Private property and the ‘common good’: Unpacking the SC verdict

Private property and the ‘common good’: Unpacking the SC verdict

Sub : Polity

Sec : Constitution

Supreme Court Verdict: Property Owners Association & Ors v. State of Maharashtra

• The Supreme Court of India, led by Chief Justice D.Y. Chandrachud (before his retirement), delivered a landmark judgment addressing two critical constitutional questions:

1. Status of Article 31C: Does this article still exist after certain amendments were struck down by the Supreme Court?
2. Scope of Article 39(b): Does it allow the state to acquire private property as part of the “material resources of the community”?

Context of the case: Articles 39(b) and 31C

• The case focused on a Maharashtra law that enabled a public housing body to acquire old, privately owned buildings in Mumbai.
• The law claimed to give effect to Article 39(b), which mandates that the state ensure the equitable distribution of material resources for the common good.
• The Bombay High Court (1991) ruled that laws implementing Article 39(b) are protected by Article 31C.

Background of Article 31C:

• Introduced in 1971 via the Constitution (Twenty-Fifth Amendment) Act, Article 31C aimed to promote socialist policies by:
  • Protecting laws that implement Article 39(b) and 39(c) from being declared void if they conflict with Article 14 (Right to Equality), Article 19 (Fundamental Freedoms), or Article 31 (Right to Property, repealed in 1978).
  • Shielding such laws from judicial scrutiny if they were declared to give effect to these policies.
• The Supreme Court in Kesavananda Bharati (1973) struck down the part that prevented judicial review but retained the protection for laws enforcing Article 39(b) and (c).
• In the Minerva Mills case (1980), the expanded scope of Article 31C to cover all Directive Principles of State Policy (Part IV) was invalidated.

Key Question 1: Status of Article 31C

• Petitioners argued that the Minerva Mills ruling effectively nullified Article 31C, making the Maharashtra law invalid for violating Article 14.
• The Supreme Court clarified:
  • The original protection under Article 31C (as upheld in Kesavananda Bharati) still stands.
  • The 42nd Amendment changes struck down in Minerva Mills did not eliminate the earlier version of Article 31C.
  • This decision was unanimous, including a dissenting view by Justice Sudhanshu Dhulia who agreed on this specific point.

Key Question 2: Interpretation of Article 39(b):

• Article 39(b) deals with the state’s role in distributing resources to benefit the community.
• Past Interpretations:
  • Justice Krishna Iyer (1977) held that both natural and man-made resources, whether publicly or privately owned, fall under “material resources of the community”.
  • In the Sanjeev Coke Manufacturing Co. (1983) case, the Court upheld nationalization as being protected under Article 39(b), exempt from challenges based on Article 14.
• Current Ruling:
  • The Court disagreed with a blanket inclusion of all private property as “material resources of the community”.
  • It stated that if this was the intent, Article 39(b) would have been worded differently.
  • The Court noted that economic policies have evolved, and today’s mixed economy (public and private investments) does not align with a rigid view prioritizing state acquisition of private property.
• Majority Opinion: Four factors must be considered when deciding if private property can be deemed a “material resource of the community”:

1. The nature and characteristics of the resource.
2. The impact on community well-being.
3. The scarcity of the resource.
4. The consequences of private ownership on resource concentration.

• Justice Nagarathna’s View:
  • Disagreed with the majority, asserting that the interpretation of Article 39(b) should not change based solely on shifts in socio-economic policies.
• Dissenting Opinion by Justice Dhulia:
  • Argued for the continued recognition of all private resources as “material resources of the community”.
  • Highlighted that despite reduced poverty, the gap between the rich and the poor persists, necessitating welfare measures under Articles 39(b) and (c).

Source: IE