Private Property Is Community Resource? Article 39(b) Can't Be Seen Through Economic Prism Or Political Ideology, AG Tells Supreme Court [Day 3]

Referring to Day 1 submissions of appellants, who contented that Justice Krishna Iyer's minority decision in State of Karnataka v. Ranganatha Reddy & Anr. (1978) reflected a 'Marxist' view, the AG argued to the contrary. Justice Krishna Iyer in his decision held that the expression 'Material Resources of the Community' included “all the private and public sources of meeting material needs, not merely public possessions.”

The AG explained that it would be incorrect to label the expression from the point of view of a certain economic or political ideology, especially one like Marxism which no longer stands the test of time today. Perhaps, the accurate lens to view the meaning of Article 39(b) is from the holistic purpose of the constitutional values which gave birth to the provision in question. Put simply, the interpretation of Article 39(b) should be from the standpoint of the ever-expanding constitutional principles and not a historical ideology entrapped in a prism.

We are not trying to ask the Court to look at Article 39(b) from an economic prism. Not a particular economic lens, the moment we try to bring into Article 39b any particular economic doctrine, it is going to crib, cabin, confine in it. It must have its openness. While it might come in at a point of time at a certain social, economic or ideological understanding, if it remains part of the Constitution it will receive that expansive meaning....but if we say that with the death of ideology, we don't need this Article to hang upon, there is a political story.

Recalling CJI's earlier observations from Day 2 about DPSPs imbibing the Gandhian ethos, especially that the property in Indian Constitutional Theory is held in 'trust', AG analysed this a notch further. When Gandhian idea of holding property in trust for future generations came under the scanner of Marxist critiques, for being too 'Bourgeoisie', the State and Society solved this challenge by amalgamating his ethos in the broader contours of the Constitution. It is this amalgamation of Gandhian ethos into the DPSPs which provides a blueprint to strive for a better tomorrow.

There was anyway a contestence of whether Marxism was dead or not, thankful that the CJI got Gandhiji's 'property in trust' issue...There was a large amount of criticism about when Gandhiji made a very interesting proposition. There was a lot of potential about it. Over there the Marxists criticised Gandhiji saying he was serving a Bourgeoisie interest - to borrow a Marxist expression. That is probably why we move towards the whole amalgamation of Gandhiji's successorship ideas, access to resources ideas and how do we build up...do we have a a blueprint for all that? That is why every experiment in the economic and social field is an experiment to move towards a better world.

The discussion then veered towards the context in which Justice Krishna Iyer interpreted Article 39(b). Justice Nagarathna posed if it would be correct to say that the minority decision should be seen as a caveat against privatization and liberalisation which is the order of the day today.

“Where private enterprises are being encouraged and as a result, the increase in private wealth would ultimately lead to an increase in the nation's wealth…..His Lordship Justice Krishna Iyer seems to warning us against what is the scenario today,” Justice Nagarathna said.

To which AG replied that Justice Krishna Iyer approached the issue by observing and sensing the social and constitutional fabric of the Country back in the day. That may be just one of the various approaches to see Article 39(b).

“He wrote at a point in time of his understanding of what would have been the reading of article 39b. I don't think....that's only one index of looking at 39b but I am looking at various indexes which have to be brought into 39b.”

Justice Nagarathna also emphasized that the idea of Justice had 3 forms- social, economic and political as enshrined in the preamble of the Constitution. It is in furtherance of social and economic justice of distribution of material resources that Article 39 was picturised.

“Social and economic Justice which is there in the Preamble of the Constitution ...Justice includes social and economic justice apart from the political Justice, so in order to ensure that goal of the Constitution we have this Article 39.”

AG agreeably added that the presence of different dimensions of Justice is the reason why an amalgamation of the various forms of Justice can be seen in the constitutional provisions as well as in the outlook of society. He gave the example of how a few overlook the fact that political, social and economic rights are all part of the common umbrella of Human Rights and have to be seen as compositely equal in importance rather than being arranged in a ladder of preference.

“That is why we are talking about this amalgamation of social, economic, and political dimensions of a society. For a long time, we had this dialogue that civil and political rights will have precedence over social and economic rights, but this all comes under Human Rights. They are all part of one common human rights endeavour. Therefore the interconnection between this.”

DPSPs Envisioned As The Roadmap For A Better World - Explains AG Venkataramani

Drawing an analogy from Oscar Wilde's expression - “ A map with a world which doesn't have Utopianism is not a world to land at all ”, the AG explained that the DPSPs were envisioned by the framers to show a roadmap for a better world.

The AG stressed that the 'understanding of the times' in which Countries like ours created their constitutions is an important aspect to consider when construing the intent of DPSPs and Fundamental Rights. The India that framed the constitution, was an India that had seen a sway of socio-political histories around the world. Be it the values of liberty, equality, and fraternity coined during the French Revolution or the subsequent influx of different political ideologies ranging from Marxism to Socialism to Utopianism, it was in this backdrop that DPSPs were birthed.

