SC reserves verdict on whether private properties can be termed material resources of community

New Delhi: Nothing will be left for future benches if it is held that all private properties can be considered as 'material resources of the community' under Article 39(b) of the Constitution and consequently, the State can take those over to subserve the 'common good', the Supreme Court said on Wednesday.

Observing that such a judicial declaration will lead to a situation where no private investor would come forward to invest, a nine-judge Constitution headed by Chief Justice D Y Chandrachud, reserved its verdict on a vexed legal question that whether private properties can be considered 'material resources of the community' under Article 39(b) and taken over by State authorities for distribution to subserve the 'common good'.

The bench, also comprising Justices Hrishikesh Roy, B V Nagarathna, Sudhanshu Dhulia, J B Pardiwala, Manoj Misra, Rajesh Bindal, Satish Chandra Sharma and Augustine George Masih, will also deal with the legal sanctity of Article 31C of the Constitution in the wake of the Minerva Mills judgment.

The top court had, in the Minerva Mills case of 1980, declared two provisions of the 42nd Amendment, which prevented any constitutional amendment from being 'called in question in any court on any ground' and accorded precedence to the Directive Principles of State Policy over the fundamental rights of individuals, as unconstitutional.

Article 31C protects a law made under Articles 39(b) and (c) empowering the State to take over material resources of the community, including private properties, for distribution to subserve the common good.

Senior advocate Gopal Sankaranarayanan said the only issue that was referred to the nine-judge bench was whether private properties can be considered as material resources of the community and the bench need not go into the 'scope of resources'.

He said if the bench was to decide that material resources of the community included private properties also, then the question would be best answered.

"If we say all private properties comprise material resources of the community, then there is nothing left for future benches," the CJI said.

Sankaranarayanan said if a vaccine manufacturer sets up a company in 2019, then at that point in time, it is a private resource.

"But come March 2020 and we have COVID-19 hitting. Then that resource, which is entirely private, becomes a resource which is essential for the entire country," he said.

The bench said there should be some parameters to deal with such situations.

Sankaranarayanan said one can enter into the private domain but "to what extent? What degree? What can be touched? I think that is best left to the smaller benches to decide when that question arises."

"You tell a manufacturer of semiconductors and chips situated somewhere in Taiwan that well, you manufacture in India because India needs semiconductors and chips. But sorry, this is a material resource of the community, and you might just take it away. They will say sorry, I do not want to invest in your country. This is the protection which you are giving," the CJI said.

Sankaranarayanan said such democratic decisions will be taken by governments.

"The only question is, do we have a deficit of faith in that system that everything needs to be defined in a very stark fashion today?" he said.

Solicitor General Tushar Mehta, appearing for the Maharashtra government, said, "Article 39(b) envisages a national goal for the creation of a welfare State to strive for an egalitarian society or nation and proposes its use as a tool to be used by the legislature to enact legislations for distribution of material resources, whether owned by the government, community or individuals, to subserve the greater common good of citizens, community or even a village."

Mehta said the issue should be left to the wisdom of the legislature to decide what should constitute material resources at a given point in time, keeping in mind the dynamics of national and international economic configurations and constraints.

"Article 39(b) indirectly admits the limitations of the generation of the day to fully fathom the nature and character of future dynamics of economic situations the country is facing and would face and hence, leaves it to the legislature to deal with such situations appropriately to enable a government to adopt welfare measures and distribute material resources as best possible for the greater common good," he said.

"The term 'community', as used in Article 39(b), does not mean the community as understood in colloquial sense but in the broader sense of the society in general or a part thereof," he added.

The verdict was reserved after arguments were put forward by several lawyers, including Attorney General R Venkataramani and Mehta, for five days.

The bench heard 16 petitions, including the lead petition filed by the Mumbai-based Property Owners' Association (POA) in 1992.

The POA has opposed Chapter VIII-A of the Maharashtra Housing and Area Development Authority (MHADA) Act. Inserted in 1986, the chapter empowers State authorities to acquire cessed buildings and the land on which those are built if 70 per cent of the occupants make such a request for restoration purposes.

The MHADA Act was enacted in pursuance of Article 39(b), which is part of the Directive Principles of State Policy and makes it obligatory for the State to create a policy towards securing "that the ownership and control of the material resources of the community are so distributed as best to subserve the common good."