The Supreme Court delivered a landmark 7:2 ruling, stating that states are not authorised under the Constitution to take over privately owned resources for redistribution aimed at the "common good". The court overruled a previous judgement that allowed the State to acquire private property under Article 39(b). While acknowledging the state's power to claim private property in certain cases, the decision emphasised the need for a more balanced approach. The ruling stemmed from a challenge to the Maharashtra Housing and Area Development Authority Act, highlighting the limits on state authority.
Earlier this week, the Supreme Court delivered a 7:2 ruling, stating that states are not authorised under the Constitution to seize all privately owned resources for redistribution aimed at serving the "common good". The ruling came from a nine-judge bench led by Chief Justice DY Chandrachud, although it clarified that in certain situations, states can claim ownership of private properties.
The majority verdict, delivered by the Chief Justice, overruled a previous judgement by Justice Krishna Iyer, which had held that the State could acquire any privately owned resources for redistribution under Article 39(b) of the Constitution. The Chief Justice, along with six other judges, addressed the complex legal issue of whether private properties could be classified as "material resources of the community" under Article 39(b) and thereby be appropriated by the State to benefit the "common good".
This judgement overturned previous rulings that had adhered to a socialist approach, which allowed states to seize all private properties for public welfare. While Justice BV Nagarathna partially disagreed with the majority decision, Justice Sudhanshu Dhulia dissented entirely. The court is in the process of announcing additional rulings.
In a related case from 1980, the Supreme Court had declared two provisions of the 42nd Amendment unconstitutional. These provisions had prevented constitutional amendments from being "called into question in any court" and had prioritised the Directive Principles of State Policy over individual fundamental rights.
Article 31C safeguards laws made under Articles 39(b) and (c), which grant the State the power to take control of the material resources of the community, including private properties, to support the "common good". The top court heard 16 petitions, including one filed by the Mumbai-based Property Owners' Association (POA) in 1992.
The POA had challenged Chapter VIII-A of the Maharashtra Housing and Area Development Authority (MHADA) Act, which, added in 1986, allows State authorities to acquire cessed buildings and their land if 70% of the occupants request restoration. The MHADA Act was enacted in accordance with Article 39(b), which is part of the Directive Principles of State Policy. It mandates that the State should implement policies ensuring the ownership and control of material resources are distributed in a way that best serves the common good.
The Supreme Court's ruling has significant implications for the distribution of private resources in the interest of the common good. By limiting the state's power to indiscriminately seize private properties, the verdict reinforces the protection of private property rights, while still acknowledging the state's role in certain circumstances. The decision challenges past socialist policies and ensures that property acquisition for public welfare must meet stricter criteria, reflecting a more balanced approach between individual rights and state interests.
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