Chief Justice of India S H Kapadia on Saturday said loss is a matter of fact and profit and gain is a matter of opinion, remarks that came against the backdrop of raging controversies over valuation of natural resources.
He made no direct reference to the controversies over the Comptroller and Auditor General reports on presumptive loss in the 2G spectrum allocation or the gains to private corporates in the coal block allotment but himself drew attention to the ongoing 'controversies on valuation'.
The CJI also lauded prime minister's address to the nation on Friday on the economic situation saying he brought out the 'doom's day that if we are not careful the young will suffer'.
"Sometime we see certain (TV) programmes and we build up our perceptions. How many of us know the basic principle of valuation. Today a number of controversies on valuation are discussed but the basic principle of valuation is that loss is a matter of fact and profit is a matter of opinion.
"Please apply this test on the controversy going on. I do not want to discuss anything further. Loss is a matter of fact and profit and gain is a matter of opinion. So if you understand these principles we will be able to judge. Our perception will become more sound and we know where the shoe pinches," Justice Kapadia said addressing the international conference here on Economic Growth and Changes of Corporate Environment in Asia.
Elaborating on the need for economic literacy, he said a common man needs to be told or explained the difference between fiscal federalism versus resources federalism which creates at times political stress.
In the modern age of communication, the CJI said the community needs to be educated as to whether higher commodity prices are more inflationary than higher fiscal deficit due to under recoveries.
And most importantly whether rule of law promotes economic growth or whether rule of law is an impediment. He said today the government has to balance for example inflation versus growth.
"These are not easy questions. It is easy for us to sit on an armchair and go on commenting. At the same time the government needs to educate people on these problems and on these challenges which we face," he said.
Referring to a recent judgement of the German supreme court on the constitutional validity and powers of the President to enter into deficit control treaty, the CJI said "it would not decide on matters of policy or economic content and refused to grant injunction to establishment of 'European stability mechanism'.
"This is for judges to understand that the difference between judicial activism and judicial restraint. If we do not have the model to apply, we need not and we cannot sit in judgement over economics or policy decision," he said.Z