Property Rights in India

Posted 17 Dec 2024

Updated 27 Dec 2024

5 min read

Why in the News?

A nine-judge Constitution Bench of the Supreme Court delivered a landmark ruling in Property Owners Association v State of Maharashtra, restricting the powers of the state to acquire private property.

Evolution of Right to Property

Original Status: Initially, the right to property and compensation for acquisition were protected as Fundamental Rights under Articles 19(1)(f) and 31 of the Constitution.
25th Amendment (1971): Introduced Article 31C, which protected laws designed to fulfil the Directive Principles of State Policy (specifically Articles 39(b) and 39(c)) from being challenged for violating Fundamental Rights, including those under Articles 14 and 19.
Revised Status of the Right to Property: The 44th Constitution Amendment in 1978 removed the right to property from the list of Fundamental Rights, making it a constitutional right under Article 300A.

Key highlights of the recent judgement(Property Owners Association v State of Maharashtra)

Scope of Article 39(b):The Court emphasized that private property cannot automatically be classified as a "material resource of the community" under Article 39(b). It clarified that not all privately owned resources meet the conditions to be treated as such.
- Article 39B provides that ownership and control of the material resources of the community are so distributed as best to subserve the common good.
Authority for Property Acquisition: Article 39(b) does not grant legislative power to the state to acquire private property.
- The Court clarified that it comes from the sovereign power of eminent domain and Entry 42 of List III in the Seventh Schedule.
Criteria for Classification: The inclusion of private property as a "material resource" depends on its nature, scarcity, impact on community welfare, and concentration in private hands.
Flexibility in Economic Policies: The court stressed that the framers of the Constitution intended for economic policies to be flexible, allowing governments to adapt to changing needs, rather than being tied to a fixed economic doctrine.
Validity of Article 31C: The Court unanimously ruled that Article 31C, upheld in the Kesavananda Bharati case, is still valid.
Balancing Public Welfare with Private Property Rights: The Court balanced public welfare with private property rights, ensuring government actions align with constitutional principles like equality (Article 14) and the right to property (Article 300A).
- It also applied the Public Trust Doctrine, mandating responsible resource management for the public good.
Limits of Eminent Domain: The Court questioned the broad application of the Doctrine of Eminent Domain in land acquisition. The court clarified that not all privately owned resources qualify as material resources of the community that can be appropriated for public good.

Doctrine of Eminent Domain

It provides that governments can acquire private property for public use, balancing societal welfare with property rights. This power is exercised by all levels of government, but fair compensation must be provided to the owner.

Elements of Doctrine of Eminent domain:
- Public Use: Government can acquire private property for public purposes like infrastructure, but only if there's a legitimate need and no alternatives.
- Just Compensation: When property is acquired, the government must provide fair compensation to the owner, based on the market value at the time of acquisition.
- Due Process: requires due process, meaning property owners must be notified in advance and given a chance to contest the acquisition or negotiate compensation.
- Government Authority: It can only be exercised by the government or authorized public agencies with legal authority to take property for public use. It is typically regulated by legislation in most jurisdictions worldwide.
Important Case laws: In Sudharsan Charitable Trust v. Government of Tamil Nadu (2018), the Supreme Court clarified that eminent domain is tied to the state's sovereignty. The state can acquire private property for public interest, provided fair compensation is given. This power does not violate a person's right to livelihood or dignity.

Public Trust Doctrine

It helps protect the environment by ensuring the responsible management of natural resources. By invoking this doctrine, we can safeguard these resources and promote the protection of the Earth. It was recognized as part of Article 21 in the landmark cases of Th. Majra Singh v. Indian Oil Corporation and M.I. Builders v. Radley Shyam Sahu.

State as Trustee: Under the Public Trust Doctrine, the State acts as a trustee, managing natural resources for the public's benefit. It ensures that resources are used responsibly and not depleted or damaged.
- In T.N. Godavarman v. Union of India, the Supreme Court affirmed that the State, as a trustee, must ensure natural resources are used sustainably for the public good.
Citizens as Beneficiaries: The citizens are the beneficiaries of the trust, using resources sustainably for their benefit and for future generations.

Implications of the Supreme Court's Decision

Legislative and Policy Impact: The ruling may influence future property acquisition laws, land reforms, and social welfare programs, promoting fairness and transparency.
Economic Reforms: The decision signals a shift to a more market-oriented economy by limiting the state's power to acquire property, supporting private investment while ensuring social justice.
Political Debates: Political parties may adjust their stances on land reforms and property rights, while the ruling could shape social welfare programs, especially land redistribution for the underprivileged.
Constitutional Scrutiny: The judgment reinforces the judiciary's role in scrutinizing government actions on private property, ensuring laws align with constitutional rights, including equality and property.

Conclusion

The Supreme Court judgement clarified on Article 39(b), stressing a case-by-case approach for classifying private property as a "material resource" for public use. The decision emphasizes the need for government actions to uphold constitutional principles, including equality and property rights, while promoting responsible resource management through the Public Trust Doctrine.