Tuesday, Dec 06, 2022

Governance after 2G

Drawing the right institutional lessons from the Supreme Court’s judgments

Drawing the right institutional lessons from the Supreme Court’s judgments

What is the significance for governance of the range of orders (Swamy vs Singh and Centre for Public Interest Litigation vs Union of India) passed in the 2G case? Only time will tell. Decisions acquire significance in light of a subsequent history. Vineet Narain and Others vs Union of India was a legal landmark; but its actual effect on governance was slight. Decisions like the Three Judges case were made on dubious legal grounds. But they salvaged the autonomy of the court as an institution. Even the famed Kesavananda Bharati vs State of Kerala,a complex and contradictory melange,acquired significance through later developments.

Indian law,like Indian democracy,does not conform to conventional textbook norms. Instead of the purity of first principles,judgments are often a modus vivendi,a kind of compromise that keeps the system going. Instead of fine-grained justice,you often get a jurisprudence of exasperation. What emerges is not rule of law in a conventional sense. Yet the institution of the court emerges stronger. It provides a powerful means of redress. In the 2G cases,the high-minded and independent assertion of important constitutional principles is praiseworthy. The judgments are admirably pointed and some of its observations will reform governance for the better. However,the judgments raise some legal puzzles and there is also an odour of politics surrounding some observations. We must use this judgment as an opportunity to draw the right institutional lessons. Otherwise,the more things seem to change,the more they will remain the same.

The one immediate risk is that the CBI has been made more powerful. This is a serious challenge. In Vineet Narain,the court had rightly identified the two bottlenecks in our system: the CBI’s functioning and the sanction for prosecution. The court has tried to fix the second by stipulating a three-month time limit. This is a sensible idea,but its actual effects will depend on other reforms. If only this problem is fixed,without reform of the the CBI,we will see huge perverse consequences. We are,rightly,fixated on the problem that the guilty go free. We ought to be equally concerned with the fact that there is little protection of the honest public official. It is not exactly a state secret that the one mechanism by which officials who take a stand are often threatened is a CBI inquiry. Now,with the filtering mechanism of a sanction to prosecution gone,and locus standi on complainants relaxed,it is possible that the state will acquire one more instrument to threaten those who stand in its way,rather than more efficiently go after the guilty. It will be easier in a climate where all government servants are presumed guilty by the larger public. It is a bit facile to say that the honest have nothing to fear: after all they can get justice in the courts,eventually. The political overtones to so many recent investigations should make us wary of the CBI. The degree of psychological coercion the state and the CBI can now deploy is immense. There,but for the grace of god,goes every honest civil servant. After Vineet Narain,we had a euphoric delusion that there can be such a thing as an external monitoring of a CBI investigation. In principle,the CVC can do that. But it has never been clear what this means operationally. Sins of omission and commission are hard to detect. Under the illusion of monitoring,more injustice can be legitimised. So unless the culture of the CBI is reformed and made accountable,the good consequences of this judgment will be short lived.

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The second governance implication is this: There is no question that the judiciary can scrutinise any policy for arbitrariness and unconstitutionality; it can even do that for constitutional amendments. And the Supreme Court has made a nuanced case for why first-come-first-serve — at least in 2007 — was arbitrary. But our debate over judicial review has been hampered by our unhelpful view of practical reason. There is an assumption in much of our discourse that for a decision not to be arbitrary,it must be derived from a rule. One sign of this is the way we think of “discretion”. Discretion has become a dirty word; it is automatically associated with arbitrariness. But discretion is the power or right to make official decisions using reason and judgement to choose among acceptable alternatives. These decisions must be justified through public reason. But giving reasons is not the same thing as making the decision fall under a general rule. We are called on to exercise judgment,precisely because there are trade-offs to be made,externalities to be taken into account. And elected governments must make these calls,not unelected judiciaries. There is a tendency in courts — across different domains — to suspect the exercise of judgment. And therefore,their solutions are often to propose rules,so that there is no discretion left in the conventional sense of the term. We inherently suspect the exercise of judgment,and overcompensate for it by peddling the illusion that rules are the only effective check on arbitrariness. Between the binary of arbitrary discretion or rigid rules,lies the space for public reason. And few are willing to occupy it.

In the 2G case,both the government and the judiciary committed this fallacy. The government has the discretion,to decide policy. It could have even come to the conclusion that revenue maximisation is not a worthy objective; giving spectrum for free might be conducive for consumers or developing technology. But it should have given a clear public justification for its decisions,rather than relying on technical cover of precedence,etc. The government’s defence of its policy is shockingly feeble: the reasons adduced are vague and general. The court was right to see through the cant. This point is more general. Democracy is not decision-making only by rules,or precedence. It is government by public justification. But barring a few exceptions,the culture of government is not attuned to clearly recording reasoning for decisions and politically defending them in public. The judgment is a severe indictment of professionalism in government across the board judged by the yardstick of public reason.

The court was not convinced that the government had adequately justified its decisions. But it went to the other extreme of suggesting the idea that auctions are virtually the only legitimate way of disposing of natural resources. While often true,the validity of this proposition depends on lots of things: context,market conditions,the trade-offs between different objectives. These can be a matter of debate and judgment. It almost seems to take away legitimate government discretion — understood in the correct sense of the term. Its overreach is not that it held a policy decision to judicial scrutiny. Its overreach is that it has used a generalised suspicion of the executive to prescribe a policy,and that too framed in terms of seemingly general rules. In the case of the telecom sector,at this juncture,it probably does not make much difference; it is the right thing to do. But in the meantime,it has given,by implication,licence to question first-come-first-serve under the NDA,when it did ostensibly have more justification. But how this will be used as a precedent remains to be seen.


The court,quite rightly,insists that any procedures for allocation should be transparent and non-discriminatory. In cases where there are multiple and often competing objectives,translating this into practice will be a challenge. Courts ought to give reasonable latitude on what counts as a fair procedure in relation to specific objectives. The government without the right degree of discretion is as impotent. This is as much to be feared as arbitrariness. But if new standards can be set on public justification,much will have been achieved.

A fair and transparent process is only one element of the fight against corruption. The other dirty little secret is that transparent procedures are quite compatible with rent-seeking. The paraphernalia of L1 and PQ and PPP does not necessarily stop rents from being collected. If A. Raja is guilty,what strikes you most about his modus operandi is his naiveté,his lack of sophistication in doing what he did. But seeming fairness has often thrown a cloak over subtler forms of collusion. But the judgment also has interesting implications for how we think of ministerial responsibility.

The writer is president,Centre for Policy Research,Delhi
(To be continued)

First published on: 09-02-2012 at 02:47:38 am
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