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'The ruling does not automatically mean that your house can be taken away, but suppose it blocks an expressway or a highway or such essential development, then it can be taken away as long as there is a law to support that action.'
Tuesday's Supreme Court landmark judgment where a nine-judge Constitution Bench ruled that not all private property can be deemed 'material resource of the community', has been hailed for various reasons.
The 8: 1 ruling comes after three decades of pending in various courts and 16 petitions filed. The lead petition was filed in 1992 by the Mumbai-based Property Owners' Association. Since then, they were referred thrice to larger Benches of five and seven judges before being referred to the nine-judge Bench on February 20, 2002.
India itself has seen a sea change from State control over most resources to liberalisation in the early 1990s which unshackled the private sector.
Chief Justice D Y Chandrachud wrote the majority ruling for himself, and the Bench included Justices Hrishikesh Roy, J B Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma and Augustine George Masih. Justice B V Nagarathna wrote a concurring opinion while Justice Sudhanshu Dhulia dissented.
Sanjay Hegde, an articulate senior advocate of the Supreme Court, tells Rediff.com Contributor Shobha John that this ruling gives a fillip to protection of personal property rights as the State cannot grab everything just because material resources belong to the community.
How significant is the November 5, 2024 nine-bench ruling of the Supreme Court striking down the State's power to seize private property?
Does that mean that the State cannot take over property if it wants to build a metro or an airport for which it will compensate?
No, not at all. All property disputes are over compensation. Sometimes the compensation may not necessarily be adequate, but courts do not generally interfere unless the compensation is manifestly unfair.
This ruling gives a little bit of fillip towards protection of personal property rights. The Constitution gives protection to property rights.
This issue has had a long history in courts where Article 31C, the provision that shielded laws enacted to give effect to Article 39(b), was inserted through the Constitution (Twenty-fifth) Amendment, 1971, to bring in a socialist economic policy.
However, this amendment was partially struck down in the landmark 1973 Kesavananda Bharati ruling. But a significant portion was not struck down. The present ruling has now clarified that the part not struck down by Kesavananda still stands.
Attorney General R Venkataramani, who appeared for the Union of India, submitted that 'all things in the material world constitute the material resources of the community'.
What is your opinion about this? For example, if I build a house, can this be part of the community?
He meant that all resources belong to a community. To this submission, the apex court ruling said that one can't just grab everything. However, there can be special situations such as war where 'material resources' can be taken over by the State.
The ruling does not automatically mean that your house can be taken away, but suppose it blocks an expressway or a highway or such essential development, then it can be taken away as long as there is a law to support that action.
The ruling overturned a 1978 ruling by Justice V R Krishna Iyer which stated that material resources of the community covered all resources -- natural and man-made, publicly and privately owned.
Do you think Justice Krishna Iyer was correct at the time in giving this ruling when India was still a socialist nation?
The present judgment says that Justice Iyer was influenced by a 'particular school of economic thought'. What did he mean by 'material resources'?
India is still a socialist nation. The word socialist was added to the Preamble of the Constitution by the 42nd Amendment of 1976. However, economic policies change and should be taken into consideration during rulings. The Constitution is also living document which can be interpreted in various ways.
'Material resources' are mentioned in Articles 39B and 39C. They are related to the distribution of resources and the economic system.
While Article 39B says the ownership and control of the community's material resources should be distributed to serve the common good, Article 39C says that the concentration of wealth and means of production cannot be used to the common detriment.
'Material resources' can include almost anything such as water, mining, spectrum, the right to run road transport vehicles...and its interpretations may have changed since the Constitution was framed.
Chief Justice Chandrachud said in the present ruling that determining whether a resource falls within the private category requires evaluating factors such as the resource's nature, its impact on public welfare, scarcity, and the consequences of it being privately held.
Won't this evaluation be a long process and add to pendency of cases?
Yes, it will be a long process -- 'material resources' is not a catch-all phrase. If the State claims that a certain object is its material resource, it will have to explain to the court how it is.
In Mumbai, there are many old buildings where the rent is as low as Rs 50 in some cases. Landlords can't even maintain them. However, the Maharashtra legislation said that if the tenants can come together and pay 100 months' rent as compensation, it will be their property to own and maintain.
Tenants being given property rights and extinguishing the landlord's rights would be valid as property would be material resources of the community being redistributed.
Can a rigid interpretation of 'community resources' hinder private ownership and entrepreneurial growth?
Phrases in the Constitution are inheritances which successive judges and lawyers have found meaning according to their own interpretation. Questions of hindering entrepreneurship and growth are questions of economic philosophy not amenable to easy adjudication.