Can’t declare every govt action as arbitrary: SC
“Criticisms are always welcome in a Parliamentary democracy, but a decision taken in good faith, with good intentions, without any extraneous considerations, cannot be belittled, even if that decision was ultimately proved to be wrong.” -- Supreme Court
Government functioning would come to a standstill if all its decisions are seen with suspicion, the Supreme Court has said while upholding Gujarat’s decision to develop an International Financial Services City in Ahmedabad in collaboration with a private company which was objected to by CAG.
The apex court said that although Comptroller and Auditor General of India (CAG) is a key figure in the parliamentary system, it is the government which runs the state and is accountable to the people.
A bench of justices K S Radhakrishnan and A K Sikri also said govern- ment's action cannot be declared arbitrary or unreasonable just because of nonfloating of tenders or absence of public auction.
"If every decision taken by the State is tested by a microscopic and a suspicious eye, the administration will come to a standstill and the decision-makers will lose all their initiative and enthusiasm," the bench said. "In hindsight, it is easy to comment upon or criticise the action of the decision maker. Sometimes, decisions taken by the State or its administrative authorities may go wrong and sometimes it may achieve the desired results. Criticisms are always welcome in a Parliamentary democracy, but a decision taken in good faith, with good intentions, without any extraneous considerations, cannot be belittled, even if that decision was ultimately proved to be wrong," it said.
In this case, the state governemnt had come into joint venture agreement with Infrastructure Leasing & Financial Services Ltd (ILFS) in the name of Gujarat Inter national Financial Tech City Limited (GIFT) on March 22, 2011 and the state allotted 412 acres of land to GIFT Company Ltd.
The state government's decision was challenged in court alleging that allotting land to the company was illegal and CBI probe was sought. The CAG also in its report raised questions on the project. The apex court, however, brushed aside all allegations of favouratism, saying "it cannot be said that the state has acted against public interest".
The apex court said that it is open to State and authorities to take economic and management decision depending upon the exigencies of a situation guided by appropriate financial policy in public interest.
"We are of the view that these are purely policy decisions taken by the State Government and, while doing so, it has examined the benefits the project would bring into the State and to the people of the State.
"It is well settled that nonfloating of tenders or absence of public auction or invitation alone is not a sufficient reason to characterize the action of a public authority as either arbitrary or unreasonable or amounted to mala fide or improper exercise of power," the bench said.
On objections raised by CAG, the bench observed that it is an important ma- chinery but requirements and needs of the people are better answered by the state.
"CAG is a key figure in the system of parliamentary control of finance and is empowered to delve into the economy, efficiency and effectiveness with which the departmental authorities or other bodies had used their resources in discharging their functions," the bench said.
CAG is also the final audit authority and is a part of the machinery through which the legislature enforces the regulatory and economy in the administration of public finance, it noted.
"But we cannot lose sight of the fact that it is the Government which administers and runs the State, which is accountable to the people. State’s welfare, progress, requirements and needs of the people are better answered by the State, also as to how the resources are to be utilized for achieving various objectives," it said.