Can Private Property Be Redistributed As 'Material Resources Of Community' As Per Article 39(b)?Supreme Court To Deliver Verdict Tomorrow

The 9-judge bench which considered the issue comprises 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 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.

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)

Supreme Court Doubts Argument That Private Property Isn't Included In 'Material Resources Of Community' As Per Article 39(b) [Day 2]

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

Should Legislature Specifically Delete Provisions Which Are Struck Down By Courts? Supreme Court Discusses [Day 3]

Justice Krishna Iyer's View On Private Property 'Little Extreme'; Can't Adopt Unbridled Communist Or Socialist Agenda To Define Article 39(b): Supreme Court [Day 4]

Are Private Properties Included In "Material Resource Of Community" Under Article 39(b)? Supreme Court 9-Judge Bench Reserves Judgment