Holding

Article 31C to the extent upheld in Kesavananda Bharati remains in force, and the phrase 'material resources of the community' in Article 39(b) may include privately owned resources, but not all such resources automatically qualify; the determination is context-specific and subject to factors such as nature, impact on community, scarcity, and consequences of concentration.

Summary

The Supreme Court of India, in a nine-judge bench decision, addressed two major constitutional questions. First, it held that Article 31C, to the extent it was upheld in Kesavananda Bharati, remains in force after the 42nd Amendment was struck down in Minerva Mills, as the amendment was a substitution and its invalidation revives the original text. Second, on Article 39(b), the majority ruled that the phrase 'material resources of the community' may include privately owned resources, but not all such resources automatically qualify; the determination must be context-specific, considering factors like the nature of the resource, its impact on community well-being, scarcity, and consequences of concentration. The majority also held that the minority opinion in Ranganatha Reddy, followed in Sanjeev Coke, was erroneously relied upon, and the single-sentence observation in Mafatlal was obiter. Justice Nagarathna concurred on Article 31C but elaborated that privately owned resources (excluding personal effects) can become community resources through nationalisation, acquisition, or other means. Justice Dhulia dissented on Article 39(b), arguing that privately owned resources are fully included and that Sanjeev Coke did not violate judicial discipline. The reference was answered accordingly, and the matters were directed to be placed before an appropriate bench for further proceedings.

Issues considered

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 the Supreme Court in Minerva Mills case.
Whether the interpretation of Article 39(b) adopted by Justice Krishna Iyer in Ranganatha Reddy and followed in Sanjeev Coke must be reconsidered; and 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.

Legislation cited

Constitution of Indias. 14, s. 19, s. 21, s. 300A, s. 31, s. 31C, s. 368, s. 37, s. 38, s. 39(b), s. 39(c)

Subjects

Article 31C of the ConstitutionAmendment struck down by Supreme CourtInterpretation of Article 39(b) of the ConstitutionArticle 300APhrase ‘material resources of the community’Kesavananda Bharati caseMinerva Mills caseSanjeev Coke caseRanganatha Reddy casePrivately owned resourcesQualifier of ‘material needs’Public Trust DoctrineMinority opinionTerm ‘distribution’Distribution by the StateVesting of resources in the StateNationalisationCommon good

Judgment

[2024] 11 S.C.R. 1 : 2024 INSC 835

Property Owners Association & Ors.
v.
State of Maharashtra & Ors.
(Civil Appeal No. 1012 of 2002)
05 November 2024
[Dr Dhananjaya Y Chandrachud,* CJI, Hrishikesh Roy,
B.V. Nagarathna,* Sudhanshu Dhulia,* J.B. Pardiwala,
Manoj Misra, Rajesh Bindal, Satish Chandra Sharma
and Augustine George Masih, JJ.]

Issue for Consideration
(1) Whether Article 31C (as upheld in Kesavananda Bharati
case) survives in the Constitution after amendment to the
provision by the forty-second amendment was struck down
by the Supreme Court in Minerva Mills case; and
(2) Whether the interpretation of Article 39(b) adopted by Justice
Krishna Iyer in Ranganatha Reddy case and followed in
Sanjeev Coke case must be reconsidered; and 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.

Headnotes†

A. Constitution of India – Art.31C – Art.31C (as upheld
in Kesavananda Bharati case), if survives in the
Constitution after amendment to the provision by
the forty-second amendment was struck down by the
Supreme Court in Minerva Mills case – Held: Article 31C
to the extent that it was upheld in Kesavananda Bharati
case remains in force.
Held [per Dr Dhananjaya Y Chandrachud, CJI (for himself
and for Hrishikesh Roy, J. B. Pardiwala, Manoj Misra,

* Author
Ed. Note: There are three judgments. One judgment was pronounced by Hon’ble Dr Justice Dhananjaya
Y Chandrachud, Chief Justice of India, on behalf of himself, Hon’ble Mr Justice Hrishikesh Roy, Hon’ble Mr
Justice J B Pardiwala, Hon’ble Mr Justice Manoj Misra, Hon’ble Mr Justice Rajesh Bindal, Hon’ble Mr Justice
Satish Chandra Sharma and Hon’ble Mr Justice Augustine George Masih. Hon’ble Mrs Justice B V Nagarathna
and Hon’ble Mr Justice Sudhanshu Dhulia pronounced their separate judgments.
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Rajesh Bindal, Satish Chandra Sharma, and Augustine
George Masih, JJ.)]:
1. Article 31C to the extent that it was upheld in Kesavananda
Bharati v Union of India remains in force. [Para 229(a)]
2.1. By Section 4 of the Forty-Second Amendment, the words
“the principles specified in clause (b) or clause (c) of
Article 39” in Article 31-C were replaced with the words “all
or any of the principles laid down in Part IV.” This is a case
of substitution. Section 4 of the Forty-Second Amendment
was subsequently struck down in Minerva Mills. Where an
amendment substituting certain text with certain alternate
text is invalidated, the effect is that the unamended text
continues in force. This is because the legislative intent
of repeal and enactment in such cases is composite and
cannot be separated. To give effect to the repeal and not
the enactment would result in an outcome which does not
correlate with legislative intent, and, as Justice Hidayatullah
noted in Laxmibai “leave the original section truncated”
resulting in absurd outcomes. This would in effect invalidate
the original, valid and constitutional provision despite there
being no constitutional fault with it nor the legislature intending
to repeal it. Thus, the presumption would be that after Minerva
Mills, the unamended Article 31-C would continue in force.
Indeed, it is evident that cases such as Bhim Singh and
Sanjeev Coke proceeded on this presumption. [Para 69]
2.2. The only plausible exception to this presumption would be
if it could be demonstrated that Parliament, when enacting
the Forty-Second Amendment would have repealed the
words “the principles specified in clause (b) or clause (c) of
Article 39” independent of their enactment of the words “all
or any of the principles laid down in Part IV.” In this case, no
reference to the broader legislative proceedings or external
aids is necessary to arrive at the inference that Parliament
would not have independently repealed these words. The
text of the amendment adopted by Parliament itself makes
it abundantly clear that there was no independent intention
to repeal. The effect of Section 4 of the Forty-Second
Amendment was to expand the scope of the immunity provided
by Article 31-C to legislation. Under the unamended Article
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31-C, immunity was only provided to legislation if it gave
effect to the Directive Principles found in clause (b) or clause
(c) of Article 39. However, by Section 4 of the Forty-Second
Amendment, the scope of this immunity was significantly
expanded to immunise legislations that gave effect to any or
all of the Directive Principles in Part IV of the Constitution.
Thus, the intention of Parliament in enacting Section 4 of the
constitutional amendment was undoubtedly to expand the
scope of the immunity granted by Article 31-C. This being
the situation, it cannot be suggested that Parliament would
have repealed the words “the principles specified in clause (b)
or clause (c) of article 39” if it did not simultaneously enact
the broader language expanding the scope of Article 31-C.
If Parliament had independently repealed these words, it
would have not just reduced the scope of Article 31-C but
altogether eliminated the effect of the Article. Without the
words “the principles specified in clause (b) or clause (c) of
article 39” in Article 31- C, the provision would have been
rendered nugatory. Given Parliament’s manifest intention
to expand the scope of Article 31-C by Section 4 of the
Forty-Second Amendment, it is not plausible to hold that
Parliament independently sought to repeal the words “the
principles specified in clause (b) or clause (c) of article 39”
from Article 31-C. Therefore, it is evident that the legislative
intent of Parliament when adopting Section 4 of the Forty-
Second Amendment was composite, to repeal and enact (i.e.,
to substitute) through one single action. This Court cannot
therefore disaggregate the steps of repeal and enactment
and give effect to the repeal even after invalidating the
enactment. 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. [Para 70]
2.3. The text of the unamended Article 31-C was challenged,
and the first part of the Article was upheld by thirteen-
judge decision in Kesavananda Bharati while the latter
half of the Article was invalidated. Therefore, the first half
of unamended Article 31-C, which is the subject matter of
the present controversy, was undoubtedly constitutional as
held by the thirteen-judge decision in Kesavananda Bharati
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and further by the Constitution Bench in Waman Rao.
Therefore, if as a consequence of the decision in Minerva
Mills, the unamended Article 31-C continues in force, there
can be no question of any unconstitutionality or adverse
consequences associated with the unamended Article 31-C.
Indeed, both the Constitution Benches in Minerva Mills and
Waman Rao expressly noted that the first half of Article 31-C
had been held to be constitutional in Kesavananda Bharati.
Further, given that the unamended Article 31-C has been
given effect for over four decades as demonstrated by the
decisions in Bhim Singh and Sanjeev Coke, no argument
can be raised concerning any legal or practical difficulties
with the operation of the unamended Article 31-C. Given
these findings, the unamended Article 31-C continues in
force. [Para 71]
2.4. An amendment can be invalidated when it modifies,
obliterates, or adds some feature to the Constitution that
is anathema to the principles that emerge upon a structural
reading of the constitutional text. If an amendment is
invalidated because it causes a drastic deviation from the
principles that govern our constitutional democracy, the
consequences must be a return to those principles. Article
31-C represented a delicate balance between the goals of
Part IV and the rights of Part III of the Constitution. This
balance was held to not impermissibly deviate from the
core principles that govern our Constitution by the thirteen
judges’ decision of this Court in Kesavananda Bharati.
However, in Minerva Mills, Section 4 of the Forty-Second
Amendment was held to violate these core principles that
form the basic structure. The logical result of such a ruling
is that the constitutional text must return to within the fold of
the basic structure. To give effect to the repealing portions
of Section 4 of the Forty-Second Amendment while also
invalidating the enactment would not result in a return to
a constitutional text that is in conformity with the basic
structure. Rather, it would result in a novel third outcome,
the constitutionality of which would be uncertain, untested,
and may itself violate the basic structure. Therefore, the
consequence of invalidating Section 4 of the Forty-Second
Amendment must be that the unamended Article 31-C is
revived. [Para 72]
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Held (per B.V. Nagarathna, J.) (Concurring): I am in complete
accord with the reasoning that, in the absence of any indication that
Parliament intended a “repeal without substitution,” the original text
of Article 31C as it existed before the Constitution (Forty Second)
Amendment Act, 1976 must be reinstated following the invalidation
of the said amendment. In Minerva Mills case, when the amendment
was struck down for deviating from constitutional principles, the
logical consequence that must follow the declaration of invalidity
of the amendment is to revert to those original principles which the
amendment deviated from. This is by giving effect to Article 31C,
to the extent it was upheld in Kesavananda Bharati case. This
represents a return to the Constitution’s original text, aligning with
the basic structure of the Constitution. Consequently, invalidating
Section 4 of the Forty-Second Amendment should automatically
result in the restoration of the unamended Article 31C. I agree
that Article 31C to the extent that it was upheld in Kesavananda
Bharati remains in force. [Paras 3 and 23(a)]
Held (per Sudhanshu Dhulia, J.) (Concurring): The unamended
Article 31-C to the extent held valid in Kesavananda Bharati
survives. [Para 2]

B 1. Constitution of India – Art.39(b) – Whether the phrase
‘material resources of the community’ used in Art.39(b)
includes privately owned resources – Held [per Dr
Dhananjaya Y Chandrachud, CJI (for himself and for
Hrishikesh Roy, J. B. Pardiwala, Manoj Misra, Rajesh
Bindal, Satish Chandra Sharma, and Augustine George
Masih, JJ.)] (Majority opinion) – Theoretically, the
answer is yes, the phrase may include privately owned
resources – However, one cannot subscribe to the
expansive view adopted in the minority judgement
authored by Justice Krishna Iyer in Ranganatha Reddy
case and subsequently relied upon in Sanjeev Coke
case – Not every resource owned by an individual can
be considered a ‘material resource of the community’
merely because it meets the qualifier of ‘material needs’ –
The inquiry about whether the resource in question falls
within the ambit of Art. 39(b) must be context-specific and
subject to a non-exhaustive list of factors such as the
nature of the resource and its characteristics; the impact
of the resource on the well-being of the community;
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the scarcity of the resource; and the consequences
of such a resource being concentrated in the hands
of private players – Public Trust Doctrine evolved by
Supreme Court may also help identify resources which
fall within the ambit of the phrase “material resource of
the community” – Held (per B.V. Nagarathna, J.) – Yes,
privately owned resources except “personal effects” can
come within the scope and ambit of the phrase “material
resources of the community” provided such resources
get transformed as “resources of the community” – Held
(per Sudhanshu Dhulia, J.) (Dissenting) – The view of the
learned Chief Justice in this case (i.e. the majority opinon)
ultimately holds that not all privately owned resources
are “material resources of the community” – Not only
this it further limits the hands of the legislature to a non-
exhaustive list of factors to determine which resources
can be considered as “material resources” – There is no
need for this pre-emptive determination – The definition
of “material resources of the community” was purposely
kept in generalized and broad-based terms – Privately
owned resources are part of “material resources of the
community” – Provisions in Article 39(b) & (c) have to
be read in light of Art.38 of the Constitution – Once one
does that, one cannot but give an expansive meaning
to the phrase “material resources of the community”.
B 2. Constitution of India – Art.39(b) – Interpretation of –
Whether interpretation of Article 39(b) adopted by Justice
Krishna Iyer in Ranganatha Reddy case and followed in
Sanjeev Coke case must be reconsidered – Held [per
Dr Dhananjaya Y Chandrachud, CJI (for himself and for
Hrishikesh Roy, J. B. Pardiwala, Manoj Misra, Rajesh
Bindal, Satish Chandra Sharma, and Augustine George
Masih, JJ.)] (Majority opinion) – The majority judgment
in Ranganatha Reddy expressly distanced itself from the
observations made by Justice Krishna Iyer (speaking on
behalf of the minority of judges) on the interpretation of
Art.39(b) – Thus, a coequal bench of this Court in Sanjeev
Coke erred by relying on the minority opinion – Held (per
B.V. Nagarathna, J.) (Dissenting) – On merits it cannot
be held that Sanjeev Coke violated judicial discipline –
One cannot lose sight of the fact that in Sanjeev Coke
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this Court did not decide the case only on the basis of
the opinion of Krishna Iyer, J. in Ranganatha Reddy –
Therefore, Sanjeev Coke is good law insofar as on the
merits of the matter is concerned – Held (per Sudhanshu
Dhulia, J.) (Dissenting) – In Sanjeev Coke, when the
Five Judge Constitution Bench unanimously followed
the minority judgement in Ranganatha Reddy, it did not
violate judicial discipline of not following the majority,
since in Sanjeev Coke, the Five Judges did not go against
the law laid down by the majority Judges in Ranganatha
Reddy but only adopted the logic of the Three Judges on
which the majority of Four Judges were silent – The five
learned judges in Sanjeev Coke relied upon the decision
of the minority judges in Ranganath Reddy as they were
persuaded by the logic and the interpretation given by
Justice Krishna Iyer to the phrase “material resources of
the community” – The broad and inclusive meaning given
to the expression “material resources of the community”
by Justice Krishna Iyer and Justice O. Chinnappa Reddy
in Ranganatha Reddy and Sanjeev Coke respectively has
lost none of its relevance, or jurisprudential value, nor
has it lost the audience which appreciates these values.
B 3. Constitution of India – Art.39(b) – Phrase ‘material
resources of the community’ in Article 39(b) – Meaning
of – Single-sentence observation in Mafatlal case to the
effect that ‘material resources of the community’ include
privately owned resources – Effect of – Held [per Dr
Dhananjaya Y Chandrachud, CJI (for himself and for
Hrishikesh Roy, J. B. Pardiwala, Manoj Misra, Rajesh Bindal,
Satish Chandra Sharma, and Augustine George Masih,
JJ.)] (Majority opinion) – The single-sentence observation
in Mafatlal case to the effect that ‘material resources of
the community’ include privately owned resources is not
part of the ratio decidendi of the judgement – Thus, it is
not binding on the Court – Held (per Sudhanshu Dhulia, J.)
(Concurring) – The majority opinion in Mafatlal constitutes
obiter dicta and is not binding on this Court – Held (per
B.V. Nagarathna, J.) – The single-sentence observation
in Mafatlal to the effect that “material resources of the
community” include privately owned resources may be
obiter but has great persuasive value.
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B 4. Words and Phrases – Term ‘distribution’ – Meaning and
connotation of – Distribution by the State – Whether
acquisition of private resources falls within the ambit
of the term ‘distribution – Held [per Dr Dhananjaya
Y Chandrachud, CJI (for himself and for Hrishikesh
Roy, J. B. Pardiwala, Manoj Misra, Rajesh Bindal, Satish
Chandra Sharma, and Augustine George Masih, JJ.)] –
The term ‘distribution’ has a wide connotation – The
various forms of distribution which can be adopted by
the State cannot be exhaustively detailed – However, it
may include the vesting of the concerned resources in
the State or nationalisation – In the specific case, the
Court must determine whether the distribution ‘subserves
the common good’ – Held (per B.V. Nagarathna, J.): The
term “distribution” has no doubt a wide connotation
but vesting in the State of a particular privately owned
“material resource” or nationalisation of the same are
only conditions precedent to distribution which have to
comply with Article 300A of the Constitution – Further,
a resource which has vested in the State or a resource
retained by a State on nationalisation could be utilised
by the State to subserve the common good as a material
resource of the community – The public trust doctrine
would apply to such material resources – Alternatively,
the State could decide to actually distribute the “material
resources of the community” to eligible and deserving
persons by way of assignment, lease, allotment, grant,
etc. – The same would also come within the scope
and ambit of the expression “distribution” – Held (per
Sudhanshu Dhulia, J.): It is for the legislature to decide
how the ownership and control of material resources is to
be distributed in order to subserve common good – How
to control and distribute a material resource is also the
task of the Legislature, but while doing so what has to
be seen is that the control and ownership of the material
resource be so distributed that it subserves common
good of the community – If it does not, then such a
legislation can be struck down as the Judiciary is not
deprived of its powers of judicial review.
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Held [per Dr Dhananjaya Y Chandrachud, CJI (for himself
and for Hrishikesh Roy, J. B. Pardiwala, Manoj Misra, Rajesh
Bindal, Satish Chandra Sharma, and Augustine George Masih,
JJ.)] (Majority Opinion):
1. Article 39(b) is not a source of legislative power. The inclusion
or exclusion of ‘privately-owned resources’ from the ambit of
the provision does not impact the power of the legislature to
enact laws to acquire such resources. The power to acquire
private resources, in certain situations, continues to be
traceable to other provisions in the Constitution, including
the sovereign power of eminent domain. [Para 203]
2. The interpretation of Article 39(b), i.e. that all private property
is covered within the ambit of Article 39(b) is inconsistent with
the text of Article 39(b). [Para 204]
3. There is a distinction between holding that private property may
form part of the phrase ‘material resources of the community’
and holding that all private property falls within the net of the
phrase. It is here that the judgment by Justice Krishna Iyer
in Ranganatha Reddy, and the consequent observations in
Sanjeev Coke fall into error. Justice Krishna Iyer cast the
net wide, holding that all resources which meet “material
needs” are covered by the phrase and any attempts by the
government to nationalise these resources would be within the
scope of Article 39(b). He clarified that not only the “means
of production” but also the goods so produced fall within the
net of the provision. The illustration which he provides in
Ranganatha Reddy indicates the unworkable nature of such
an interpretation. Justice Krishna Iyer observed, by way of an
illustration, that not only do factories which produce cars fall
within the net of Article 39(b), but even privately owned cars
are covered by the provision. Similarly, even in Sanjeev Coke,
the net is cast wide and this Court observed that “all things
capable of producing wealth of the community” fall within
the ambit of the phrase. In both decisions, it was observed
that all resources of the individual are consequentially the
resources of the community. [Para 209]
4. An interpretation of Article 39(b) which places all private
property within the net of the phrase “material resources of
the community” only satisfies one of the three requirements
of the phrase, i.e. that the goods in question must be a
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‘resource’. However, it ignores the qualifiers that they must
be “material” and “of the community”. The use of the words
“material” and “community” are not meaningless superfluities.
One cannot adopt a construction of the provision which
renders these terms otiose. The words “of the community”
must be understood as distinct from the “individual”. If
Article 39(b) was meant to include all resources owned by
an individual, it would state the “ownership and control of
resources is so distributed as best to subserve the common
good”. Similarly, if the provision were to exclude privately
owned resources, it would state “ownership and control of
resources of the state …” instead of its current phrasing. The
use of the word “of the community” rather than “of the state”
indicates a specific intention to include some privately owned
resources. [Para 211]
5. In essence, the text of the provision indicates that not all
privately owned resources fall within the ambit of the phrase.
However, privately owned resources are not excluded as
a class and some private resources may be covered. The
resource in question must meet the two qualifiers, i.e. it must
be a “material” resource and it must be “of the community”.
[Para 212]
6. To declare that Article 39(b) includes the distribution of all
private resources amounts to endorsing a particular economic
ideology and structure for our economy. Justice Krishna
Iyer’s judgment in Ranganatha Reddy, which was followed
inter alia in Sanjeev Coke and Bhim Singhji, was influenced
by a particular school of economic thought. In essence, the
interpretation of Article 39(b) adopted in these judgements is
rooted in a particular economic ideology and the belief that an
economic structure which prioritises the acquisition of private
property by the state is beneficial for the nation. [Para 213]
7. The Constitution was framed in broad terms to allow
succeeding governments to experiment with and adopt a
structure for economic governance which would subserve the
policies for which it owes accountability to the electorate. The
role of this Court is not to lay down economic policy, but to
facilitate this intent of the framers to lay down the foundation
for an ‘economic democracy’. The doctrinal error in the Krishna
Iyer approach was, postulating a rigid economic theory, which
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advocates for greater state control over private resources,
as the exclusive basis for constitutional governance. The
foresighted vision of our framers to establish an ‘economic
democracy’ and trust the wisdom of the elected government,
has been the backbone of the highgrowth rate of India’s
economy, making it one of the fastest-growing economies in
the world. To scuttle this constitutional vision by imposing a
single economic theory, which views the acquisition of private
property by the state as the ultimate goal, would undermine
the very fabric and principles of our constitutional framework.
[Paras 214, 215 and 216]
8. The right to property was included in the Constitution as
a fundamental right under Articles 19(1)(f) and Article 31.
Subsequently, the right to property was deleted from Part III of
the Constitution by the Constitution (Forty-fourth Amendment)
Act, 1978. However, a modified version was inserted and the
right to property continues to be constitutionally protected
under Article 300A. Although no longer in the nature of a
fundamental right, the provision has been characterised
as a constitutional and human right. The interpretation of
Article 39(b), both as a pre-cursor to the protection of Article
31C and as an aspirational Directive Principle, cannot run
counter to the constitutional recognition of private property.
To hold that all private property is covered by the phrase
“material resources of the community” and that the ultimate
aim is state control of private resources would be incompatible
with the constitutional protection. [Paras 217, 220]
9. A construction of Article 39(b) which provides that all private
property is included within the ambit of Article 39(b) is incorrect.
However, there is no bar on the inclusion of private property as
a class and if a privately owned resource meets the qualifiers
of being a ‘material resource’ and ‘of the community’, it may
fall within the net of the provision. “Material resources of the
community” refers to either natural resources (which are those
of the nation) or those resources which in a large sense can
be said to be of community, even though they may be in
private hands. [Para 221]
10. There are various forms of resources, which may be privately
owned, and inherently have a bearing on ecology and/or
the well-being of the community. Such resources fall within
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the net of Article 39(b). To illustrate, non-exhaustively, there
may exist private ownership of forests, ponds, fragile areas,
wetlands and resource-bearing lands. Similarly, resources
like spectrum, airwaves, natural gas, mines and minerals,
which are scarce and finite, may sometimes be within private
control. However, as the community has a vital interest in
the retention of the character of these resources, they fall
within the ambit of the expression “material resources of the
community”. [Para 223]
11. The majority judgment in Ranganatha Reddy expressly
distanced itself from the observations made by Justice
Krishna Iyer (speaking on behalf of the minority of judges)
on the interpretation of Article 39(b). Thus, a coequal bench
of this Court in Sanjeev Coke erred by relying on the minority
opinion. [Para 229(b)]
12. The single-sentence observation in Mafatlal to the effect that
‘material resources of the community’ include privately owned
resources is not part of the ratio decidendi of the judgement.
Thus, it is not binding on this Court. [Para 229(c)]
13. On the limited question of whether the acquisition of private
resources falls within the ambit of the term ‘distribution’,
to hold that the term “distribution” cannot encompass the
vesting of a private resource would amount to falling into
the same error as the Justice Krishna Iyer doctrine, i.e. to
lay down a preference of economic and social policy. The
term ‘distribution’ has a wide connotation. The various forms
of distribution which can be adopted by the state cannot be
exhaustively detailed. However, it may include the vesting
of the concerned resources in the state or nationalisation.
In the specific case, the Court must determine whether the
distribution ‘subserves the common good’. [Paras 227, 228
and 229(f)]
14. The direct question referred to this bench is whether the
phrase ‘material resources of the community’ used in Article
39(b) includes privately owned resources. Theoretically,
the answer is yes, the phrase may include privately owned
resources. However, this Court is unable to subscribe to the
expansive view adopted in the minority judgement authored by
Justice Krishna Iyer in Ranganatha Reddy and subsequently
relied on by this Court in Sanjeev Coke. Not every resource
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owned by an individual can be considered a ‘material resource
of the community’ merely because it meets the qualifier of
‘material needs’. [Para 229(d)]
15. The inquiry about whether the resource in question falls
within the ambit of Article 39(b) must be context-specific
and subject to a non-exhaustive list of factors such as the
nature of the resource and its characteristics; the impact of
the resource on the well-being of the community; the scarcity
of the resource; and the consequences of such a resource
being concentrated in the hands of private players. The Public
Trust Doctrine evolved by this Court may also help identify
resources which fall within the ambit of the phrase “material
resource of the community”. [Para 229(e)]
Held (per B.V. Nagarathna, J.):
1. Articles 37, 38 and 39 of the Constitution of India which are
part of the Directive Principles of State Policy have to be
interpreted by bearing in mind the changing economic policies
of the State and not in a rigid watertight compartment. The
flexibility of interpretation is having regard to the dynamic
changes in the Indian socio-economic policies meant for the
welfare and progress of the people of India. An interpretation
of the aforesaid Articles or for that matter any other provision
of the Constitution must be viewed in the historical backdrop
of the period in which the interpretation was made by this
Court during the course of adjudication. Any interpretation
which was found to be sound and in consonance with the
socio-economic policy of the State during a particular period
of time, cannot be critiqued at a later point of time in any
quarter including by a court of law merely because the
socio- economic policies of the State have changed over a
period of time or there is a paradigm shift in the thinking and
policies of the State. [Para 22(I)]
2. Articles 37 and 38 of the Constitution have to be borne in
mind by the Courts while considering the validity of any
policy or statute which intend to further any of the Directive
Principles of State Policy. [Para 22(II)]
3. Article 39(b) has to be read in the context of Article 39(c).
Articles 39(b) and (c) supplement and complement each other
and cannot be construed in silos. Article 39(b) comprises of
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following five components, namely, (i) ownership and control;
(ii) material resources; (iii) of the community; (iv) so distributed;
and (v) as best to subserve the common good.
(i) The expression “ownership and control” must be given
its widest connotation in the context of “distribution
of” “material resources of the community” “as best to
subserve the common good”.
(ii) “Material resources” can in the first instance be divided
into two basic categories, namely, (i) State owned
resources which belong to the State which are essentially
material resources of the community, held in public
trust by the State; and (ii) privately owned resources.
However, the expression “material resources” does
not include “personal effects” or “personal belonging”
of individuals, such as, clothing or apparel, household
articles, personal jewellery and other articles of daily
use belonging to the individuals of a household and
which are intimate and personal in nature and use.
Excluding “personal effects”, all other privately owned
resources can be construed as “material resources”.
Thus, all resources whether they are public resources
or privately owned resources which come within the
scope and ambit of the expression “material resources”
as stated above are included within that expression.
(iii) “Material resources” which are privately owned could be
transformed as “material resources of the community”,
inter alia, in the following five ways: a. by nationalisation,
which could be either by way of an enactment made
by the Parliament or a State legislature or in any other
manner in accordance with law; b. by acquisition,
which could be by way of a special enactment made
by the Parliament or a State legislature having regard
to Entry 42 – List III of the Seventh Schedule of the
Constitution. Alternatively, the acquisition could be
made under the extant Parliamentary or State laws
dealing with acquisition; c. by operation of law, such as
vesting of private resources in the State, which could
be by virtue of statutes dealing with land reforms, land
tenures, abolition of inams, village offices or any other
law where by operation of law there would be vesting
[2024] 11 S.C.R. 15

