Property Owners Association vs State of Maharashtra
Two questions of seminal importance are at stake in Property Owners Association vs State of Maharashtra, in which hearings recently concluded before a nine-judge Bench of the Supreme Court of India.
First, what does the term “material resources of the community” used in Article 39(b) of the Constitution denote?
Second, are laws made in furtherance of the goal stipulated in Article 39(b) — that is, legislation aimed at securing ownership of resources and distributing them to best subserve the common good — immunised from challenges premised on the fundamental rights to equality and freedom?
The second of these questions brings to sharp focus a clash between Part III of the Constitution, which delineates fundamental rights, and Part IV, which enumerates a set of “Directive Principles of State Policy” (DPSP).
Clash between Fundamental Rights and Directive Principles
The Constitution expressly makes fundamental rights enforceable, while DPSPs are regarded as goals that the state is expected to work towards.
The tension between these parts has simmered through India’s history, reaching boiling point in the 1970s when the Constitution was routinely amended, primarily to make certain kinds of legislation exempt from judicial review.
The Supreme Court has from time to time attempted to clarify where the law stands, starting with the verdict of its 13-judge Bench in Kesavananda Bharati vs State of Kerala (1973).
How the Bench in Property Owners answers the reference made to it will have a deep bearing on the Constitution’s future course.
At its inception, the Constitution’s bare text was clear enough. Article 13 declared that any law made in breach of a fundamental right would be void.
Article 37, on the other hand, declared that DPSPs will not be “enforceable in any court”.
Yet, it said that its precepts would be treated as fundamental in the country’s governance and the State would be obliged to apply them in making laws.
History of the Debate
The Court in some of its earliest judgments described the hierarchy.
Part III, wrote Chief Justice S.R. Das, in Mohd. Hanif Quareshi vs State of Bihar (1958), cannot be reduced to “a mere rope of sand”.
He said, “the State should certainly implement the directive principles, but it must do so in such a way that its laws do not take away or abridge the fundamental rights”.
This balance came unstuck when the Constitution was amended in 1971.
Through the 25th amendment, Parliament, in a bid to place some of its laws beyond judicial review, introduced a new provision, Article 31C.
This provision stipulated that a law giving effect to clauses (b) and (c) of Article 39 — which respectively entreated the state to make legislation towards securing the material resources of the community and towards implementing an economic system that does not result in concentration of wealth — could not be declared void on the ground that it violated the rights conferred by Articles 14 or 19.
This meant that the laws so made were exempt from any challenge on grounds that they contravened the right to equality under Article 14 or one of the other of the bundle of freedoms contained in Article 19, including the rights to freedom of expression, and to profession, business, and trade
Meaning of "material resources" in Article 39(b)
Consider the consequences: Parliament might believe that the printing press is a material resource of the community.
It might then proceed to nationalise the media.
The measure, it might say, is made with a view to securing the common good under Article 39(b).
As an upshot of the 25th amendment, this law could neither be challenged on the ground that it did not subserve the common good nor could it be found void on the ground that it infringed our right to free speech.
The debates
Kesavananda alleviated some of these potentially drastic results.
Through a narrow majority of seven to six, with Justice H.R. Khanna’s controlling opinion tipping the balance, the Court found that an amendment which offended the Constitution’s basic structure would be void.
Justice Khanna further found that the 25th amendment partially fell afoul of this theory.
He held that to the extent that it forbade any examination on whether a law made was in furtherance of Articles 39(b) and (c) it transgressed the principle of judicial review.
But he upheld the amendment insofar as it protected such laws from challenges grounded on Articles 14 and 19.
Oddly though, the six judges who otherwise formed part of the minority, by holding that Parliament had unlimited power to amend the Constitution, did not engage in any independent analysis on the 25th amendment.
This meant that while a majority found a part of Article 31C void, Kesavananda offers no clear verdict on whether the amendment —insofar as it exempts certain laws from fundamental rights challenges — otherwise breaches the Constitution’s basic features.
Despite this, in 1976, through the 42nd amendment, Parliament made further changes to Article 31C.
These were even more far-reaching.
They stipulated that a law made in furtherance of any DPSP — and not merely a law made in furtherance of Articles 39(b) and (c) — would enjoy safe harbour.
In Minerva Mills vs Union of India (1980), a five-judge Bench declared the amendment unconstitutional.
The Court found that while DPSPs provided the ends of governance, fundamental rights constituted the means to such ends.
Articles 14, 19 and 21, wrote Chief Justice Y.V. Chandrachud stood between the “heaven of freedom into which Tagore wanted his country to awake and the abyss of unrestricted power”.
This amendment, he added, “removed two sides of that golden triangle”.
The issue is complicated by another judgment delivered by Justice Y.V. Chandrachud, on behalf of a five-judge Bench in Waman Rao vs Union of India.
Here, somewhat at odds with his own opinion in Minerva Mills, he held that the unamended Article 31C was valid, because it was impossible to conceive how a law made in furtherance of Articles 39(b) and (c) could at all infringe the rights under Articles 14 and 19.
This finding is clearly incorrect.
As we saw, a law made to purportedly subserve the common good — for example, a nationalising of the printing press — can have grave consequences on our liberty.
Current Situation and Significance
In Property Owners, the Court will decide on the validity of a law that allows a State government board to acquire complete control over dilapidated buildings, if done with the consent of at least 70% of residents.
To resolve this, it will examine whether the law furthers Article 39(b) under which it is purportedly made.
But even assuming it answers this in the affirmative, the question still remains: can the statute also be tested on the touchstone of Articles 14 and 19?
Way forward
Regardless of the judgments in Waman Rao and Sanjeev Coke vs Bharat Coking Coal (1982), which followed it, to date there is no conclusive analysis from the Supreme Court on Article 31C, in the form introduced by the 25th amendment, and its adherence to the Constitution’s basic structure.
This has meant that fundamental rights and DPSPs have been in perennial conflict.
The Court has a chance in Property Owners to resolve this clash and, in the process, provide a fillip to the Constitution’s most cherished guarantees.
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