Can Any Government Take Over Private Property? Supreme Court Weighs In

A nine-judge bench of Supreme Court is hearing the matter

New Delhi:

A nine-judge bench of the Supreme Court, led by Chief Justice of India DY Chandrachud, is looking into a three-decade-old case to decide whether privately-owned property can be considered “material resources of the community” and taken over by the State. A frenetic election season and the BJP’s allegations regarding the Congress manifesto has put the spotlight on the legal battle.

Here is the look at the many aspects of this big case: 

The Political Backdrop

Prime Minister Narendra Modi recently alleged that the Congress has suggested in its manifesto that if the Opposition party comes to power in the ongoing Lok Sabha polls, it would take away private property, including houses, gold and vehicles, as part of a wealth redistribution plan.

The Congress has denied any such plan and accused the Prime Minister of trying to mislead the people. Its manifesto says that if elected, the Congress will conduct a nationwide socio-economic and caste census. “Congress will conduct a nation-wide Socio-Economic and Caste Census to enumerate the castes and sub-castes and their socio-economic conditions. Based on the data, we will strengthen the agenda for affirmative action.” The manifesto does not say anything about a plan to redistribute private property.

The Case And Its History

The case before the Supreme Court’s nine-judge bench dates back to 1986 when the Maharashtra government tweaked the Maharashtra Housing and Area Development Act, 1976 (MHADA). This allowed the Mumbai Building Repair and Reconstruction Board to acquire certain “cessed properties” for restoration purposes with the consent of 70 per cent of the residents. The amendment cited Article 39(b) of the Constitution that says “the ownership and control of the material resources of the community are so distributed as best to sub serve the common good”.

The Property Owners’ Association (POA), which represents over 20,000 landowners in Mumbai, challenged the amendment and said it gave untethered power to the board to forcibly take over residential complexes. In December 1991, the Bombay High Court junked the petitions on the ground that the government was duty bound to provide shelter to common people.

The POA and other petitioners moved the Supreme Court. Their petition was linked with Shivram Ramayya Yerala v State of Maharashtra and Pramila Chintamani Mohandas of Bombay, Indian Inhabitant v State of Maharashtra, which are among the oldest pending cases in the Supreme Court. The Supreme Court bench referred it to the five-judge Constitution bench, which referred it to a seven judge bench.

In 2002, the seven-judge bench led by then Chief Justice SP Bharucha referred the matter to a nine-judge bench.

In 2019, another key development took place — Maharashtra government amended the law again. According to the new amendment, if landowners failed to restore property within a deadline, the state government would take over the property. The state government stressed that this was a welfare legislation, but the landowners alleged a plan to snatch property and low prices and hand it over to contractors.

Last year, the Supreme Court said it would list the pending nine-judge bench cases for hearing. The matter was heard yesterday by a bench led by Chief Justice Chandrachud. The other eight judges on the bench are Justice Hrishikesh Roy, Justice BV Nagarathna, Justice Sudhanshu Dhulia, Justice JB Pardiwala, Justice Manoj Misra, Justice Rajesh Bindal, Justice Satish Chandra Sharma and Justice Augustine George Masih. A total of 16 petitions are before the court. 

The Critical Question

The key issue before the court concerns two provisions in the Constitution – Article 31c and Article 39(b). These are related to the Directive Principles of State Policy. The principles are not justiciable — meaning they are not subject to trial in a court — but are fundamental in the governance of the country. The Constitution says it shall be the duty of the State to apply these principles in making laws.

Article 39(b) says ownership and control of the material resources of the community are so distributed as best to subserve the common good. Article 31(c) protects laws giving effect to certain directive principles. This effectively means that no law enacted by the state under directive principles shall be deemed to be void on the ground that it is inconsistent with Article 14 and Article 19 of the Constitution that deal with fundamental rights, including the freedom of expression and the right to protest.

Among the directive principles is one that says the State shall “strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations”.

So the key question before the court is whether private property can be considered ‘material resources of the community’ and taken over by the State for the common good.

The Key Observations

Hearing the matter yesterday, the Chief Justice made some key observations. “If you look at the capitalist concept of property, it attributes a sense of exclusiveness to the property. This is my pen, exclusively mine,” he said. “The socialistic concept of property is the mirror image, which attributes to property a notion of commonality. Nothing is exclusive to the individual, all property is common to the community. That is (an) extreme socialistic view.”

India’s directive principles of state policy, he said, are in line with Gandhian ethos and ideology. “What is that ethos? Our ethos regards property that is held in trust. We don’t go as far as to adopt a socialistic model that there is no private property at all, of course, there is private property.”

“Our concept of property has undergone a very different, a very subtle change – from either the extreme capitalist perspective or the extreme socialist perspective. We regard property as something we hold in trust. We hold a property in trust for the succeeding generations in the family, but broadly we also hold the property in trust for the wider community, that’s the whole concept of sustainable development – that’s what we call intergenerational equity,” he said.

The Chief Justice said it may be a “little extreme” to suggest that ‘material resources of the community’ only mean public resources and we do not have their origin in the private property of an individual. “I will tell you why it would be dangerous to take that view. Take simple things like mines and even private forests. For instance, for us to say that the governmental policy will not apply to the private forests under Article 39 (b)… therefore keep the hands off. It will be extremely dangerous as a proposition,” he said.

The Chief Justice referred to the situation in the 1950s when the Constitution was drafted, “The Constitution was intended to bring about social transformation and we cannot say that Article 39 (b) has no application once the property is privately held.”

It, however, stressed that whether the Maharashtra law empowered authorities to take over dilapidated buildings was a different issue and would be decided independently.

The Chief Justice also referred to the abolition of the ‘zamindari’ system. “You must understand that Article 39 (b) has been crafted in a certain way in the Constitution because the Constitution was intended to bring about a social transformation. We shouldn’t therefore go that far to say that the moment private property is private property, the Article 39 (b) will have no application,” he said.

The matter will be heard again today.