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

of private material resources in the State or in any
other manner in accordance with law; d. by purchase
of the material resource from private persons by the
State, its agencies and instrumentalities in the manner
known to law; and e. by the private owner of the
material resource converting his “material resources”
as a “material resource of the community” by donation,
gift, creation of an endowment or a public trust or in
any other manner known to law.
(iv) In (a) to (d) above, the provision of Article 300A which is
a constitutional right to property has to be complied with.
(v) The “material resources of the community” have to be
“distributed as best to subserve the common good”.
Distribution could be in two ways: Firstly, by the
State itself retaining the material resource for a public
purpose and/or for public use; and Secondly, privately
owned material resources when converted as “material
resources of the community” can be distributed to eligible
and deserving persons either by way of auction, grant,
assignment, allocation, lease, sale or any other mode of
transfer known to law either temporarily or permanently
depending upon the mode adopted and unconditionally
or with conditions depending upon:(a) nature of the
resource and its inherent characteristics; (b) the impact
of the resource on the well-being of the community;
(c) the scarcity of the resource; (d) the consequences
of such a resource being concentrated in the hands of
the private owners; and (e) any such factors.
(vi) The expression “common good” would, inter alia, mean
that the distribution of the “ownership and control of
material resources of the community” would not lead
to concentration of the wealth and means of production
in the hands of few which is a Directive Principle in
clause (c) of Article 39. Thus, “distribution of material
resources of the community” cannot violate the Directive
Principle in clause (c) of Article 39 of the Constitution.
[Para 22(III)]
4. The majority judgment of this Court in Ranganatha Reddy
and the judgment in Abu Kavur Bai relate to nationalisation of
contract carriages/State carriages which were upheld by this
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Court. Nationalisation of coking coal mines was upheld by this
Court in Sanjeev Coke. In Bhim Singhji and Basantibai, certain
provisions of the Urban Land Ceiling Act and the provisions of
MHADA respectively were upheld on the touchstone of Article
39(b) of the Constitution. The nine-Judge Bench in Mafatlal
referred to the judgments of this Court in Ranganatha Reddy,
Abu Kavur Bai etc. in the context of the submission made
before, i.e., the Indian Constitution envisages Justice – social,
economic and political, to all citizens of India as enshrined
in the preamble. This was by way of an obiter but having
persuasive value. [Para 22(IV)]
5. The majority judgment in Ranganatha Reddy, no doubt, did
not concur with the views of Krishna Iyer, J. expressed in his
separate opinion. However, in Sanjeev Coke the Constitution
Bench of five-Judges independently upheld what was
challenged in the said case, namely, the Coking Coal Mines
(Nationalisation) Act, 1972 and while doing so in paragraphs
19 and 20 referred to the observations of Krishna Iyer, J. in
Ranganatha Reddy and made certain observations on the
majority judgment in Minerva Mills. However, A.N. Sen, J.
did not express any opinion on the judgment of this Court
in Minerva Mills. What is significant is that the judgments in
Ranganatha Reddy as well as in Sanjeev Coke upheld the
respective Nationalisation Acts. Therefore, on merits it cannot
be held that Sanjeev Coke violated judicial discipline. One
cannot lose sight of the fact that in Sanjeev Coke this Court
did not decide the case only on the basis of the opinion of
Krishna Iyer, J. in Ranganatha Reddy but on merits on the
validity of the Nationalisation Act. Therefore, Sanjeev Coke is
good law insofar as on the merits of the matter is concerned.
[Para 23(b)]
6. The single-sentence observation in Mafatlal to the effect
that “material resources of the community” include privately
owned resources may be obiter but has great persuasive
value. [Para 23(c)]
7. Yes, privately owned resources except “personal effects” as
explained above can come within the scope and ambit of the
phrase “material resources of the community” provided such
resources get transformed as “resources of the community”
as discussed by me above. [Para 23(d)]
[2024] 11 S.C.R. 17

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

8. I agree that the inquiry about whether the resource in question
falls within the ambit of Article 39(b) must be context-specific
and subject to a non-exhaustive list of factors such as the
nature of the resource and its characteristics; the impact of
the resource on the well-being of the community; the scarcity
of the resource; and the consequences of such a resource
being concentrated in the hands of private players. The Public
Trust Doctrine evolved by this Court may also help identify
resources which fall within the ambit of the phrase “material
resource of the community”. In addition, I also reiterate my
discussion and conclusion on how privately owned material
resource can be transformed as “material resource of the
community”. [Para 23(e)]
9. The term “distribution” has no doubt a wide connotation but
vesting in the State of a particular privately owned “material
resource” or nationalisation of the same are only conditions
precedent to distribution which have to comply with Article
300A of the Constitution. Further, a resource which has
vested in the State or a resource retained by a State on
nationalisation could be utilised by the State to subserve the
common good as a material resource of the community. The
public trust doctrine would apply to such material resources.
Alternatively, the State could decide to actually distribute the
“material resources of the community” to eligible and deserving
persons by way of assignment, lease, allotment, grant, etc.
The same would also come within the scope and ambit of
the expression “distribution”. [Para 23(f)]
10. The judgments of this Court in Ranganatha Reddy, Sanjeev
Coke, Abu Kavur Bai and Basantibai correctly decided the
issues that fell for consideration and do not call for any
interference on the merits of the matters. The observations of
the Judges in those decisions would not call for any critique
in the present times. Neither is it justified nor warranted.
[Para 24]
Held (per Sudhanshu Dhulia, J.):
1. The question as to whether privately owned resources are
part of “material resources of the community” as used in
Article 39(b), has been answered by the learned Chief Justice
as “yes”, “the phrase may include privately owned resources”,
but not in the expansive manner as held by the three learned
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judges in State of Karnataka v. Ranganatha Reddy and
later in Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd.
The judgment further sets limits on what could be “material
resources of the community”. I am unable to accept the above
proposition as this view ultimately holds that not all privately
owned resources are “material resources of the community”.
Not only this it further limits the hands of the legislature to a
non-exhaustive list of factors to determine which resources
can be considered as “material resources”. In my opinion there
is no need for this pre-emptive determination. The definition
of “material resources of the community” was purposely kept
in generalized and broad-based terms. I entirely endorse
the view taken by the Three learned Judges in Ranganatha
Reddy and by the Five learned Judges in Sanjeev Coke,
as to the scope and ambit of “material resources of the
community”. Privately owned resources are a part of the
“material resources of the community”. [Para 3]
2. “We may have democracy, or we may have wealth
concentrated in the hands of a few, but we cannot have both.”
This expression is attributed to Justice Louis D. Brandeis, an
eminent Jurist and a former Judge of US Supreme Court.
Without doubt, when Articles 38 and 39 of the Constitution of
India were being incorporated in Part IV of our Constitution,
a similar thought dominated the minds of the framers of our
Constitution. It is for this reason that Granville Austin calls
the Indian Constitution, “first and foremost a social document”.
Our Constitution is not merely a roadmap for governance,
it is also a vision for a just and equitable society. [Para 5]
3. In Mafatlal, the question before this Court primarily was of
unjust enrichment. The observations of Justice Jeevan Reddy
are only incidental and were not related to the core issue.
I agree with the learned Chief Justice on this point and I
adopt the detailed reasoning given by him in holding that
the majority opinion in Mafatlal constitutes obiter dicta and
is not binding on this Court. [Para 24]
4. The question is that when in Sanjeev Coke, the Five Judge
Constitution Bench unanimously followed the minority
judgement in Ranganatha Reddy did it violate judicial
discipline of not following the majority but the minority decision.
In my opinion, it did not break any judicial discipline, since in
[2024] 11 S.C.R. 19

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Sanjeev Coke, the Five Judges did not go against the law
laid down by the majority Judges in Ranganatha Reddy
but only adopted the logic of the Three Judges on which the
majority of Four Judges were silent. [Para 30]
5. It is difficult to even come to the conclusion that the Four
Judges in Ranganatha Reddy entirely disagreed with the
minority opinion of Justice Krishna Iyer. It merely says “we
must not be understood to agree with all that he has said in his
judgment in this regard.” This is not exactly a disagreement.
The majority of the Four Judges chose to remain silent on the
subject. It cannot be said that the Four Judges, in any way,
said anything contrary or in opposition to what was laid down
by the Three Judges in Ranganatha Reddy, and therefore, no
judicial discipline was broken by Justice O. Chinnappa Reddy
when he authored the unanimous judgment in Sanjeev Coke
by adopting the logic of the Three Judges in Ranganatha
Reddy. The logic is very clear, in cases where a Judge or
Judges of the Supreme Court in minority have given a decision
on a point on which the majority has remained silent, that it
would be binding on the High Courts and all other Courts,
and for this Court the least it will have is persuasive value.
The five learned judges in Sanjeev Coke relied upon the
decision of the minority judges in Ranganath Reddy as they
were persuaded by the logic and the interpretation given by
Justice Krishna Iyer to the phrase “material resources of the
community”. [Para 31]
6. The provisions in Article 39(b) & (c) have to be read in the
light of Article 38 of the Constitution of India. Once one
does that, one cannot but give an expansive meaning to the
phrase “material resources of the community”. The meaning
which must be given to “material resources of the community”
is what has been given to it in Ranganatha Reddy by the
Three Judges and what has been followed in the Constitution
Bench decision in Sanjeev Coke. To my mind, this has been
the interpretation of the phrase “material resources of the
community”. [Para 48]
7. It is for the legislature to decide how the ownership and
control of material resources is to be distributed in order to
subserve common good. Once the expansive meaning of
“material resources of the community” is determined, there is
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no necessity of drawing further guidelines for the legislatures to
determine as to what will constitute material resources. How
to control and distribute a material resource is also the task
of the Legislature, but while doing so what has to be seen is
that the control and ownership of the material resource be so
distributed that it subserves common good of the community.
If it does not, then such a legislation can be struck down as
the Judiciary is not deprived of its powers of judicial review.
The legislation in question has to establish a nexus with
the principles specified in Article 39(b) and (c) to be a valid
legislation. This is the law in terms of Kesavananda Bharati
and Minerva Mills. To put it differently what and when do
the “privately owned resources” come within the definition of
“material resources” is not for this Court to declare. This is
not required. The key factor is whether such resources would
subserve common good. Clearly the acquisition, ownership
or even control of every privately owned resource will not
subserve common good. Yet at this stage we cannot come
out with a catalogue of do’s and don’ts. We must leave this
exercise to the wisdom of the legislatures. [Para 49]
8. The incorporation of Article 38 as well as Article 39(b) and
(c) in Part IV of our Constitution was based on the prevalent
philosophy of the time and the path of development India
chose to follow. The interpretation given to the above
provisions by this Court, particularly in Ranganatha Reddy
and Sanjeev Coke also has its contextual relevance. Perhaps
in some ways situations have changed. What has not changed,
however, is the inequality. There is today a political equality
and there is also an equality in law, yet the social and
economic inequalities continue as cautioned by Dr. Ambedkar
in his speech in the constituent Assembly on November 25,
1949. The inequality in income and wealth and the growing
gap between the rich and the poor is still enormous. It will
therefore not be prudent to abandon the principles on which
Articles 38 and 39 are based and on which stands the Three
Judge opinion in Ranganatha Reddy and the unanimous
verdict in Sanjeev Coke. [Para 50]
9. The broad and inclusive meaning given to the expression
“material resources of the community” by Justice Krishna
Iyer and Justice O. Chinnappa Reddy in Ranganatha
Reddy and Sanjeev Coke respectively has stood us in good
[2024] 11 S.C.R. 21

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

stead and has lost none of its relevance, or jurisprudential
value, nor has it lost the audience which appreciates these
values. I must also record here my strong disapproval on the
remarks made on the Krishna Iyer Doctrine as it is called.
This criticism is harsh, and could have been avoided. The
Krishna Iyer Doctrine, or for that matter the O. Chinnappa
Reddy Doctrine, is familiar to all who have anything to do
with law or life. It is based on strong humanist principles
of fairness and equity. It is a doctrine which has illuminated
our path in dark times. The long body of their judgment is
not just a reflection of their perspicacious intellect but more
importantly of their empathy for the people, as human being
was at the centre of their judicial philosophy. [Para 50]

Case Law Cited
In the judgment of Dr. Dhananjaya Y. Chandrachud, CJI:
Sanjeev Coke Manufacturing Co v. Bharat Coking Coal Ltd. [1983]
1 SCR 1000 : (1983) 1 SCC 147 : 1982 INSC 93 and State of
Karnataka v. Ranganatha Reddy [1978] 1 SCR 641 : (1977) 4
SCC 471 : 1977 INSC 196 [Minority opinion of Justice Krishna
Iyer] – held, erroneous.
State of Maharashtra v. Central Provinces Manganese Ore. [1977]
1 SCR 1002 : (1977) 1 SCC 643; DK Trivedi & Sons v. State of
Gujarat [1986] 1 SCR 479 : (1986) Supp. SCC 20; Shamarao
Parulekar v. District Magistrate, Thana [1952] 1 SCR 683 : (1952)
2 SCC 1 : 1952 INSC 63; Natural Resources Allocation, In Re :
Special Reference No.1 of 2012 [2012] 9 SCR 311 : (2012) 10
SCC 1 : 2012 INSC 428; Shaukat Khan v. State of Andhra Pradesh
[1975] 1 SCR 429 : (1974) 2 SCC 376; Indian Express Newspapers
(Bombay) v. Union of India [1985] 2 SCR 287 : (1985) 1 SCC
641 : 1984 INSC 231 – relied on.
State of Maharashtra v. Basantibai Khetan [1986] 1 SCR 707 :
(1986) 2 SCC 516 : 1986 INSC 40; Minerva Mills v. Union of
India [1981] 1 SCR 206 : (1980) 3 SCC 625 : 1980 INSC 142;
Kesavananda Bharati v. State of Kerala [1973] Supp. 1 SCR 1 :
(1973) 4 SCC 225 : 1973 INSC 91; Waman Rao v. Union of India
[1981] 2 SCR 1 : (1980) 3 SCC 587 : 1980 INSC 216; Mafatlal
Industries Ltd v. Union of India [1996] Supp. 10 SCR 585 : (1997) 5
SCC 536 : 1996 INSC 1514; IR Coelho v. State of Tamil Nadu [1999]
Supp. 2 SCR 394 : (1999) 7 SCC 580 : 1999 INSC 394; Malpe
22 [2024] 11 S.C.R.

