Supreme Court limits state authority to seize private properties for public distribution

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In a significant ruling on Tuesday, the Supreme Court of India declared that states do not have the authority under the Constitution to take over all privately-owned properties solely to distribute them in the interest of the "common good." This majority decision, delivered by a 7:2 bench, underscores the limited power of the state in taking control of private resources.

The nine-judge bench, led by Chief Justice DY Chandrachud, clarified that while states may assert claims over private assets in certain specific cases, they are not empowered to seize all private property at their discretion. Chief Justice Chandrachud, writing for himself and six other judges, overruled an earlier decision by Justice Krishna Iyer, which had allowed for the acquisition of privately-held resources by the state for broader distribution under Article 39(b) of the Constitution, according to PTI.

The ruling addresses the complex constitutional question of whether private properties fall within the category of "material resources of the community" under Article 39(b) and can thus be acquired by the state to serve the collective welfare. The court's decision overturned previous judgments that had followed a more socialist interpretation, permitting states to take control of private property for the common good.

Justice BV Nagarathna issued a partial dissent on the majority decision, while Justice Sudhanshu Dhulia dissented entirely from the ruling. As the pronouncement of judgments was underway, PTI reported that this landmark ruling is expected to have broad implications on how private properties are treated under Indian constitutional law.

This case brings into focus the 1980 Minerva Mills judgement, where the Supreme Court declared two provisions of the 42nd Amendment unconstitutional. These provisions had previously given Directive Principles of State Policy precedence over fundamental rights and had blocked constitutional amendments from being questioned on any grounds. Article 31C of the Constitution provides for laws made under Articles 39(b) and (c), which grant the state the authority to take control of community resources, including private properties, to distribute them in a way that best serves the collective good.

The judgment stems from the hearing of 16 petitions, including one by the Property Owners' Association (POA), a Mumbai-based group that initially filed its case in 1992. The POA's petition specifically challenges Chapter VIII-A of the Maharashtra Housing and Area Development Authority (MHADA) Act. According to PTI, this particular chapter, added to the MHADA Act in 1986, empowers state authorities to acquire cessed buildings and the land on which they are situated if 70% of the occupants agree to request such a restoration.

The MHADA Act was formulated under Article 39(b) of the Constitution, which is part of the Directive Principles of State Policy. This article requires the state to develop policies that secure the distribution of "material resources of the community" in a manner that serves the common good.

This Supreme Court decision effectively limits the extent to which the state can control private property for the sake of social distribution, placing a stronger emphasis on the protection of private ownership within the framework of India's Constitution, according to PTI.

(With inputs from PTI)