In a significant ruling regarding property rights, a 9-judge bench of the Supreme Court of India declared that not all private property can be classified as a “material resource of the community” for redistribution under Article 39(b) of the Constitution. This decision was announced on Tuesday and has profound implications for citizens’ rights to hold property.
The majority opinion stated that while the term “material resource” in Article 39(b) may encompass privately owned resources, not all such resources fall under this classification. Chief Justice D Y Chandrachud authored the majority ruling, supported by Justices Hrishikesh Roy, J.B. Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma, and Augustine George Masih. Justice B.V. Nagarathna provided a concurring opinion, while Justice Sudhanshu Dhulia dissented.
Background and Context
This ruling addresses a constitutional reference pending since 1992 and revises decades of Supreme Court jurisprudence on the matter. Historically, a series of judgments had determined that both public and private resources were considered “material resources of the community” under Article 39(b), based on a minority opinion by Justice Krishna Iyer in the 1977 case State of Karnataka v. Shri Ranganatha Reddy. A later ruling in 1982 affirmed Iyer’s position.
The Supreme Court’s majority opinion now challenges Justice Iyer’s interpretation, which broadly defined “material resources.” The court stated that his view suggested that any resource meeting material needs could be included, which would allow the government to nationalize these resources under Article 39(b).
Interpretation of Article 39(b)
Article 39(b), part of the Directive Principles of State Policy (DPSP), mandates the state to ensure that the ownership and control of material resources are distributed to serve the common good. Although DPSPs guide legislative action, they are not enforceable in court.
The majority opinion articulated that Justice Iyer’s interpretation aligned with a specific economic ideology. It noted that declaring all private resources as part of the community disregards essential qualifiers such as “material” and “community.” The court emphasized that “the words of the community must be understood as distinct from the individual.”
The ruling clarified that if Article 39(b) intended to cover all privately owned resources, it would explicitly state so. The current phrasing indicates an intention to include only certain private resources without excluding them as a class.
Economic Democracy and Constitutional Framework
The Supreme Court asserted that its role is not to dictate economic policy but to uphold the foundational principles of economic democracy laid out by the Constitution. Chief Justice Chandrachud reflected on India’s economic evolution, noting shifts from heavy public investment to a balanced coexistence of public and private investments.
He pointed out that past rigid economic theories advocating state control over private resources have been consistently rejected by voters who have supported diverse governments with varying economic policies. The court maintained that enforcing a single economic theory that promotes state acquisition of private property would compromise the constitutional framework.
The ruling highlights the importance of allowing the electorate to determine the direction of economic policy in India, ensuring that the nation continues to grow as one of the fastest-growing economies globally.
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