Government decision not to pursue competitive bidding not arbitrary: Supreme Court

NEW DELHI: The Supreme Court today held that Centre's decision not to pursue competitive bidding over the years for coal block allocations cannot be said to be so arbitrary or unreasonable warranting judicial interference.

The apex court also made it clear that it was not for the court to evaluate the advantages of competitive bidding as compared to other methods of distribution of natural resources.

After going through various notes and discussions held at various levels of the government, a bench headed by Chief Justice R M Lodha said introduction of competitive bidding took eight years because of various reasons including serious opposition by many state governments.

"...the administrative decision of the Government not to pursue competitive bidding cannot be said to be so arbitrary or unreasonable warranting judicial interference. It is not the domain of the Court to evaluate the advantages of competitive bidding vis-à-vis other methods of distribution / disposal of natural resources," the bench said.

It mentioned to earlier situations prevailing in the country due to which auction or bidding was not adopted.

The bench referred to the grave shortage of power necessitating private participation in the sector when Centre felt that it would have been impractical to allocate coal blocks through auction and later on in 2004 there was serious opposition by many state governments to bidding system due to which competitive bidding/public auction route was not adopted.

The then Coal Secretary in his note dated July 16, 2004 first mooted introduction of bidding system and the rules were finally notified on February 2, 2012.