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Vishwanath Acharya v. State of Maharashtra [1997] Supp. 6 SCR
717 : (1998) 2 SCC 1 : 1997 INSC 831; Supreme Court Advocates-
On-Record Association v. Union of India [2015] 13 SCR 1 : (2016)
5 SCC 1 : 2015 INSC 285; Maharao Sahib Shri Bhim Singhji v.
Union of India [1985] Supp. 1 SCR 862 : (1981) 1 SCC 166 : 1980
INSC 219; ATB Mehtab Majid v. State of Madras [1963] Supp. 2
SCR 435 : (1963) 14 STC 355 : 1962 INSC 342; Koteswar Vittal
Kamath v. Rangappa Baliga [1969] 3 SCR 40 : (1969) 1 SCC
255 : 1968 INSC 335; The Property Owners’ Association and Ors.
v. The State of Maharashtra and Ors. [1996] Supp. 2 SCR 230 :
(1996) 4 SCC 49 : 1996 INSC 598; Property Owners’ Assn. v.
State of Maharashtra (2001) 4 SCC 455; Property Owners’ Assn.
v. State of Maharashtra (2013) 7 SCC 522; Mulchand Odhavji v.
Rajkot Borough Municipality (1971) 3 SCC 53; BN Tewari v. Union
of India [1965] 2 SCR 421; T Devadasan v. Union of India [1964]
4 SCR 680 : 1963 INSC 183; B Banerjee v. Anita Pan [1975] 2
SCR 774 : (1975) 1 SCC 166 : 1974 INSC 246; State of Tamil
Nadu & Ors. v. L. Abu Kavur Bai & Ors. [1984] 1 SCR 725 : (1984)
1 SCC 515; Jijubhai Nanbhai Kachar v. State of Gujarat [1994] 1
SCR 807 : (1995) Supp 1 SCC 596; National Textile Corp Ltd. v.
Sitaram Mills Ltd. [1986] 2 SCR 187 : AIR 1986 SC 1234 : 1986
INSC 61; Union of India v. Cynamide India Ltd. [1987] 2 SCR 841 :
(1987) 2 SCC 720 : 1987 INSC 100; Tinsukhia Electric Supply Co.
Ltd. v. State of Assam & Ors. [1989] 2 SCR 544 : (1989) 3 SCC
709 : 1989 INSC 128; N. Parthasarathy v. Controller of Capital
Issues [1991] 2 SCR 329 : (1991) 3 SCC 153 : 1991 INSC 104;
Orient Paper and Industries Ltd. v. State of Orissa [1990] Supp.
2 SCR 480 : (1991) Supp 1 SCC 81; Assam Sillimanite Ltd. &
Anr v. Union of India & Ors. [1990] 1 SCR 983 : (1992) Suppl
1 SCC 692 : 1990 INSC 89; Mahinder Kumar Gupta v. Union of
India, Ministry of Petroleum and Natural Gas (1995) 1 SCC 85;
Tata Iron & Steel Co v. UOI [1996] Supp. 3 SCR 808 : (1996)
9 SCC 709 : 1996 INSC 770; Victorian Granites Pvt. Ltd. v. P.
Rama Rao & Ors. [1996] Supp. 5 SCR 692 : (1996) 10 SCC 665 :
1996 INSC 1018; Mafatlal Industries Ltd. & Ors. v. Union of India
& Ors. [1996] Supp. 10 SCR 585 : (1997) 5 SCC 536; Reliance
Natural Resources Ltd. v. Reliance Industries Ltd. [2010] 5 SCR
704 : (2010) 7 SCC 1 : 2010 INSC 290; Central Board of Dawoodi
Bohra v. State of Maharashtra [2004] Supp. 6 SCR 1054 : (2005)
2 SCC 673; Trimurthi Fragrances (P) Ltd. v. State (NCT of Delhi)
[2022] 15 SCR 516 : 2022 SCC OnLine SC 1247 : 2022 INSC
975; Jaishri Laxmanrao Patil v. State of Maharashtra [2021] 15
[2024] 11 S.C.R. 23

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

SCR 715 : (2021) 8 SCC 1 : 2021 INSC 284; Rajnarain Singh v.
Patna Administration Committee [1955] 1 SCR 290 : (1954) 2 SCC
82 : 1954 INSC 69; Kaikhosrou (Chick) Kavasji Framji v. Union of
India [2019] 4 SCR 222 : (2019) 20 SCC 705 : 2019 INSC 378;
Navtej Singh Johar v. Union of India [2018] 7 SCR 379 : (2018) 10
SCC 1 : 2018 INSC 790; Lt. Col. Nitisha & Ors. v. Union of India
& Ors. [2021] 4 SCR 633 : (2021) 15 SCC 125 : 2021 INSC 210;
Sita Soren v. Union of India [2024] 3 SCR 462 : (2024) 5 SCC
629 : 2024 INSC 161; Islamic Academy of Education v. State of
Karnataka [2003] Supp. 2 SCR 474 : (2003) 6 SCC 697 : 2003
INSC 391; Secunderabad Club v. CIT [2023] 12 SCR 979 : 2023
SCC OnLine SC 1004 : 2023 INSC 736; State of Gujarat v. Utility
Users’ Welfare Assn. [2018] 9 SCR 106 : (2018) 6 SCC 21 : 2018
INSC 329; State of Madras v. Champakan Dorairjan [1951] 1 SCR
525 : AIR 1951 SC 226 : 1951 INSC 26; Mohd Hanif Qureshi v.
State of Bihar [1959] 1 SCR 629 : 1957 SCC OnLine SC 17;
Golak Nath v. State of Punjab [1967] 2 SCR 762 : [1967] SCC
OnLine SC 14 : 1967 INSC 45; Indian Handicrafts Emporium v.
Union of India [2003] Supp. 3 SCR 43 : (2003) 7 SCC 589 : 2003
INSC 427; M.R.F. Ltd. v. Inspector, Kerala Govt [1998] Supp.
2 SCR 632 : (1998) 8 SCC 227 : 1998 INSC 423; Workmen v.
Meenakshi Mills Ltd. [1992] 3 SCR 409 : (1992) 3 SCC 336 :
1992 INSC 164; Pathumma v. State of Kerala [1978] 2 SCR 537 :
(1978) 2 SCC 1 : 1978 INSC 7; State of Gujarat v. Mirzapur Moti
Kureshi Kassab Jamat [2005] Supp. 4 SCR 582 : (2005) 8 SCC
534 : 2005 INSC 525; State of Kerala v. N.M. Thomas [1976] 1
SCR 906 : (1976) 2 SCC 310 : 1975 INSC 224; Bandhua Mukti
Morcha v. Union of India [1984] 2 SCR 67 : (1984) 3 SCC 161 :
1983 INSC 203; Ashok Kumar Thakur v. Union of India [2008] 4
SCR 1 : (2008) 6 SCC 1 : 2008 INSC 473; Olga Tellis v. Bombay
Municipal Corpn. [1985] Supp. 2 SCR 51 : (1985) 3 SCC 545 :
1985 INSC 151; S.R. Chaudhuri v. State of Punjab [2001] Supp. 1
SCR 621 : (2001) 7 SCC 126 : 2001 INSC 373; K.S. Puttaswamy
v. Union of India [2017] 10 SCR 569 : (2017) 10 SCC 1 : 2017
INSC 1235; Maharashtra State Electricity Board v. Thana Electric
Supply Co. [1989] 2 SCR 518 : (1989) 3 SCC 616 : 1989 INSC
127; Tinsukhia Electric Supply Co. Ltd. v. State of Assam [1989] 2
SCR 544 : (1989) 3 SCC 709 : 1989 INSC 128; Assam Sillimanite
Ltd. v. Union of India [1990] 1 SCR 983 : (1992) Supp. 1 SCC
692 : 1990 INSC 89; Hardeep Singh v. State of Punjab [2014]
2 SCR 1 : (2014) 3 SCC 92 : 2014 INSC 21; Rohitash Kumar v.
Om Prakash Sharma [2012] 13 SCR 47 : (2013) 11 SCC 451 :
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2012 INSC 509; Chandigarh Housing Board v. Major General
Devinder Singh [2007] 3 SCR 1049 : (2007) 9 SCC 6 : 2007 INSC
291; Lachhman Dass v. Jagat Ram [2007] 2 SCR 980 : (2007)
10 SCC 448; Vidya Devi v. State of Himachal Pradesh [2020] 1
SCR 749 : (2020) 2 SCC 569 : 2020 INSC 23; Kolkata Municipal
Corporation & Anr v. Bimal Kumar Shah & Ors. [2024] 5 SCR
831 : 2024 INSC 435; M.C. Mehta v. Kamal Nath [1996] Supp.
10 SCR 12 : (1997) 1 SCC 388 : 1996 INSC 1482; M.I. Builders
(P) Ltd. v. Radhey Shyam Sahu [1999] 3 SCR 1066 : (1999) 6
SCC 464 : 1996 INSC 1482; Fomento Resorts and Hotels Ltd.
v. Minguel Martins [2009] 3 SCR 1 : (2009) 3 SCC 571 : 2009
INSC 39; Intellectuals Forum v. State of A.P. [2006] 2 SCR 419 :
(2006) 3 SCC 549 : 2006 INSC 101; Vedanta Limited v. State of
Tamil Nadu [2024] 2 SCR 1121 : 2024 INSC 175; Centre for Public
Interest Litigation v. Union of India [2012] 3 SCR 147 : (2012) 3
SCC 1 – referred to.
Property Owners’ Association v. State of Maharashtra, 1991 SCC
OnLine Bom 521; Laxmibai v. State of Madhya Pradesh, AIR
1951 Nag 94; Shriram Gulabdas v. Board of Revenue, Madhya
Pradesh (1952) 3 STC 343 – referred to.
Frost v. Corporation Commissioner, 278 U.S. 505; Texas Company
v. Cohn Wash, 2d 360 (17 April 1941, Supreme Court of
Washington); Mazurek v. FM Ins Company, Jamestown 320
Pa 33 (Pa. 1935) (25 November 1935, Supreme Court of
Pennsylvania) – referred to.

In the judgment of B. V. Nagarathna, J.
Sanjeev Coke Manufacturing Co. v. Bharat Coking Coal Ltd. [1983]
1 SCR 1000 : (1983) 1 SCC 147 : AIR 1983 SC 239; State of Tamil
Nadu v. L. Abu Kavur Bai [1984] 1 SCR 725 : (1984) 1 SCC 515 :
1984 INSC 17 and State of Maharashtra v. Basantibai Mohanlal
Khetan [1986] 1 SCR 707 : (1986) 2 SCC 516 – affirmed.
Property Owners’ Association v. State of Maharashtra [1996]
Supp. 2 SCR 230 : (1996) 4 SCC 49; H.H. Kesavananda Bharati
Sripadagalvaru v. State of Kerala [1973] Supp. 1 SCR 1 : (1973) 4
SCC 225 : AIR 1973 SC 1461; State of Karnataka v. Ranganatha
Reddy [1978] 1 SCR 641 : AIR 1978 SC 215; Mafatlal Industries v.
Union of India [1996] Supp. 10 SCR 585 : (1997) 5 SCC 536; IR
Coelho v. State of Tamil Nadu [1999] Supp. 2 SCR 394 : (1999)
7 SCC 580 : 1999 INSC 394; Minerva Mills Ltd. v. Union of India
[2024] 11 S.C.R. 25

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

[1981] 1 SCR 206 : (1980) 3 SCC 625 : AIR 1980 SC 1789; State
of West Bengal v. Anwar Ali Sarkar [1952] 1 SCR 284 : AIR 1952
SC 75; Supreme Court Advocates-On-Record Association v. Union
of India [1993] Supp. 2 SCR 659 : (1993) 4 SCC 441; Zee Telefilms
Ltd. v. Union of India [2005] 1 SCR 913 : AIR 2005 SC 2677;
Justice K.S. Puttaswamy (Retd.) v. Union of India [2017] 10 SCR
569 : (2017) 10 SCC 1; National Legal Services Authority v. Union
of India [2014] 5 SCR 119 : (2014) 5 SCC 438; Joseph Shine v.
Union of India [2018] 11 SCR 765 : (2019) 3 SCC 39; Navtej Johar
v. Union of India [2018] 7 SCR 379 : (2018) 10 SCC 1; Anuj Garg
v. Hotel Association of India [2007] 12 SCR 991 : AIR 2008 SC 63;
Secretary, Ministry of Defence v. Babita Punia [2020] 3 SCR 833 :
(2020) 7 SCC 469; Lt. Colonol Nitisha & Others v. Union of India
[2021] 4 SCR 633 : AIR 2021 SC 1797; Bhim Singhji v. Union of
India, AIR 1981 SC 234; Waman Rao v. Union of India [1981] 2
SCR 1 : (1980) 3 SCC 587 : 1980 INSC 216; AIR 1981 SC 271;
Centre for Public Interest Litigation v. Union of India [2012] 3 SCR
147 : (2012) 3 SCC 1; In Re : Natural Resources Allocation, Special
Reference No.1 of 2012 [2012] 9 SCR 311 : (2012) 10 SCC 1;
H.H. Maharaja Rana Hemant Singhji v. CIT [1976] 3 SCR 423 :
(1976) 1 SCC 996; State of West Bengal v. Subodh Gopal Bose
[1954] 1 SCR 587 : AIR 1954 SC 92; Jilubhai v. State of Gujarat
[1994] 1 SCR 807 : AIR 1995 SC 142; Rustom Cavasjee Cooper
v. Union of India [1970] 3 SCR 530 : AIR 1970 SC 564; State of
Bihar v. Kameshwar Singh [1952] 1 SCR 889 : AIR 1952 SC 252;
Coal India Ltd. v. CCI [2023] 7 SCR 827 : (2023) 10 SCC 345;
Madhusudan Singh v. Union of India [1984] 1 SCR 849 : (1984)
2 SCC 381; Tinsukhia Electric Supply Co. Ltd. v. State of Assam
[1989] 2 SCR 544 : (1989) 3 SCC 709; Assam Sillimanite Ltd.
v. Union of India [1990] 1 SCR 983 : (1992) Supp. 1 SCC 692;
Kolkata Municipal Corporation v. Bimal Kumar Shah [2024] 5 SCR
831 : 2024 INSC 435 – referred to.

In the judgment of Sudhanshu Dhulia, J.
State of Karnataka v. Ranganatha Reddy [1978] 1 SCR 641 :
(1977) 4 SCC 471 [Minority opinion of Justice Krishna Iyer];
and Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd. [1983] 1
SCR 1000 : (1983) 1 SCC 147 : AIR 1983 SC 239 – impliedly
affirmed.
Minerva Mills v. Union of India [1981] 1 SCR 206 : (1980) 3
SCC 625; Kesavananda Bharati v. State of Kerala [1973] Supp.
26 [2024] 11 S.C.R.

Digital Supreme Court Reports

1 SCR 1 : (1973) 4 SCC 225; State of Madras v. Champakam
Dorairajan [1951] 1 SCR 525 : 1951 SCC OnLine SC 30; In Re :
Kerala Education Bill, 1957 [1959] 1 SCR 995 : 1958 SCC OnLine
SC 8; Mohd. Hanif Quareshi and others v. State of Bihar and others
[1959] 1 SCR 629 : 1957 SCC OnLine 17; State of Kerala v. N.M.
Thomas [1976] 1 SCR 906 : (1976) 2 SCC 310; State of Gujarat
v. Mirzapur Moti Kureshi Kassab Jamat and others [2005] Supp.
4 SCR 582 : (2005) 8 SCC 534; Mafatlal Industries v. Union of
India [1996] Supp. 10 SCR 585 : (1997) 5 SCC 536; Waman Rao
& Others v. Union of India [1981] 2 SCR 1 : (1981) 2 SCC 362;
State of T.N. v. L. Abu Kavur Bai [1984] 1 SCR 725 : (1984) 1
SCC 515; Tinsukhia Electric Supply Co. Ltd. v. State of Assam
[1989] 2 SCR 544 : (1989) 3 SCC 709; Madhusudan Singh v.
Union of India [1984] 1 SCR 849 : (1984) 2 SCC 381; State of
Maharashtra v. Basantibai Mohanlal Khetan [1986] 1 SCR 707 :
(1986) 2 SCC 516; Assam Sillimanite Ltd. v. Union of India [1990]
1 SCR 983 : (1992) Supp 1 SCC 692; Jilubhai Nanbhai Khachar
v. State of Gujarat [1994] 1 SCR 807 : (1995) Supp 1 SCC 596;
KT Moopli Nair v. State of Kerala [1961] 3 SCR 77 : 1960 SCC
OnLine SC 7; Shankari Prasad Singh v. Union of India, AIR 1951
SC 458; State of Bihar v. Kameshwar Singh [1952] 1 SCR 889 :
(1952) 1 SCC 528; State of West Bengal v. Bela Banerjee [1954]
1 SCR 558 : (1953) 2 SCC 648; Vajravelu v. Special Deputy
Collector [1965] 1 SCR 614 : 1964 SCC OnLine SC 22; State
of Madras v. D. Namasivaya Mudaliar [1964] 6 SCR 936 : 1964
SCC OnLine SC 169; Union of India v. Metal Corporation of India
[1967] 1 SCR 255 : 1966 SCC OnLine SC 15; State of Gujarat
v. Shri Shantilal Mangaldas & Ors. [1969] 3 SCR 341 : AIR 1969
SC 634; RC Cooper v. Union of India [1970] 3 SCR 530 : (1970)
1 SCC 248; Video Electronics Pvt. Ltd. v. State of Punjab [1989]
Supp. 2 SCR 731 : (1990) 3 SCC 87; Bangalore Water Supply
& Sewerage Board. v. A. Rajappa & Others [1978] 3 SCR 207 :
(1978) 2 SCC 213; Maneka Gandhi v. Union of India [1978] 2
SCR 621 : (1978) 1 SCC 248; MH Hosket v. State of Maharashtra
[1979] 1 SCR 192 : (1978) 3 SCC 544; Hussainara Khatoon v.
Home Secretary, State of Bihar (I) [1979] 3 SCR 169 : (1980) 1
SCC 81; Sunil Batra v. Delhi Administration [1980] 2 SCR 557 :
(1980) 3 SCC 488; Bijoe Emmanuel v. State of Kerala [1986]
3 SCR 518 : (1986) 3 SCC 615; Vishaka v. State of Rajasthan
[1997] 3 Supp. SCR 404 : (1997) 6 SCC 241; K.S. Puttaswamy
[2024] 11 S.C.R. 27

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

v. Union of India [2017] 10 SCR 569 : (2017) 10 SCC 1; Navtej
Singh Johar v. Union of India [2018] 7 SCR 379 : (2018) 10
SCC 1 – referred to.
V. Padmanabha Ravi Varma Raja v. Deputy Tahsildar, 1962 SCC
OnLine Ker 98; Mahinder Bahawanji Thakur v. S.P. Pande, 1963
SCC OnLine Bom 28; Sudha Tiwari v. Union of India, 2011 SCC
OnLine All 253; Raja Suryapal Singh v. U.P of Govt., 1951 SCC
OnLine All 183 – referred to.
Hunter v. Southam Inc (1984) 2 SCR 145 (Canada Supreme
Court); Fay v. New York 332 U.S. (1947) (Jackson, J.) –
referred to.

