A nine-judge bench of the Supreme Court ruled in a majority judgment that not all privately owned property of citizens can be acquired by the state, but only those properties which are ‘material to the community’ of such nature. And depend on the effect. resources and whether its distribution is in the public interest.
Seven judges of a nine-judge bench led by Chief Justice of India (CJI) Dhananjay Y Chandrachud took the majority view while deciding on petitions that invoked the Directive Principles to curb the state’s power to acquire privately owned property. But questions were raised. State policy under Article 39(b) of the Constitution which says, “The State shall direct its policy towards securing that the ownership and control of the material resources of the community shall be so distributed as to best serve the common good. ”
The majority judgment said, “Whether physical resources under Article 39(b) include privately owned resources, the answer is in principle yes because it can include private resources. But not every resource owned by an individual can be considered as a material resource.
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This view was also concurred by Justice Hrishikesh Roy, Justice JB Pardiwala, Justice Manoj Mishra, Rajesh Bindal, Justice SC Sharma and Justice Augustin George Masih, although they placed a condition saying, “The examination whether any resource clause 39(B) will depend on “the nature of the resource, the impact of the resource on the community and the result of the concentration of the resource in a few hands.”
Furthermore, the bench said that the term “distribution” has a wide meaning, and the court has to determine whether the distribution of resources is in the common interest in a given case.
The court was hearing the Mumbai property owners’ association’s petitions seeking access to Chapter VIII-A of the Maharashtra Housing and Area Development Act (MHADA), introduced in 1986, which allows the state to take over Mumbai’s old, dilapidated buildings. Allows them to be acquired as “cessed properties”. In favor of occupiers’ co-operative societies. This amendment contained a declaration that the Act seeks to give effect to the policy of the State to secure the objective specified in Article 39(b) of the Constitution.
The state claimed that the “housing stock” is a material resource of the community and that building reconstruction is in the common interest because old buildings are unsafe. The MHAD authority (MHADA) also argued that the owners of the buildings have refused to carry out repairs due to the rent freeze since September 1, 1940, due to which they get very low rents which is less than the taxes they pay. is less than. These qualities.
However, property owners have opposed the state’s move by arguing that Article 39(b) cannot envisage privately owned property. They have also challenged the Maharashtra Rent Control Act for fixing extremely low standard fares. MHADA argued that 39(B) should be given the widest possible meaning to include private property also.
The uncertainty in law arose due to the interpretation of the decision of a 7-judge bench of the apex court in the case State of Karnataka v. Ranganatha Reddy (1977), which had considered the application of Article 39(B) in the context of nationalization of contract trains.
The majority view was not in favor of bringing private property under Article 39(b). However, a minority view of 3 judges delivered by Justice (retd) VR Krishna Iyer was to the contrary. This minority view became the basis of a five-judge bench in the Sanjeev Coke case (1982), where the issue of Article 39(b) arose in the context of nationalization of coke oven plants and private property was considered part of physical resources. community.
The CJI-led majority judgment held that the views expressed by Justice Iyer and Justice Chinnappa Reddy in Sanjeev Kok were wrong as it failed to distinguish that the physical resource belongs to the community and not the State.
It said, “To declare Article 39(b) It involves the distribution of all resources following an economic ideology…Justice Iyer was guided by a particular (socialist) school of thought.”
Moreover, Justice Reddy’s interpretation of Article 39(b) was rooted in “a particular economic ideology and ideological framework” that gave priority to the distribution of public wealth.
The bench said that the framers of our Constitution never intended to tie economic democracy to any particular social structure or ideology but for the welfare of the society.
“It has allowed the government to pursue economic reforms,” the bench said, “as it traced the trajectory of economic growth which was initially a mixed economy and later led to liberalization and market-based reforms by inviting private investment.” Developed with. It states that including all resources as physical resources will weaken the structure of the economy.
The two dissenting opinions were written by Justice B. For future generations.
Justice Dhulia shared the view that all resources except resources having “personal effects” would be physical resources under Article 39(b).
Justice Nagarathna further said, material resources cannot include items of daily necessity of a person or tangible property having a close relationship with the person.
On the related issue of whether laws passed to give effect to Article 39(B) enjoy constitutional immunity under Article 31C, the nine-judge bench was unanimous in holding that such protection would be available.
Article 31C was introduced by the Constitution (Twenty-fifth Amendment) Act, 1971, which provides a “safe harbor” or protective umbrella to any law giving effect to the policy of the State towards securing the principles of Article 39(b). Takes away or abridges, if it is inconsistent with, any right conferred by Articles 14 and 19 relating to equality and fundamental freedom.
The basic protection of this provision was upheld by a landmark judgment by a 13-judge bench Kesavananda Bharti Case (1973), is famous for presenting the basic structure theory. The Court left laws furthering the purpose of Article 39(b) untouched by 31C protection, but struck down the part that barred judicial review of such laws.
Later, by the Constitution (Forty-second Amendment) Act, 1976, the scope of protection given under Article 31C was extended not only to Article 39(b) and (c) but to all Directive Principles of State Policy (DPSP). extended, which means that any violation of any law based on DPSP Material 14 and 19 cannot be challenged in the courts. The amendment to Article 31C was struck down by the subsequent decision in Minerva Mills.
The present nine-judge bench held that the unamended 31C as it existed before the amendment would remain in force.
At the heart of the current controversy was the interpretation of Article 39(b) of the Constitution. It is one of the Directive Principles of State Policy (DPSP) which says, “The State shall direct its policy towards ensuring that the ownership and control of the material resources of the community are best distributed for the common good.”
Certainly, various laws relating to Article 39(B) that have reached the apex court in the past relate to natural or public resources such as land, mines, forests, electricity, coke oven plants, sick textile industries, contract carriage, etc. Excise duty, natural gas, etc. However, this was the first time the court faced an issue on housing and building by urban landlords, which is considered to be of great importance to private citizens, in the present challenge under Article 39(B). Nine judges.
The Constitution Bench’s decision had attracted significant attention following an intense political discussion just before the Lok Sabha elections were held earlier this year.
The catalyst for this renewed focus was a speech by Prime Minister Narendra Modi on April 21, in which he accused the Congress Party of advocating redistribution of wealth to ordinary citizens if elected to power.
This claim was based on an earlier address Congress leader Rahul Gandhi on 20 AprilWhere he proposed to conduct a comprehensive caste survey to determine the demography and socio-economic status of various communities including backward classes, SC, ST, minorities and others. Gandhi outlined plans for the subsequent distribution of wealth, job opportunities and welfare schemes based on these findings. Although these political statements may seem separate from the legal proceedings, they have fueled public interest in the case being heard by the Supreme Court.
