“Government Can’t Take Over…”: Big Supreme Court Order On Private Property

Not all privately owned properties qualify as community resources that the State can take over for the common good, the Supreme Court said in a landmark verdict today.

The nine-judge Constitution bench led by Chief Justice of India DY Chandrachud delivered the judgment on the vexed issue with an 8-1 majority. Three judgments were authored — the Chief Justice wrote one for himself and six colleagues, Justice BV Nagarathna wrote a concurrent but separate judgment and Justice Sudhanshu Dhulia dissented. The judges on the bench were Chief Justice DY Chandrachud, Justice Hrishikesh Roy, Justice Nagarathna BV, Justice Sudhanshu Dhulia, Justice JB Pardiwala, Justice Manoj Misra, Justice Rajesh Bindal, Justice SC Sharma and Justice AG Masih.

The case relates to Article 31C of the Constitution that protects laws made by the State to fulfill directive principles of state policy — guidelines the Constitution lays down for governments to follow while making laws and policies. Among the laws that Article 31C protects is Article 39B. Article 39B lays down that the State shall direct its policy towards ensuring that the ownership and control of the material resources of the community are so distributed as best to subserve the common good.

On this, the Chief Justice remarked, “Does material resource of a community used in 39B include privately owned resources? Theoretically, the answer is yes, the phrase may include privately owned resources. However, this court is unable to subscribe itself to the minority view of Justice Iyer in Ranganath Reddy. We hold that not every resource owned by an individual can be considered a material resource of a community only because it meets the qualifier of material needs.”

“The enquiry about the resource in question falls under 39B must be contest-specific and subject to a non-exhaustive list of factors such as nature of resource, the characteristics, the impact of the resource on well-being of the community, the scarcity of resource and consequences of such a resource being concentrated in the hands of private players, the public trust doctrine evolved by this court may also help identify resources which fall under the ambit of material resource of a community,” he added.

In 1977, a seven-judge bench had ruled with a 4:3 majority that all privately owned property did not fall within the ambit of material resources of the community. In a minority opinion, however, Justice Krishna Iyer held that both public and private resources fell within the ambit of “material resources of the community” under Article 39(b).

In her separate judgment, Justice Nagarathna disagreed with the Chief Justice on his observations on the ruling by Justice Iyer.

“Justice Krishna Iyer adjudicated on the material resources of a community in the backdrop of a constitutional and economic structure which gave primacy to the State in a broad sweeping manner. As a matter of fact, the 42nd amendment had included socialist in the Constitution. Can we castigate former judges and allege them with disservice only because of reaching a different interpretative outcome?”

“It is a matter of concern as to judicial brethren of posterity view the judges of the brethren of past… possibly by losing sight of time when the latter discharged duty and socio-economic policies pursued by the state… merely after liberalisation, paradigm shift after 1991 reforms, it cannot lead to branding the judges of this court of yesteryears as to doing disservice to the Constitution… at the outset I may say that such observations emanating from this court and calling that they were not true to their oath of office… but just by having a paradigm shift in economic policies… judges of posterity should not follow the practice. I do not concur with the opinion of the Chief Justice in this regard,” she said.