Books and Periodicals Cited

In the judgment of Dr. Dhananjaya Y. Chandrachud, CJI:
DD Basu, ‘Constitution of India’, Vol 9, p. 9917; Advanced Law
Lexicon by Ramanathaier, 3rd Edn., Vol. III, p. 2509; Halsbury, 2nd
Edn, Vol 19, para 556; Eugene Wambaugh, The Study of Cases
(Boston: Little, Brown & Co., 1892); HM Seervai, Constitutional
Law of India, Vol 2 (4th ed, Universal Law Publishing 2002)
1934–40; Constituent Assembly Debates, Vol VII (15th November
1948); Black’s Law Dictionary, 8th Edition, South Asian Edition,
2015; Hughes, The Supreme Court of The United States, (1930)
American Bar Asson. Journal.; Rahul De, A History of Economic
Policy in India: Crisis, Coalitions, and Contingency, 2023 (Oxford
University Press); Ministry of Finance (Department of Economic
Affairs), Government of India, The Indian Economy: A Review,
January 2024; Ministry of Finance (Department of Economic
Affairs), Government of India, Economic Survey 2023-24, July
2024 – referred to.

In the judgment of Sudhanshu Dhulia, J.
Mr. Justice Brandeis, Great American: Press Opinion & Public
Appraisal (The Modern View Press, Saint Louis, 1941), Pg.42;
Granville Austin, The Indian Constitution: Cornerstone of a Nation
(Oxford University Press, New Delhi, Second Impression 2000),
Pgs. 50, 51; Aharon Barak, The Judge in a Democracy (Princeton
University Press, 2006), Pgs. 4-5, 308; Aharon Barak, Purposive
28 [2024] 11 S.C.R.

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Interpretation in Law (Universal Law Publishing Co., 2007), Pgs.
370, 372, 377; Aharon Barak, Hermeneutics and Constitution
Interpretation, 14 Cardozo L. Rev. 767, (1992-93), Pg. 772; A. M
Zaidi et al., The Encyclopaedia of The Indian National Congress
(VOL.-10: 1930-1935): The Battle For Swaraj (S. Chand & Co.
Ltd., 1980), Pg. 183; Rakesh Batabyal (ed.), The Penguin Book
of Modern India Speeches (Penguin Books, 2007), Pg. 365;
O. Chinnappa Reddy, The Court and The Constitution of India:
Summits and Shallows (Oxford University Press, 2008), Pg. 137,
139; Bipan Chandra, Nationalism & Colonialism in Modern India
(Orient Longman, 1979), Pgs. 145, 158; Sir P. Thakurdas, Jrd Tata
et al., A Plan of Economic Development for India (Part II) (1944);
Sanjay Baru (ed.), The Bombay Plan (Rupa Publications India
Pvt Ltd., 2018), Pg. 292; Aditya Mukherjee, Political Economy of
Colonial and Post-Colonial India (Primus Books, 2022), Pg.192;
Justice O. Chinnappa Reddy, The Court and The Constitution of
India: Summits and Shallows (Oxford University Press, 2008), Pgs.
74-75, 76; Constituent Assembly Debates, Vol. I, Pg. 62; Vol. II,
Pg. 316; Vol. V, Pg.341; Vol. VII, Pgs. 41, 225, 473, 518-19 and
539; Vol. IX, Pg. 1195; Vol. XI, Pg.979; P.K. Tripathy, Spotlights
on Constitutional Interpretation (N.M Tripathi Pvt. Ltd., 1972), Pg.
295; Shylashri Shankar, Scaling Justice: The Supreme Court,
Social Rights and Civil Liberties in India (Oxford University Press,
2009), Pg. 124; H.M. Seervai, Constitutional Law of India (4th Ed.,
Vol. II, 1993), Pgs. 1923-1924, 1932; Lael K. Weis, Constitutional
Directive Principles, 37 (4) Oxford Journal of Legal Studies 916
(2017), Pg. 923; Parliamentary Debates (Part II-Proceedings Other
Than Questions and Answers), Pgs. 8830, 8831-8832; Aditya
Mukherjee, Political Economy of Colonial and Post-Colonial India
(Primus Books, 2022), Pg. 511; C.H Hanumantha Rao, Rural
Society and Agricultural Development in Course of Industrilisation:
Case of India, 26 Economic and Political Weekly (1991), Pg.
691; Report of the Monopolies Inquiry Commission 1965; Lok
Sabha Debates (Part II- Proceedings Other Than Questions
and Answers), Vol-III, Pgs. 4833-4834; A. Moin Zaidi, The Great
Upheaval 1969-1972 (Orientalia, 1972), Pgs. 103-105; Anatole
France et. al., Crainquebille (Dodd, Mead & Co., Inc., 1922),
Pg. 171; Global Hunger Index 2024; National Multidimensional
Poverty Index: A Progress Review 2023, Niti Aayog, Government
Of India – referred to.
[2024] 11 S.C.R. 29

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

List of Keywords
Article 31C of the Constitution; Amendment struck down by
Supreme Court; Interpretation of Article 39(b) of the Constitution;
Article 300A; Phrase ‘material resources of the community’;
Kesavananda Bharati case; Minerva Mills case; Sanjeev Coke
case; Ranganatha Reddy case; Privately owned resources; Qualifier
of ‘material needs’; Public Trust Doctrine; Minority opinion; Term
‘distribution’; Distribution by the State; Vesting of resources in the
State; Nationalisation; Common good.
Case Arising From
CIVIL APPELLATE/ ORIGINAL JURISDICTION: Civil Appeal No.
1012 of 2002
From the Judgment and Order dated 13.12.1991 of the High Court
of Judicature at Bombay, Maharashtra in WP No. 2673 of 1986
With
Special Leave Petition (Civil) Nos. 4367, 5204, 5777, 6191-6192,
7950, 8797 of 1992, Special Leave Petition (Civil) No. 6744 of 1993,
Special Leave Petition (Civil) Nos. 2303 And 13467 of 1995, Writ
Petition (Civil) No. 934 of 1992, Writ Petition (Civil) No. 660 of 1998,
Writ Petition (Civil) No. 342 of 1999, Writ Petition (Civil) Nos. 469
And 672 of 2000 and Writ Petition (Civil) No.66 of 2024
Appearances for Parties
R Venkataramani, Attorney General for India, Tushar Mehta,
Solicitor General, Zal Andhyarujina, Balbir Singh, Rakesh Dwivedi,
Gopal Sankaranarayanan, Shyam Divan, Ms. Uttara Babbar, Dr.
Harshvir Pratap Sharma, Santosh Paul, Rajiv Dutta, Sr. Advs., H.
Devarajan, Sameer Parekh, Ms. Sonali Basu Parekh, E.R. Kumar,
Sumit Goel, Ishan Nagar, Jayom Mahesh Shah, Ashok Rajagopalan,
Abhishek Thakral, Ms. Aditi, Ms. Apurba Pattanayak, Abhay Jadeja,
Ms. Dhanyashree Jadeja, Varun Satiya, Arun Unnikrishnan, Ms.
Revati Desai, Ms. Akanksha Agrawal, Ms. Serena Jetmalani,
Shayan Bisney, M/s. Parekh & Co., D. Ashok Rajagopalan, Ms.
Madhu Tyagi, Kunal Jain, S. C. Birla, Subrat Birla, Ujjwal A. Rana,
Himanshu Mehta (for M/s. Gagrat And Co.), S. R. Setia, Amarjit
Singh Bedi, Gaganpreet Sandhu, Varun Chandiok, Ms. Riya Seth,
Dinesh Kumar, Jay Kishan Dev, P. N. Gupta, Mrs. Bharti Gupta,
Pushp Raj Gupta, Ms. Aashima Gupta, T. Srinivasa Murthy, Hemant
30 [2024] 11 S.C.R.

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Pathak, Mrs. Manisha Chanwani, Samit Shukla, Ashish Wad, Manoj
Wad, Mrs. Tamali Wad, Ajeyo Sharma, Ms. Akriti Arya, M/s. J S
Wad And Co, P. Narasimhan, Sushant Dogra, Dhananjay Kataria,
Kartikay Aggarwal, Raman Yadav, Ms. Ameyavikrama Thanvi,
Ms. Oorjasvi Goswami, Chitvan Singhal, Abhishek Kr. Pandey,
Chirag M. Shroff, Siddharth Dharmadhikari, Aaditya Aniruddha
Pande, Bharat Bagla, Sourav Singh, Aditya Krishna, Kanu Agrawal,
Naman Tandon, Madhav Sinhal, Gaurang Bhushan, Ms. Monica
Benjamin, Ms. Anu Sura, Ranjeev Khatana, Shyam Gopal, Ms.
Preet S. Phanse, Adarsh Dubey, Prahlad Singh, Shashank Bajpai,
Ms. Sansriti Pathak, Nipun Saxena, Ms. Astha Sharma, Srisatya
Mohanty, Ms. Anju Thomas, Sanjeev Kaushik, Ms. Mantika Haryani,
Shreyas Awasthi, Eklavya Dwivedi, Himanshu Chakravarty, Ms.
Aditi Gupta, Ms. Jahnvi Dubey, Ms. Trisha Chandran, Ms. Shivani
Vij, Ms. Tanya Srivastava, Vishal Sinha, Madhav Gupta, Ms. Ripul
Swati Kumari, Bhanu Mishra, Ms. Muskan Surana, Ms. Lihzu Shiney
Konyak, Archit Adlakha, Ms. Saumya Saxena, Aditya Raj Pandey,
Shrutanjaya Bharadwaj, Mahesh Agarwal, Rishi Agrawala, Manu
Krishnan, Ms. Anwesha Padhi, Yash Momaya, Ms. Shivani Agarwal,
Udayaditya Banerjee, Aditi Deshmukh, Shaurya Rai Ranjan, Aryan
Rachh, E. C. Agrawala, Ms. Daisy Hannah, Ms. Oindrila Sen, Ms.
Rayana Mukherjee, Samarth Mohanty, Tejas Patel, Mrs. Meera
Kaura, Mrs. Stuti Jain, Paras Joshi, Akshu Jain, Akul Krishnan,
Amit Seth, Dibyanshu Pandey, Radhe Shyam Sharma, Varun K
Chopra, Mehul Sharma, M/s. Vkc Law Offices, Ms. Sujata Kurdukar,
Gopal Balwant Sathe, Nishant Ramakantrao Katneshwarkar, M/s.
Manoj Swarup And Co., Mrs. Manik Karanjawala, Ms. Nandini Gore,
Ms. Sonia Nigam, Mohammad Shahyan Khan, Akarsh Sharma,
Rabin Majumder, Pramod B. Agarwala, Sriharsh Nahush Bundela,
Vedant Mishra, Virendra Mohan, M/s. Lawyer S Knit & Co, Sunil
Kumar Verma, Manu Krishnan G, Ms. B. Vijayalakshmi Menon,
Vivek Sharma, R. Nedumaran, Haresh G. Ganatra, Ms. Anuradha
H. Ganatra, Siddharth Dutta, Ms. Neha Singh, Ms. Subhashree
Jaganathan, C. Aravind, Shivaji M. Jadhav, Brij Kishor Sah, Adarsh
Kumar Pandey, Ms. Apurva, Vignesh Singh, Aditya S. Jadhav, Alok
Kumar, Diwakar Sharma, Arun Kanwa, Ms. Aliya Singh, Kanishk
Chaudhary, Prabal Chaudhary, Mrs. Chitra Chaudhary, Prashant
Chaudhary, M. C. Dhingra, Gaurav Dhingra, Piyush Kant Roy,
Surendra Gautam, Abhishek Lakra, Rishab Kumar Singh, Arvind
Kumar Singh, Shashank Singh, Advs. for the appearing parties.
[2024] 11 S.C.R. 31

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Judgment / Order of the Supreme Court
Judgment
Dr Dhananjaya Y Chandrachud, CJI
Table of Contents*

A. Background ...................................................................... 6
i. Genesis of the Reference ......................................... 6
ii. The three reference orders ....................................... 12
iii. Scope of the present reference ................................ 18
B. Issues ................................................................................ 21
C. Article 31C ........................................................................ 23
i. Brief History of Article 31-C ...................................... 23
ii. The present dispute concerning Article 31-C and
rival contentions ...................................................... 35
iii. Precedents concerning invalidation of
amendments ........................................................... 46
iv. Analysis and Conclusions concerning Article 31-C 75
D. Article 39(b) ...................................................................... 84
i. Submissions ............................................................. 84
a. Submissions of the appellants and intervenors ..... 84
b. Submissions of the Respondents and Intervenors.... 89
ii. Judicial Discipline: Observations in Sanjeev Coke
and Mafatlal ............................................................... 95
a. The resurrection of the minority view in Ranganatha
Reddy by Sanjeev Coke ............................... 95
b. Sanjeev Coke erred in relying on the observations
of the minority in Ranganatha Reddy ...................... 103
c. The error has been carried forward in subsequent
decisions ............................................................... 110
d. The single-line observation in Mafatlal is obiter
dicta ...................................................................... 112
iii. Interpreting Article 39(b) ........................................... 123

* Ed. Note: Pagination as per the original Judgment.
32 [2024] 11 S.C.R.

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a. Article 39(b) as a pre-requisite to protection under
Article 31C ............................................................ 123
b. Article 39(b) as a Directive Principle ......................... 128
iv. Historical Context: Constituent Assembly Debates 135
a. Debates about the purpose of Directive Principles... 135
b. Debates about the text of Article 39(b) ..................... 142
c. Inferences from the discussions in the Constituent
Assembly .............................................................. 150
v. Interpretation of Article 39(b) that has been
doubted ...................................................................... 156
vi. Correctness of the above interpretation of Article
39(b) ........................................................................... 175
a. The interpretation is inconsistent with the text of
Article 39(b) ........................................................... 176
b. The interpretation amounts to endorsing a
particular economic ideology ................................. 180
c. The interpretation is incompatible with the right to
property ................................................................. 184
d. Determining the ‘materiality’ and ‘community
element’ of the resource ........................................ 186
e. The provision may include the ‘vesting’ of private
resources in the state ............................................ 189
E. Conclusion ....................................................................... 191
1. The reference to this Constitution Bench raises significant questions
about Articles 39(b) and 31-C of the Constitution. Answering
the reference has been an adventure through the intricacies of
constitutional interpretation and the annals of constitutional history.
However, an interpretation of these provisions must involve an
understanding of not only their historical context but also the social
and economic values which guide the present and are likely to guide
the future. Directive Principles of State Policy1 such as Article 39(b)
and safe harbour provisions such as Article 31-C are unique
creations of our Constitution. Understanding them is a delicate task

1 “Directive Principles”
[2024] 11 S.C.R. 33

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

that involves balancing competing yet coexistent values embedded
in our Constitution – the recognition of the individual rights of all
citizens and an aspiration towards a welfare state which secures
socio-economic justice.
2. Before proceeding, it would be appropriate to briefly refer to the
provisions of the Constitution which form the heart of the reference
and controversy before this Court. Article 39(b), a part of the Directive
Principles contained in Chapter IV of the Constitution, reads as follows:
“39. Certain principles of policy to be followed by
the State.—The State shall, in particular, direct its policy
towards securing—
…
“(b) that the ownership and control of the material resources
of the community are so distributed as best to subserve
the common good;”
3. Article 31C of the Constitution provides certain legislations a safe
harbour and protects them from being challenged under Articles 14
and 19. The only requirement is that the legislation must give effect
to “the principles specified in clause (b) or clause (c) of Article 39”.
In a sense, Article 31C is the ying to the yang of Article 39(b), which
gives it a unique colour and texture and provides it with far-reaching
consequences. Once it is established that a particular legislation
has a nexus with the principles specified in Article 39(b), Article 31C
provides the legislation with a lifeboat – protecting it from a challenge
to its constitutionality under Articles 14 and 19 of the Constitution.
4. With this broad context in mind, we first delve into the journey of
the reference to this Constitution Bench and define the scope of
this judgement.
A. Background
i. Genesis of the Reference
5. Mumbai is the most populous city in India and one of the most
densely populated cities in the world. A persistent problem faced by
its residents has been the large number of old, dilapidated buildings
which continue to be inhabited despite becoming unsafe due to
lack of repairs and reconstruction. It is estimated that over sixteen
34 [2024] 11 S.C.R.

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thousand buildings in the city were constructed before 1940.2 The
antiquity of the buildings in the island city is compounded by the
geographical location of the city. Situated on the western coastline,
the saline air of the city contributes to the reduction in the lifespan
of its structures. The monsoon rains create pressing challenges
for the safety of human settlements and residential buildings.
Every year before the monsoon, the Mumbai Building Repair and
Reconstruction Board issues a list of dangerous buildings deemed
unfit for human habitation. It issues eviction notices to the people
living in such buildings and asks occupants to vacate the buildings
to avert untoward incidents. Yet, despite these efforts, the city still
grapples with the recurring tragedy of building collapses, resulting
in loss of life and property, a reminder of the ongoing struggle to
ensure safe and secure housing for its residents.3
6. The erstwhile Bombay was originally a group of seven islands.
These islands were merged by a series of land reclamation projects
to create the present-day ‘Island City of Bombay’. By the beginning
of the twentieth century, the island city emerged as a major textile
centre. With the growth of the textile industry, there was a significant
inflow of workmen from outside of the city. This necessitated the
construction of additional residential buildings to house the workmen
and their families. The colonial government leased properties for this
purpose and a large number of buildings were constructed. During
World War II, the scarcity of housing accommodation became even
more acute and there was an unprecedented increase in the rents.
To mitigate this, Rent Control legislations were introduced.
7. The use of the buildings by more people than they could accommodate
resulted in a steady deterioration of the structures and the dilapidation
of the buildings over a period of time. Therefore, the Bombay Housing

2 Maharashtra Housing and Area Development Authority, Number of Cessed Buildings, https://www.
mhada.gov.in/en/content/m-b-r-r-board-history.
3 See Hindustan Times, 1 dead, four hurt as portion of nearly 100-year-old building collapses in Grant
Road, 21 July 2024, https://www.hindustantimes.com/cities/mumbai-news/1-dead-four-hurt-as-portion-
of-nearly-100-year-old-building-collapses-in-grant-road-101721503683871.html; Indian Express,
Dongri building collapse: In 37 years, 894 people died in accidents involving MHADA, 17 July 2019,
https://indianexpress.com/article/cities/mumbai/dongri-building-collapse-in-37-years-894-people-died-
in-accidents-involving-mhada-buildings-5832965/; Indian Express, Mumbai building collapse: Bhendi
Bazaar accident leaves 24 dead, CM Devendra Fadnavis assures strict action, 31 August 2017, https://
indianexpress.com/article/cities/mumbai/mumbai-building-collapse-bhendi-bazaar-accident-death-toll-
rises-to-22-4822665/
[2024] 11 S.C.R. 35

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Board Act 1948 was enacted which provided for the setting up of
a Housing Board of Bombay to execute housing schemes and
construct new residential buildings in the island city. Although the
enactment helped increase the housing stock, it could not address
the issue of existing buildings, which were collapsing from time to
time, resulting in loss of life and property. To address the alarming
rate of collapses, which were resulting in the loss of life and property,
and exacerbating the existing housing shortage, urgent measures
were needed, particularly in light of the rapid population growth of
the city due to influx from various parts of the country. The Bombay
Repairs and Reconstruction Board Act 1969 was introduced. Under
this enactment, the Bombay Building Repairs and Reconstruction
Board was set up and a cess was introduced to generate funds
for the repair and reconstruction of dangerous buildings. A part of
the cess was borne by the owners, while the remaining part was
borne by the tenants. However, despite these efforts, due to the
unprecedented scale of the problem and lack of financial resources,
the problem persisted.
8. Accordingly, the state legislature of Maharashtra enacted the
Maharashtra Housing and Area Development Act 1976, 4 which
received the assent of the President on 25 April 1977. The long
title stipulates that it is an Act to “unify, consolidate and amend the
laws relating to housing, repairing and reconstructing dangerous
buildings and carrying out improvement works in slum areas.” Pre-
existing laws such as the Bombay Housing Board Act 1948, the
Madhya Pradesh Housing Board Act 1950, the Bombay Building
Repairs and Reconstruction Board Act 1969 and the Maharashtra
Slum Improvement Board Act 1973 were repealed on the enactment
of the MHADA Act.5
9. Chapter VIII of the MHADA Act provides for the repairs and
reconstruction of dilapidated buildings in ‘Brihan Mumbai’ or the
erstwhile ‘Greater Bombay’.6 A cess is levied on the owners which
is utilised by the Mumbai Building Repair and Reconstruction
Board to carry out repairs and reconstruction of such buildings.

