IOn November 5, 2024, a nine-judge Constitution bench of the Supreme Court delivered the verdict by a majority of 8:1. held Under this, not all private property can be considered as “physical resource of the community” Article 39(B) of the Constitution. For acquisition and redistribution by the Government. Chief Justice of India (CJI) DY Chandrachud wrote the lead majority opinion for himself and Justices Hrishikesh Roy, JB Pardiwala, Manoj Mishra, Rajesh Bindal, Satish Chandra Sharma and Augustine George Masih. Justice BV Nagarathna partially agreed while Justice Sudhanshu Dhulia dissented.
What is included in Article 39(B)?
Part IV of the Constitution, which outlines the “Directive Principles of State Policy” (DPSP), contains Article 39(b), which mandates the State to adopt policies ensuring “the material resources of the community The Court was tasked with interpreting the scope of “material resources” under Article 39(b).
Another important issue before the court was whether laws made to further the purposes of Article 39(B) could be protected from constitutional challenges based on fundamental rights such as the right to equality and freedom of expression. The fundamental rights enshrined in Part III of the Constitution and the DPSP have been in conflict for a long time. While the Constitution explicitly makes fundamental rights enforceable, the DPSPs act as guiding principles, outlining the objectives towards which the state is expected to strive.
Why was Article 31C introduced?
On July 19, 1969, former Prime Minister Indira Gandhi introduced the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969 to the public through a radio broadcast. The purpose of this ordinance was to nationalize fourteen commercial banks in the country and was later enacted as law by the Parliament. However, in the historical case of RC Cooper vs Union of India (1970)The Supreme Court struck down the law by invoking the now-repealed Article 31(2) of the Constitution. This provision prohibits the government from acquiring private property under any law unless a certain compensation has been determined.
In 1971, to protect such Emergency-era economic policies from judicial review, Parliament introduced a new provision – Article 31C. 25th amendmentThe provision states that any law giving effect to clauses (b) and (c) of Article 39 – which respectively urge the State to make laws to secure the material resources of the community and to establish an economic system which prevents concentration of wealth – cannot be void on the ground that they violate Articles 14 (right to equality) and 19 (freedom of speech and expression). Additionally, it prevented courts from assessing whether a law actually furthers the objectives set out in Article 39(b) and (c).
This amendment was later challenged in seminal Kesavananda Bharti Case (1973) in which a narrow majority of 7–6 found that an amendment that struck down the Constitution basic structure Will become zero. Justice Khanna found that the amendment partly offended this principle. He held that, in so far as it prohibited any inquiry into whether any law was made in furtherance of the purposes of Article 39(b) and (c), it violated the principle of judicial review. However, he upheld the amendment to the extent that it protected such laws from challenges based on Articles 14 and 19.
Which amendment happened after this?
Despite this, in 1976, Parliament made more sweeping changes to Article 31C. 42nd amendmentThey determined that any legislation made in furtherance of the DPSP – and not limited to those under Article 39(b) and (c) – would enjoy immunity against constitutional challenge. In 1980, the Supreme Court, in Minerva Mills vs Union of IndiaRepealed the amendment, strengthening the primacy of fundamental rights over the DPSP. The then Chief Justice YV Chandrachud famously said that the amendment had “removed two arms of the golden triangle” formed by Articles 14, 19 and 21.
However, this judgment gave rise to a conundrum: whether Article 31C now exists in full force, as mentioned in the 25th Amendment, or has the Supreme Court restored the term-Kesavananda Bharti Situation in which only Articles 39(b) and (c) remain protected?
How did the matter reach the top court?
The petitions before the apex court pertained to the constitutional validity of Chapter-VIIIA, which was introduced as an amendment in 1986. Maharashtra Housing and Area Development Act (MHADA) of 1976.It allowed the Mumbai Building Repair and Reconstruction Board (MBRRB) to acquire acquired properties with the consent of 70% of the residents for restoration purposes. Additionally, Section 1A was inserted into the MHADA by invoking Article 39(b), enabling the MBRRB to acquire lands and buildings and transfer them to “needy persons” and “occupiers of such lands or buildings”. Created.
