New Delhi: In a significant verdict, the Supreme Court on Tuesday held that all private properties cannot form part of the 'material resources of the community'.
The judgment was delivered by a nine-judge bench led by Chief Justice of India D Y Chandrachud and comprising justices Hrishikesh Roy, B V Nagarathna, Sudhanshu Dhulia, J B Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma, Augustine George Masih.
The majority view, by 7:2, held that all private properties cannot form part of the 'material resources of the community' which the state is obliged to equitably redistribute as per the directive principles under Article 39(b) of the Constitution. Justices Nagarathna and Dhulia dissented.
The majority overruled Justice Krishna Iyer's previous ruling, which held that all privately owned resources could be acquired by the state. The CJI, who pronounced the majority judgment, said that the old ruling was motivated by a particular ideology.
The CJI said in the late 1960s and 1970s, there was a shift towards socialist reforms and policies and in the liberalisation year, there was a shift towards pursuing market-based reforms. He said today, the India economy has transitioned from public investment to the coexistence of public and private investment.
“The doctrinal error in the Krishna Iyer approach was postulating a rigid economic theory, which advocated for greater state control over private resources….”, said the CJI.
The majority said that the vision of the framers while drafting the Constitution was not to lay down a particular form of social structure or economic policy for future governments. Citing India’s economic trajectory, the CJI said the electorate has routinely rejected one economic dogma.
The CJI said that not every resource owned by an individual can be considered a material resource of the community merely because it meets the qualifier of material needs.
The apex court also unanimously held that Article 31C to the extent it was upheld in Kesavanda Bharati remains in force. Article 31C protects laws enacted to ensure the “material resources of the community” are distributed to serve the common good (Article 39(b)) and that wealth and the means of production are not “concentrated” to the “common detriment” (Article 39(c)).
The majority ruled that Justice Krishna Iyer's 1978 ruling - all properties of private individuals can be termed community property -advanced socialist economic ideology, which was unsustainable. “Not all privately owned resources fall within the ambit of the state. However, privately owned resources are not excluded as a class, and some private resources may be covered”, said the CJI.
The CJI said judgments in reference before the court are incorrect to the extent that they hold all resources of an individual are part of the community and thus all private property is covered by the phrase material resources of the community. “The interpretation amounts to endorsing a particular economic ideology…”, said the CJI.
Justice Nagarathna, dissenting from the majority view, said that the judges from the past can't be condemned for the views they adopted at a previous point in time. She emphasized that the institution is bigger than individuals and that no judge can be said to do a "disservice to the Constitution". Justice Sudhanshu Dhulia also disagreed with the majority's view on Justice Iyer's 1978 ruling. The detailed judgment on the matter will be uploaded later in the day.
In the Ranganatha Reddy case (1978), a five-judge of the apex court, by a 4-1 majority, had clarified that privately owned resources did not come under material resources of the community under Article 3 (b). However, Justice Krishna Iyer said in his dissenting opinion that it would include private property.
The reference to the nine judges had arisen in the context of the two views emerging in the Ranganatha Reddy case. The question before the bench was whether privately owned property is covered under the ambit of “material resources of the community”, under Article 39(b) of the Constitution.
Article 39(b) enjoined the State to endeavour “that the ownership and control of material resources of the community are so distributed as best to subserve the common good”.
The case arose out of a law in Maharashtra that allows a state undertaking (MHADA – Maharashtra Housing and Development Authority) to acquire certain private properties under Chapter VIII-A of the MHADA Act 1976. The acquisition of the private properties could be for better preservation of the said property/building or for reconstruction/repairs etc.
