 600 staff.
“This addition will enhance Invesco?s presence in an important and growing market, while providing Religare’s clients access to our broad range of investment solutions,” Invesco President and CEO Martin L Flanagan said.
“Our agreement with Religare will expand comprehensive range of investment capabilities Invesco provides to our retail and institutional clients around the world, and further position both firms for long-term success,” he added.
RAMC began operations in late 2008 has recorded almost a four-fold increase in its combined assets under management in the last four years.
It has also established its Portfolio Management Services (PMS) and Offshore advisory platforms in the last two years and achieved financial profitability in its third full year of operations (year ending March 2012).
Commenting on the deal, Religare Enterprises Group CEO Shachindra Nath said: “We are very pleased to bring a global asset manager of Invesco’s repute to India as a partner in our asset management business.
“With a good three-year performance track record and solid revenue growth, we believe that both our retail and offshore businesses would be propelled to the next level of their growth journey,” he said.
The joint venture, to be called Religare Invesco Asset Management Company, will be headed by Saurabh Nanavati (CEO, RAMC) along with the existing management team.
The transaction is subject to regulatory approvals and JP Morgan acted as the exclusive financial advisor to Religare.
Besides asset management, Religare group is present in life and health insurance, lending, broking, investment banking, and wealth management businesses.


IAC questions BJP president Gadkari's ‘silence’ over irrigation scam

Instead of raising questions over the Rs72,000 irrigation scam in Maharashtra, the BJP president allegedly told RTI activist Anjali Damania that he and the NCP chief are friends and do business together and often do favours for each other


India Against Corruption (IAC) and Right to Information (RTI) activist Anjali Damania have questioned the silence of Bharatiya Janata Party (BJP) president Nitin Gadkari over the Rs72,000 crore irrigation scam in Maharashtra. IAC and Damania alleged that Gadkari refused to rake the issue of irrigation scam saying BJP has good relations with Sharad Pawar, chief of Nationalist Congress Party (NCP), and the role of opposition party is limited to asking questions in the assembly and at best, taking a press conference.


“It is shocking state of affairs when all parties are together looting the nation, there are no checks and balances, this whole system have rotted totally! It is time now to lay bare the nexus, to bring down those people who have such scant regard for the sanctity of our democracy. The only glimmer of hope in all this is that Kirit Somaiya has not been stopped from filing his PIL and some better sense seems to have prevailed,” IAC said in a press release.


Damania, a member of India Against Corruption (IAC), at a news conference in Mumbai in the presence of Arvind Kejriwal yesterday initially did not name Gadkari only alleging that “a president from the opposition party” from Maharashtra attempted to cover up the irrigation scam. Later, she named the BJP president and said she has met him thrice.


Damania had alleged that when she approached Gadkari to pursue the case against NCP leaders involved in the Rs 20,000 crore irrigation scam, he asked her not to go ahead.


She has alleged that Gadkari told her he has business interests with Pawar and that they extend mutual help where required.


BJP rubbished the charge by Damania against Gadkari, alleging that the “dirty tricks” department of the Congress is at work to derail the opposition's on-going national conclave.


IAC volunteers led by Anjali Damania, have been relentlessly fighting corruption by exposing the irrigation scam. When the strength of the perpetrators was used in full force to subvert the exposure, we were heartened that help came from an unexpected quarter, the opposition party. MLA Devendra Phadnavais and BJP leader Kirit Somaiya began demanding a probe into the irrigation scam and the disproportionate assets of Maharashtra irrigation minister Sunil Tatkare. “Then we heard a rumour that there was some settlement likely between NCP and BJP, that Bhaiyyu Maharaj met Nitin Gadkari on behalf of NCP and asked them to drop the issue. Anjali in her naiveté carried an idealistic impression of the RSS and firmly believed this was not possible. She decided to meet Nitin Gadkari to clarify the rumour

and enlist his support,” IAC said in a release.


According to the release, On 14th August, Anjali Damania visited Nitin Gadkari’s residence at Worli in Mumbai. Gadkari allegedly told Damania that the opposition’s role was limited to asking questions in the assembly and at best taking a press conference. “Kirit Somaiya was an eccentric person to attempt a public interest ligitation (PIL) and Gadkari said he would ask Kirit Somaiya to stop it. He clarified that ‘Sharad Pawar ke saath hamara uthana baithna hai, ham saath dhanda karte hein. Woh hamare char kaam karte hein aur hum unke char kaam karte hein’, (We are friends and do business together and often do favours for each other). He went on to say in the forthcoming elections, they may even partner together!” the IAC said.


Amid the row whether or not Damania met Gadkari, Kejriwal said the meeting did take place.


“This is unfortunate for the country. There is no opposition in the country. If the president of the biggest opposition party has business links with the leaders in ruling parties, then there is no difference between ruling and opposition parties," he said.


Kejriwal also posed four questions to Gadkari asking whether he had ever raised the issue of involvement of NCP, Sharad Pawar or Ajit Pawar in the irrigation scam and why he has not voiced his opposition yet. Ajit Pawar has resigned over the scam which has triggered a crisis in the ruling Congress-NCP alliance in Maharashtra.


Gadkari was also asked whether he has any business links with Pawar and demanded that he make public his business interests.


According to a TV channel, Gadkari is planning to sue Damania over the allegations, but it cannot be confirmed.  


Following the meeting, Damania said she sent an SMS to the BJP president. Here are the snapshots of the SMS sent by Damania...




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