Aggrieved by this, the Property Owners Association, a body representing over 20,000 landowners in Mumbai, filed a suit before the Bombay High Court, which dismissed the challenge. The court ruled that Article 31C of the Constitution bars any challenge on the basis of Articles 14 or 19 if the statute is enacted in furtherance of Article 39(b). An appeal was made in this case and it was initially heard by a three-judge bench of the Supreme Court. In 1996, it was referred to a five-judge bench, which in 2001 referred it to a seven-judge bench. Eventually, in 2002, the case was placed before a bench of nine judges.
What determines the majority decision?
The majority opinion underlined that not all private property would fall within the scope of Article 39(B) for government acquisition to serve the “common good”. The Chief Justice argued that such an interpretation would echo an unnecessary “rigorous economic dogma” that advocates greater state control over private resources. He further said that, due to several market reforms over the past few years, the Indian economy has transformed from being predominantly public investment-driven to a model in which both public and private investment co-exist.
Notably, the majority rejected Justice VR Krishna Iyer’s interpretation State of Karnataka vs. Sri Ranganatha Reddy (1977), which held that the “material resources of the Community” under Article 39(b) include both public and private resources. Justice Iyer’s approach shaped subsequent decisions of the Constitution Bench, including Sanjeev Coke Manufacturing (1982) and Mafatlal Industries (1997). The judges stressed that these decisions reflected a “particular economic ideology” based on the assumption that prioritizing state acquisition of private property would best serve the country’s interests.
The Chief Justice further clarified that whether a privately owned resource has communal significance must be assessed on a “case-by-case basis”. He identified a number of “non-exhaustive factors” for consideration, including the inherent properties of the resource, its impact on public welfare, its limited availability, and the potential consequences of concentrating its ownership among a small group of private entities.
Addressing the question whether laws made to implement Article 39(b) are protected from constitutional challenges by Article 31C, the judges confirmed that such an exemption exists. He further clarified that the unamended Article 31C has been considered valid to some extent Kesavanand Bharti, Remains active. However, the Chief Justice cautioned that any acquisition of private property for public use must comply with constitutional guarantees including Articles 14 and 300A (right to property).
What did Justice Nagarathna and Dhulia say?
Justice Nagarathna offered partial concurrence, holding that certain private resources, particularly those essential to the public welfare, could “in principle” fall within the scope of Article 39(b). However, he clarified that personal belongings and everyday property should be exempted from this classification. However, both he and Justice Dhulia took strong objection to the comments made by the Chief Justice in the “Proposed Judgment” regarding the principle supported by Justice Iyer. According to the judges, the proposed opinion stated that “the Krishna Iyer doctrine insults the broad and flexible spirit of the Constitution”. However, this criticism does not appear in the published majority decision written by the Chief Justice. It is unusual for judges to cite “proposed” decisions as draft opinions are typically circulated internally among members of the bench.
Condemning the practice of censuring former judges, Justice Nagarathna emphasized that one should not ignore the times when judges like Justice Iyer performed their duties including the socio-economic policies adopted by the state at that time. Was discharged. Expressing similar sentiments, Justice Dhulia described the criticism in the proposed judgment as “harsh”.
In his lone dissent, Justice Dhulia said that excluding privately owned assets from the ambit of Article 39(b) fails to take into account the reality that some private resources, if distributed equitably, are available to the public. Can provide benefits. He further cautioned that such a blanket boycott risks undermining the broader objectives of the DPSP, especially at a time when “the growing gap between the rich and the poor is still very large”.
What are the possible implications?
The majority decision stands as judicial approval of the evolution of the country’s economic policy over the years – from extensive state control over most resources to a more liberal economy promoting private wealth creation. By acknowledging the role of the state in promoting social welfare while respecting individual property rights, the apex court has crafted a balanced approach that is consistent with India’s broader economic growth aspirations. However it remains to be seen which economic policies on the acquisition of private resources pass judicial muster, especially given the Court’s stance that such determinations will be made on a case-by-case basis.
The decision also assumes significance in view of the political rhetoric ahead of the Lok Sabha elections, where Congress leader Rahul Gandhi reportedly advocated a comprehensive census followed by redistribution of wealth among different socio-economic groups. Prime Minister Narendra Modi in response alarm bells rang What he described as a dubious attempt by Congress to confiscate private property and redistribute it among Muslims.
published – November 07, 2024 09:40 PM IST
