IN the middle of this month, it was announced that the Indian government had given a score of plots of valuable land in New Delhi to organisations that were either affiliated to or shared the ideology of the Rashtriya Swayamsevak Sangh. No one was deceived by the pretext that they were scholarly bodies.

A number of ‘think tanks’ have lately mushroomed to provide inputs to the regime. It bears mention, in all fairness, that this is not unprecedented. The Congress also provided ample evidence of abuse of power. The distinction between the party and the state was obliterated.

The Supreme Court has developed a formidable body of case law on improper allocation of public property, natural resources and trade outlets. Outright sale of public property or grant of natural resources without any public auction or inviting tenders is disapproved unless circumstances, warranting direct sale in the public interest, are proved to the court’s satisfaction.

Recent cases concern the improper grant of radio spectrum in 2G band for which a couple of cabinet ministers had to face imprisonment.

India has a large body of case law on improper allotment of state property.

It is unlikely that the last has been heard of such abuses. In Mumbai, reclamation of land in the late 1960s gave rise to credible suspicion of malpractice by ministers. In India’s financial capital, big business keenly matched progress of the reclamation scheme and made early bids to ministers in charge for allotments of precious land.

MPA Piloo Mody moved the Bombay high court alleging that three ministers of the Maharashtra government had leased out valuable plots of land mala fide at a gross undervalue.

The judge upheld this contention but, having regard to the equities of the case, directed the lessees to pay 33.33 per cent increased rent if they wanted to obtain the grant of a lease, or return the land to the government. The lessees accepted the court’s order. The state secured an increase of rent of one crore (10 million) rupees per year for 99 years. This case blazed the trail.

A distinguished authority on constitutional law H.M. Seervai pertinently asked: “Can government be restrained from dealing with government property contrary to the purpose for which such property is vested in government?”

Assets and properties are vested by the constitution in the union or the state governments for their purpose. The constitution also provides for the levying, collection and expenditure of revenue of the union and the states.

Such revenues are to be expended for the purposes of the union or the states; and not to favour private persons for political ends. The union and the states hold their assets and properties impressed with an obligation to use them for public purpose. A private person can do what he likes with his property.

The law was authoritatively laid down by the Supreme Court in a landmark case in terms that are of general application. It was a case of grant of government contracts to hoteliers to run snack bars at an airport. Grant of contract to a favourite was successfully challenged.

The court pointed out some fundamentals: “Today, the government in a welfare state is the regulator and dispenser of special services and provider of a large number of benefits, including jobs, contracts, licences, quotas, mineral rights, etc. The government pours forth wealth, money, benefits, services, contracts, quotas and licences.” These valuables of different types share a characteristic. “They are steadily taking the place of traditional forms of wealth. … Many individuals and many more businesses enjoy largesse in the form of government contracts. These contracts often resemble subsidies.

“Government owns and controls hundreds of acres of public land valuable for mining and other purposes.”

The government cannot say that it will give “jobs or enter into contracts or issue quotas or licences only in favour of belonging to a particular political party or professing a particular religious faith. The government is still the government when it acts in the matter of granting largesse and it cannot act arbitrarily. It does not stand in the same position as a private individual”.

These fundamentals have been upheld in later cases whether in regard to a government or a public corporation.

Cases relating to the allocation of spectrum for telecommunication or otherwise yielded a rich crop of cases. Spectrum is a scarce natural resource of high economic value. Airwaves are public property.

By now the law is firmly established. The state or its agencies cannot give largesse to any person according to the whims of the petitioner, in power in the state. Every action of the state or its agencies to give largesse or confer benefit must be founded on a sound and transparent policy known to the public.

The writer is an author and lawyer based in Mumbai.

Published in Dawn September 24th, 2016