Nature of private property | Day 2: Nine-judge Bench says it’s essential to decide the position of Article 31C

Nature of private property

Judges: D.Y. Chandrachud CJI, Hrishikesh Roy J, B.V. Nagarathna J, Sudhanshu Dhulia J, J.B. Pardiwala J, Manoj Misra J, Rajesh Bindal J, S.C. Sharma J, A.G. Masih J

Today, a nine-judge Constitution Bench of the Supreme Court continued to hear the case to decide whether “material resources of the community” under Article 39(b) included private property.

More specifically, the Bench is hearing challenges to Chapter VIIIA of the Maharashtra Housing and Area Development Act, 1976 (MHADA). Introduced in 1986, this Chapter allowed the Mumbai Building Repair and Reconstruction Board (MBRRB) to acquire certain “cessed properties” for restoration purposes with the consent of 70 percent of the residents. 

Yesterday, the Bench had steered clear of venturing into the constitutional position of Article 31C, a saving provision for laws enacted to give effect to Directive Principles of State Policy. Echoing the view adopted by Solicitor General Tushar Mehta, they reasoned that the reference before them was limited to the scope of Article 39(b). “It’s very clear that the ambit of the reference to nine judges is squarely only on the content of 39(b),” the Chief Justice had said. 

Today, in a surprising turn of events, the Bench observed that “31C has to be decided.” There would be a “radical constitutional consequence” if it was found that Article 31C did not exist after the decision in Minerva Mills v Union of India (1980). “Leaving things in constitutional uncertainty is also not a good thing for the nation,” the Chief said, before allowing Mehta on the respondent side and Senior Advocate Zal Andhyarujina on the petitioner side to make their arguments. 


Article 39(b), a Directive Principles of State Policy, obligates the State to ensure the distribution of “material resources of the community” to “subserve the common good.” 

In State of Karnataka v Shri Ranganatha Reddy (1977), five judges of the Supreme Court debated whether privately owned resources fell under the ambit of “material resources of the community.” A minority opinion by Justice Krishna Iyer stated that private property fell in the ambit of Article 39(b). 

Five years later, a five-judge bench in Sanjeev Coke Manufacturing Company v Bharat Coking Coal Ltd, led by Justice Chinnappa Reddy, adopted Justice Iyer’s minority view. In 1997, a nine-judge bench in Mafatlal Industries Ltd. v Union of India, followed the Sanjeev Coke precedent.

The challenges of the present case arose in 1986, when the Maharashtra government amended the Maharashtra Housing and Area Development Act, 1976 (MHADA) to insert Chapter VIII-A and Section 1A. Chapter VIII-A allowed the Mumbai Building Repair and Reconstruction Board to acquire certain “cessed properties”—primarily old, dilapidated buildings in Mumbai—for restoration purposes with the consent of 70 percent of the residents. Section 1A declared that the Act was aimed at implementing the principles enshrined in Article 39(b).

In December 1991, the Bombay High Court dismissed the petitions challenging Chapter VIII-A. The Court reasoned that the government was only trying to protect “the shelter of the occupiers in the old dilapidated buildings and saving life and property by preventing collapse of such buildings.” Further, the High Court also held that Article 31C of the Constitution bars any challenges on the grounds of Articles 14 or 19, if the statute has been enacted in furtherance of Article 39(b). The petitioners moved the Supreme Court. 

As the case lay pending, in 2019, subsequent amendments to the MHADA precipitated a new set of challenges. According to the new amendment, if landowners failed to restore property within a deadline, the state government could take over the property. The Property Owners Association (POA) alleged malicious intent on the state government. 

The dispute, which first reached the Supreme Court in 1992, now has several petitions tagged to it. After several references to larger benches, a nine-judge bench started hearing the case on merits on 24 April 2024. This bench is also hearing arguments on the constitutional position of Article 31C.

Intervenors: The right to “acquire” is not covered under Article 39(b)

The day’s hearings started with submissions from two intervenors on the petitioners’ side. 

Senior Advocate Uttara Babbar submitted that the objective envisioned under Article 39(b) was the “distribution” of a material resource of a community. A prerequisite to distribution, she submitted, was acquisition. In other words, the state could not distribute what it did not already have. In this backdrop, she reasoned that Chapter VIIIA of the MHADA was a law for acquisition. 

Since Article 39(b) only covered distribution and not acquisition, the Chapter in question could not be said to be enacted to give effect to the Directive Principle. Babbar referred to the Constituent Assembly Debates where the suggestion to add the word “vested” to the Draft Article 39(b) was rejected by the Assembly—she contended that this highlighted that the Article’s scope was limited to “distribution.”

Bench: Our Constitution has adopted a Gandhian ethos to the right to property

The Bench repeated their view from yesterday that it may not be in the best interest to hold that Article 39(b) could not include private property. CJI Chandrachud elaborated on the philosophy of the right to property. He explained that while the capitalistic view adopted an “exclusive” meaning to the right, the socialist view adopted the opposite view that the right to property was “common” to all. 

The Indian Constitution, he said, had adopted a Gandhian view in which property was viewed as a trust. This was evident in environmental law and the principles of sustainable development which state that property was borrowed from future generations on the basis of trust. 

In this context, the Bench noted that it was important to assess the intention of the framers when viewing Article 39(b). “We must understand that 39(b) has been crafted in a certain constitutional ethos. The Constitution was intended to bring about social transformation. So, we should not therefore go as far as to say that the moment property is private property, 39(b) and (c) will not apply.” 

Mehta: The constitutional position of Article 31C is not in question in the present case

In Minerva Mills, the Court had struck down the 42nd Constitutional Amendment which widened the scope of Article 31C to include the whole of Chapter IV instead of just Article 39(b) and (c). 

