Landmark judgement of the SC on natural resource management

In a landmark judgement yesterday on 2G scam case, the Hon'ble Supreme Court expanded on what is 'Natural Resource' and the duties of the State to protect and preserve the Natural Resource base for the common good instead of misallocating it for private gains. This decision will go a long way towards conservation, protection of rights of Forest Dwellers,preventing the indecent haste shown by various governments to acquire lands, mines, forests for private projects.
 The very first paragraph of the judgement [pages 1 and 2] begins with the fundamental question [shaded light orange], then takes up the issue in pages 58 to 75. I just hope that the implication of this judgement is not diluted by subsequent judges as happened in the case of writ petition 206 of 2005 in which CJ Balachandran diluted the limitations imposed by earlier CJ and allowed the DST and GEAC to continue with illegal approvals of Genetically Engineered seeds. Relevant parts with page number pasted below.
Kind regards
Arun Shrivastava

The important questions which arise for consideration in these petitions,
(i) Whether the Government has the right to alienate, transfer or distribute natural resources/national assets otherwise than by following a fair and transparent method consistent with the fundamentals of the equality clause enshrined in the Constitution?

58 Question No.1: [Pages 68 to 75]
At the outset, we consider it proper to observe that even though there is no universally accepted definition of natural resources, the same can be understood as naturally occurring elements which have an intrinsic utility. They may be renewable or non renewable. They are thought of as the individual elements of the natural environment that provide economic and social services to human society and are considered valuable in their relatively unmodified, natural, form. A natural resource’s value rests in the amount of the material available and the demand for it. The latter is determined by its usefulness to production.

As the State in which a natural resource is located benefits immensely from this value, natural resources are considered national assets. In Article 39(b) of the Constitution it has been provided that the ownership and control of the natural resources of the community should be so distributed so as to best sub-serve the common good but no comprehensive legislation has been enacted to generally define natural resources and framework for their protection. Of course, environment laws have been so framed that they deal with specific natural resources, i.e., Forest, Air, Water, Costal Zones, etc.

59. The ownership regime relating to natural resources can be ascertained from international conventions and customary law, common law and national constitutions. In international law it rests upon the concept of sovereignty and seeks to respect the principle of permanent sovereignty (of peoples and nations) over (their) natural resourcesas asserted in the 17th Session of the United Nations General Assembly and then affirmed as a customary international norm by the International Court of Justice in the case opposing the Democratic Republic of Congo to Uganda. Common Law recognizes States as having the authority to protect natural resources, insofar as the resources are within the interests of the general public. The State is deemed to have a proprietary interest in natural resources and must act as guardian and trustee in relation to the same. Constitutions across the world focus on establishing natural resources as owned and for the benefit of the country. In most instances where constitutions specifically address ownership of natural resources, the sovereign state, or, as it is more commonly expressed, ‘the people’, is designated as the owner of the natural resource.

60. Spectrum has been internationally accepted as a scarce, finite and renewable natural resource which is susceptible to degradation in case of inefficient utilisation. It has a high economic value in light of the demand for it on account of growth in the telecom sector. Although, it does not belong to a particular State, the right of use has been granted to the States as per international norms. It is hence to that extent a national asset.

61. In India Court have given extensive interpretation to the concept of natural resources and have from time to time issued directions by relying upon the provisions contained in Articles 38, 39, 48, 48A and 51A(g) for protection of natural resources. The doctrine of public trust which was invoked by the
Courts in US in Illinois Central R. Co. v. Illinois - 146 U.S. 387 (1892), National Audubon Society v. Superior Court of Alpine County 33 Cal.3d 419 (1983) has been applied by the Courts in our country in M.C. Mehta v. Kamal Nath (1997) 1 SCC 388, Intellectuals Forum, Tirupathi v. State of A.P., (2006)
3 SCC 549, Fomento Resorts and Hotels Limited v. Minguel Martins, (2009) 3 SCC 571. In the third case, the Court referred to the article of Prof. Joseph L. Sax and made the following observations:
“53. The public trust doctrine enjoins upon the Government to protect the resources for the enjoyment of the general public rather than to permit their use for private ownership or commercial purposes. This
doctrine puts an implicit embargo on the right of the State to transfer public properties to private party if such transfer affects public interest, mandates affirmative State action for effective management
of natural resources and empowers the citizens to question ineffective management thereof.
54. The heart of the public trust doctrine is that it imposes limits and obligations upon government agencies and their administrators on behalf of all the people and especially future generations. For
example, renewable and non-renewable resources, associated uses, ecological values or objects in which the public has a special interest (i.e. public lands, waters, etc.) are held subject to the duty of the State not to impair such resources, uses or values, even if private interests are involved. The same obligations apply to managers of forests, monuments, parks, the public domain and other public assets.
Professor Joseph L. Sax in his classic article, “The Public Trust Doctrine in Natural Resources Law: Effective Judicial Intervention” (1970), indicates that the public trust doctrine, of all concepts known
to law, constitutes the best practical and philosophical premise and legal tool for protecting public rights and for protecting and managing resources, ecological values or objects held in trust.
55. The public trust doctrine is a tool for exerting long-established public rights over short-term public rights and private gain. Today every person exercising his or her right to use the air, water, or land
and associated natural ecosystems has the obligation to secure for the rest of us the right to live or otherwise use that same resource or property for the long-term and enjoyment by future generations. To say it another way, a landowner or lessee and a water right holder has an obligation to use such resources in a manner as not to impair or diminish the people’s rights and the people’s long-term interest in that property or resource, including down slope lands, waters and resources.”

