Issues.-

1. Whether Article 31C (as upheld in Kesavananda Bharati) survives in the Constitution after the amendment to the provision by the forty-second amendment was struck down by this Court in Minerva Mills.
2. Whether the interpretation of Article 39(b) adopted by Justice Krishna Iyer in Ranganatha Reddy and followed in Sanjeev Coke must be reconsidered. Whether the phrase ‘material resources of the community’ in Article 39(b) can be interpreted to include resources that are owned privately and not by the state.

 

Issue 1.-

• History.-

Inserted by Constitution 25^th Amendment Act, 1971.

• • It empowers Parliament as well as state legislatures to enact laws towards securing the Directive Principles specified in Article 30 (b) and (c) of the Constitution. Such laws cannot be challenged on the ground that they infringe articles, 14 and 19 of the Constitution. Article 31C thus gives the directive principles Article 30 (b) and (c) primacy over fundamental rights guaranteed by article 14 or 19 or 31 of the Constitution.
• • 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

 

Challenged in Kesavananda Bharati Case in 1973.

• • First Part upheld which provided immunity from challenges under Article 14 and Article 19 to laws giving effect to the DPSP set out in Article 39 (b) and (c).
  • Second Part was struck down as unconstitutional on ground “Destructive of basic feature of the constitution”, i.e., Judicial Review.
    
    Art. 31-C amended by 42^nd Constitutional Amendment, 1976.
    • Scope widened to cover “all the directive principles.
      
      
      
      Minerva Mills Case 1980.
      • Struck down Article 31-C as amended by 42nd amendment as unconstitutional on the ground that it was destructive of the basic features of the Constitution.
      • Damaged the basic structure of the constitution by totally excluding from challenge to any laws giving affect through directive principles of state policy, even if they were inconsistent with rights guaranteed by article 14 and 19
      • the Constitution is founded on the bedrock, of balanced between part III and IV, to give absolute primacy to one over the other is to disturb the harmony of the Constitution.
      • This ‘harmony’ is an essential feature of the basic structure of the Constitution.
      • Part III and IV Meant to supplement one another.

 

Sanjeev Coke Mfg. Co. V. Bharat Coking Coal Limited, 1983.

• • Article 31C as amended by 42nd Constitutional amendment was not directly at issue in Minerva Mills case.
  • Determination of that question in that case was uncalled for orbiter.
  • The logic in Kesavananda Bharti case which upheld the constitutionality of Art. 31-C should lead to same conclusion that article 31-C  with its extended protection of all the directive principles is also constitutionally valid.

 

In present Case, 2024.

• • After Minerva Mills invalidated Section 4 of the Forty-Second Amendment, the composite legal effect of Section 4 is nullified and the unamended text of Article 31-C stands revived.

Issue 2.-

Article 39 (b).- Ownership and control of material resources of the community are so distributed as best to subserve the common good.

• •  The words “of the community” must be understood as distinct from the “individual”.
  • If for private property were to be included - “ownership and control of resources is so distributed as best to subserve the common good”
• • If private property were to be excluded - “ownership and control of resources of the state ...” 

Right to property and compensation for acquisition as a Fundamental Right under Articles 19(1)(f) and Article 31 respectively. 1950

Article 31C was added through the 25th amendment in 1971.

Kesavananda Bharati case (1973) – Judicial Review.

 

The right to property was omitted from Fundamental Rights and made a constitutional right under Article 300A. 1978

State of Karnataka versus Ranganatha Reddy (7 Judge Bench) (1977)

• • Minority but Concurring opinion by Justice Krishna Iyer  interpreting the phrase ‘material resource of the community’ contained in Article 39(b).
• • • Held that Article 39(b) embraces all national wealth, not merely natural resources, but all the private and public sources for meeting material needs.
• • This minority judgment formed the basis of the 
• • • Sanjeev Coke Manufacturing Company versus Bharat Coking Coal Limited (1982) case, that upheld the nationalisation of coke oven plants.
• • • Mafatlal Industries Limited versus Union of India (1996)

 

In present Case, seven-judge Bench referred the issue of interpretation of Article 39(b) to a nine-judge Bench.

• • The current majority (7:2) opinion (for seven judges including the CJI) held
• • • the interpretation of V.R. Krishna Iyer, that every privately-owned property could be used by the state as a ‘material resource’ to ‘subserve the common good’, as a rigid economic ideology that advocates greater governmental control over private resources.
• • • Therefore, it was rejected by the majority opinion which said that India has moved on from a socialistic model to a market-based liberalised economic model.
    • to qualify as a ‘material resource of the community,’ a resource must be ‘material’ and ‘of the community.’ 
• • • The ‘public trust doctrine’ and context-specific key factors that would determine this are
      • the inherent characteristics of the resource
      • its impact on community well-being;
      • its scarcity; and
      • the impact due to its concentration in private hands.

 

• • • Hence, certain resources like forests, ponds, spectrum, wetlands and resource-bearing lands like where mines and minerals are found may fall within the scope of Article 39(b) even if they are privately held.
• • • However, not every private resource automatically qualifies just because it meets material needs.
• • • The term ‘distribute’ in Article 39(b) also carries a wide meaning that can include both government acquisition and redistribution to private players, as long as it serves the common good.

 

• • Justice Nagarathna concurred partially with the seven-judge majority while opining that all private resources except ‘personal effects’ like apparel, jewellery etc., can be transformed into a ‘material resource of the community’ through nationalisation, acquisition etc.
• • Justice Sudhanshu Dhulia wrote the sole dissenting opinion where he upheld the interpretation of V.R. Krishna Iyer in the Ranganatha Reddy case and opined that it is for the legislature to decide on how the ownership and control of material resources is to be distributed.

Some important details.-

1.  According to Dr Ambedkar, if the Constitution laid down a particular form of economic and social organisation, it would amount to taking away the liberty of people to decide the social organisation in which they wish to live. He opined on several occasions that economic democracy is not tied to one economic structure, such as socialism or capitalism, but to the aspiration for a 'welfare state'.