Not every private property can be taken over by govt: Supreme Court

Mangalore Today News Network

New Delhi, November 5, 2024: In a majority verdict, the Supreme Court on Tuesday ruled that not all private properties can be acquired by the government, even if it is for the greater good.

In the 7:1:1 majority judgment, the court said, “Not all privately-owned resources can be acquired by the State even as the State can stake claims over resources that are material and are held by the community, for the public good."

Supreme Court pronounced the verdict on a vexed legal question of whether private properties can be considered “material resources of the community" under Article 39(b) and taken over by State authorities for distribution to subserve the “common good".

A nine-judge constitution bench headed by Chief Justice DY Chandrachud pronounced the verdict which deals with the legal sanctity of Article 31C of the Constitution in the wake of the Minerva Mills judgment.

While CJI Chandrachud and six other judges pronounced the majority judgment, Justice Nagrathna partially concurred, and Justice Dhulia penned a dissent.

The court also said, “The role of this court is not to lay down economic policy but to facilitate to lay down economic democracy."

In the majority opinion, it held that not every resource owned by an individual met the “material resource" criteria merely because it qualified for the needs of a community.

What SC said in 1980 Minerva Mills case

The top court had, in the Minerva Mills case of 1980, declared two provisions of the 42nd Amendment, which prevented any constitutional amendment from being “called in question in any court on any ground" and accorded precedence to the Directive Principles of State Policy over the fundamental rights of individuals, as unconstitutional.

What does Article 31C say

Article 31C protects a law made under Articles 39(b) and (c) empowering the State to take over material resources of the community, including private properties, for distribution to subserve the common good.

The bench, also comprising Justices Hrishikesh Roy, B V Nagarathna, Sudhanshu Dhulia, J B Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma and Augustine George Masih, had reserved its verdict on the issue on May 1 after hearing arguments of different sides for five days.

On May 1, the nine-judge bench observed that nothing will be left for future benches if it is held that all private properties can be considered as “material resources of the community" under Article 39(b) of the Constitution and consequently, the State can take those over to subserve the “common good".

It had observed that such a judicial declaration will lead to a situation where no private investor would come forward to invest.

Senior advocate Gopal Sankaranarayanan for some of the parties had said the only issue that was referred to the nine-judge bench was whether private properties can be considered as material resources of the community and the bench need not go into the “scope of resources".

He had argued that if the bench was to decide that material resources of the community included private properties also, then the question would be best answered.

Solicitor General Tushar Mehta, appearing for the Maharashtra government, had argued that Article 39(b) envisages a national goal for the creation of a welfare State to strive for an egalitarian society or nation and proposes its use as a tool to be used by the legislature to enact legislations for distribution of material resources, whether owned by the government, community or individuals, to subserve the greater common good of citizens, community or even a village.

Mehta had submitted that the issue should be left to the wisdom of the legislature to decide what should constitute material resources at a given point in time, keeping in mind the dynamics of national and international economic configurations and constraints.

The top court had heard 16 petitions, including the lead petition filed by the Mumbai-based Property Owners’ Association (POA) in 1992.

The POA has opposed Chapter VIII-A of the Maharashtra Housing and Area Development Authority (MHADA) Act. Inserted in 1986, the chapter empowers State authorities to acquire cessed buildings and the land on which those are built if 70 per cent of the occupants make such a request for restoration purposes.

The MHADA Act was enacted in pursuance of Article 39(b), which is part of the Directive Principles of State Policy and makes it obligatory for the State to create a 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".