BREAKING| Not All Private Property Is 'Material Resource Of Community' Which State Must Equally Distribute As Per Article 39(b) : Supreme Court
The Supreme Court today (November 5) held by a majority of 8:1 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 of State Policy under Article 39(b) of the Constitution.
The Court held some private properties may come under Article 39(b) provided they are material and belong to the community.
The 9-judge bench comprised Chief Justice of India DY Chandrachud, Justices Hrishikesh Roy, B.V. Nagarathna, Sudhanshu Dhulia, J.B. Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma and Augustine George Masih.
The majority opinion was authored by the CJI, while Justice BV Nagarathna partially concurred and Justice Dhulia dissented.
Majority view
The majority judgment authored by CJI DY Chandrachud held that the phrase "material resources of the community" may theoretically include privately owned resources, however, the expansive view expressed by Justice Krishna Iyer's minority judgment in Ranganath Reddy and relied on by Justice Chinnappa Reddy in Sanjeev Coke can't be accepted.
The single sentence observation in Mafatlal to the effect that "material resources of the community" include privately owned resources is not part of the ratio decidendi of the judgment and was not binding on the Court.
"The phrase may include privately owned resources....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," CJI Chandrachud pronounced.
The enquiry on whether a resource falls within the ambit of "material resource of community" must be based on the nature of the resource, the characteristics of the resource, the impact of the resource on the well-being of the community, the scarcity of the resource, and the consequence of such a resource being concentrated in the hands of private players. The public trust doctrine can also be applied here.
The term 'distribution' has a wide connotation. The various forms of distribution which can be adopted by the State can include vesting of the concerned resource in the State or nationalisation.
The majority judgment also observed that the views expressed by Justice Krishna Iyer and Chinnappa Reddy were rooted in a particular economic ideology. The majority observed that the framers of the Constitution did not intend to bind the country with any particular economic dogma.
The bench also unanimously held that Article 31C to the extent it was upheld in Kesavanda Bharati remains in force.
Justice Nagarathna's views
Privately owned resources except for personal effects (such as ornaments, utensils, furniture, articles of daily need etc) can come under the ambit of the term 'material resources of community', provided such resources get transformed as resources of the community. Private resources can be turned into material resources of the community by means such as (1) nationalisation; (2) acquisition; (3) operation of law ; (4) by purchase by state; (5) owner's donation.
The judgment in Sanjeev Coke was correct on its merits and it cannot be held that it was decided merely on the basis of the minority view of Justice Krishna Iyer in Ranganath Reddy. It is not justifiable to criticise these views merely on the basis of the shift in economic policies.
The details of Justice Dhulia's dissent are not fully known due to some technical glitches during the pronouncement. The report will be updated once the judgment is uploaded.
Background
The batch of petitions initially arose in 1992 and was subsequently referred to a nine-judge bench in 2002. After more than two decades of being in limbo, it was taken for a hearing in 2024. The main question to be decided is whether material resources of the community under Article 39(b) (one of the Directive Principles of the State Policy), which states that the government should create policies to share community resources fairly for the common good, includes privately owned resources.
Article 39(b) reads as follows:
"The State shall, in particular, direct its policy towards securing-
(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good;”
The main contention raised by the appellants and other intervenors was that the term 'Material Resource' under Article 39(b) is to be interpreted as any resource which is capable of generating wealth - through goods or services for the larger good of the community. If the intention of the law was to include private resources within the meaning of 'Material resources', the drafter would have done so in order to avoid any possible future misinterpretations.
The Union highlighted that the interpretation of Article 39(b) should be from the standpoint of the ever-expanding constitutional principles and not any ideology. In terms of understanding a resource, the Union urged that it is a community's dynamic interactions that mould the meaning of 'Material Resources'. In a community, different individuals have different interactions and business transactions. This makes the sum total of a community's wealth, to which each individual through its economic interactions contributes. Thus 'resource' under Article 39b means a common economic base.
Issue Involved & Reference Trajectory
The issue in these petitions revolves around the constitutional validity of Chapter-VIIIA, introduced in 1986 as an amendment to the Maharashtra Housing and Area Development Act,(MHADA) of 1976. Chapter VIIIA deals with the acquisition of specific properties, wherein the State requires payment at a rate equivalent to one hundred times the monthly rent for the premises in question. Section 1A of the Act also incorporated through the 1986 amendment, states that the Act is designed to implement Article 39(b) of the Constitution.
The reference was with regard to the interpretation of Article 39(b) of the Constitution. Put shortly, in State of Karnataka v. Ranganatha Reddy & Anr. (1978), two judgments were delivered. The judgment delivered by Justice Krishna Iyer stated that material resources of the community covered all resources– natural and man-made, publicly and privately owned. The other judgment, delivered by Justice Untwalia, did not consider it necessary to express any opinion with regard to Article 39(b). However, the judgement stated that the majority of Judges did not subscribe to the view taken in respect of Article 39(b) by Justice Iyer. The view taken by Justice Iyer was affirmed by a Constitution Bench in the case of Sanjeev Coke Manufacturing v. Bharat Coking Coal Ltd. (1982). This was also affirmed by a judgment in the case of Mafatlal Industries Ltd. v. Union of India.
The seven-judge bench in the present matter stated that this interpretation of Article 39(b) required to be reconsidered by a Bench of nine learned Judges. It held–
"We have some difficulty in sharing the broad view that material resources of the community under Article 39(b) covers what is privately owned."
Accordingly, the matter was referred to a nine-judge bench in 2002.
The report will be updated once the judgment is uploaded.
Case Details: Property Owners Association v. State of Maharashtra (CA No.1012/2002) & Other Connected Matters
Reports of the hearing :
Do Private Properties Come Under 'Material Resources Of Community' To Be Distributed For Common Good? Supreme Court Starts Hearing On Article 39(b)