Can private property be used as a community resource? What is Article 39(b)? Why it needs SC’s interpretation

Amid the controversy over the country’s wealth distribution, the Supreme Court, in an unrelated case, has begun the process of interpreting Article 39(b) of the Constitution, which allows the government to acquire and redistribute private property if it is considered “material resources of the community”.

According to the Directive Principles of State Policy, Article 39(b) imposes the obligation on the state to create policies aimed at securing “the ownership and control of the material resources of the community are distributed in such a way as to serve the public interest benefits”.

Directive principles are guiding principles for the development of laws, which cannot be directly enforced by the courts.

The bench comprising Chief Justice DY Chandrachud and Justices Hrishikesh Roy, BV Nagarathna, S Dhulia, JB Pardiwala, Manoj Misra, R Bindal, SC Sharma and AG Masih weighed on the interpretation of Article 39(b) in State of Karnataka vs. Shri Ranganatha Reddy case in 1977. The seven judges ruled that private resources did not fall within the scope of “material resources of the community.”

It was Justice Krishna’s dissenting views that formed the basis of what community resources are. Justice Iyer opined that private resources should be considered as material resources of the community. “Everything of value or use in the material world is a material resource and the individual who is a member of the community, his resources are part of those of the community. By excluding ownership of private resources from the rules of Article 39(b), the purpose of Article 39(b) is deciphered, which is to redistribute in a socialist manner,” Iyer argued.

When SC relied on the opinion of Justice Iyer

Justice Iyer’s opinion was upheld by a five-judge bench of the Supreme Court in the case of Sanjeev Coke Manufacturing Company vs Bharat Coking Coal, 1983. The court upheld the central legislation that nationalized coal mines and their respective coke oven factories, relying on what Justice Iyer had specifically. It stated that the provision “limits the transformation of wealth from private to public ownership and is not limited to what is already owned by the government.”

In Mafatlal Industries Ltd v Union of India (1996), Justice KS Paripoornan in the nine-judge bench further endorsed Justice Iyer’s interpretation of Article 39 (b). Justice Paripoornan stated that the term “tangible resources” includes not only natural or physical resources, but also movable or immovable property, and includes both private and public assets.

In 1986, invoking Article 39(b), Section 1A was added to the Mumbai Building Repair and Reconstruction Board (MHADA), allowing plans for acquisition of lands and buildings to be transferred to “needy persons ” and the “occupiers of such land or buildings”. . The amendment also introduced Chapter VIII-A, which gave the state government the power to acquire abandoned buildings and their land if 70% of residents made such a request.

The Property Owners’ Association of Mumbai has challenged Chapter VIII-A of the MHADA in the Bombay High Court, alleging violations of the right to equality of property owners under Article 14 of the Constitution. However, the court upheld the laws promulgated in accordance with the DPSP, citing Article 31C of the Constitution (“Retention of laws giving effect to certain directive principles”).

The Association appealed this decision to the Supreme Court in December 1992. The key question for the SC was whether “material resources of the community” within the meaning of Article 39(b) include private resources, including abandoned buildings. judge Bench referred the matter to a larger Bench citing the need to reconsider the views expressed in Sanjeev Coke Manufacturing.

CJI Chandrachud explained why there is a need for the interpretation of Article 39(b) by the nine judges. “The reason for the exercise before the nine-judge bench is that while the majority in the Ranganathan Reddy case in 1977 made it clear that material resources of the community did not include private property, a five-judge bench in Sanjeev Coke in 1983 relied on Justice Iyer. ignoring that it was a minority view,” he said The times of India.

“Meanwhile, in the 1997 Mafatlal Industries case, the SC held that Article 39(b) should be interpreted by a nine-judge bench,” the CJI said.