The Union Cabinet on Tuesday decided to opt for a Presidential Reference in the 2G scam case. The cancellation of 122 licenses by the Supreme Court has been challenged by companies concerned. The government wants complete clarity on that landmark judgement. Analysts say that the government action after the February judgement creates an environment of policy uncertainty that could hurt the investment climate.
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Here are pointers that could explain what this means:
• The government has the power to make a presidential reference under Article 143 of the Indian constitution. In the larger interest of the public, the government can seek Supreme Court’s view on important questions of law.
• Presidential reference is rarely used. In the past, the Supreme Court has even refused to give its opinion on controversial matters raised in presidential reference.
• In October 1994, a three-judge SC Bench unanimously rejected a presidential reference seeking its opinion on whether an ancient Hindu temple existed at the disputed site of the Babri Masjid in Ayodhya. The mosque was demolished by a mob of Hindu right wing activists in December 1992.
• The last presidential reference to the Supreme Court, made in 2004, about sharing of river water through Sutlej-Yamuna Canal between Punjab and Haryana is still pending.
• The Supreme Court judgement to cancel 122 licences has ramifications on several other sectors. So the government has put together a list of seven questions that will be delivered to a five-judge bench of the Supreme Court where the matter will be debated.
• Of the seven questions raised, the one on applicability of the February judgement retrospectively to licences allocated since 1994 could cause concern for major telecom players. If the judgement is applicable to decisions as far as 1994, it could damage the investor sentiment, analysts say.
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