Supreme Court Verdict on Property Rights and State Acquisition of Private Property

What’s in today’s article?

• Why in News?
• Background of the Property Owners Association & Ors v State of Maharashtra Case
• Understanding Articles 39(b) & 31C
• The Property Owners Association & Ors v State of Maharashtra Case
• Diverging Opinions in the Property Owners Association & Ors v State of Maharashtra Case
• Conclusion

Why in News?

The Supreme Court of India’s (SC) judgement in the Property Owners Association & Ors v State of Maharashtra case, marked a shift in how it views state’s acquisition of private property.

Background of the Property Owners Association & Ors v State of Maharashtra Case:

• This case concerned a Maharashtra law allowing the acquisition of certain privately owned dilapidated buildings in Mumbai. The law claimed to enact Article 39(b) of the Constitution of India.
• The Bombay HC upheld this law in 1991, stating it was protected under Article 31C, originally introduced in 1971 to promote socialist objectives under the Indira Gandhi government.

Understanding Articles 39(b) & 31C:

• Article 39(b): It requires the state to ensure “ownership and control of the material resources of the community are so distributed as best to subserve the common good.”
• Article 31C:
  • It has two parts:
    • First part: Exempts laws promoting Article 39(b) or (c) from being challenged for inconsistency with Articles 14, 19, or 31.
    • Second part: Shields these laws from court scrutiny, provided they claim to uphold Article 39(b) or (c). However, this part was struck down in the Kesavananda Bharti case (1973).
  • Later, the scope of Article 31C was expanded by the 42nd Amendment in 1976 but was partially invalidated by the Minerva Mills case (1980).

The Property Owners Association & Ors v State of Maharashtra Case:

• About the judgement:
  • It is led by a 9-judge bench of the SC (chaired by the Chief Justice of India [CJI]), and addressed two primary questions:
    • The current status of Article 31C of the Constitution of India and whether it still exists despite previous amendments being struck down.
    • The scope of Article 39(b) and its implications for the state’s authority to acquire private property as “material resources of the community.”
• The status of Article 31C:
  • The case challenged the Bombay HC’s interpretation, contending that the Minerva Mills ruling effectively invalidated Article 31C.
  • The court clarified that Minerva Mills only removed the expanded scope but preserved the original version from Kesavananda Bharti, keeping Article 31C operative in its original form.
  • All justices on the bench agreed that this interpretation remains consistent with constitutional principles.
• Interpretation of Article 39(b):
  • The court next examined whether Article 39(b) allows the acquisition of all private property as community resources.
  • Referring to Justice Krishna Iyer’s earlier views, the court clarified that not all private property falls under “material resources of the community.”
  • The court established four criteria to determine if private property could be deemed a community resource:
    • Nature of the resource: Its inherent characteristics.
    • Community impact: How the resource affects societal well-being.
    • Resource scarcity: Availability of the resource.
    • Concentration consequences: Risks of resource concentration among private owners.

Diverging Opinions in the Property Owners Association & Ors v State of Maharashtra Case:

• Majority opinion: Emphasised the shift from a purely public-investment economy to one with both public and private investments, suggesting that not all private property qualifies as community resources.
• Justice Nagarathna’s concurrence: Supported a broader interpretation, arguing that changing socio-economic policies shouldn’t alter Article 39(b)’s intent.
• Justice Dhulia’s dissent: Advocated for including all private resources under community resources to address ongoing wealth inequality.

Conclusion:

• The SC’s decision in this case has redefined the interpretation of Article 39(b) while retaining the original version of Article 31C.
• This verdict reflects the judiciary’s approach to balancing state welfare objectives with private property rights, adapted to India’s evolving socio-economic landscape.

Q.1. What is the Minerva Mills case (1980)?

In the Minerva Mills case (1980), the court ruled that Parliament cannot alter the fundamental framework of the Constitution, including the principles of judicial review and limited power of amendment, thereby protecting citizens’ rights.

Q.2. What is the doctrine of judicial review?

The doctrine of judicial review is the power of the judiciary to review the actions of the government and determine if they are constitutional. It was inserted in the Indian Constitution from the American Constitution.

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

‹ ›