Not All Private Property Qualifies as a ‘Material Resource of the Community’ for Redistribution
Context:
The Supreme Court today (November 5) held by a majority of 8:1 that all private properties cannot form part of the ‘material resources of the community’ which the State is obliged to equitably redistribute as per the Directive Principles of State Policy under Article 39(b) of the Constitution.
Case Name:- Property owners Association v/s State of Maharashtra and other connected matters. 19 such cases were merged together.
What is Article 39(b)?
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 sub serve the common good.
Previous Cases:
State of Karnataka v/s Ranganatha Reddy & Anr. (1978): This case saw a 7 Judges Bench, by a 4:3 majority, holding that privately owned resources did not fall within the ambit of “material resources of the community”.
- In this case, Justice Krishna lyer delivered a dissenting opinion that privately owned resources should be considered material resources of the community. (4:3)
Sanjeev Coke Manufacturing v/s Bharat Coking Coal Ltd. (1982) (5 Judges Bench): The Constitution Bench affirmed Justice lyer’s opinion in this case. In this case, the Supreme Court upheld central legislation that nationalized coal mines and their respective coke oven plants relying on what justice lyer had ruled.
Mafatlal Industries Ltd. v/s Union of India (1993): In this case, the court felt that a nine-judge Constitutional Bench was needed to interpret Article 39(b).
Issues before the current constitutional bench 9 Judges Bench:
There were two key issues:
- Does Art. 31C still exist?
- Interpretation of Art. 39(b) of the constitution.
Does Art. 31C still exist?
Original Intention of Art. 31C (inserted through 25th Constitutional Amendment Act):
- Article 31C originally stood to protect laws enacted to ensure the “material resources of the community” are distributed to serve the common good (Article 39(b)) and that wealth and the means of production are not “concentrated” to the “common detriment” (Article 39(c)).
- It said no law giving effect to the policy of the State towards securing shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Art. 14 & 19 or Art. 31.
- No judicial review allowed.
Supreme Court in Keshavananda Bharti Case:
- Supreme Court upheld the validity of Art. 31C.
Parliament response in 1976
- Parliament enacted the 42nd Constitutional Amendment Act. Which expanded the protection under Art. 31C to all or any of the principles laid down in Part IV of the constitution.
- As a result, every single DPSP (Art. 36-51) was protected from challenges under Art. 14 & 19.
Supreme Court response in Minerva Mills v/s Union of India (1980):
- Supreme Court stuck down the changes made under 42nd Constitutional Amendment Act.
In 2024, the question before the SC was whether the SC between 1978-1980 struck down Article 31C as a whole, or did it restore the post-Kesavananda Bharati position wherein Articles 39(b) and (c) remained protected.
- The SC has said that the post-Kesavananda position is restored.
Interpretation of Article 39(b) of the Constitution:
The second question before the Court was whether the government can acquire and redistribute privately owned properties if they are deemed as “material resources of the community” — as mentioned in Article 39(b) of the Constitution.
Supreme Court ruling (8:1):
- The government cannot acquire and redistribute all privately owned properties deeming them “material resources of the community”, as mentioned in Article 39(b) of the Constitution.
- The SC has now effectively held against Justice Iyer’s position.
- “The phrase may include privately owned resources….Not every resource owned by an individual can be considered a material resource of the community merely because it meets the qualifier of material needs,”.
- The enquiry on whether a resource falls within the ambit of “material resource of community” must be based on
- The nature of the resource,
- The characteristics of the resource,
- The impact of the resource on the well-being of the community,
- The scarcity of the resource, and
- The consequence of such a resource being concentrated in the hands of private players.
- The public trust doctrine can also be applied here.
- The majority judgment also observed that the views expressed by Justice Krishna Iyer and Chinnappa Reddy were rooted in a particular economic ideology.
- The majority observed that the framers of the Constitution did not intend to bind the country with any particular economic dogma.
Conclusion
The Supreme Court’s recent ruling marks a pivotal moment in defining the scope of Article 39(b) of the Indian Constitution. By holding that not all privately owned property qualifies as “material resources of the community” subject to state redistribution, the Court has set a boundary on government intervention in private ownership. The decision upholds the constitutional balance between protecting individual property rights and promoting public welfare. By introducing criteria to assess whether a resource serves the community’s material needs, the Court has provided a framework that respects both the need for economic equity and the importance of private property rights. This ruling reinforces the vision of the Constitution’s framers, acknowledging that while public welfare remains a priority, it must not come at the unchecked expense of private ownership.
It is very informative sir. Thanks Civils Phodo!!