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In a landmark decision with significant implications for private property rights, a nine-judge bench of the Supreme Court ruled that not all private property qualifies as “material resources of the community” under Article 39(b) of the Constitution. The SC held that the government cannot acquire and redistribute all privately owned property by simply deeming them as “material resources of the community” under Article 39(b) of the Indian Constitution. SC Judgement on Private Property.
What has been the evolution of the Right to Property?
| Initially Fundamental Right | The right to property and compensation for acquisition were Fundamental Rights under Articles 19(1)(f) and Article 31. |
| 25th CAA passed to curtail property Rights | The 25th Amendment in 1971 introduced Article 31C. Article 31C provided immunity to laws aimed at fulfilling Articles 39(b) and (c) from challenges on the basis of Fundamental Rights violations, including property rights. However, in the Kesavananda Bharati case 1973, the Supreme Court upheld Article 31C but subjected it to judicial review. |
| Downgrading of Right to Property | The right to property was downgraded to a constitutional right under Article 300A in 1978. This allowed government acquisition of private property to serve a public purpose with fair compensation. |
What were the Key Questions of Deliberations on Private Property?
The SC deliberated on two key Questions on Private property-
a. Existence of Article 31C – The SC was examining whether Article 31C, which pertains to property rights, remains valid despite amendments and court rulings that have affected its scope.
| Article 31C | Article 31C- Article 31C was designed to protect laws aimed at ensuring the equitable distribution of resources for the common good (Article 39(b)) and preventing the concentration of wealth (Article 39(c)). |
| Evolution of Article 31C | In response to judicial challenges to government policies like bank nationalization, the 25th Amendment Act was introduced in 1971. 25th CAA expanded Article 31C to protect state laws implementing the principles of Article 39(b) and (c), even if they conflicted with rights under Articles 14, 19, and 31. In the Kesavananda Bharati case 1973, the Supreme Court upheld Article 31C but subjected it to judicial review. In 1976, the 42nd Amendment extended Article 31C to shield all Directive Principles (Part IV) from challenges. This extension was invalidated by the Minerva Mills judgment (1980), which reaffirmed only the protection for Article 39(b) and (c). |
b. Interpretation of Article 39(b) – The SC also deliberated on the question whether the government can categorize privately owned property as “material resources of the community” and thereby acquire it for redistribution.
| Article 39(b) | Article 39(b) mandates the state to promote equitable distribution of material resources of the community. |
| Historical Evolution of Position on Article 39 (b) | In State of Karnataka v Shri Ranganatha Reddy (1977), a seven-judge Bench by a 4:3 majority, ruled that privately owned resources are not necessarily “material resources of the community.” However, Justice Krishna Iyer’s dissenting opinion, held that “material resource of the community” in Article 39(b) extended to all national wealth, public or private, capable of meeting material needs. This view influenced subsequent cases like Sanjeev Coke Manufacturing Company v. Bharat Coking Coal Limited (1982) and Mafatlal Industries Limited v. Union of India (1996), supporting broader government control over private resources. |
What has been the SC judgement on the issue of private property?
In Property Owners’ Association v. State of Maharashtra, a seven-judge Bench sought clarification on Article 39(b), leading to the recent nine-judge decision. The majority opinion, led by seven judges including the Chief Justice, rejected Justice Krishna Iyer’s expansive interpretation of Article 39(b).
| Recent SC Judgement on Article 31C | The current ruling clarifies that the position post-Kesavananda Bharati remains valid, preserving Article 31C protections solely for Article 39(b) and (c). |
| Recent SC Ruling on Article 39(b) | The current ruling limits the government’s authority by rejecting the broad interpretation endorsed by Justice Iyer. The Court ruled that not all privately owned property can be deemed “material resources of the community” and thus safeguarded from automatic acquisition. Material Resource Consideration Factors- Factors like the public trust doctrine, the resource’s intrinsic qualities, its community impact, scarcity, and potential harm from private monopolization must be taken into consideration for consideration as material resource. Distribution Term Clarification- SC has held that the term “distribute” in Article 39(b) allows for either government acquisition or redistribution to private parties, as long as it serves the common good. |
What are the implications of the SC ruling?
1. Narrows Government scope in acquisition of Private Property- The SC ruling narrows the government’s scope to acquire private property under Article 39(b). The ruling emphasizes individual property rights and clarifies the limits on government power regarding private resources in society.
2. Support of “economic democracy”- The SC judgment states that the Court’s role is not to prescribe economic policy but to support “an economic democracy” as envisioned by the Constitution.
3. Respect for evolving market realities- SC has recognized the dramatic shifts in the nature of private property, from traditional assets to data and space exploration. The judgement emphasizes on the need to respect evolving market realities.
4. DPSPs Guiding Policies- The Supreme Court emphasized that the Constitution’s Directive Principles are guiding policies, not enforceable laws.
5. People’s role in shaping economic direction- The SC ruling affirms the people’s role, in shaping India’s economic direction and adaptation to changing global and domestic conditions.
6. Protection for marginalized communities- This judgment offers protection for marginalized communities against unjust acquisition of their small farms and forest lands while promoting responsible management of essential public resources.
7. Reinforcement of market-oriented economic model- The judgement has reinforced that India now follows a market-oriented economic model.
| Read More- Redistribution of wealth- Explained Pointwise |
Conclusion
The Supreme Court’s ruling reinforces a balanced approach to property rights, underscoring the Constitution’s flexibility in supporting both private ownership and community welfare. The judgment allows for some private resources to be used for the public good under Article 39(b) while preserving individuals’ property rights, supporting India’s economic growth within a democratic framework.
| Read more- The Hindu UPSC Syllabus- GS 2- Issues related to constitution |
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