62. In Secretary, Ministry of Information & Broadcasting, Govt. of India v. Cricket Assn. of Bengal, (1995) 2 SCC 161. The Court was dealing with right of organizers of an event such as sport tournament to its live audio-visual broadcasting universally, through an agency of their choice, national or foreign. In paragraph 78, the Court described the airways/frequencies as public property in the following words:
“There is no doubt that since the airwaves/frequencies are a public property and are also limited, they have to be used in the best interest of the society and this can be done either by a central authority by
establishing its own broadcasting network or regulating the grant of licences to other agencies, including the private agencies.”

63. In Reliance Natural Resources Limited v. Reliance Industries Limited, (2010) 7 SCC 1, P. Sathasivam J. with whom Balakrishnan, C.J., agreed made the following observations: “It must be noted that the constitutional mandate is that the natural resources belong to the people of this country. The nature of the word “vest” must be seen in the context of the public trust doctrine (PTD). Even though this doctrine has been applied in cases dealing with environmental jurisprudence, it has its broader application.” Learned Judge then referred to the judgments In re Special Reference No. 1 of 2001 (2004) 4 SCC 489, M.C. Mehta v. Kamal Nath (1997) 1 SCC 388 and observed: “This doctrine is part of Indian law and finds application in the present case as well. It is thus the duty of the Government to provide complete protection to the natural resources as a trustee of the people at large.” The Court also held that natural resources are vested with the Government as a matter of trust in the name of the people of India and it is the solemn duty of the State to protect the national interest and natural resources must always be used in the interest of the country and not private interests.

64. The doctrine of equality which emerges from the concepts of justice and fairness guides the State in determining the actual mechanism of distribution of natural resources. It has two aspects: first, it regulates the rights and obligations of the State vis-à-vis its people and demands that the people be granted equitable access to natural resources and/or its products and that they are adequately compensated for the transfer of the resource to the private domain; and second, it regulates the rights and obligations of the State vis-à-vis private parties seeking to acquire/use the resource and demands that the procedure adopted for distribution is just, non-arbitrary and transparent and that it does not discriminate between similarly placed private parties.

65. In Akhil Bharatiya Upbhokta Congress v. State of M.P. (2011) 5 SCC 29, this Court examined the legality of the action taken by the Government of Madhya Pradesh to allot 20 acres land to an institute established in the name of Kushabhau Thakre on the basis of an application made by the Trust. One of the grounds on which the appellant challenged the allotment of land was that the State Government had not adopted any rational method consistent with the doctrine of equality. The High Court negatived the appellant’s challenge. Before this Court, learned senior counsel appearing for the State relied upon
the judgments in Ugar Sugar Works Ltd. v. Delhi Administration (2001) 3 SCC 635, State of U.P. v. Choudhary Rambeer Singh (2008) 5 SCC 550, State of Orissa v. Gopinath Dash (2005) 13 SCC 495 and Meerut Development Authority v. Association of Management Studies (2009) 6 SCC 171 and argued that the Court cannot exercise the power of judicial review to nullify the policy framed by the State Government to allot Nazul land without advertisement. This Court rejected the argument, referred to the judgments in Ramanna Dayaram Shetty v. International Airport Authority of India (1979) 3 SCC 489,
S.G. Jaisinghani v. Union of India AIR 1967 SC 1427, Kasturilal Lakshmi Reddy v. State of J & K (1980) 4 SCC 1, Common Cause v. Union of India (1996) 6 SCC 530, Shrilekha Vidyarthy v. State of U.P. (1991) 1 SCC 212, LIC v. Consumer Education and Research Centre (1995) 5 SCC 482, New India Public School v. HUDA (1996) 5 SCC 510 and held:
“65. What needs to be emphasised is that the State and/or its agencies/instrumentalities cannot give largesse to any person according to the sweet will and whims of the political entities and/or officers of the State. Every action/decision of the State and/or its agencies/instrumentalities to give largesse or confer benefit must be founded on a sound, transparent, discernible and well-defined policy, which shall be made known to the public by publication in the Official Gazette and other recognised modes of publicity and such policy must be implemented/executed by adopting a non-discriminatory and non-arbitrary method irrespective of the class or category of persons proposed to be benefited by the policy. The distribution of largesse like allotment of land, grant of quota, permit licence, etc. by the State and its
agencies/instrumentalities should always be done in a fair and equitable manner and the element of favouritism or nepotism shall not influence the exercise of discretion, if any, conferred upon the
particular functionary or officer of the State.”

66. In Sachidanand Pandey v. State of West Bengal (1987) 2 SCC 295, the Court referred to some of the precedents and laid down the following propositions:
“State-owned or public-owned property is not to be dealt with at the absolute discretion of the executive. Certain precepts and principles have to be observed. Public interest is the paramount
consideration. One of the methods of securing the public interest, when it is considered necessary to dispose of a property, is to sell the property by public auction or by inviting tenders. Though that
is the ordinary rule, it is not an invariable rule. There may be situations where there are compelling reasons necessitating departure from the rule but then the reasons for the departure must be rational and should not be suggestive of discrimination. Appearance of public justice is as important as doing justice. Nothing should be done which gives an appearance of bias, jobbery or nepotism.”