Context:

The Nine-Judge Constitution Bench ruled by 7:2 that all 'private properties' cannot be considered' material resources of the community' under Article 39(b) of the Constitution.

Details

In the Property Owners Association & Ors. v/s State of Maharashtra & Ors case, the Supreme Court clarified that the government cannot seize private property by referring to it as "community resources."

Background of the case

Mumbai property owners challenged the constitutionality of Chapter VIII-A of the Maharashtra Housing and Area Development Act (MHADA), which allows for the acquisition of old buildings if 70% of residents request it.

The property owners claimed that the law violated their constitutional rights to equality before the law (Article 14) and the freedom to move and settle throughout India (Article 19).
The case was appealed to the Supreme Court after the Bombay High Court denied the petitions.

What were the key issues raised by the court in this case?

After the 42nd amendment was invalidated by the Court in the Minerva Mills case under Article 39(b), is Article 31C still part of the Constitution?

Does Article 39(b)'s definition of "material resources of the community" include privately held resources?

What is Article 31C, and how does it relate to this case?

The 25th Amendment Act added Article 31C to the Constitution to overcome judicial challenges by protecting laws that implement directive principles of state policy, specifically Articles 39(b) and 39(c), from being challenged on the basis of violating fundamental rights under Articles 14, 19, and 31 of the Constitution.

In Kesavananda Bharati's Case (1973), the Supreme Court established the doctrine of basic structure; certain fundamental features of the Constitution are beyond Parliament's amending power. The court partially overturned Article 31C, specifically the provision that prohibited laws from being challenged in court.

The 42nd Amendment Act of 1976 expanded the protection under Article 31C to include all directive principles of state policy (Articles 36-51) and shielded them from challenges under Articles 14 and 19. It aimed to prioritize directive principles over fundamental rights for socio-economic reforms.

In the Minerva Mills Case (1980), the Supreme Court overturned certain provisions of the 42nd Amendment Act, including clauses of Article 31C.

In this present case, the court argued whether laws aimed at ensuring equitable resource distribution (such as MHADA) could override private property rights under Articles 14 and 19.

What is the significance of Article 39(b) in the case?

Article 39(b) says that the State should try to distribute ownership and control of material resources in a way that benefits the public good.

The court viewed whether privately owned resources could be considered "material resources of the community" and thus subject to government acquisition or redistribution under this provision.

What was the Court's majority opinion?

The Court highlighted that Article 31C still protects laws that implement Articles 39(b) and (c), but only to the extent upheld in the Kesavananda Bharati case, which means that such laws cannot be challenged under fundamental rights.

The court clarified that Article 39(b) defines "material resources of the community", may include some privately owned resources, but this must be identified on a case-by-case basis, by considering the nature of the resource, impact on the welfare of the community, the scarcity of resources, and the effects of its concentration in private hands.

The court stressed that Article 39(b) allows for distribution through a variety of mechanisms, including state acquisition or nationalization, as long as it serves the common good.

The Court rejected the broad interpretation of "material resources of the community" and argued that the Constitution should not bind governments to a single economic ideology.

What is the significance of this judgment?

The Supreme Court verdict strengthened the protection of private property rights under Article 300A of the Constitution, while also allowing the government to acquire resources in the public interest.

This decision sets a case study for future cases related to property rights and government acquisitions of private resources. It establishes that, while private property is protected, the government has the authority to acquire private resources if they serve the common good, but only after taking into account specific factors such as resource scarcity and community impact.

The ruling establishes a balanced framework for resolving conflicts between private property rights and the state's obligation to ensure equitable resource distribution.

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Source:

Indian Express

Legal Service India

MONEYCONTROL