States Can’t Take Over All Private Properties For Common Good, Rules SC

New Delhi: The Supreme Court on Tuesday held that states are not empowered by the Constitution to take over all privately-owned resources or properties to serve the “common good”. A majority of seven judges of the nine-judge bench, headed by Chief Justice DY Chandrachud, made this observation.

But the bench maintained that states could claim private properties in certain cases.

The majority verdict overruled Justice Krishna Iyer’s previous ruling that all privately owned resources can be acquired by the State for distribution under Article 39(b) of the Constitution.

The CJI wrote for himself and six other judges on the bench. It also overturned several other verdicts post 1978 that had adopted the socialist theme.

However, Justice BV Nagarathna partially disagreed with the majority judgement. Justice Sudhanshu Dhulia dissented on all aspects of the judgment.

The majority judgment authored by CJI DY Chandrachud held that the phrase “material resources of the community” may theoretically include privately owned resources, however, the expansive view expressed by Justice Krishna Iyer’s minority judgment in Ranganath Reddy and relied on by Justice Chinnappa Reddy in Sanjeev Coke can’t be accepted, reported the LiveLaw.

“The enquiry on whether a resource falls within the ambit of “material resource of community” must be based on the nature of the resource, the characteristics of the resource, the impact of the resource on the well-being of the community, the scarcity of the resource, and the consequence of such a resource being concentrated in the hands of private players. The public trust doctrine can also be applied here,” the court observed, according to LiveLaw.

Background of the petitions

The batch of petitions in this regard initially came up in 1992. Those were subsequently referred to a nine-judge bench in 2002. Finally, it was taken up for a hearing in 2024. The main question to be decided was whether material resources of the community under Article 39(b) (one of the Directive Principles of the State Policy), which states that the government should create policies to share community resources fairly for the common good, includes privately owned resources.

What the Union Government had stated?

The Union Government had highlighted that the interpretation of Article 39(b) should be from the standpoint of the ever-expanding constitutional principles and not any ideology, the LiveLaw reported. The Union had urged that it is a community’s dynamic interactions that mould the meaning of ‘Material Resources’.