CJI’s take on recent rows: Loss fact, gain a matter of opinion

Asking for recent controversies to be tested against "the basic principle of valuation", 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."

His observation came in the backdrop of the ongoing debate over the quantum of presumptive loss caused to the exchequer by 2G spectrum and coal block allocation, with both the UPA government and Congress questioning the figures cited by the Comptroller and Auditor General.

With Prime Minister Manmohan Singh sharing the dais with him, Justice Kapadia said: "Sometime we see certain (TV) programmes and we build 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 or gain is a matter of opinion. Please apply this test to the controversies 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 perceptions will become more sound and we know where the shoe pinches.

The CJI was addressing the opening session of a conference here on 'Economic Growth and Changes of Corporate Environment in Asia'.

Referring to a recent judgment of the German supreme court on the constitutional validity and powers of the president to enter into deficit control treaty with other members of the European Union, Justice Kapadia pointed out that the court 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 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 judgment over economics or policy decision," he said.

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