4 “MHADA Act”
5 Section 188, MHADA Act.
6 Section 1(2), MHADA Act.
36 [2024] 11 S.C.R.

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For this purpose, the buildings in Brihan Mumbai are divided into
three categories. Category A consists of buildings erected before 1
September 1940, Category B consists of buildings erected between 1
September 1940 and 31 December 1950 and Category C consists of
buildings erected between 1 January 1951 and 30 September 1969.7
10. On 26 February 1986, the Governor of Maharashtra introduced an
Ordinance to amend the MHADA Act.8 Subsequently, an amending
Act came into force, which inserted Chapter VIII-A of the MHADA
Act.9 The chapter deals with the ‘acquisition of cessed properties
for co-operative societies of occupiers’, and its provisions apply to
the buildings in Category A, i.e. cessed buildings erected before 1
September 1940 in Brihan Mumbai.10 The provisions of the Chapter
envisage the acquisition of such properties by the state and their
transfer to a cooperative society on payment of a hundred times the
monthly rent of the premises if seventy per cent of the occupiers
of the building make an application to this effect.11 Such acquisition
may be for the better preservation of the buildings; for carrying out
structural repairs or for the reconstruction of a new building. After the
land is transferred to the cooperative society, it must be used solely
for its original purpose, and there is a restriction on transferring the
land or building.12
11. The intention behind inserting Chapter VIII-A has been stated by
the legislature in the Preamble and the Statement of Objects and
Reasons of the Amending Act. It is stated that the provisions were
introduced to address the urgent need for repairs and reconstruction
of old, dilapidated buildings in urban areas, particularly in ‘Greater
Bombay’. These buildings pose a significant danger due to their poor
condition and risk of collapse. Previous efforts, including levying a
cess and establishing an authority for structural repairs, failed to
achieve the desired results due to the scale of the problem and
insufficient financial resources. Thus, a new approach was adopted

7 Section 84, MHADA Act.
8 Maharashtra Housing and Area Development (Amendment) Ordinance, 1986
9 Maharashtra Housing and Area Development (Second Amendment) Act, 1986 [Mah. XXI of 1986]
(“Amending Act”)
10 Section 103A, MHADA Act.
11 Section 103B, MHADA Act.
12 Section 103C, MHADA Act.
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

by introducing Chapter VIII-A, involving occupiers in structural repairs
or reconstruction by acquiring the old buildings and transferring
ownership and control to the occupiers. The aim, according to the
legislature, is to protect the occupiers’ shelter, prevent building
collapses, and promote equitable distribution of ownership and control
of tenements to subserve the ‘common good’.
12. Significantly, by the same Amending Act, Section 1A was also inserted
in the MHADA Act containing the following declaration:
“1-A. Declaration.—It is hereby declared that this Act is
for giving effect to the policy of the State towards securing
the principle specified in Clause (b) of Article 39 of the
Constitution of India and the execution of the proposals,
plans or projects therefor and the acquisition therefor of the
lands and buildings and transferring the lands, buildings
or tenements therein to the needy persons and the co-
operative societies of occupiers of such lands or buildings.”
13. The appellants instituted proceedings under Article 226 of the
Constitution before the High Court of Judicature at Bombay 13
challenging the constitutionality of the provisions of Chapter VIII-A of
the MHADA Act. The case of the appellants before the High Court was
that the provisions of Chapter VIII-A are violative of Articles 14 and
19 of the Constitution. It was urged that the provisions are arbitrary,
deprive property owners of their rights for illusory amounts and the
classification of the buildings had no rational nexus to their object.
On the other hand, the respondents submitted that the provisions
were not discriminatory or unreasonable. Further, the respondents
argued that the MHADA Act gives effect to the principles laid down
in Article 39(b) and in view of the immunity granted by Article 31C,
the constitutionality of the Act cannot be challenged under Articles
14 and 19.14
14. On 13 December 1991, a Division Bench of the High Court dismissed
the writ petitions and upheld the constitutionality of the provisions of
Chapter VIII-A of the MHADA Act.15 Relying on the decision of this

13 “High Court”
14 Property Owners’ Association v. State of Maharashtra, 1991 SCC OnLine Bom 521, para 10.
15 Ibid.
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Court in State of Maharashtra v Basantibai Khetan,16 the High
Court held that the provisions of Chapter VIII-A are saved by Article
31C as they were enacted to give effect to the principles laid down
in Article 39(b). In Basantibai Khetan, this Court held certain other
provisions of the MHADA Act to be protected by Article 31C. The
High Court held that the same principle applies to Chapter VIII-A
as well. Further, the High Court also rejected the challenge to the
constitutionality of the provisions on their merits and held that they
do not violate Article 14.
15. Aggrieved by the judgement of the High Court, the appellants
instituted Special Leave Petitions before this Court. These petitions
have culminated in the underlying civil appeals.
ii. The three reference orders
16. The appeals have travelled through three separate reference orders
before being placed before this bench of nine judges. The batch of
appeals was first placed before a bench of three judges of this Court.
By an order dated 1 May 1996,17 the three-Judge Bench recorded the
submission of Mr Fali S Nariman, the learned counsel appearing for
the appellants that Article 31C no longer survives in the Constitution
after an amendment to the provision was invalidated by this Court in
Minerva Mills v. Union of India.18 It was argued that since Article 31C
no longer survived, it could not exclude an attack on the constitutional
validity of the Act on the grounds of Articles 14 and 19.
17. A brief history of Article 31C and the layers of this contention are
discussed in Part C of this judgement. However, at this stage, to
understand the scope of the reference, it is sufficient to note that
in Kesavananda Bharati v. State of Kerala,19 this Court upheld
the validity of Article 31C in part. Subsequently, Article 31C was
amended by the Constitution (Forty-second Amendment) Act, 197620
to expand the protection of Article 31-C to laws framed in furtherance
of any Directive Principle and not only Articles 39(b) and (c). This

16 [1986] 1 SCR 707 : (1986) 2 SCC 516 : 1986 INSC 40
17 [1996] Supp 2 SCR 230 : (1996) 4 SCC 49 : 1996 INSC 598 (“three-judge bench order”)
18 [1981] 1 SCR 206 : (1980) 3 SCC 625 : 1980 INSC 142
19 [1973] Supp. 1 SCR 1 : (1973) 4 SCC 225 : 1973 INSC 91
20 “Forty-Second Amendment”
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Property Owners Association & Ors. v.
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amendment to Article 31C by the forty-second amendment was
invalidated by this Court in Minerva Mills for being violative of the
basic structure of the Constitution.
18. Before the bench of three judges, Mr Nariman inter alia urged that
the doctrine of revival, as it applies to ordinary statutes does not
apply to a constitutional amendment. Hence, he urged that when
the part of the forty-second amendment which amended Article
31C was invalidated, it did not result in the automatic revival of the
unamended Article 31C. He argued that the decision in Minerva Mills
proceeded on a concession that Article 31C remained in force and
an unexplained assumption that the unamended Article 31-C (to the
extent that it was upheld in Kesavananda Bharati)stood revived.
He argued that the question never arose nor was it decided in the
case or subsequently in Waman Rao v Union of India21 or Sanjeev
Coke Manufacturing Co vs. Bharat Coking Coal Ltd.22
19. On the other hand, Mr Ashok Desai appearing for the respondents
contended that the matter stood concluded by the decisions in
Minerva Mills, Waman Rao and Sanjeev Coke, wherein revival
of the unamended Article 31C was undisputed because it was an
‘obvious position of law’ and had held the field for a long period of
time.
20. The three-judge bench of this Court observed since the decisions in
Minerva Mills, Waman Rao and Sanjeev Coke were all rendered by
a bench of five judges and the assumption that Article 31C remains
in force was disputed, it would be appropriate to refer the matter
to a larger bench. The reference was made in the following terms:
“8. Having heard learned counsel for some time, we have
formed the opinion that it would be more appropriate for a
Bench of not less than five Judges to consider and decide
these questions for an authoritative pronouncement on
the same. The decisions in Minerva Mills [(1980) 3 SCC
625], Waman Rao [(1980) 3 SCC 587] and Sanjeev Coke
[(1983) 1 SCC 147] are all by a Bench of five Judges. The
question in the form it is raised by Shri F.S. Nariman did

21 [1981] 2 SCR 1 : (1980) 3 SCC 587 : 1980 INSC 216
22 [1983] 1 SCR 1000 : (1983) 1 SCC 147 : 1982 INSC 93
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not arise for consideration in any of those decisions which
were rendered on a certain premise as indicated therein,
which assumption is now seriously challenged by Shri
F.S. Nariman. Even if it is assumed that Article 145(3)
of the Constitution is not attracted, it does appear
to us that in order to settle the controversy on this
point which is of some significance and to avoid the
question being reagitated before another Bench of
less than five Judges, the more appropriate course
is to refer these matters for being heard and decided
by a Bench of not less than five Judges.”
(emphasis supplied)
21. The underlying appeals were then placed before a bench of five
judges of this Court. By an Order dated 21 March 2001,23 the five-
judge bench noted the contentions which had been raised before the
three-judge bench about the revival of Article 31-C. Further, it was
observed that the counsel were heard by the Bench at length on the
“various issues” that arose in the case, including the interpretation of
Article 39(b). The bench went on to express the need to reconsider
the view taken by this Court in Sanjeev Coke on the interpretation
of Article 39(b), where this Court relied on a concurring opinion
authored by Justice Krishna Iyer in State of Karnataka v. Ranganatha
Reddy,24 on behalf of a minority of judges.
22. Part D of this judgement will explore these decisions and their
interpretation of Article 39(b) in further detail. At this stage, to
understand the scope of the reference, it is sufficient to note that in
Ranganatha Reddy, the validity of the Karnataka Contract Carriages
(Acquisition) Act 1976 was under challenge. The majority opinion
authored by Justice Untwalia (for himself and three other judges)
upheld the constitutionality of the legislation on its merits. However,
Justice Krishna Iyer (for himself and two other judges) authored a
concurring opinion, where the enactment was upheld on the ground
that it had a nexus with Article 39(b), which protected the legislation
under Article 31C. The majority opinion expressly noted that it did not
consider it necessary to deal with Article 31C or Article 39(b) and must

23 (2001) 4 SCC 455 (“five-judge bench order”)
24 [1978] 1 SCR 641 : (1977) 4 SCC 471 : 1977 INSC 196
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Property Owners Association & Ors. v.
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not be construed to agree with the observations of Justice Krishna
Iyer. Subsequently, in Sanjeev Coke, while upholding the validity of
the Coking Coal Mines (Nationalisation) Act 1972, a five-judge Bench
of this Court adopted the view taken in the judgement authored by
Justice Krishna Iyer, on behalf of the minority in Ranganatha Reddy.
23. In this backdrop, the Bench of five judges expressed the view
that the interpretation of Article 39(b) in Sanjeev Coke, requires
reconsideration and referred the cases to a larger bench, in the
following terms:
“6. The interpretation put on Article 39(b) by Krishna Iyer,
J.in Ranganatha Reddy case [(1977) 4 SCC 471 : (1978)
1 SCR 641] was not specifically assented to in the majority
decision but in Sanjeev Coke case[(1983) 1 SCC 147 :
(1983) 1 SCR 1000] it is the observations in the judgment
of Krishna Iyer, J. which have been followed.
7. Having heard the counsel at length, we are of the opinion
that the views expressed in Sanjeev Coke case [(1983)
1 SCC 147 : (1983) 1 SCR 1000] require reconsideration.
Keeping in view the importance of the point in issue,
namely, the interpretation of Article 39(b) it will be
appropriate if these cases are heard by a larger Bench
of not less than seven Judges.”
(emphasis supplied)
24. Finally, the batch of cases was placed before a Bench of seven
judges of this Court. The learned Solicitor General (at the time)
brought the attention of the bench to an observation in the majority
opinion in Mafatlal Industries Ltd vs. Union of India,25a decision
by a bench of nine judges of this Court. In the majority opinion in
Mafatlal, Justice Jeevan Reddy (speaking for himself and four other
judges) observed: “[t]that ‘the material resources of the community
are not confined to public resources but include all resources, natural
and man-made, public, and private owned’ is repeatedly affirmed by
this Court” and referred inter alia to the decisions of this Court in
Ranganath Reddy and Sanjeev Coke to advance this proposition.

25 [1996] Supp. 10 SCR 585 : (1997) 5 SCC 536 : 1996 INSC 1514
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25. In its order dated 19 February 2002,26 the Bench of seven judges took
the view that the interpretation of Article 39(b) requires reconsideration
by a larger bench of nine judges. The bench expressed “some
difficulty in sharing the broad view” that material resources owned
by the community, the phrase employed by Article 39(b), includes
privately owned resources. It was directed that the case be listed
before a bench of nine judges after the hearing in IR Coelho vs.
State of Tamil Nadu27 is concluded, as there appeared to be similar
issues raised. The reference was made in the following terms:
“5. Having given due consideration, we are of the opinion
that this interpretation of Article 39(b) requires to be
reconsidered by a Bench of nine learned Judges: we
have some difficulty in sharing the broad view that
material resources of the community under Article
39(b) covers what is privately owned.
6. Given that there is some similarity in the issues here
involved and in I.R. Coelho v. State of T.N. [(1999) 7
SCC 580. Ed. : The nine-judge Bench decision therein
is reported as I.R. Coelho v. State of T.N., (2007) 2
SCC 1.] which already stands referred to a larger Bench,
preferably of nine learned Judges, we are of the view that
these matters should be heard by a Bench of nine learned
Judges immediately following the hearing in I.R. Coelho”
(emphasis supplied)
26. The above seven-Judge Bench order has resulted in the present
reference before this bench of nine judges.
iii. Scope of the present reference
27. During the course of the hearing, the learned Solicitor General
appearing on behalf of the respondents,submitted that the reference
made in the seven-judge bench order only pertains to the interpretation
of Article 39(b) and not the survival of Article 31-C. It was urged that,
unlike the three-judge bench order, the five-judge bench order and
the seven-judge bench order dropped the issue concerning Article

26 (2013) 7 SCC 522 (“seven-judge bench order”)
27 [1999] Supp. 2 SCR 394 : (1999) 7 SCC 580 : 1999 INSC 394
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Property Owners Association & Ors. v.
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31C and only referred the Article 39(b) question to a larger bench.
Therefore, it was urged that this Court restrict the scope of this
judgement to the interpretation of Article 39(b) and more specifically,
only to the question of whether “material resources of the community”
include privately owned resources.
28. On the other hand, the learned counsel for the appellants urged this
Court to understand the scope of the reference more expansively.
They broadly submitted that this Court may consider five issues and
filed detailed submissions on each of these questions. The issues
which they raised are: firstly, whether the unamended Article 31C
survives after the amendment to the provision by the forty-second
amendment was struck down in Minerva Mills. Second, the meaning
of Article 39(b) and whether the phrase ‘material resources of the
community’ includes privately owned resources. Third, whether the
MHADA Act gives effect to the principles laid down in Article 39(b)
and is protected by Article 31C. Fourth, in view of the decision in
IR Coehlo, whether a challenge under Articles 14, 19 and 21 can
continue to be mounted even if the Act is protected by Article 31C.
Finally, the appellants have also filed their submissions challenging
the constitutionality of specific provisions of Chapter VIII-Aof the
MHADA Act on other grounds.
29. Eventually, during the course of the hearing, the counsel for the
appellants fairly conceded that the last three issues may be argued
before a regular bench after the present reference is answered.
They urged that this Court, however, must determine the question
about whether Article 31C survives in the Constitution as it was a
central theme in the reference orders and also has a bearing on
the interpretation of Article 39(b). We agree with this understanding.
30. In our considered view, although the seven-judge bench order does
not directly refer the question regarding the survival of Article 31C
to this bench of nine judges, it must form a part of our analysis for
the following reasons:
i. The issue about the survival or revival of Article 31C is
intrinsically connected to the question of interpreting Article
39(b). If this Court concludes that Article 31C does not survive
as part of the Constitution after the decision in Minerva Mills,
no protection will be provided to the MHADA Act even if it has
a nexus with the principles laid down in Article 39(b). Therefore,
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logically, in the context of this reference, this Court must first
decide the question about the survival of Article 31C before
adjudicating on the interpretation of Article 39(b).
ii. The question about the survival of 31-C has never been
conclusively answered by this Court. The question was
specifically referred to the bench of five judges in the three-judge
bench order. However, the five-judge bench did not decide the
question about the survival of Article 31-C and instead referred
the case to a larger bench on the question of the interpretation
of Article 39(b). Similarly, even the seven-judge bench did not
answer the Article 31-C question and only referred the Article
39(b) question to this bench. Therefore, the 31-C question has
remained unanswered.
iii. Several judgements of this Court post-Minerva Mills have
proceeded on the assumption that Article 31C (as upheld
in Kesavananda Bharati) remains part of the Constitution.
However, none of these decisions directly deals with the
legal question of its survival. These decisions are addressed
in further detail in Part C below. This Court must provide
certainty on questions of law that have remained unanswered
over prolonged periods of time, particularly, when the question
has a direct bearing on the reference before it. In the event
that this Court concludes that Article 31C is not revived, it will
impact numerous legislations that have been protected by this
provision. Therefore, it is incumbent on this Court to decide
this significant constitutional question at the earliest occasion.
A bench of nine judges is best suited to carry out this exercise
and bring finality to this question of law.
B. Issues
31. In view of the above, the scope of this judgment can be tied down
to determining two issues:
a. Article 31C: 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; and
b. Article 39(b): 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
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

‘material resources of the community’ in Article 39(b)can be
interpreted to include resources that are owned privately and
not by the state.
32. All other issues, including the constitutionality of the MHADA Act, are
not being determined in the present judgment. Parties are at liberty
to raise submissions on these issues before the regular bench that
will decide the underlying appeal.
33. A Writ Petition challenging inter alia the standard rent provisions of the
Bombay Rent Hotel and Lodging House Rates Control Act 1947 and
the Maharashtra Rent Control Act 1999 has also been tagged with
the underlying appeals.28 The petitioners contend that the provisions
of these legislations contravene the decision of this Court in Malpe
Vishwanath Acharya vs. State of Maharashtra.29 A determination
of the constitutionality of these individual enactments does not form
part of our analysis in this judgement and may be determined by a
regular bench after this Court answers the present reference.
34. Further, several intervenors before this Court, including the State
of West Bengal are parties to a pending batch of appeals before
this Court relating to the constitutionality of the West Bengal Land
Reforms Act 1955 and the amendments made to the Act in 1981
and 1986.30Akin to the declaration in the MHADA Act, the West
Bengal Land Reforms Act 1955 also contains a declaration that it
has been enacted to give effect to the “policy of the State towards
securing the principle specified in Clauses (b) and (c) of Article 39
of the Constitution”. By an Order dated 17 July 2014, a three-judge
Bench of this Court has referred several questions arising from
these appeals to a Bench of five judges.31 On 26 February 2016,

