New Delhi, July 12 (IANS) The government Thursday told the Supreme Court that it had no problem in allocating natural resources in a transparent, fair and non-discriminatory manner but auction could not be the sole method of apportioning them.

A constitution bench of Chief Justice S.H. Kapadia, Justice D.K. Jain, Justice J.S. Khehar, Justice Dipak Misra and Justice Ranjan Gogoi was hearing arguments on the maintainability of the presidential reference seeking its advisory opinion whether auction was the only method of allocating natural resources.

The reference is rooted in the 2G verdict wherein the apex court said if scarce natural resources like the telecom spectrum were to be allotted by the state, then the only legal method was a transparent public auction.

That the allocation of natural resources should be transparent, non-discriminatory and fair is accepted but the only problem is the general principle of auction as laid down in the 2G verdict, Attorney General G. Vahanvati told the court.

Vahanvati told the court that while the government was implementing the decree and direction of the 2G verdict, it was seeking the apex court's opinion whether auction was the only method of allocating natural resources.

He told the court that when the president came to the conclusion that there was doubt on the question of law laid down by the court, then it was expedient to obtain the opinion of the court.

The attorney general told the court that the law of auction of scarce natural resources was in the context of the allocation of telecom spectrum.

The law laid down can't have an across-the-board application for all natural resources, he said.

Chief Justice Kapadia asked: Can't we be impeded from pronouncing the opinion because of the existence of a judgment that had laid down the principle?

If the court makes observations on questions which did not arise for consideration or which were never fully argued before the court, the reference court is not precluded from dealing with these observations, Vahanvati said.

He said that even without disturbing the law laid down by the court, the reference could be made on its interpretation and applicability.

The attorney general told the constitution bench: The president of India has made this reference on the basis that there are doubts now with regard to the way forward for the development of the country in general and introduction of FDI (foreign direct investment) in these sectors.

If, for instance, the government were to announce a project for discovery and winning of some natural resources such as gas, other than on auction basis, foreign investor would be wary, if not reluctant, of participating if there was a likelihood of the project being cancelled or challenged on the ground that the auction principle was not implemented, Vahanvati told the court.

Addressing a number of issues that NGO Centre for Public Interest Litigation (CPIL) raised in the last two days seeking return of the presidential reference without answering it, Vahanvati told the court that the reference was not an attempt to override the 2G verdict.

The question does not arise. No one is asking to set aside the 2G verdict, the attorney general told the court.

The attorney general told the constitution bench, that the reference was filed April 12, even when the petition seeking the review of the 2G verdict was pending. It was not as if the reference was filed after it (review petition) was withdrawn.