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The Supreme Court (SC) on Wednesday started hearing a case regarding the government's jurisdiction to requisition and redistribute private properties, should they be deemed "material resources of the community" as per Article 39(b) of the Constitution. The court is hearing the matter amid a separate political debate on the issue.
Notable dissenting opinion
Article 39(b), falling within Part IV under the "Directive Principles of State Policy" (DPSP), instructs the state to formulate policies ensuring that "the ownership and control of the material resources of the community are so distributed as best to subserve the common good." While the DPSP serves as a guide for legislative action, it lacks direct enforceability in courts.
Since 1977, the Supreme Court has interpreted Article 39(b) in several cases, prominently in State of Karnataka v Shri Ranganatha Reddy (1977). In this case, a seven-judge Bench, by a 4:3 majority, determined that privately owned resources did not fall within the ambit of "material resources of the community." However, it was the minority opinion articulated by Justice Krishna Iyer that would later carry significant influence.
Justice Iyer contended that privately owned resources should indeed be perceived as material resources of the community. He argued, "Every thing of value or use in the material world is material resource and the individual being a member of the community his resources are part of those of the community. To exclude ownership of private resources from the coils of Article 39(b) is to cipherise (make hidden) its very purpose of redistribution the socialist way."
Supreme Court affirms Justice Iyer’s opinion
Iyer’s opinion on Article 39(b) was upheld in a subsequent ruling by a five-judge Supreme Court Bench in Sanjeev Coke Manufacturing Company v Bharat Coking Coal (1983). The court upheld legislation that nationalised coal mines and their coke oven plants, drawing from Justice Iyer's earlier interpretation.
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It stated that the provision "takes within its stride the transformation of wealth from private-ownership into public ownership and is not confined to that which is already public-owned."
Notably, this verdict did not explicitly reference Justice Iyer's minority view or the majority's dissociation from it ("We must not be understood to agree with all that he [Justice Iyer] has said in his judgment in this regard," noted Justice N L Untwalia in the majority opinion).
Subsequent concurrences, such as that of Justice K S Paripoornan in the nine-judge Bench case of Mafatlal Industries Ltd v Union of India (1996), further endorsed Justice Iyer's interpretation of Article 39(b). Justice Paripoornan stated that the term "material resources" encompasses not only natural or physical resources but also movable or immovable property, encompassing both private and public assets.
Dispute over cessed properties
The ongoing case before the Supreme Court stems from a challenge to the 1986 amendment to the Maharashtra Housing and Area Development Act, 1976 (MHADA) by proprietors of 'cessed' properties in Mumbai.
Enacted in 1976, MHADA aimed to tackle the issue of dilapidated buildings housing impoverished tenants in Mumbai. MHADA imposed a cess on occupants, directed to the Mumbai Building Repair and Reconstruction Board (MBRRB) for overseeing restoration projects.
In 1986, invoking Article 39(b), Section 1A was appended to MHADA, enabling plans for acquiring lands and buildings to transfer them to “needy persons” and the “occupiers of such lands or buildings”. The amendment also introduced Chapter VIII-A, granting the state government powers to acquire cessed buildings and their land if 70 per cent of occupants made such a request.
Three decades with the Supreme Court
The Property Owners’ Association in Mumbai contested Chapter VIII-A of MHADA in the Bombay High Court, alleging violations of property owners' Right to Equality under Article 14 of the Constitution. The court, however, upheld the laws enacted in line with DPSP, citing Article 31C of the Constitution ("Saving of laws giving effect to certain directive principles").
The Association appealed this decision to the Supreme Court in December 1992. The central issue before the apex court was whether "material resources of the community" under Article 39(b) encompass privately owned resources, including cessed buildings. In March 2001, a five-judge Bench referred the case to a larger Bench, citing the need to reconsider the views expressed in Sanjeev Coke Manufacturing.
In February 2002, a seven-judge Bench took note of Justice Iyer's interpretation but expressed reservations, stating, "we have some difficulty in sharing the broad view that material resources of the community under Article 39(b) covers what is privately owned." Consequently, the challenge to Chapter VIII-A of MHADA was referred to a nine-judge Bench, which is presently deliberating on the matter.