28 Writ Petition No 660 of 1998.
29 [1997] Supp. 6 SCR 717 : (1998) 2 SCC 1 : 1997 INSC 831
30 Civil Appeal No. 16879 of 1996.
31 Questions referred: “a. Whether Article 300 A, which does not contain a provision like Article 31(2), would
mandate payment of any amount as compensation for depriving of a person of his property under the
authority of law? If yes, then what are the parameters of adjudging the principles for payment of amount
or the amount fixed by the Acquiring Act as illusory?
b. Whether the Constitutional Amendments inserting the amending Acts in the 9th Schedule would be
violative of the Basic Structure of the Constitution and would therefore be open to challenge in the light of
the judgment of this Hon’ble Court in I.R. Coelho (Dead by LRS) Vs. State of Tamil Nadu [(2007) 2 SCC
1] and therefore be liable to be struck down?
c. Whether the Section 4-D inserted by the 1981 Amendment Act of the West Bengal Land Reforms Act,
1955 which prescribes the offences and penalties with retrospective effect from 07.08.1969 in the face
of the prohibition contained in Article 20(1) of the Constitution of India is valid?”
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the five-Judge Bench of this Court so constituted directed that these
appeals be listed after the disposal of the underlying civil appeals
in the present case. It is clarified that the intervenors have only
been heard on the issues that arise from the reference before us.
This judgement does not deal with the West Bengal Land Reforms
Act 1955 or any other related enactment. A determination on the
questions of law referred to the five-judge bench and adjudication
of the constitutionality of the West Bengal Land Reforms Act 1955
will be carried out by appropriate benches of this Court.
C. Article 31C
i. Brief History of Article 31-C
35. Article 31-C provides statutes with immunity against constitutional
challenges for alleged breaches of Articles 14 and 19 provided that
the statutes give effect to the principles set out in clauses (b) or (c)
of Article 39. Article 31-C represents a constitutionally sanctioned
limitation on the operation of certain Part III rights insofar as they
give effect to the Directive Principles contained in clauses (b) and
(c) of Article 39.
36. When inserted into the Constitution in 1971, Article 31-C provided
that no law giving effect to a State policy securing the principles
set out in clauses (b) or (c) of Article 39 was void on the ground
that it impermissibly abridged the rights conferred by Articles 14,
19, or 31. However, Article 31-C has been amended by Parliament
and interpreted by this Court on several occasions. It is therefore
necessary to clearly lay out the history of this constitutional provision
before adverting to the current controversy concerning the provision.
Article 31-C was inserted into the Constitution by Section 3 of the
Constitution (Twenty-Fifth Amendment) Act, 1971. At the time of its
inclusion in the Constitution, it read as follows:
“31C. Saving of laws giving effect to certain directive
principles. – Notwithstanding anything contained in article
13, no law giving effect to the policy of the State towards
securing the principles specified in clause (b) or clause
(c) of article 39 shall be deemed to be void on the ground
that it is inconsistent with, or takes away or abridges any
of the rights conferred by article 14, article 19 or article
31; and no law containing a declaration that it is for giving
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Property Owners Association & Ors. v.
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effect to such policy shall be called in question in any court
on the ground that it does not give effect to such policy:
Provided that when such law is made by the Legislature
of a State, the provisions of this article shall not apply
thereto unless such law, having been reserved for the
consideration of the President, has received his assent.”
37. Article 31-C, along with Article 31-A, was challenged in Kesavananda
Bharati v State of Kerala.32 In the decision in that case, a majority
comprising of seven of the thirteen judges consisting of Justices
KK Mathew, AN Ray, DG Palekar, HR Khanna, YV Chandrachud,
MH Beg, and SN Dwivedi upheld the constitutional validity of the
first part of Article 31-C which provided immunity from challenges
under Article 14, Article 19, and Article 31 to laws giving effect to the
Directive Principles set out in clauses (b) or (c) of Article 39.33 In the
case of six of the Judges (Mathew, Ray, Palekar, Chandrachud, Beg,
and Dwivedi JJ), this flowed from their reasoning that Parliament’s
power to amend the Constitution was unbounded and courts could
not judicially review the validity of a constitutional amendment even
if it modified the application of fundamental rights. Justice Khanna,
however, did not subscribe to the view that Parliament’s power
to amend the Constitution was unlimited.34 Nonetheless, on an
independent analysis of Article 31-C, Justice Khanna found that the
first part of Article 31-C which immunised laws from Article 14, Article
19, and Article 31 challenges did not violate the basic structure of
the Constitution.35
38. In Kesavananda Bharati, there also arose substantial disagreement
concerning the second half of Article 31-C which stated that no
law containing a declaration that the statute gave effect to a policy
furthering the principles in clause (b) or (c) of Article 39 could be
questioned by a court on the ground that it did not in fact give
effect to such policy. A majority of seven judges consisting of Chief
Justice SM Sikri, and Justices JM Shelat, AN Grover, KS Hegde, AK

32 [1973] Supp. 1 SCR 1 : (1973) 4 SCC 225 : 1973 INSC 91
33 Ibid [1035]-[1040], [1065] (Ray J); [1323], [1331], [1333] (Palekar J); [1518] (Khanna J); [1770]-[1771],
[1787]-[1788] (Mathew J); [1855] (Beg J); [1995] (Dwivedi J); [2118] (Chandrachud J).
34 Ibid [1537] (Khanna J).
35 Ibid [1518] (Khanna J).
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Mukherjea, P Jaganmohan Reddy, and HR Khanna found that the
latter half of Article 31-C violated the basic structure and was therefore
invalid.36 Thus, the final outcome of the decision in Kesavananda
Bharati as concerns Article 31-C was that (i) the first half of Article
31-C granting immunity to laws enacted in furtherance of clauses
(b) or (c) of Article 39 against challenges based on Articles 14,19
and 31 was valid; and (ii) the second half of Article 31-C excluding
judicial review over whether a law in truth furthers the principles set
out in clauses (b) or (c) of Article 39 was struck down. As Justice
HR Khanna succinctly recorded in his conclusions:
“1537. … (xiii) The first part of Article 31-C introduced by
the Constitution (Twenty-fifth) Amendment Act is valid. The
said part is as under:
“31-C. Notwithstanding anything contained in Article 13,
no law giving effect to the policy of the State towards
securing the principles specified in clause (a) or clause
(c) of Article 39 shall be deemed to be void on the ground
that it is inconsistent with, or takes away or abridges
any of the rights conferred by Article 14, Article 19 or
Article 31:
Provided that where such law is made by the legislature
of a State, the provisions of this article shall not apply
there to unless such law, having been reserved for the
consideration of the President, has received this assent.”
(xiv) The second part of Article 31-C contains the seed
of national disintegration and is invalid on the following
two grounds:
(1) It gives a carte blanche to the legislature to make
any law violative of Articles 14, 19 and 31 and
make it immune from attack by inserting the
requisite declaration. Article 31-C taken along
with its second part gives in effect the power to
the legislature including a State Legislature, to
amend the Constitution in important respects.

36 Ibid [417]-[429] (Sikri CJ); [599]-[605] (Shelat and Grover JJ); [726]-[735] (Hedge and Mukhrejea);
[1203]-1210] (Reddy J); [1530]-[1535-A] (Khanna J).
[2024] 11 S.C.R. 49

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

(2) The legislature has been made the final authority
to decide as to whether the law made by it is for
the objects mentioned in Article 31-C. The vice
of the second part of Article 31-C lies in the fact
that even if the law enacted is not for the object
mentioned in Article 31-C, the declaration made
by the legislature precludes a party from showing
that the law is not for the object and prevents a
court from going into the question as to whether
the law enacted is really for that object. The
exclusion by the legislature, including a State
Legislature, of even that limited judicial review
strikes at the basic structure of the Constitution.
The second part of Article 31-C goes beyond the
permissible limit of what constitutes amendment
under Article 368.
The second part of Article 31-C can be severed
from the remaining part of Article 31-C and its
invalidity would not affect the validity of the
remaining part. I would, therefore, strike down
the following words in Article 31-C –
“and 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.”
39. In essence, the second half of Article 31-C was severed from the first
half and struck down. The second half of Article 31-C was thus no
longer legally enforceable. What follows from the above conclusions
is that after the decision in Kesavananda Bharati, Article 31-C ought
to be read as follows:
“31C. Saving of laws giving effect to certain directive
principles. – Notwithstanding anything contained in
article 13, no law giving effect to the policy of the State
towards securing the principles specified in clause (b) or
clause (c) of article 39 shall be deemed to be void on
the ground that it is inconsistent with, or takes away or
abridges any of the rights conferred by article 14, article
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19 or article 31; *[and 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:]
Provided that when such law is made by the Legislature
of a State, the provisions of this article shall not apply
thereto unless such law, having been reserved for the
consideration of the President, has received his assent.”
*No longer enforceable after Kesavananda Bharati
40. Subsequently, Article 31-C was further amended by the Constitution
(Forty-second Amendment) Act, 1976 (“Forty-Second Amendment”).
By Section 4 of this Act, the words “the principles specified in clause
(b) or clause (c) of article 39” were replaced with the words “all or
any of the principles laid down in Part IV.” The effect of the Forty-
Second Amendment was that Article 31-C was amended as follows:
“31C. Saving of laws giving effect to certain directive
principles. – Notwithstanding anything contained in article
13, no law giving effect to the policy of the State towards
securing *[all or any of the principles laid down in Part
IV the principles specified in clause (b) or clause (c) of
article 39] shall be deemed to be void on the ground that
it is inconsistent with, or takes away or abridges any of
the rights conferred by article 14, article 19 or article 31;
**[and 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:]
Provided that when such law is made by the Legislature
of a State, the provisions of this article shall not apply
thereto unless such law, having been reserved for the
consideration of the President, has received his assent.”
*Substitution effected by the Forty-Second Amendment
** No longer enforceable after Kesavananda Bharati
Shortly thereafter, Article 31-C was once again amended by Section
8 of the Constitution (Forty-fourth Amendment) Act, 1978. This
amendment removed reference to Article 31 of the Constitution
contained in Article 31-C. This was a logical corollary to the omission of
[2024] 11 S.C.R. 51

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Article 31 itself from the Constitution. As Article 31 had been removed
from the Constitution, it was no longer necessary that Article 31-C
provide legislation with immunity from Article 31 challenges. Thus,
after the Constitution (Forty-fourth Amendment) Act, 1978, Article
31-C read as follows:
“31C. Saving of laws giving effect to certain directive
principles. – Notwithstanding anything contained in article
13, no law giving effect to the policy of the State towards
securing *[all or any of the principles laid down in Part IV
the principles specified in clause (b) or clause (c) of article
39] shall be deemed to be void on the ground that it is
inconsistent with, or takes away or abridges any of the
rights conferred by article 14, [or] article 19 **[or article
31]; ***[and 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:]
Provided that when such law is made by the Legislature
of a State, the provisions of this article shall not apply
thereto unless such law, having been reserved for the
consideration of the President, has received his assent.”
*Substitution effected by the Forty Second Amendment
**Omission by Forty Forth Amendment
*** No longer enforceable after Kesavananda Bharati
The amendment to Article 31-C by Section 8 of the Constitution (Forty-
fourth Amendment) Act, 1978 and its legal effect are not in dispute.
41. The amendment to Article 31-C by Section 4 of the Forty-Second
Amendment was challenged in Minerva Mills v Union of India.37
The petitioners had challenged the Sick Textile Undertakings
(Nationalisation) Act, 1974, and the order dated 19 October 1971
nationalising their business. However, at the time of the challenge,
the impugned legislation had already been inserted into the Ninth
Schedule of the Constitution. Thus, to secure the ultimate relief of

37 [1981] 1 SCR 206 : (1980) 3 SCC 625 : 1980 INSC 142
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reversing the nationalisation, the petitioners in Minerva Mills also
challenged the thirty-ninth amendment to the Constitution which
had inserted the impugned legislation into the Ninth Schedule of
the Constitution and Section 55 of the Forty-Second Amendment
which modified Article 368 to exclude constitutional amendments
from judicial review. As part of this broader challenge, the petitioners
in Minerva Mills also separately challenged Section 4 of the Forty-
Second Amendment on the ground that the amendment to Article
31-C violated the basic structure of the Constitution. Parallel to
the Constitution Bench proceedings in Minerva Mills, a separate
Constitution Bench heard the challenge to the Maharashtra
Agricultural Lands (Ceiling on Holdings) Act, 1961 in Waman Rao
v Union of India.38 Although Chief Justice YV Chandrachud and
Justice PN Bhagwati sat on both Constitution Benches (and indeed
Justice Bhagwati authored a common opinion for both cases), the
remaining three judges on both Constitution Benches were different
and the two cases dealt with separate issues. In Waman Rao, the
petitioners sought to assail the unamended portion of Article 31-C.
We shall advert to the decision in Waman Rao shortly, but at present,
it is sufficient to note that in Minerva Mills, the Constitution Bench
decided the validity of the changes wrought to Article 31-C by the
Forty-Second Amendment while in Waman Rao, the Constitution
Bench dealt with arguments concerning the validity of Article 31-C
as it stood prior to the Forty-Second Amendment. This is clarified
by the observation of Chief Justice YV Chandrachud, speaking for
the majority in Minerva Mills, where he noted:
“24. … Mr. Palkhivala did not challenge the validity of
the unamended Article 31-C, and indeed that could not
be done. The unamended Article 31-C forms the subject-
matter of a separate proceeding and we have indicated
therein that it is constitutionally valid – to the extent to
which it is upheld in Kesavananda Bharati.”
The separate proceedings that the learned Chief Justice was
adverting to were those in Waman Rao. It is also worth referring to
the opinion of Justice PN Bhagwati (as he then was) in the decision

38 [1981] 2 SCR 1 : (1981) 2 SCC 362
[2024] 11 S.C.R. 53

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

of Minerva Mills. Justice Bhagwati authored a common judgment
for both the decisions in Minerva Mills and Waman Rao. In his
common judgment he stated:
“84. Now, in Wamanrao case the broad argument of Mr
Phadke on behalf of the petitioners […] that the fundamental
rights enshrined in Articles 14 and 19 form the basic
structure of the Constitution and therefore Article 31-A,
Article 31-B read with Ninth Schedule and the unamended
Article 31-C insofar as they exclude the applicability
of Articles 14 and 19 to certain kinds of legislation
emasculate those fundamental rights and thereby damage
the basic structure of the Constitution…
[…]
The argument of Mr. Palkhivala on behalf of the
petitioners in the Minerva Mills case was a little
different. He too attacked the vires of clause (4) and 5) of
Article 368 since they barred at the threshold any challenge
against the constitutional validity of the amendment made
in Article 31-C but so far as Article 31-A, Article 31-B and
the unamended Article 31-C were concerned, he did not
dispute their validity and, as pointed out by us earlier,
he conceded and in fact gave cogent reasons showing
that they were constitutionally valid. His only attack was
against the validity of the amendment made in Article
31-C by Section 4 of the Constitution (Forty-second
Amendment) Act, 1976 and he contended that this
amendment, by making the directive principles supreme
over the fundamental rights, damaged or destroyed the
basic structure of the Constitution….”
(emphasis supplied)
The opinion of Justice PN Bhagwati clearly delineates the scope of
the contentions, and consequently the decisions in Minerva Mills
and Waman Rao. In the former case, the amendment to Article 31-C,
which expanded the scope of immunity provided to legislation, was
challenged. In the latter case, the petitioners sought to challenge
the unamended Article 31-C that had already been partly upheld
and partly invalidated in Kesavananda Bharati.
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42. The Constitution Bench of five judges of this Court in Minerva Mills
invalidated Section 4 of the Forty-Second Amendment.39 Chief Justice
YV Chandrachud, speaking for the majority held:
“58. … On any reasonable interpretation, there can be no
doubt that by the amendment introduced by Section 4 of
the 42nd Amendment, Articles 14 and 19 stand abrogated at
least in regard to the category of laws described in Article
31-C. The startling consequence which the amendment
has produced is that even if a law is in total defiance of
the mandate of Article 13 read with Articles 14 and 19, its
validity will not be open to question so long as its object
is to secure a directive principle of State policy. […] A
large majority of laws, the bulk of them, can at any rate
be easily justified as having been passed for the purpose
of giving effect to the policy of that State towards securing
some principle or the other laid down in Part IV. In respect
of such laws, which will cover an extensive gamut of the
relevant legislative activity, the protection of Articles 14
and 19 will stand wholly withdrawn…”
Chief Justice YV Chandrachud noted that the amendment to Article
31-C provided immunity to a sweeping range of legislation and the
threshold for availing of such immunity was remarkably low. This
severely undermined the protections granted to citizens by Articles
14 and 19. This reasoning led the majority in Minerva Mills to
conclude that:
“75.…Section 4 of the Constitution (Forty-second
Amendment) Act is beyond the amending power of the
Parliament and is void since it damages the basic or
essential features of the Constitution and destroys its
basic structure to the total exclusion of challenge to any
law on the ground that it is inconsistent with, or takes
away or abridges any of the rights conferred by Article
14 or Article 19 of the Constitution, if the law is for giving
effect to the policy of the State towards securing all or any
of the principles laid down in Part IV of the Constitution.”

39 Minerva Mills [75] (Chandrachud CJ).
[2024] 11 S.C.R. 55

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Before examining the legal effect of the Minerva Mills decision on
Article 31-C, we may briefly advert to the decision in Waman Rao
which was delivered four months after the decision in Minerva
Mills. As noted above, the Constitution Bench in Waman Rao was
faced with arguments that the unamended Article 31-C was also
unconstitutional.
43. The petitioners in Waman Rao challenged the Maharashtra Lands
(Ceiling on Holdings) Act, 1961 which had been placed in the Ninth
Schedule of the Constitution. The respondents relied on Articles
31A, 31B, and 31C to contend that the impugned legislation was
immunised from constitutional challenges grounded in Articles 14
and 19. In response to this defence, the petitioners contended
that the aforementioned constitutional provisions were themselves
unconstitutional and assailed the constitutional amendments which
inserted them into the Constitution. In doing so, the petitioners
challenged Article 31-C (as it stood prior to the Forty-Second
Amendment). To obviate the precedent in Kesavananda Bharati,
where the vires of Article 31-C had already been disputed and arguably
settled, the petitioners in Waman Rao contended that no clear holding
concerning Article 31-C was discernible from the numerous opinions
in Kesavananda Bharati. The Constitution Bench in Waman Rao
rejected this contention. Chief Justice YV Chandrachud, speaking
for the majority, held:
“53. Shri M.N. Phadke, who led the argument on behalf of
the petitioners, built a formidable attack against the vires
of Article 31-C. But, with respect to the learned counsel,
the effort is fruitless because the question as regards
the validity of Article 31-C is no longer res integra. The
opening clause of Article 31-C was upheld by the majority
in Kesavananda Bharati and we do not quite see how the
petitioners can be permitted to go behind this decision. […]
It is well known that six learned Judges who were in minority
in Kesavananda Bharati upheld the first part of Article
31-C, which was a logical and inevitable consequence of
Parliament’s power to amend the Constitution. Khanna,
J. did not subscribe to that view but, all the same, he
upheld the first part of Article 31-C for different reasons.
The question of the validity of the Twenty-fifth Amendment
by which the unamended Article 31-C was introduced
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into the Constitution was specifically raised before the
court and the arguments in that behalf were specifically
considered by all the six minority Judges and by Khanna,
J. It seems to us difficult, in these circumstances, to hold
that no common ratio can be culled from the decision of
the majority of the seven judges who upheld the validity
of Article 31-C. Putting it simply, there is no reason why
simple matters should be made complicated, the ratio of
the majority judgements in Kesavananda Bharati is that
the first part of Article 31-C is valid.”
The majority of the Constitution Bench in Waman Rao ultimately
held that:
“68. … (3) Article 31-C of the Constitution, as it stood
prior to its amendment by Section 4 of the Constitution
(42nd Amendment) Act, 1976, is valid to the extent to
which its constitutionality was upheld in Kesavananda
Bharati. Article 31-C, as it stood prior to the Constitution
(42nd Amendment) Act does not damage any of the
basic or essential features of the Constitution or its basic
structure….”
The decision in Waman Rao upheld the validity of Article 31-C (as
it stood prior to the Forty-Second Amendment) insofar as it had
already been upheld in Kesavananda Bharati.
44. To sum up, the decision in Kesavananda Bharati upheld the first
half of Article 31-C to the extent that it provided immunity to statutes
from Article 14 and Article 19 challenges if they gave effect to the
principles in clause (b) or clause (c) of Article 39. The decision in
Kesavananda Bharati also struck down the second half of Article
31-C which prevented judicial review of whether a law in fact gave
effect to these principles. The decision in Minerva Mills invalidated
Section 4 of the Forty-Second Amendment which expanded the
scope of the immunity provided by Article 31-C from laws giving
effect to the principles in clause (b) or clause (c) of Article 39 to laws
giving effect to any Directive Principle. The decision in Waman Rao,
which concerned Article 31-C prior to the Forty-Second Amendment,
reiterated the position set out in Kesavananda Bharati, that the first
half of the unamended Article 31-C was constitutionally valid and
the second half was not.
[2024] 11 S.C.R. 57

