Nature of private property | Day 3: Article 31C stands inoperative after Minerva Mills decision, petitioners argue
Nature of private propertyToday, a nine-judge Constitution Bench led by Chief Justice D.Y. Chandrachud continued hearing in the case to decide whether “material resources of the community” under Article 39(b), a Directive Principle of State Policy (DPSP), include private property. The Bench is also hearing arguments about the constitutional position of Article 31C. This provision was introduced through the 25th Constitutional Amendment (1971) as a saving clause for all laws with the purpose of giving effect to DPSPs.
The challenge in the present case is against a 1986 amendment to the Maharashtra Housing and Area Development Act, 1976 (MHADA) which introduced a new chapter VIIIA to the legislation. This Chapter allows Mumbai Building Repair and Reconstruction Board (MBRRB) to acquire certain “cessed properties” for restoration purposes with the consent of 70 percent of the residents to give effect to Article 39(b) of the Constitution. Property Owners of Mumbai have claimed that this Chapter breached their fundamental rights. With the first reference order in 1996, the case remains one of the oldest pending cases before the Supreme Court.
On the petitioner’s side, the Bench today heard arguments from Senior Advocate Zal Andhyarujina and brief submissions from Advocate Sameer Parekh. Soon after the petitioners concluded their arguments, Attorney General R. Venkataramani opened arguments on the respondents’ side.
Continuing his arguments from yesterday, Andhyarujina contended that Article 31C was a void law after the Court’s decision in Minerva Mills v Union of India (1980). Venkataramani elaborated upon the scope of Article 39(b) and the evolution of property jurisprudence in India.
Background
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.
Substituting a provision obliterates the older version
When it was first introduced, Article 31C did two things. First, it stated that a law giving effect to the policy as under 39(b) and (c) shall not be deemed to be void on the ground that it is inconsistent with Articles 14 and 19. Second, it also stated that “any law containing a declaration that it is for giving effect to such policy” shall not be subject to judicial review.
In Kesavananda Bharati v State of Kerala (1973), a 13-judge Constitution Bench struck down the second part of Article 31C which bars judicial review.
Subsequently, the 42nd Constitutional Amendment came to force in 1976 during the Indira Gandhi regime. This Amendment expanded the scope of Article 31C to apply to the whole of Part IV instead of just Article 39 (b) and (c). A five-judge bench in Minerva Mills, struck down this amendment as unconstitutional.
The key question at hand is whether Article 31C as it stood prior to the 42nd Amendment was revived. While on Day 1 of the hearings in the present case, the Bench observed that this question was beyond the scope of reference, yesterday, they noted that this was a key constitutional question that had to be answered.
Opening the arguments for the petitioners, Andhyarujina laid out how the 42nd Amendment was in the form of a substitution under Article 368. He contended that when a provision is substituted, the older version of the provision ceases to exist. Therefore, when the substituted provision was later struck down, he argued, it does not automatically revive the earlier provision.
Reinstating a pre-substituted provision is a legislative function
Yesterday, Solicitor General Tushar Mehta had argued that after the decision in Minerva Mills, the doctrine of revival was to be applied. Therefore, Article 31C as it stood after the decision in Kesavananda Bharati had been resurrected.
Today, Andhyarujina submitted that this could not happen because an act of substitution, obliterated the older provision, rendering it void in the books of law. Therefore, its reinstatement could not be automatic. It had to be done by an express act of Parliament. Going a step further, he contended that this act of reinstatement was a constituent power of Parliament.
The Chief summarised the gist of Andhyarujina’s argument as follows:
- An amendment substituting a constitutional provision, obliterates the old version.
- Striking down the substituted provision, renders it ineffective and void in the books of law.
- The Court could not then say that the older version of the provision is reinstated for two reasons:. First, tts pre-substituted version did not exist. and second, reinstatement was a constituent power of Parliament.
In other words, the Act of reinstating the pre-substituted version of Article 31C, fell within the legislative realm. The separation of powers doctrine prevented the Court from encroaching on a legislative power.
The effect of expansion
Chief Justice Chandrachud pointed out that the 42nd Amendment was slightly different from other forms of substitution as it was not a deletion. Rather, it expanded the scope of 31C to include the whole of Part IV and not just clauses (b) and (c) of Article 39.
Since Minerva Mills struck down this expanded provision, the only question was whether the previous version which had a narrower scope survived.
“The narrow question which we have to decide is this: what is the effect of the declaration of Section 4 (of the 42nd Amendment) as unconstitutional? Will that in that sense affect the operation of the un-amended Article 31C?” the Chief remarked.
The Chief also proposed a possible argument to this question. He stated that in Minerva Mills, the five-judge bench was not really questioning 31C as it stood after the Keshavananda Bharati judgement. “The discussion in Minerva, is actually about this wide expanse which has arisen—that if a law is passed in any of the Directive Principles, it is immune from 14 and 19 challenge…they couldn’t have doubted Kesavananda Bharati,” the CJI said.
The Waman Rao position
In Waman Rao v Union of India (1980), Andhyarujina, submitted that the un-amended Article 31C was considered to be revived for two reasons. First, because that was the direct result of Kesavananda Bharati and second, because the absence of that would impact a plethora of legislations.
Andhyarujina argued that the Waman Rao decision must be viewed in this context. In that case, the only challenge against un-amended 31C was that it contravened the Basic Structure Doctrine, and the bench held that it did not. This did not mean that 31C as it existed before Minerva Mills was revived.
On the second aspect, Andhyarujina also contended that non-revival of the un-amended 31C would not have the impact of making other legislations vulnerable; and if they were truly enacted to give effect to DPSPs, a challenge against them under Articles 14 and 19 would not stand.
The evolution of DPSPs and the nature of property and Article 39(b)
Venkatramani opened the arguments on behalf of the respondents after lunch. At the get go, he clarified that it would first argue on the aspect of whether private property was included under Article 39(b).
First, he delved into the origins of the DPSPs and the evolution of property rights. DPSPs, he said, had to be viewed in the context of the time in which they were enacted. When constitutions were enacted, they were influenced by “the feel of the times,” the AG stated. When Part IV came to be enacted, he claimed that we had all the history of the French Revolution which gave rise to ideas of liberty, equality and also marxian and utopian traditions. Part IV was not a perfect blueprint but was a “roadmap for a better world,” Venkataramani urged.
In the context of Article 39(b), he contended that when ascribing meanings to words like ‘resource’, ‘material resource’ and ‘common good,’ certain social, political and economic aspects had to be kept in mind. “‘Common good’ is not something found in a dictionary,” he stated. He suggested that in the context of the present case, housing property was common good.
Delving further, the AG submitted that the wealth we create was not an individual endeavour. Rather, it was the result of several economic interactions. “The word ‘resource’ in 39(b) has an economic basis,” he said.
He also suggested that private property could be a material resource of the community if it was for the benefit of someone beyond an individual. The Chief asked: if a corporation created a cell phone, would that be a “material resource of the community? “They are all resources, yes,” Venkataramani responded “.. to what extent the state can regulate them is a separate question, but they are all resources,” he said.
The AG also stated that in the Ranganath Reddy judgement, the phrase “man-made” resources included private resources. Shares etc were all resources. On the evolution of property, the AG stated the definition had evolved over time.
After the Attorney General’s submissions, the Bench concluded the hearings for the day.
Solicitor General Tushar Mehta will argue about Articles 31C and 39(b) on Tuesday 30 April 2024. He will be followed by Senior Advocates Rakesh Dwivedi and Gopal Sankaranarayanan on the respondents’ side.