On 23rd April, a 9-Judges Constitution Bench of the Supreme Court of India commenced the hearing to examine if material resources of the community may include privately owned resources under Article 39(b) of the constitution. Chief Justice of India DY Chandrachud, Justice Hrishikesh Roy, Justice BVNagarathna, Justice Sudhanshu Dhulia, Justice JB Pardiwala, Justice Manoj Mishra, Justice Rajesh Bindal, Justice Satish Chandra Sharma and Justice Augustine George Masih are part of the constitutional bench hearing the matter. It is one of the oldest pending cases in the apex court.
In 1992, a batch of petitions were filed in the Supreme Court and the matter was first heard by a three-judge bench. In 1996, it was referred to a five-judge bench and then to a seven-judge bench in 2001. Eventually, in 2002, it was referred to a 9-judge bench, and since then, it stayed in limbo for two decades. Finally, in 2024, the apex court listed the matter for hearing.
Understanding the background of the matter
The matter revolves around the constitutional validity of Chapter-VIIIA, which was introduced in 1986 as an amendment to the Maharashtra Housing and Area Development Act,(MHADA) of 1976. It deals with the acquisition of specific properties and requires the state to pay a rate equivalent to 100 times the monthly rent of the premises that needed to be acquired. Furthermore, Section 1A of the Act was also incorporated through the said amendment making it possible to implement Article 39(b) of the Constitution.
A series of petitions were filed when the Maharashtra government made a law to deal with old and unsafe buildings in Mumbai. These buildings, often occupied by tenants with landlords having no resources to repair them, would be taken over by the government as per the law under certain conditions to fix them up and transfer them to people who need housing.
With the law, the question came to the fore if privately owned properties could be seen as “material resources of the community” as mentioned in Article 39(b) of the Constitution. The Property Owners Association argued that the law was discriminatory against landlords and violated their rights to equality under Article 14 of the Constitution.
In 1978, the Supreme Court of India delivered two judgments in the matter of State of Karnataka vs Ranganatha Reddy & Anr. As per the judgment delivered by Justice Krishna Iyer, material resources of the community covered everything including natural and man-made resources, publicly or privately owned. However, in the second judgment delivered by Justice Untwalia, the necessity to express any opinion in connection to Article 39(b) was not considered. Furthermore, it was stated that the judges did not subscribe to the view with respect to Article 39(b) by Justice Iyer. In 1982, the Constitutional Bench affirmed the view taken by Justice Iyer in the matter of Sanjeev Coke Manufacturing vs Bharat Coking Coal Ltd. It was again affirmed by a 1996 matter of Mafatlal Industries Ltd vs Union of India.
Notably, in 2002 7-judges bench, before forwarding the case to the 9-judge bench, stated that the interpretation of Article 39(b) needed reconsideration. The court said, “We have some difficulty in sharing the broad view that material resources of the community under Article 39(b) covers what is privately owned.”
Bench refuses to reopen discussion on law under Article 31C of the Constitution
Notably, there is one important aspect of the case as a question was raised among the bench if the decision in the Kishavananda Bharati case should be revisited or not. Article 31C deals with certain principles in the Constitution related to the government’s policies. Originally, it said that laws made to achieve certain societal goals would not be cancelled just because they clash with individual rights guaranteed by the Constitution.
In Keshavananda Bharati, the court changed that perception. It said that though these laws could still be made, they could be reviewed by the court if they violated fundamental rights. Now, it is a question before the court if the decision in this particular case is still valid. One side in the case argues that as certain rights like equality mentioned in Article 14 and freedom of speech mentioned in Article 19 are considered important if any law violates these rights, it should be reconsidered. However, the other side argued that Keshavananda Bharati already settled this matter, confirming that Article 31C stands as it originally did. It provides government immunity to be challenged based on individual rights.
Notably, CJI made it clear that the bench was bound by the decision in Keshavananda Bharati as it was heard by a larger bench of 13 judges. They would not reopen discussion on the matter linked to Article 31C and the court would stick to its interpretations.
CJI: but we are a bench of 9 judges, we are bound by the decision of Keshavananda Bharati which upheld the provision of 31C as originally enacted. The originally enacted 31C gave a safe harbour provision in respect to the challenged in laws given in the DPSPs 39(b) and (c) on…
— Live Law (@LiveLawIndia) April 23, 2024
Understanding 39(b) and per CJI’s remarks on interpretations
First, let’s discuss what 39(b) of the Constitution says. Article 39(b) of the Constitution falls under Part IV, Directive Principles of State Policy. It reads, “Certain principles of policy to be followed by the State.—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.” It says that the government should focus on making sure that the ownership and control of resources like land, money and other resources are shared in a way that helps everyone in the society.
CJI stated that four main aspects of the Article 39(b) need to be discussed. First is the presence of all resources in the community. Second is the sharing of these resources within the community. Third is the resources owned and/or controlled by different agencies and finally how the resources owned and controlled are distributed. CJI remarked that there is a need to analyse the expression “ownership and control”. When it comes to ownership, it is a legal title over something. However, control over something covers a larger picture. Someone who controls a property is not looking at just ownership but using and maintaining it as well.
CJI: (4) ownerhsip and control of what? of the material resources , the distribution of what? the distribution of ownership and control of material resources . #SupremeCourtOfIndia #MaterialResources #Article39b
— Live Law (@LiveLawIndia) April 23, 2024
Here is an interesting interpretation. CJI rebutted the main proposition that private properties cannot be covered under Article 39(b). He gave the example of a mineral mine and said while the mine can be privately owned, it becomes a larger part of the material resourced that belonged to the community.
CJI said, “The dichotomy that 39b can never include private property, then it is very artificial, because when it says material resources of community it is agnostic to the title. It doesn’t mean that distinction that a case where the title vests in a person as opposed to the title in that community…..mines for instance, they may be private mines but in the broader sense they are a resource to the community.”
