Author: Nandana Mohandas, 2nd Year B.A. LLB (Hons.), Symbiosis Law School, Pune
ABSTRACT
The recent Supreme Court judgement clarifies that a context-specific enquiry is necessary in the matter of property rights and provides a lens into the socialist context of this discussion considering it aims to clarify the legal position in public v. privately owned resources.
The length of the Indian Constitution garnering it the recognition of being the longest written constitution in the world is paralleled only by the same accolade it holds in terms of having the most amendments in the world. This is a testament to the dynamic nature of the central supreme law of the nation and its evolving nature in light of the changing landscape of the world. An important underpinning of the conversation surrounding fundamental rights that emanates in a commercial and economic context arises in the field of property rights.
Historically, several developments have occurred in this context in Indian jurisprudence. Initially, it was treated and encoded as a fundamental right in Article 19(1)(f) that granted citizens the right to hold, acquire and dispose of property primarily. Additionally, Article 31 was a safety mechanism that saved property owners from being deprived of their property unless it is through lawful methods. However, following multiple challenges to the land reform changes to the legal provisions in this regard were effectuated. The first amendment added Article 31A and 31B to shield land reform laws from judicial review along with the placing of certain laws outside the scope of judicial review through shifting it to the Ninth Schedule. Over twenty-five years since this, in 1978, through the Forty-forth amendment, Articles 19(1)(f) and 31 were repealed and to clarify the law on this matter Article 300A was introduced thus converting this from a fundamental right to a property right; legal but not imperative. This transformed the interpretation of Article 300A to mean that property may be deprived by the authority of law if the due process of law was followed. This principle was upheld in multiple judicial decisions including the 2011 judgement of K.T. Plantation v. State of Karnataka.
On November 5th 2024, an important judgement, Property Owners Assn. v. State of Maharashtra, regarding property rights was delivered by a constitution bench of the Supreme Court by a 7:2 majority. This verdict clarified key concepts regarding community ownership and executive reach in the matter of privately-owned property. It is necessary to contextualize that the 42nd Amendment was struck down by the court in the Minerva Mills judgement and this directly impacts Article 31-C of the constitution. The issues that were deliberated upon and resolved are the following: –
1. Does the repeal of an amendment that strikes down a section lead to an automatic revival of said provision?
2. Does the terminology “material resources of the community” as phrased in Article 39(b) include privately-owned property that does not inherently belong to the state?
The factual matric of this case revolves around the Maharashtra Housing and Area Development Act, 1976 (“MHADA”) that detailed the reconstruction and repairs of dilapidated buildings in a part of the state. In 1986, Chapter VIII-A of the Act was enforced that attempts to explain the acquisition of cessed properties for co-operative societies and restricts its application to cessed buildings erected before a particulate date in the disputed area. The constitutional backing of the same arises from Article 39(b) wherein it is extended that these steps are taken in furtherance of the Directive Principles of State Policy. The source of conflict arises from the fact that Section 1A of the Act necessitates that only 70% of the residents’ consent for the state acquisition and it is contended that this is violative of the rights available as under Articles 14 and 19 of the Indian constitution.
It is relevant to note that in the landmark judgement of Minerva Mills in 1980 it was held that Article 31C survived the striking down of the 43nd amendment to remain applicable to clauses (b) and (c) of Article 39. Considering that the MHADA legislation caused controversy, several cases were filed. Initially, the state argued that the act remains protected under Article 31C. Upon understanding that this matter required greater deliberation, referred this matter to a bench larger than the initial three judge bench. There would eventually be two judgements that further deepen the rationale for requiring further analysis of these questions. Firstly, in 1978, Justice Krishna Iyer famously held in the matter of Ranganatha Reddy v. Karnataka that the disputed terminology includes natural and man-made resources irrespective of the nature of ownership. Further, in the 1983 judgement of Sanjeev Coke Manufacturing Co. v. Bharat Coking Coal Ltd. it was extended that material resources included still includes private resources. However, the seven-judge bench that this matter was referred to further sent it to the nine-judge constitutional bench seeing as this matter required more intricate explanations of the law.
In the first issue, the court delved into the legislative intent behind the 42nd amendment and the effect of the Minerva Mills judgement. Section 4 of the aforementioned amendment existed to expand the protection to actions in pursuance of any of the DPSPs as opposed to only state action in pursuance of Article 39(a) and (b). In Minerva Mills, recognizing that this could lead to arbitrary decision-making and would upset the balance between Fundamental Rights and DPSPs that was necessary for compete justice, this expansive scope was nullified. The court’s exhaustive explanation of this decision in the present context exists to express that the judgement repealed the original language that expanded the scope but continued to hold that the initial interpretation remained valid. This was further upheld in the matters of Kesavananda Bharati v. State of Kerala and Waman Rao v. Union of India.
In the second issue, the court first considered the conflicting views as observed in the earlier judgements in this context. It recognized that the five-judge bench in Sanjeev Coke erroneously relied on the minority view from Ranganatha Reddy instead of the majority opinion that held that material resources could not include private property. The court observed that this violated the precedential principle that existed to ensure uniformity in judgements and maintain the applicability of the law in a just manner. The court also went further in clarifying that in the matter of Mafatlal, the single-line observation quoted was only obiter dicta and does not hold relevance. Finally, upon the crux of the issue presented, the court found that a context-specific enquiry must be made and provided plausible factors to be considered for this approach. It mentioned the nature of the resource, its scarcity and availability and its connected impact among other factors.
Despite the dissenting opinions of Justice B V Nagarathna and Justice Sudhanshu Dhulia (7:2) that observed differently in the matter of public v. private ownership, this judgement serves as a landmark matter in this realm of law. It also strengthened the application of the environmental law principle of the public trust doctrine and highlights the diaspora of Indian judgements that continue to strive to concur with the Preamble’s setting-forth of a socialist country – economically, culturally and environmentally in the instant case.
FAQS
1.What was the Court’s stance on Justice Krishna Iyer’s interpretation of Article 39(b)?
The Court rejected Justice Krishna Iyer’s minority view in Ranganatha Reddy that all resources meeting material needs are covered by Article 39(b). The majority in Ranganatha Reddy disagreed with this expansive interpretation, emphasizing that the qualifiers “material” and “of the community” must not be rendered meaningless
2.How does the Public Trust Doctrine relate to Article 39(b)?
The Public Trust Doctrine helps identify resources that qualify as “material resources of the community.” It suggests that certain resources must be preserved for public use and cannot be monopolized by private ownership. This doctrine aligns with the goals of equitable distribution and serving the common good under Article 39(b).
