"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well."

-Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Wednesday, March 9, 2011

More on the RNRL v RIL Judgement

We had two posts (access those from here and here) on the RNRL v. RIL case before the Supreme Court. We wish to delve further into the case.

In the last two posts, we had analysed the legal doctrines that were applied by the Supreme Court and had dealt with the politico-historical aspects of petroleum exploration. These historical reasons and the public trust doctrine (refer to previous posts- links above) made the Supreme Court "grant" enormous powers to the government to regulate the petroleum industry, especially considering fuel security and sovereignty issues. We were to deal with the significant restrictions that the minority judgement (MIJ) has imposed on the enormous power given to the government to regulate the petroleum industry (two judges formed the majority while one formed the minority).

The MIJ held that since the government holds control over the petroleum resources in trust, the restraints on the Union government (government) are the following:

1. The government cannot transfer title to such resources unless it receives just and proper compensation
2. The government shall not allow deprivation of such resources to users in different sectors/ industries.
3. The government shall frame a proper conservation policy taking into account domestic availability, need for balancing present and future needs and the country’s security requirements. Extraction of such resources shall be allowed only after framing of such policy
4. The government shall periodically evaluate equitable distribution of such resources between different sectors and regions
5. The government shall frame a proper utilization policy and shall disallow a contractor from extracting and distributing such resources without permission of the government
6. An end user shall not be given a guarantee of continued access to such resources without the period specified by the government.

The MIJ declared that any action of the government which fails to take into account the above principles would be violative of Article 14 of the Constitution. Now, it must be noted that the majority judgement (MAJ) contained no such restrictions. The MAJ granted virtually a carte blanche to the government as regards regulation of the petroleum industry but placed no restrictions on the government. This blawgger feels that restrictions like the above must be placed on the government so that the government regulates the sector not on the basis of political considerations but on the basis of sectoral needs. 

More on the Reliance judgement in another post.

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