Today, On 5th November, The Supreme Court ruled that not all private properties can be classified as community resources eligible for State acquisition. Chief Justice D.Y. Chandrachud, leading the majority opinion alongside six other judges, held this view. Justice Nagarathna issued a partial concurrence, agreeing with parts of the majority opinion, while Justice Dhulia dissented. In total, three separate judgments were delivered in the case, reflecting diverse judicial perspectives on the limits of State authority over private property.
New Delhi: The Supreme Court, today, Supreme Court ruled that not all private properties can be deemed “material resources of the community under Article 39(b) of the Constitution, which allows the State to acquire them for the common good.”
This decision held by a majority of 8:1.
The Court specified that certain private properties may fall under Article 39(b) if they are deemed material and belong to the community.
A bench led by Chief Justice of India (CJI) D.Y. Chandrachud, alongside Justices Hrishikesh Roy, B.V. Nagarathna, Sudhanshu Dhulia, J.B. Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma, and Augustine George Masih, issued the ruling.
Three judgments were delivered in this case, CJI Chandrachud led the majority opinion with six other judges, Justice Nagarathna issued a partial concurrence, and Justice Dhulia dissented.
The majority stated,
“We hold that not every resource owned by an individual can be considered a material resource of a community solely because it meets the qualifier of material needs.”
The court clarified that for privately owned property to qualify as a material resource of the community, it must satisfy specific criteria.
“The inquiry regarding whether a resource falls under Article 39(b) must be contest-specific and take into account a non-exhaustive list of factors, including the nature of the resource, its characteristics, its impact on the community’s well-being, the scarcity of the resource, and the consequences of it being concentrated in private hands. The public trust doctrine developed by this court may also aid in identifying resources that fall under the definition of material resources of a community.”
While delivering her decision, Justice Nagarathna stated that she concurred with the majority opinion led by the Chief Justice on certain issues and provided her own views in response to Justice Dhulia’s judgment.
Justice Nagarathna remarked,
“The central question of my judgment is how the ownership and control of privately owned material resources can transform into material resources of the community for distribution in a manner that best serves the common good,”
This matter references two conflicting views expressed by the Supreme Court in 1978 regarding the nationalization of road transport services.
On May 2, a nine-judge Constitution Bench reserved its judgment in this case, which pertains to Article 31C of the Indian Constitution. Article 31C protects laws enacted to ensure the Directive Principles of State Policy (DPSPs) outlined in Part IV of the Constitution.
This article was established by the 25th Amendment in 1971, aimed at safeguarding the DPSPs specified in clauses (b) and (c) of Article 39, which detail principles of policy for the State to follow.
The 25th Amendment faced challenges in the landmark Kesavananda Bharati case, in which a thirteen-judge bench of the Supreme Court ruled that the Constitution has a basic structure that cannot be altered through amendments. Subsequently, Article 31C was amended by the 42nd Amendment during the Emergency, expanding its scope to prioritize all DPSPs, not just those under Article 39 (b) and (c).
In 1980, a Constitution Bench of the Supreme Court, in the case of Minerva Mills v. Union of India, struck down certain clauses of the 42nd Amendment that had amended Article 31(c).
Following that judgment, the current Bench was tasked with determining whether the Court in Minerva Mills restored the post-Kesavananda Bharati position or nullified Article 31C entirely.
Today, the Supreme Court unanimously ruled that Article 31C, as upheld in the Kesavananda Bharati case, remains valid.
The Court stated,
“We hold that Article 31C, to the extent upheld in Kesavananda Bharati, remains in force, and this is a unanimous decision,”
The Court clarified that when an amendment that substitutes specific text is invalidated, the original unamended text remains in effect.
It added,
“This is because the legislative intent behind repeal and enactment in such cases is composite and cannot be separated. To enforce the repeal without the enactment would lead to an outcome that does not align with the legislative intent,”
The lead petition in this matter was filed by the Mumbai-based Property Owners’ Association (POA) in 1992.
The POA opposed Chapter VIII-A of the Maharashtra Housing and Area Development Authority (MHADA) Act, which was inserted in 1986. This chapter empowers state authorities to acquire cessed buildings and the land on which they stand if 70% of the occupants request restoration.
The MHADA Act was enacted in accordance with Article 39(b) of the Constitution, which mandates that the State ensure “that the ownership and control of the material resources of the community are so distributed as best to subserve the common good.”