 of Constitution: Supreme Court){kind=link}
The Supreme Court on Tuesday ruled that all private properties could not form part of the ‘material resources of the community,’ which a State was obliged to equitably redistribute as per the Directive Principles of State Policy under Article 39(b) of the Constitution.
The nine-judge Constitution Bench, led by Chief Justice of India DY Chandrachud, further held by a majority of 8:1, that some private properties might come under Article 39 (b), provided they were material and belonged to the community.
The nine-judge bench comprised Justice Hrishikesh Roy, Justice BV Nagarathna, Justice Sudhanshu Dhulia, Justice JB Pardiwala, Justice Manoj Misra, Justice Rajesh Bindal, Justice Satish Chandra Sharma and Justice Augustine George Masih.
CJI Chandrachud authored the majority judgment. Justice Nagarathna partially concurred with the verdict, while Justice Dhulia gave a dissenting opinion.
The majority verdict held that though the phrase ‘material resources of the community’ might theoretically include privately-owned resources, the expansive view expressed by Justice Krishna Iyer’s minority judgment in Ranganath Reddy and relied on by Justice Chinnappa Reddy in Sanjeev Coke could not be accepted.
The single-sentence observation in Mafatlal to the effect that ‘material resources of the community’ include privately-owned resources was not part of the ratio decidendi of the judgment and not binding on the Court, it noted.
As per the Apex Court, not every resource owned by an individual could be considered a material resource of the community merely because it met the qualifier of material needs.
Enquiry on whether a resource fell within the ambit of a “material resource of community” must be based on the nature and characteristics of the resource, its impact on the well-being of the community, scarcity of the resource, and the consequence of such a resource being concentrated in the hands of private players. The public trust doctrine could also be applied here, held the Apex Court.
It said the term ‘distribution’ had a wide connotation. The various forms of distribution that could be adopted by the State, could include vesting of the concerned resource in the State or nationalisation.
The judgment authored by the CJI further held that the views expressed by Justice Krishna Iyer and Justice Chinnappa Reddy were rooted in a particular economic ideology. The framers of the Constitution did not intend to bind the country with any particular economic dogma, it noted.
Article 31C, to the extent it was upheld in the Kesavanda Bharati case, would remain in force, the top court of the country held unanimously.
Justice Nagarathna observed that privately-owned resources, except for personal effects (such as ornaments, utensils, furniture, articles of daily need, etc) could come under the ambit of the term ‘material resources of community’.
The nine-judge Constitution Bench passed the order, while hearing a batch of petitions initially heard in 1992. The matter was referred to a nine-judge bench in 2002. After remaining in limbo for over two decades, it was taken up for hearing in 2024.
The Apex Court had to decide on 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.
As per Article 39(b), “The State shall, in particular, direct its policy towards securing 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) was to be interpreted as any resource, which was 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 Centre 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 government urged that it was a community’s dynamic interactions that moulded the meaning of ‘Material Resources’. In a community, different individuals have different interactions and business transactions. This made the sum total of a community’s wealth, to which each individual, through its economic interactions, contributed. Thus ‘resource’ under Article 39b meant a common economic base, it added.
The matter pertained to 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 dealt with the acquisition of specific properties, wherein the State required 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. In State of Karnataka vs Ranganatha Reddy & Anr (1978), two judgments were delivered.
The verdict 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 verdict 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 vs Bharat Coking Coal Ltd (1982). This was also affirmed by a judgment in the case of Mafatlal Industries Ltd vs 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 that the Court had some difficulty in sharing the broad view that material resources of the community under Article 39(b) covered what was privately-owned.
The matter was then referred to a nine-judge Bench in 2002. After remaining in limbo for over two decades, it was taken up for hearing in 2024.
The Apex Court had to decide on 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.
As per Article 39(b), “The State shall, in particular, direct its policy towards securing 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) was to be interpreted as any resource, which was 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 Centre 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 government urged that it was a community’s dynamic interactions that moulded the meaning of ‘Material Resources’. In a community, different individuals have different interactions and business transactions. This made the sum total of a community’s wealth, to which each individual, through its economic interactions, contributed. Thus ‘resource’ under Article 39b meant a common economic base, it added.
The matter pertained to 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 dealt with the acquisition of specific properties, wherein the State required 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. In State of Karnataka vs Ranganatha Reddy & Anr (1978), two judgments were delivered.
The verdict 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 verdict 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 vs Bharat Coking Coal Ltd (1982). This was also affirmed by a judgment in the case of Mafatlal Industries Ltd vs Union of India.
he 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 that the Court had some difficulty in sharing the broad view that material resources of the community under Article 39(b) covered what was privately-owned.
The matter was then referred to a nine-judge Bench in 2002