Perhaps, the Constitutional history, according to AG began with a premise that Part 3 (Fundamental Rights) and Part 4 (DPSPs) were at loggerheads, with the latter being an 'antithesis' to the concept of Fundamental Rights. The AG suggested that to see Part 4 as a polar opposite to Part 3 would not be a correct proposition. It is because of this assumption of 'antithesis' towards Part 4, the State is necessitated to devise workable solutions to scepticale responses.

It is in this light that the introduction of Article 31C is to be seen. The said assumption of a clash of goals between Part 4 and Part 3 led to the building of a protective inner wall within the DPSPs- Article 31C. The AG expressed that the question of whether such a wall was built too high or too low is a matter of different debate.

Article 31C provides a safe harbour to several welfare endeavours outlined in Part 4 and has to be seen as a measure taken to ensure the protection of Part 4 which is a roadmap towards a better world. In this roadmap towards a better world, Fundamental Rights under Part 3 can often pose challenges where individualist rights and needs demand attention. Thus the meaning of the provisions of the constitution have to be understood keeping in hindsight the overlapping yet equally important values that Part 3 and Part 4 hold. A mechanical interpretation to the interplay of Parts 3 and 4 would not be the ideal approach.

“So there is a wall of support for many of the endeavours of Part 4 of the Constitution....how do you draw a roadmap for a better world? if Part 3 is a provision for a saner and open society, but Part 4 is a roadmap for a better world. If it is a roadmap for a better world, then every step that the state takes is for a roadmap of the better world will always get interlocked with this open society claiming certain rights, interests etc . Therefore unless we have that understanding we are not reading constitution as a mere statute, a dictionary in one hand and a constitutional provision in the other hand which gives it meaning etc, we don't have to do that.”

The Concept of 'Resource' Evolves With The Changing Social Economy

Countering a previous argument raised by the appellants that 'Material Resource' is only that which produces wealth in the form of goods or services, the AG expressed that it is a community's dynamic interactions that mould the meaning of 'Material Resources'.

He explained that 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.

“We don't live in isolation, all of us live in interrelations, transactions, etc so the wealth we create, and the value we create are all by the interaction of economic activities. Resource mentioned in 39b essentially connotes an economic base, it should be understood from that framework.”

The CJI then interjected to ask whether a corporation that produces cars or semiconductors, or mobiles would constitute material resources of the community.

To which the AG simplified that what makes a thing a 'resource' has to be understood from the broader constitutional ideal of 'public goods'. While the initial focus of resources of public good as borrowed from Utopian or Socialist ideologies would have been limited to tangible assets like factories or land, especially in the 18th and 19th centuries, the true meaning of resource will always focus on the State's responsibility for subserving the common good. The extent of the State's interference in controlling and regulating these resources, however always remains a contemporary topic of discussion.

“They are all (both private and public assets) resources of the community, in the most fundamental constitutional sense. The next question of the extent of state in entering is a different question altogether…..I think today, regardless of the fact we have given up this socialist control model, regardless of all that, the need and necessity for the state at any point in time to take stock of the resources of the community for subserving the common good will always be an open question.”

Since every object whether private or public can be seen as a resource, the true test of understanding 'Material Resource' would be whether an asset/ thing can be utilised for the purpose of the community's holistic good. This demand for utility is perhaps ever-changing, and one has to see which resource is 'material' for the commune's united good in contemporary times.

“That is why it is important for us to understand that along with the moving times we receive some contemporary meanings to these expressions- that they would have served in ensuring that Constitutional provisions Article 39b and c play their role well. The moment we try to confine Articles 39b and c to concern only with land or mineral resources etc, then we are most probably missing the message under Articles 39b and c as it has evolved through times. The only way I thought to look at it was the distinction between material and non-material. What is non-material is certainly not within the ownership and control.

it was further contended that the term community is to be interpreted as a collective. Embedded in sociological concepts, community is where individuals as a collective lead an organised life.

“Community can be a nation, a part of the nation, a geographical area where people have an organised way of life is a community. In the large sociological understanding of the term.”

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 is finally being revisited 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 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.

A three-judge bench first heard this matter. In 1996, it was referred to a five-judge bench, which then referred to a seven-judge bench in 2001. Eventually, in 2002, the matter was put before a nine-judge bench.

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 of a nine-judge bench 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 bench hearing the issue comprises CJI DY Chandrachud and Justices Hrishikesh Roy, B.V. Nagarathna, Sudhanshu Dhulia, J.B. Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma and Augustine George Masih.

Case Details: Property Owners Association v. State of Maharashtra (CA No.1012/2002) & Other Connected Matters