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

ii. The present dispute concerning Article 31-C and rival
contentions
45. It is here that the present controversy concerning Article 31-C arises.
Both the appellants and the respondents before us accept that after
the decision in Minerva Mills, the words “all or any of the principles
laid down in Part IV” in Article 31-C are legally unenforceable. But
this is where the agreement ends. In the respondents’ view, the
consequence of Minerva Mills invalidating these words is that
the words that existed in Article 31-C prior to the Forty-Second
Amendment stand revived. In other words, as the Forty-Second
Amendment has been struck down by the Court, Article 31-C will
now read as it did after the decision in Kesavananda Bharati but
prior to the Forty-Second Amendment. The Respondents submit that
after Minerva Mills, Article 31-C should be read as follows:
“31C. Saving of laws giving effect to certain directive
principles. – Notwithstanding anything contained in article
13, no law giving effect to the policy of the State towards
securing [all or any of the principles laid down in Part IV]
the principles specified in clause (b) or clause (c) of article
39 shall be deemed to be void on the ground that it is
inconsistent with, or takes away or abridges any of the
rights conferred by article 14, article 19 or article 31; and
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:”
In contrast to this, the appellants submit that since the words “the
principles specified in clause (b) or clause (c) of Article 39” were
omitted by the Forty-Second Amendment and substituted with
different words, the invalidation of the substituted words by the
Minerva Mills decision cannot revive words specifically omitted by
Parliament. Thus, in the view of the appellants, Article 31-C reads
as follows:
“31C. Saving of laws giving effect to certain directive
principles. – Notwithstanding anything contained in article
13, no law giving effect to the policy of the State towards
securing [all or any of the principles laid down in Part IV]
the principles specified in clause (b) or clause (c) of article
39 shall be deemed to be void on the ground that it is
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inconsistent with, or takes away or abridges any of the
rights conferred by article 14, article 19 or article 31; and
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:”
The appellants acknowledge that such an interpretation would
effectively render the protection granted to legislation by Article
31-C nugatory. However, this is not an inadvertent consequence of
the appellants’ argument but rather a central plank. It is their case
that after the decision in Minerva Mills, Article 31-C may no longer
be relied on to immunise legislation, even if such legislation can be
justified as giving effect to the principles specified in clause (b) or
clause (c) of Article 39. Thus, the tests of Articles 14 and 19 would be
unequivocally applicable even to such legislations. The contentions
and interpretation advanced by the appellants have significant
ramifications not only for the legislations impugned in the underlying
appeals before us but also for countless others whose constitutional
validity is dependent on the immunity provided by Article 31-C.
46. At its core, the present dispute concerns whether the text of Article
31-C as it stood prior to the Forty-Second Amendment can continue
to be given legal effect after the Court in Minerva Mills invalidated
Section 4 of the Forty-Second Amendment. The appellants contended
that the unamended Article 31-C (as it stood prior to the Forty-Second
Amendment) does not automatically revive after the decision in
Minerva Mills. Mr Zal Andhyarujina, learned senior counsel and
Mr Sameer Parekh, learned counsel represented the appellants.
Their position was supported by Ms Uttara Babbar, learned senior
counsel for one of the intervenors. The argument may be briefly
summarised as follows:
(i) The act of substitution by the Forty-Second Amendment consists
of two steps, first the old provision is erased and next, the
new provision is inserted. After the new provision is inserted,
the old text ceases to exist and cannot be given legal effect.
This was described as the “pen and ink” theory. Thus, even if
Minerva Mills invalidated the amended text, the judgement’s
effect was only to stop the inserted text from being enforced
and a judicial order cannot reverse the first step of erasure.
Only a legislature can modify words in a statute. As a result,
[2024] 11 S.C.R. 59

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

after Minerva Mills, the words erased by the Forty-Second
Amendment do not revive and the unamended Article 31-C
cannot be given effect to.
(ii) Further, when a court declares a law to be unconstitutional, this
declaration does not repeal the law from the statute books, it
merely renders it legally unenforceable. Only the legislature
can add or repeal the text from the statute books. Thus, the
decision in Minerva Mills only renders the amended text of
Article 31-C unenforceable and cannot repeal the Forty-Second
Amendment in totality or reinstate the unamended Article 31-C.
47. Mr R Venkatramani, learned Attorney General for India and Mr
Tushar Mehta, learned Solicitor General of India, representing the
respondents, countered the above understanding. Their position was
supported by Mr Rakesh Dwivedi and Mr Gopal Sankarnarayan,
learned senior counsel appearing for the intervenors. Their arguments
may be briefly summarised as follows:
(i) When an amendment is set aside, the entire legal effect of
the amendment is invalidated and thus the text preceding
the amendment will be restored. There are no distinct steps
of erasure and insertion. All the stages of the Forty-Second
Amendment stand cumulatively negated by the decision in
Minerva Mills;
(ii) When exercising basic structure scrutiny, this Court grounds its
reasoning in the relationship between the unamended provision
and the amended provision and the impact the amendment
has on the Constitution. If the Court finds an amendment
impermissible and invalidates it, the position as it stood prior
to the amendment must stand revived for the basic structure
theory to have effect. If the invalidation of an amendment by
the Court led to some third result, where the insertion was
invalidated but the erased text did not revive, this would not
result in a return to the unamended Constitution but some
third uncontemplated result which may itself violate the basic
structure. Thus, the revival of the unamended constitutional
provision is the approach consistent with the theoretical
foundation of basic structure review;
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(iii) The decision of a Constitution Bench of this Court in Supreme
Court Advocates-On-Record Association v Union of India40
squarely covers the present scenario and holds that when a
constitutional amendment is struck down, the position that
existed prior to the amendment stands revived;
(iv) This Court in the decisions in Maharao Sahib Shri Bhim
Singhji v Union of India,41 Sanjeev Coke and Basantibal
Khetan has repeatedly held that Article 31-C as it stood prior
to the Forty-Second Amendment is operative; and
(v) If the words struck down by Minerva Mills relating to clauses
(b) and (c) of Article 39 were omitted by judicial fiat from Article
31-C, the entire provision would be unworkable despite this
precise text of Article 31-C having been upheld by thirteen
judges in Kesavananda Bharati and the constitutional validity
of the provision having been reaffirmed in Waman Rao.
Before delving further into our analysis, we may briefly advert to
the decisions relied on by the Respondents where this Court has
applied Article 31-C after the decision in Minerva Mills. If these
decisions provide a cogent answer as to the status of Article 31-C
after Minerva Mills, our inquiry need not go any further.
48. In Bhim Singh, a Constitution Bench of this Court upheld the Urban
Land (Ceiling and Regulation) Act, 1976 on the ground that the Act
gave effect to the Directive Principles in clauses (b) and (c) of Article
39 of the Constitution. The impugned legislation in Bhim Singh
sought to inhibit the concentration in ownership of urban land and
was inter alia challenged on the ground that it was not in furtherance
of clause (b) or (c) of Article 39 and thus not protected under Article
31-C. Rejecting this submission, Chief Justice YV Chandrachud,
speaking for himself and Justice PN Bhagwati held:
“1. We have perused the judgement prepared by Brother
Tulzapurkar with care but, with respect, we are unable to
agree with him that the Urban Land (Ceiling and Regulation)
Act, 33 of 1976, does not further the Directive Principles
of State Policy in clauses (b) and (c) of Article 39 of the

40 [2015] 13 SCR 1 : (2016) 5 SCC 1 : 2015 INSC 285
41 [1985] Supp. 1 SCR 862 : (1981) 1 SCC 166 : 1980 INSC 219
[2024] 11 S.C.R. 61

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Constitution. The vice from which a provision here or a
provision there of the impugned Act may be shown to suffer
will not justify the conclusion that the Act is not intended to
or does not, by its scheme, in fact implement or achieve
the purpose of clause (b) and (c) of Article 39.”42
Justice Krishna Iyer, concurring with Chief Justice Chandrachud and
Justice Bhagwati and thus forming a majority in Bhim Singh, held:
“16-A. … The purpose of the enactment, garnered from the
preamble, is to set a ceiling on vacant urban land, to take
over the excess and to distribute it on a certain basis of
priority. The whole story of the legislation, the long gestation
of pre-legislative consideration, the brooding presence of
Article 39(b) and (c) and the emphasis in Section 23(4)
on common good as the guiding factor for distribution
point to public purpose, national development and social
justice as the cornerstone of the policy of distribution…”43
The decision in Bhim Singh was delivered after that in Minerva
Mills. The majority opinions in Bhim Singh proceeded on the basis
that the text of Article 31-C stood as it had prior to the Forty-Second
Amendment to the Constitution. In other words, the judges began
their analysis with the presumption that the Union could rely on Article
31-C and that the appropriate test under Article 31-C was whether the
legislation in question furthered the principles set out in clauses (b)
or (c) of Article 39. If the Court had adopted the present appellants’
interpretation of Article 31-C, they could not have proceeded on this
basis because according to the appellants, references to clauses (b)
or (c) of Article 39 are deemed to be omitted from Article 31-C after
the Forty-Second Amendment and Minerva Mills. While the decision
in Bhim Singh would fortify the position of the present respondents,
the judgment does not provide any rationale as to how and why the
text of the unamended Article 31-C stood revived.
49. In Sanjeev Coke, a challenge was brought to various legislations
including the Coking Coal Mines (Emergency Provisions) Act, 1971
which vested the management of coking coal mines and coke oven

42 Maharao Sahib Shri Bhim Singhji v Union of India 1981 (1) SCC 166 [1] (Chandrachud CJ).
43 Maharao Sahib Shri Bhim Singhji v Union of India 1981 (1) SCC 166 [16-A] (Krishna Iyer J).
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plants with the State, the Coking Coal Mines (Nationalisation) Act,
1972 which resulted in the nationalisation of certain coking coal mines,
the Coal Mines (Taking Over of Management) Act, 1973 and finally
the Coal Mines (Nationalisation) Act, 1973 which together resulted
in nationalisation of all coal mines irrespective of whether they were
a coking coal mine or not. The petitioners in Sanjeev Coke argued
that the State had discriminated between certain coke oven plants
and their coke oven plants. In response, the Union Government
contended that the legislations were immunised against an Article
14 challenge as they were protected by Article 31-C. The majority
opinion in Sanjeev Coke raised certain concerns regarding the
reasoning in Minerva Mills but observed that as a review petition
against Minerva Mills was pending before the Court, it was not
appropriate to examine this issue further.44 Nonetheless, in the
ultimate analysis of the petitioners’ arguments, Justice Chinnappa
Reddy speaking for the Constitution Bench in Sanjeev Coke, held:
“17. We are firmly of the opinion that once Article 31-C
comes in Article 14 goes out. There is no scope for
bringing in Article 14 by a side wind as it were, that is, by
equating the rule of equality before the law of Article 14
with the broad egalitarianism of Article 39(b) or by treating
the principle of Article 14 as included in the principle of
Article 39(b).To insist on nexus between the law for which
protection is claimed and the principle of Article 39(b) is
not to insist on fulfilment of the requirement of Article 14.
They are different concepts and in certain circumstances,
may even run counter to each other. That is why the need
for the immunity afforded by Article 31-C. Indeed there
are bound to be innumerable cases where the narrower
concept of equality before the law may frustrate the broader
egalitarianism contemplated by Article 39(b)….”
“18. The next question for consideration is whether the
Coking Coal Mines (Nationalisation) Act is a law directing
the policy of the State towards securing “that the ownership
and control of the material resources of the community are
so distributed as best to subserve the common good”…”

44 Sanjeev Coke [10]-[13] (Chinnappa Reddy J).
[2024] 11 S.C.R. 63

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

As in the decision in Bhim Singh, the above paragraphs evince that
the Constitution Bench in Sanjeev Coke proceeded on the basis
that Article 31-C was operative and that it ought to be interpreted as
it stood prior to the Forty-Second Amendment. The Court noted that
once an Article 31-C defence is claimed, Article 14 cannot be resorted
to if there is a nexus between the law and the aims set out in clause
(b) and clause (c) of Article 39. The explicit references to Articles
31-C and 39(b) demonstrate that the Court proceeded on the basis
that the protection afforded to legislations by Article 31-C continued
to operate after Minerva Mills. However, as with Bhim Singh, the
decision in Sanjeev Coke offers no explanation as to the exact
legal mechanics which lead to the continued legal operation of the
unamended Article 31-C. Thus, these decisions leave unaddressed
the contentions raised by the present appellants.
50. It is also pertinent to refer to the approach of the two-judge Bench of
this Court in Basantibal Khetan. In that case, Special Leave Petitions
were filed against the judgement of the High Court of Judicature
at Bombay invalidating certain provisions of the MHADA Act which
permitted the acquisition of private property. It was contended that the
provisions of the legislation which set out the basis for determining
compensation were violative of Articles 14 and 19 of the Constitution.
In invalidating these provisions, the High Court held that the impugned
provisions were not protected by Article 31-C of the Constitution and
were violative of Article 14. However, when the matter was heard by
a Division Bench of this Court, Justice ES Venkataramiah (as the
learned Chief justice then was) held that the law would be entitled
to immunity under Article 31-C. The learned judge observed:
“13. Even granting for purpose of argument that sub-
sections (33) and (4) of Section 44 are violative of Article
14 of the Constitution, we are of the view that the said
provisions receive the protection of Article 31-C of the
Constitution. […] Let us proceed on the basis that after
Kesavananda Bharati v. State of Kerala and Minerva Mills
Ltd. v. Union of India, Article 31-C reads as:
“Notwithstanding anything contained in Article 13, no
law giving effect to the policy of the State towards
securing the principles specified in clause (b) or clause
(c) of Article 39 shall be deemed to be void on the
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ground that it is inconsistent with or takes away or
abridges any of the rights conferred by Article 14 or
Article 19.”
Clause (b) or Article 39 of the Constitution which is relevant
for our purpose states that the State shall, in particular,
direct its policy towards securing that the ownership and
control of material resources of the community are so
distributed as best to subserve common good.
[…]
14. … The High Court erred in taking a very narrow view
of the objects of the Act and the functions of the Authority
under it. We are satisfied that the Act is brought into force
to implement the Directive Principle contained in Article
39(b) and hence even if there is any infraction of Article
14 it is cured by Article 31-C which is clearly attracted to
the case.”
The extracted paragraphs demonstrate that the Division Bench
explicitly proceeded on the basis that the unamended Article 31-C
had revived and was in legal effect. The two-Judge Bench cited
both the decisions in Kesavananda Bharati and Minerva Mills.
It concluded that after Kesavananda Bharati, the second half of
Article 31-C was no longer in effect. It also concluded that after
Minerva Mills struck down the Forty-Second Amendment, the text
of Article 31-C as it stood prior to the Forty-Second Amendment
stood revived. This approach would support the arguments of the
respondents concerning the interpretation of Article 31-C. However,
like the decisions in Bhim Singh and Sanjeev Coke, no argument
was raised that the unamended Article 31-C did not automatically
revive absent legislative intervention and the two-judge Bench has
proceeded on an assumption that the unamended Article 31-C is
enforceable.
51. In the above decisions interpreting Article 31-C, this Court has
consistently taken the position that Article 31-C, as it stood prior to
the Forty-Second Amendment, has legal effect and can be invoked
to defend legislations against Article 14 and Article 19 challenges.
However, as the appellants correctly point out, no jurisprudential
explanation has been provided for why this is the case and, in most
[2024] 11 S.C.R. 65

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

decisions, this Court has assumed that Article 31-C continues to
have legal effect. In light of the specific contentions raised by the
appellants in the present case, and the significant consequences
flowing from the appellants’ arguments, this Court must examine the
constitutional question of whether, after Minerva Mills invalidated
the Forty-Second Amendment, the text of the unamended Article
31-C can be enforced.
iii. Precedents concerning invalidation of amendments
52. The first decision which the appellants relied on was Shamarao
Parulekar v District Magistrate, Thana.45 The case concerned the
Preventive Detention Act, 1950 which at the time was scheduled to
expire on 1 April 1952. A few months prior to this, on 15 November
1951, the petitioner (Shamarao) was detained. However, the statute
was subsequently amended to extend its lifespan by six months till
1 October 1952. Shamarao contended that the extension of the Act
could not extend his detention past 1 April 1952, when the Act was
originally scheduled to expire. Justice Vivian Bose, speaking for a
Constitution bench of this Court observed that the amendment to
the Preventive Detention Act, 1950 expressly stated that detention
orders shall remain in force “so long as the principal Act is in force”
and “principal Act” had been defined as the 1950 Act. The learned
Judge went on to explain:
“7. … The rule is that when a subsequent Act amends an
earlier one in such a way as to incorporate itself, or a part
of itself, into the earlier, then the earlier Act must thereafter
be read and construed (except where that would lead to
a repugnancy, inconsistency or absurdity) as if the altered
words had been written into the earlier Act with pen and
ink and the old words scored out so that thereafter there
is no need to refer to the amending Act at all. This is the
rule in England [citation omitted]; it is the rule in America
[citation omitted] and it is the law which the Privy Council
applied in India in Keshoram Poddar v. Nundo Lal Mallick.
Bearing this in mind it will be seen that the 1950 Act remains
the 1950 Act all the way through even with its subsequent
amendments. Therefore, the moment the 1952 Act was

45 [1952] 1 SCR 683 : 1952 (2) SCC 1 : 1952 INSC 63
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passed and Section 2 came into operation, the Act of
1950 meant the 1950 Act as amended by Section 2, that
is to say, the 1950 Act now due to expire on 1-10-1952.”
The decision in Shamarao Parulekar outlines the “Pen and Ink”
theory advocated by the appellants. When an amending statute
effectuates a substitution, it modifies the original statutory text by
omitting certain words and inserting certain other words. After the
amending Act, the statute must be read to exclude the omitted
words and to include the inserted words. The appellants rely on
Shamarao Parulekar to highlight that a court cannot give effect to
the omitted words after they have been removed by the amending
Act. This rule is subject to certain well-recognised exceptions (such
as in respect of rights which have been created under the original
statutory text and limitations on the retrospective operation of laws).
The exceptions are not of concern to us presently. However, the
appellants argue that Shamarao Parulekar represents an authority
for the proposition that after the Forty-Second Amendment, the words
“the principles specified in clause (b) or clause (c) of article 39”
can no longer be enforced as they were omitted by a constitutional
amendment. However, the decision in Shamarao Parulekar is not
strictly applicable to the present situation as it did not deal with the
legal effect of the amending act itself being declared void. While the
decision undoubtedly lays down the correct position of law where
a valid amendment is enacted, it offers no insight into whether a
court can give effect to the words omitted by an amendment if the
amendment is declared unconstitutional. In such cases, do the
omitted words revive? This question is not answered by Justice
Bose in Shamarao Parulekar for the amendment to the Preventive
Detention Act was not invalidated.
53. The Appellants next placed significant emphasis on the decision in
ATB Mehtab Majid v State of Madras.46 The case concerned a
challenge to Rule 16 of the Madras General Sales Tax (Turnover
and Assessment) Rules, 1939. Rule 16 had been amended to
include a proviso which resulted in the differential taxation of tanned
hides based on whether they had been tanned within the state of
Madras or outside the state. When the issue reached this Court, it

46 [1963] Supp. 2 SCR 435 : (1963) 14 STC 355 : 1962 INSC 342
[2024] 11 S.C.R. 67

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

was observed that under the amended Rule 16, a dealer who both
purchased the untanned hides and tanned them within the State,
was only required to pay the duty on the purchase price but a dealer
who purchased the untanned hides from outside the state and tanned
them within the state, would be liable to pay sales tax on the sale
price of the tanned hides, which was substantially higher.47 Speaking
for a Constitution Bench of this Court, Justice Raghubar Dayal,
struck down the amended Rule 16 as violative of Article 304(a) of
the Constitution on the following terms:
“We are therefore of the opinion that the provisions of rule
16(2) discriminate against imported hides or skins which
had been purchased or tanned outside the State and that
therefore they contravene the provisions of Article 304(a)
of the Constitution.
It has been urged for the respondent that if the impugned
rule be held invalid, old rule 16 gets revived and that the
tax assessed on the petitioner will be good. We do not
agree. Once the old rule has been substituted by the new
rule, it ceases to exist and it does not automatically get
revived when the new rule is held to be invalid.”48
The Court in ATB Mehtab Majid found that when an amendment to
a rule is invalidated by a court, the old rule does not revive. It draws
on the underlying rationale of the Shamarao Parulekar decision
in that once a rule is substituted, it ceases to have any legal force
and cannot be given legal effect. Hence, the Court held that if the
amendment is found to be unconstitutional, the unamended text
does not revive and cannot be enforced. While the decision does
support the argument of the appellants, that the unamended text of
Article 31-C does not revive, the judgement does not elaborate on
why the pre-existing rule does not revive. Thus, the decision is of
no more assistance to us than the decisions in Bhim Singh and
Sanjeev Coke which, without providing detailed reasons, found that
Article 31-C stood revived.

