Explainer : Issues In 9-Judge Bench Matters Which Supreme Court Will Hear Soon

On October 12, 2023, the Supreme Court is gearing up for a significant day as a bench presided by CJI DY Chandrachud will be heading for completion of pre-hearing steps in four longstanding nine-judge bench matters. All these matters have lingered on the legal horizon for quite an extended period, some even dating back to a decade or two. These matters cover a variety of important topics, including interpretation of equitable sharing of community resources under Article 39(b) of the Constitution, the interpretation of tax laws and whether 'royalty' can be considered in the nature of tax, what qualifies as an 'industry' under the Industrial Disputes Act, and the division of powers between the Central Government and State Legislature when it comes to regulating industries. 

This article provides with a brief summary of all the four cases lined up before the Supreme Court. 

1. Property Owners Association v. State of Maharashtra (CA No.1012/2002)

This 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 2023. 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. 

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, 1976. Chapter-VIIIA deals with the acquisition of specific properties, wherein the State requires a 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. 

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

The reference was with regards 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 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. 

2. Mineral Area Development v. M/S Steel Authority Of India & Ors (CA N0. 4056/1999)

This matter was referred to a nine judge bench in 2011. This batch of petitions deals with a challenge to the Bihar Coal Mining Area Development Authority (Amendment) Act, 1992 and the rules framed thereunder, which imposed additional cess and taxes on land revenue due from mineral-bearing lands. The three judge bench had framed eleven questions to be referred to the nine judge bench. These include important tax law question such as whether 'royalty' can be considered as being in the nature of tax and can the State Legislature while levying a tax on land adopt a measure of tax based on the value of the produce of land. The three judge bench clarified in this case that the reason why it was not referred to a five-judge bench and directly referred to a nine-judge bench was because prima facie, there appeared to be some conflict in the decisions of State of West Bengal v. Kesoram Industries Ltd. and Ors which was delivered by a bench of five-Judges and India Cement Ltd. and Ors. v. State of Tamil Nadu and Ors. which was delivered by a seven-judge bench. 

Accordingly, to resolve the conflict, the matter was referred to a nine-judge bench in 2011.

3. State of UP v. Jai Bir Singh (CA No. 897/2002)

The issue that arises in this matter pertains to the definition of "Industry" under Section 2(j) of the Industrial Disputes Act, 1947. The matter was initially referred to a five-judge bench to determine whether social forestry department of State, which was a welfare scheme undertaken for improvement of the environment, would be covered by the definition of "Industry". The issue had arisen when two different benches of the court had culled out differently the ratio of the seven judges' Bench in Bangalore Water Supply and Sewerage Board v. A. Rajappa. While one bench had held that as per Bangalore Water Supply, "Social Forestry Department" was covered by the definition of "industry", the other bench held otherwise.

The definition of the term "industry" is of great importance as any person working in an industry as defined by the Industrial Disputes Act is entitled to various protections under the Act such as mandatory notice period, maximum hours of work, leaves etc. The five judge bench stated that the interpretation of the term "Industry" had not been unanimous and clear in Bangalore Water Supply and the same had resulted in different benches coming to do different conclusions regarding the same. Accordingly, it was referred to a larger bench. While doing so, the five judge bench, in 2005 had held–

"Pressing demands of the competing sectors of employers and employees and the helplessness of legislature and executive in bringing into force the Amendment Act compel us to make this reference."

In 2017, a seven-judge Bench of the Supreme Court passed an order for the constitution of a nine-judge Bench to hear the matter. 

4. State of UP & Ors. v. M/S Lalta Prasad Vaish (CA No.151/2007)

This matter, which was referred to a nine judge bench in 2007, pertains to interpretation of Section 18G of the the Industries (Development and Regulation) Act, 1951. Section 18G allows the Central Government to ensure that certain products related to scheduled industries are distributed fairly and are available at reasonable prices. They can do this by issuing an official notification to control the supply, distribution, and trade of these products. However, as per Entry 33 of List III of the Seventh Schedule to the Constitution, the State legislature has the power of regulating trade, production, and distribution of products from industries under Union control and similar imported goods. It was argued that in Synthetics and Chemical Ltd. vs. State of U.P., a seven judge bench had failed to address Section 18G's interference with the concurrent powers of the State. Accordingly, the Supreme Court held–

"If the decision in the Synthetics and Chemicals case (supra) with regard to the interpretation of Section 18-G of the 1951 Act is allowed to stand, it would render the provisions of Entry 33 (a) of List III nugatory or otiose."

The matter was then referred to a nine judge bench.

Also Read - 15 Nine-Judge Bench Decisions In Supreme Court's History