New Delhi: The state’s obligation under Article 39(b) of the Constitution to distribute community resources for achieving social and economic equality is not limited to natural resources, but extends to manmade or privately owned resources, the Supreme Court was told Thursday.
Appearing for the Maharashtra Housing and Area Development Authority (MHAADA), Attorney-General R. Venkataramani told a nine-judge bench that the term “material resources of the community” mentioned in Article 39(b) cannot be construed narrowly to include only natural resources. It should be given a broad definition to bring within its fold all “things available in the world and maintained by individual human beings.”
Article 39 (b) falls within Part IV of the Constitution or the Directive Principles of State Policy (DPSP). Though these principles are not enforceable in a court of law, they are seen as aspirational directives asking the government to implement certain laws for social and economic justice. This means the state can formulate policies or laws to secure the mandate in Part IV of the Constitution.
Under Article 39(b), the state is to ensure that “ownership and control of the material resources of the community are so distributed as best to subserve the common good”. If the court accepts Venkataramani’s argument, then it would mean the government can redistribute private wealth for social, economic and political equity.
Though the top law officer’s arguments were on behalf of a Maharashtra government body, his submissions are significant as they come amidst the ongoing political debate over redistribution of wealth that took centre stage in the run-up to the second phase of voting in the 2024 Lok Sabha polls.
Venkataramani told the bench that “for the purpose of welfare, all things available in the world and maintained by individual human beings are a part of community resources. Also, any object created or made for human purposes will constitute community resources.”
The country’s top law officer said that all resources —corporeal, incorporeal, tangible, intangible and all that produces wealth for a community — would come within the sweep of the “material resources” as mentioned in Article 39(b).
“Today we talk about emerging forms of property and not merely monetary wealth. So, we cannot have a pedestrian answer to say that private wealth is not included in community resources,” Venkataramani said.
But he clarified that his argument about the state’s power to distribute material resources under Article 39 (b) did not suggest following the “Marxist distribution of wealth” philosophy. The article, he added, was to enable a large mass of the population that needed “to be provided a succour”.
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Challenge to MHADA
Venkataramani made his submissions while defending the Maharashtra Housing and Area Development Act (MHADA) of 1976, which authorises the state to take over old buildings or cessed properties for restoration and redevelopment in case 70 percent of occupants make such a request. The act enables the authority to also transfer the redeveloped properties or land to “needy persons,” apart from giving it to the “occupiers of such lands or buildings”.
Led by Chief Justice D.Y. Chandrachud, the nine-judge bench is also deliberating on the interpretation of the term “material resources” in Article 39(b) of the Constitution.
In the case before the nine-judge bench of the Supreme Court, private property owners have challenged MHADA on the ground that it violated their right to equality and said the term “material resources” in Article 39 (b) does not include private resources, but only natural resources such as coal mines.
The owners first moved the Bombay High Court, which upheld MHADA on the ground that it was protected under Article 31(c) of the Constitution. The law, the HC said, fulfilled the state’s obligations set out in Article 39(b).
Article 31(c) gives legal immunity to laws that intend to give effect to securing principles under DPSP. Such laws cannot be challenged for breach of articles 14 and 19. Article 14 speaks of equality before the law and equal protection of law, while Article 19 guarantees six fundamental freedoms to all citizens.
The private property owners’ association then moved the top court in December 1992. Due to some earlier rulings on the interpretation of Article 39(b), the case was in March 2001 referred to a five-judge bench, which later sent it to a seven-judge bench.
In February 2002, the seven-judge bench expressed its reservation over previous top court judgements that said the phrase “material resources of community” in Article 39(b) would cover privately owned resources. Subsequently, the case was marked to the nine-judge bench that Tuesday commenced hearing on what constitutes “material resources of a community.”
Defining ‘material resources’
The legal conundrum over the definition of “material resources” dates back to 1977, when a seven-judge bench had then by a 4:3 majority determined that privately owned resources did not fall within the ambit of “material resources of a community” in Article 39(b).
Authoring the minority view, Justice V.R. Krishna Iyer opined that to exclude ownership of private resources from the coils of Article 39(b) is to “cipherise” its very purpose of “redistribution the socialist way”.
Six years later, a five-judge bench unanimously concurred with Justice Iyer’s version on Article 39(b), without explicitly referring to his minority view. This verdict came on a decision the court gave while validating a law that nationalised coal mines and their coke oven plants.
Later, in 1996, a nine-judge bench further endorsed Justice Iyer’s interpretation of Article 39(b) to hold that “material resources” encompasses not only natural or physical resources but also movable or immovable property.
But in 2002, while hearing the challenge to MHADA, the top court expressed reservations in sharing the broad view on “material resources” as taken in previous judgments, warranting another round of deliberations on Article 39(b).
Rebutting the stand of the owners’ association, Venkataramani said wealth would remain for personal consumption if it did not go beyond a certain boundary. “Once it goes beyond the boundary then the element of community resources would come,” he explained.
He contended that individuals do not live in isolation and wealth is created through interactions and economic activities. Therefore, “all things in the material world, which are available and made available by human interaction or engagement, constitute the resources of the community,” he said.
However, to what extent the state can enter to regulate or redistribute community resources is a question that can be looked into on a case-by-case basis, he said. Human interactions and economic transactions should not benefit just a few, the law officer argued.
“Each one of them (methodology for distribution of resources) will certainly be scrutinised by the court,” he said, adding that having “egregious legislation” is unthinkable in the current scenario where there is competition in the political field and there are limitations in the law-making process.
According to the attorney-general, Article 39(b) has a social mission and envisages a meaningful right to life with the availability of equal opportunity to all. This would include the state’s endeavours to maximise revenue.
Venkataramani acknowledged that DPSP have always been in conflict with the Fundamental Rights principle in the Constitution. But they are two wheels of the same chariot and the concept of public interest must receive its orientation towards directive principles, he said.