The confusion arises because previously, in Kesavananda Bharati v State of Kerala (1973), a 13-judge Constitution Bench had struck down part of the original Article 31C. 

When Article 31C was first introduced through the 25th Constitutional Amendment, it read as follows: 

“Notwithstanding anything contained in article 13, no law giving effect to the policy of the State towards securing the principles specified in clause (b) or clause (c) of article 39 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 article 14, article 19 or article 31; and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy.”

In Kesavananda Bharati the Court had struck down the second part of Article 31C, which precluded testing a law on the grounds of its nexus with Article 39(b) and (c).  

Later on, the 42nd Constitutional Amendment Act in 1976, substituted the words “principles specified in clause (b) or clause (c) of Article 39”, with the words “all or any of the principles laid down in Part IV.”

In 1980, a five-judge Constitution Bench invalidated the above amendment in Minerva Mills

So the question is whether after the Minerva Mills decision, the doctrine of revival applied and reinstated Article 31C as it existed after Kesavananda Bharati or whether the provision had ceased to exist altogether. 

The Chief stated that this question of law should fall before a bench of seven judges for consideration as Minerva Mills was a five-judge decision. However, since a nine-judge bench had already assembled, it would be in the best interest to “put an end to this controversy.”  

Mehta attempted to convince the Bench that the constitutional position was not in question in the present case. “Nobody has doubted that proposition which may give rise to a reconsideration by a larger bench,” he said. But the Chief Justice pointed out that in the first reference order in this matter, from 1996, the question of Article 31C does come up. 

The applicability of the doctrine of revival to constitutional provisions

Mehta argued in favour of the doctrine of revival, stating that the striking down of the 42nd Amendment in Minerva Mills meant that Article 31C was reinstated to its post-Kesavananda Bharati position. He referred to Waman Rao v Union of India (1980), where the Court had clearly stated that the majority judgements in Kesavananda Bharati suggested that the first part of Article 31C is valid. 

Mehta urged that the doctrine of revival was also upheld in Supreme Court Advocates-on-Record Association vs Union of India (2015), where a five-judge Bench had struck down the 99th Constitutional Amendment in a 4:1 majority. In this judgement, Mehta said, the Court made it clear that when an amendment which “substituted” a constitutional provision was struck down, the version of the provision which existed prior to the striking down would survive. 

To buttress his arguments, Mehta highlighted observations made by Justices Kurian Joseph and Adarsh Goel in the judgement.  

Justice Joseph, for instance, had remarked: 

“The 99th Amendment sought to ‘substitute’ a few provisions in the Constitution and ‘insert’ a few new provisions. Once the process of substitution and insertion by way of a constitutional amendment is itself held to be bad and impermissible, the pre-amended provisions automatically resurface and revive. That alone can be the reasonably inferential conclusion.” 

Senior Advocate Rakesh Dwivedi who addressed the Bench briefly also echoed Mehta’s contention. 

At this stage, Justice Rajesh Bindal interjected to ask whether a narrow version of the provision would survive once the broader version of the provision was struck down. 

The matter of Nani Palkhivala’s concession

When it noted that the matter of Article 31C had to be addressed in the present case, the Bench leaned on the observation of the Court in the first reference order. 

During those proceedings in 1996, Senior Advocate Fali Nariman had argued that Minerva Mills had proceeded “on the basis of a concession” made by advocate Nani Palkhivala, who was appearing for Minerva Mills in its challenge against its nationalisation by the government. 

Palkhivala’s “concession” amounted to agreeing that Article 31C could not be revived to its post-Kesavananda Bharati position if the Court held the 42nd Amendment to be unconstitutional in Minerva Mills

Nariman, the Bench noted today, had submitted that Minerva Mills never revived Article 31C to its position “since this question neither arose nor was it decided therein…” Additionally, Nariman had argued that subsequent “decisions in Waman Rao and Sanjeev Coke” had also proceeded on the same basis. 

Andhyarujina asserted that Minerva Mills was in fact decided on the basis of a “concession” by Palkiwala. Mehta, on his part, stated that the view was not accurate. However, the Bench said that it would be beneficial to clarify the position once and for all. “Should there not be clarity on what is a very significant part of the Constitution…?” Justice Hrishikesh Roy asked. 

The Bench in Minerva Mills did not have a choice

The Chief today also remarked that given that Minerva Mills was a five-judge bench decision, the judges  were not able apply the doctrine of severability to hold that Article 31C as upheld by Kesavananda Bharati stood. 

The problem was pronounced, the Chief noted, because in Minerva Mills, the amendment in question had widened the scope of the provision. “I guess the problem which the Minerva bench felt was: they couldn’t bifurcate the two,” the Chief noted, “Because what Parliament had done was bring in one composite amendment. So they couldn’t bifurcate between 39(b) and (c) and the other parts of the Directive Principles.” 

The effect of the unconstitutionality of a substituted provision

Towards the end of day, Andhyarujina was given the opportunity to present his case on the position of Article 31C since he was not permitted to do so yesterday. He submitted that the core question here was “the effect of a declaration of unconstitutionality on a substituted provision in the Constitution.” This, he said, was different from “other legislative activities such as repeal of [statutory] laws.”

He contended that for the provision that existed before the 42nd Amendment to be revived, there needed to be  an express act of Parliament. 

Andhyarujina also took the Bench through the legislative history of Article 31C and submitted that between the judgements in Kesavananda Bharati and Minerva Mills, Article 31C did not exist at all. 

Further, he asserted that the non-existence of Article 31C would not cause any “constitutional chaos” as apprehended by the Bench. 

Andhyarujina will resume arguments tomorrow (25 April 2024).