47 ATB Mehtab Majid v State of Madras 1963 14 STC 355.
48 ATB Mehtab Majid v State of Madras 1963 14 STC 355.
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54. However, further elucidation on the view in ATB Mehtab Majid
is found in Koteswar Vittal Kamath v Rangappa Baliga.49 The
decisions has its roots in a contractual dispute where the appellants
contended that the contracts in question were forward contracts
and void considering the prohibition on forward contracts in the
Travancore-Cochin Vegetable Oils and Oil cakes (Forward Contracts
Prohibition) Order, 1950. The respondents in the case alleged that the
1950 Prohibition Order was unenforceable as it was passed under
a law that had since been repealed. After tracing the history of the
relevant legislation, a three-judge bench of this Court observed that
the 1950 Prohibition Order was potentially still in force due to the
Section 73(2) of the Travancore-Cochin Public Safety Measures Act,
1950, which stipulated that orders passed under certain repealed
legislations continued in force.50 However, the respondents in the
case raised a secondary contention that the state legislature of
Travancore was not competent to enact the Public Safety Measures
Act, 1950 because Parliament had the exclusive power to legislate
on the issue of stock exchanges and forward contracts under Entry
48 of List I of the Seventh Schedule of the Constitution. Justice
Bhargava, speaking for a three-Judge Bench of this Court opined
that this contention was not relevant for the following reasons:
“7. … if it be held that the State Government could not
competently pass the Prohibition Order, 1950, because
it was a piece of legislation on Forward Contracts, that
Order would be treated as void and non-est. Thereupon,
the earlier Prohibition Order 1119, would continue in force
right up to 30th March, 1950. […] When the Prohibition
Order of 1950, was purported to be issued on 8th March,
1950, it was not laid down that it was being issued so as
to supersede the earlier Prohibition Order of 1119. If it had
been a valid Order, it would have covered the same field
as the Prohibition Order of 1119, and, consequently, would
have been the effective Order under which the rights and
obligations of parties have to be governed. On the other
hand, if it be held to be void, this Order will not have the
effect of superseding the earlier Order of 1119.”

49 [1969] 3 SCR 40 : (1969) 1 SCC 255 : 1968 INSC 335
50 Ibid [4] (Bhargava J).
[2024] 11 S.C.R. 69

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Justice Bhargava observed that even if the 1950 Prohibition Order was
held to be void, the consequence would merely be that the parties
would have been governed by the earlier Prohibition Order 1119.
Justice Bhargava held that if the later Order was found to be void,
it would “not have the effect of superseding the earlier Order.”51 The
learned Judge went on to distinguish the decision in ATB Mehtab
Majid in the following manner:
“7. … Learned counsel for the respondent, however, urged
that the Prohibition Order of 1119, cannot, in any case,
be held to have continued after 8th March, 1950, if the
principle laid down by this Court in Firm A.T.B. Mehtab
Majid & Co. v. State of Madras is applied….
[…]
8. On that analogy, it was argued that, if we hold that
the Prohibition Order of 1950, was invalid, the previous
Prohibition Order of 1119, cannot be held to be revived. This
argument ignores the distinction between supersession of
a rule, and substitution of a rule. In the case of Firm A.T.B.
Mehtab Majid & Co., the new Rule 16 was substituted for
the old Rule 16. The process of substitution consists
of two steps. First, the old rule is made to cease to
exist and, next, the new rule is brought into existence
in its place. Even if the new rule is invalid, the first
step of the old rule ceasing to exist comes into effect,
and it was for this reason that the court held that, on
declaration of the new rule as invalid, the old rule
could not be held to be revived. In the case before us,
there was no substitution of the Prohibition Order of 1950,
for the Prohibition order of 1119. The Prohibition Order of
1950, was promulgated independently of the Prohibition
Order of 1119 and because of the provisions of law it would
have had the effect of making the Prohibition Order of 1119
inoperative if it had been a valid Order. If the Prohibition
Order of 1950 is found to be void ab initio, it could never
make the Prohibition Order of 1119 inoperative.”
(emphasis supplied)

51 Ibid [7] (Bhargava J).
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Justice Bhargava observed that unlike in ATB Mehtab Majid, in
Koteswar Vittal Kamath, the later order did not substitute the earlier
order but it merely superseded the earlier order. Thus, the earlier
order was never expressly repealed and hence if the later order was
struck down, the earlier order continued to be in force. However,
beyond this distinction, Justice Bhargava went on to explain what
in his view was the reason for the holding in ATB Mehtab Majid,
namely that the process of substitution had two distinct steps, first,an
omission and second,an insertion. According to Justice Bhargava,
the reason for the outcome in ATB Mehtab Majid was that where an
amending rule is struck down, only the second step of inserting new
words is invalidated but the first step of omitting old words continues
to have legal effect. The appellants rely on this reasoning to contend
that when Minerva Mills stuck down the Forty-Second Amendment,
only the newly inserted language expanding Article 31-C’s exemption
to cover all Directive Principles was struck down. However, the
Amendment’s function of omitting the words “the principles specified
in clause (b) or clause (c) of article 39” still stands. Hence, it was
urged that even after the decision in Minerva Mills, these words
stand omitted from Article 31-C. This is in essence the heart of the
argument of the appellants. As a matter of interpreting precedent, it
is important to note that the two-step process of substitution relied on
by the appellants is only found in the three-judge bench decision in
Koteswar Vittal Kamath, and not in the Constitution Bench decision
in ATB Mehtab Majid. Further, Justice Bhargava’s explanation of
the process of substitution as having two steps after he had already
distinguished ATB Mehtab Majid on facts is at best an obiter dictum.
However, ultimately neither of these judgments is binding on us,
sitting in a composition of nine, and we must independently evaluate
the correctness and completeness of the view taken regarding the
legal effect of invalidating an amendment.
55. The Respondents resist the reasoning of a two-step substitution
process set out in Koteswar Vittal Kamath by relying on a second
line of decisions, beginning with the 1951 decision of the High
Court of Nagpur in Laxmibai v State of Madhya Pradesh.52 The
case concerned the Central Provinces & Berar Regulation of Letting

52 AIR 1951 Nag 94.
[2024] 11 S.C.R. 71

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Accommodation Act, 1946 which, when originally enacted, stipulated
that the statute would expire at the end of one year. However, by
an Ordinance, and later a validating legislation, the lifespan of the
statute was extended till such date as the provincial government may
specify. The Ordinance and validating legislation were challenged on
the grounds of excessively delegating legislative functions (concerning
the lifetime of a statute) to the executive. A Full Bench of the Nagpur
High Court upheld the Ordinance and the validating legislation
extending the operation of the 1946 Act.53 Justice Hidayatullah, as the
learned Chief Justice then was, speaking for the majority of the Full
Bench went on to discuss the question of whether, if the amending
Ordinance had been void, the original text would have been revived
or not. The learned Judge observed:
“144. The original section read:
“It shall come into force on 1-10-1947 & shall remain in
operation for a period of one year.’
145. The underlined (here italicised) words alone were
amended. If the amendment is unconstitutional we must
leave it completely out. We cannot use the intention
underlying that amendment to take the place of enactment.
We cannot read the legislative act of the Governor as
involving a repeal & a reenactment & give effect to
the repeal though not the enactment. To do so would
leave the original section truncated, & besides, there
is no authority to give effect to a mere legislative intent
or purpose…
[…]
146. … When the amendment comes later & is
unconstitutional it has no effect whatever.”
(emphasis supplied)
The judgement in Laxmibai outlines a different approach to analysing
the legal effect of a judicial decision invalidating an amendment.
Justice Hidayatullah found that where an amendment is invalid, the
legal effect of the amendment is nullified in its entirety. The learned

53 Ibid [142] (Hidayatullah J); [157] (Mangalmurti J).
72 [2024] 11 S.C.R.

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Judge relied on several decisions of the US Supreme Court, most
notably, Frost v Corporation Commissioner54 where Justice
Sutherland held:
“Here it was conceded that the statute, before the
amendment, was entirely valid. When passed, it expressed
the will of the Legislature which enacted it. Without an
express repeal, a different Legislature undertook to create
an exception, but, since that body sought to express its
will by an amendment which, being unconstitutional, is a
nullity and therefore, powerless to work any change in the
existing statute, that statute must stand as the only valid
expression of the legislative intent.”
According to Frost and Laxmibai, where an amendment is invalidated
both the amendment’s omission of old words and its insertion of
new words have no legal effect. Justice Hidayatullah noted that
giving effect to the legislative intent of repeal while simultaneously
striking down the new enactment could lead to a truncated statutory
provision rendering the law unworkable. The effect of the judgement
may be to inadvertently invalidate two provisions, both the new and
the old, despite there being no constitutional fault with the old. This
observation is directly applicable to the case before us because if
the unamended Article 31-C does not revive after the decision in
Minerva Mills, Article 31-C would be truncated and unworkable
despite the validity of the Article being upheld by thirteen Judges
in Kesavananda Bharati. In terms of precedential value, Justice
Hidayatullah’s observations are admittedly also obiter dictum given
that the High Court had upheld the Ordinance. However, these
observations were subsequently relied on by the High Court of Nagpur
in Shriram Gulabdas v Board of Revenue, Madhya Pradesh55 and
in the decisions of this Court that we shall now advert to.
56. In Mulchand Odhavji v Rajkot Borough Municipality56 a Constitution
Bench of this Court invalidated the Municipality of Rajkot’s levy of
octroi duty. The case originated from the United States of Saurashtra
where the Saurashtra Terminal Tax and Octroi Ordinance of 1949

54 278 U.S. 505.
55 1952 (3) STC 343.
56 1971 (3) SCC 53.
[2024] 11 S.C.R. 73

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

allowed the state government to levy octroi duty from the towns and
cities specified in Schedule I until these municipalities enacted their
own rules for the levy of octroi duty. Rajkot was one such town and
in 1953 the municipality enacted its own rules for the levy of octroi
duty. In 1956, the state government removed Rajkot from Schedule
I of the 1949 Ordinance. However, in Mulchand Odhavji, the
1953 rules for levying octroi duty were invalidated by the trial court
for violating the rule-making procedure in the parent legislation.57
Following this invalidation and in appeal to this Court, a secondary
question arose as to whether the municipality could still collect octroi
duty for the period that the 1953 rules were in force. In other words,
did the levy of octroi duty by the state government under the 1949
Ordinance revive after the 1953 rules were invalidated? Justice JM
Shelat, speaking for a Constitution Bench of this Court held:
“8. … As already stated, Ordinance 47 of 1949, was
promulgated to meet the transitional situation when
municipalities in towns and cities of Saurashtra were
yet to be constituted. […] The rules framed by the
Government were thus put in the field until the time when
the municipalities could frame rules of their own and levy
and collect the octroi duty. […] While issuing the said
notification, the intention obviously was that once the
municipal rules came into operation the Government rules,
insofar as they pertained to the respondent-Municipality,
would cease to operate. The Government rules, however,
were to cease to operate as the notification provided
“from the date the said Municipality put into force their
independent bye-laws.” It is clear beyond doubt that the
Government rules would cease to apply from the time the
respondent Municipality brought into force its own bye-
laws and rules under which it could validly impose, levy
and recover the octroi duty. The said notification did not
intend any hiatus when neither the Government rules
nor the municipal rules would be in the field. Therefore,
it is clear that if the bye-laws made by the respondent
Municipality could not be legally in force for some
reason or the other, for instance, for not having been

57 Ibid [10].
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validly made, the Government rules would continue
to operate as it cannot be said that the Municipality had
“put into force their independent bye-laws.”
(emphasis supplied)
The decision in Mulchand Odhavji admittedly did not concern an
amendment simpliciter and relied on the text of the state government
rules which stipulated when they would operate. However, two
important observations may be made. First, this Court observed that
it would be an anomalous situation whereby a court invalidated a
freshly enacted rule, but because of such invalidation and the courts’
simultaneous enforcement of the repeal of the earlier rule, no rule of
taxation held the field despite the state government having such power
and there being no fault with the earlier rule. Second, the court gave
effect to the state government’s rules despite Rajkot being removed
from Schedule I of the 1949 Ordinance. This was a recognition that
the omission of Rajkot was only done because of the corresponding
enactment of the municipality’s separate rules. This was even though
the omission was done by an entirely separate authority (the state
government) from the enacting authority (the municipality). Thus,
the Constitution Bench in Mulchand Odhavji adopted a broader
approach of examining the entirety of the legislative circumstances
and reversed both the omission and insertion steps of the legislative
process after invalidating the unconstitutional rule.
57. The respondents next relied on State of Maharashtra v Central
Provinces Manganese Ore.58 In a taxation dispute, the assessee
challenged an amendment to the Explanation to clause (g) of
Section 2 of the Central Provinces and Berar Sales Tax Act, 1947.
The amendment to the Explanation modified the regime of taxation
from one concerning goods that were in the Central Provinces and
Berar when the contract was made, to one covering even future
goods that were in the provinces after the contract was made. The
High Court invalidated the amendment on the ground that it had not
secured the assent of the Governor General under Section 107 of
the Government of India Act, 1935.59 After the High Court declared
the amendment as void, a question arose before this Court as to

58 [1977] 1 SCR 1002 : (1977) 1 SCC 643 : 1976 INSC 269
59 Ibid [8] (Beg J).
[2024] 11 S.C.R. 75

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

whether the unamended Explanation to clause (g) stood revived. The
assessee adopted the two-step argument concerning substitution
found in Koteswar Vittal Kamath and contended that as the assent
of the Governor General was not required to repeal the earlier
Explanation to clause (g), the repealing step of the substitution was
valid while only the insertion step of the substitution was hit by the
failure to secure the Governor General’s assent under Section 107
of the Government of India Act. Therefore, the assessee contended
that the unamended Explanation to clause (g) did not stand revived.
Justice Beg, speaking for a Three-Judge Bench of this Court rejected
this contention and held:
“17. In the case before us although the word “substitution”
is used in the amending Act, yet, the whole legislative
process termed substitution was itself abortive. The whole
of that process did not take effect as the assent of the
Governor-General, required by Section 107, Government
of India Act, was lacking. […]
18. We do not think that the word substitution
necessarily or always connotes two severable steps,
that is to say, one of repeal and another of a fresh
enactment even if it implies two steps. Indeed, the
natural meaning of the word “substitution” is to
indicate that the process cannot be split up into two
pieces like this. If the process describes as substitution
fails, it is totally ineffective as to leave intact what was
sought to be displaced. That seems to be the ordinary
and natural meaning of the words “shall be substituted”.
This part could not become effective without the assent
of the Governor-General. The State Governor’s assent
was insufficient. It could not be inferred that, what was
intended was that, in case the substitution failed or
proved ineffective, some repeal, not mentioned at
all, was brought about and remained effective so
as to create what may be described as a vacuum in
the statutory law on the subject matter. Primarily, the
question is one of gathering the intent from the use of
words in the enacting provisions seen in the light of the
procedure gone through. Here, no intention to repeal,
without a substitution, is deducible. In other words,
76 [2024] 11 S.C.R.

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there could be no repeal if substitution failed. The two
were a part and parcel of a single indivisible process and
not bits of a disjointed operation.”
(emphasis supplied)
This extracted paragraph has several strands of important reasoning
that build on the decisions of Laxmibai and Mulchand Odhavji.
First, the Court cast doubt on whether substitution always entails
two distinct steps of repeal and enactment as outlined in Koteswar
Vittal Kamath. Second, the Court reiterated that this two-step
approach, where repeal is given effect to but insertion is not given
effect to, can result in an unintended legislative vacuum. Third,
the Court highlighted that it was necessary to examine whether
there was any intention to repeal without insertion. This is relevant
because there may exist cases where a legislature independently
seeks to repeal a provision and also enacts another provision. In
such cases, it may be appropriate to differentiate the two steps if
there is cogent evidence to demonstrate that independent of the
enactment step, the legislature would have nonetheless repealed
the provision in question. In the words of Justice Beg, is there an
“intention to repeal, without a substitution”? However, absent clear
legislative intent to independently repeal without substitution, where
the legislature engages in substitution, it is in fact a single indivisible
process and the effect of a court invalidating the amended text is
to bring back the unamended text. This is because, in the case of
substitution, an inference can be made that the legislature would
never have repealed the unamended text without simultaneously
inserting the new amended text. Thus, to invalidate the amended text
but also refuse to give effect to the unamended text would be to give
effect to a third outcome that could lead to absurd consequences
and was never intended by the legislature. Thus, where the intent is
substitution and the inserted or amended text is declared invalid, the
result is to invalidate the combined exercise of repeal and enactment
and the pre-amendment provision continues in force.
58. The above approach was also adopted by a two-Judge Bench of
this Court in DK Trivedi & Sons v State of Gujarat.60 The case
concerned three notifications issued by the state government of

60 [1986] 1 SCR 479 : (1986) Supp SCC 20
[2024] 11 S.C.R. 77

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Gujarat under Section 15 of the Mines and Minerals (Regulation
and Development) Act, 1957 (MMRD Act) specifying rates of royalty
and dead rent to be paid by mining companies. Section 15(3) of
the MMRD Act prohibited the state government from increasing the
rates of royalty (and as a result dead rent)61 more than once in a
period of four years. For the four-year period between 1974 and
1978, this Court found that the State of Gujarat had increased the
rates of royalty and dead rent in 1974 and then again impermissibly
increased royalty rates in 1975 and dead rents in 1976. The Court
struck down these subsequent enhancements as violative of Section
15(3) of the MMRD Act.62 A question then arose, as to whether after
invalidating these subsequent notifications, the rate of royalty and
dead rent under the last valid notification of 1974 stood revived or
not. Justice DP Madon, writing for the Bench, cited the decision in
Central Provinces Manganese Ore with approval and held:
“72. The position before us is the same. It was not the
intention of the Government of Gujarat that even if the new
schedule of royalty substituted by the 1975 Notification
was void and inoperative Schedule I as substituted by
the 1974 Notification nonetheless stand repealed. It was
equally not the intention of the Government of Gujarat that
even if the rates of dead rent substituted in Schedule II
by the 1976 Notification were void and inoperative, the
rates of dead rent as substituted by the 1974 Notification
would nonetheless stand repealed. If the contention in
this behalf were correct, it would lead to the startling
result that on and from the date of the coming into
force of the 1975 Notification no royalty was payable
in respect of minor minerals and that on and from the
date of the coming into force of the 1976 Notification
no dead rent was payable in respect of any leased area.
The rates in Schedule I and Schedule II were intended to
be substituted by new rates. The intention was not to
repeal them in any event. If the substitutions effected
by the 1975 and 1976 Notifications were invalid, such
substitutions were equally invalid to repeal the 1974

61 See Ibid [55] (Madon J).
62 Ibid [65], [67] (Madon J).
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Notification. The result is that the 1974 Notification
continued to be operative both as regards the rates of
royalty and the rates of dead rent until they were validly
substituted with effect from April 1, 1979, by the 1979
Notification.”
(emphasis supplied)
The above extract comports with the reasoning in Central Provinces
Manganese Ore. The two-Judge bench observed that it could
never have been the intention of the Government of Gujarat to
independently repeal the existing 1974 rates of royalty and dead rent
when it substituted them by subsequent notifications enhancing the
rates. This is doubly evident from the fact that the government had
enhanced the rates of royalty and dead rent. Therefore, it cannot
be presumed that the Government ever independently intended to
repeal the 1974 notification which would have led to a cessation
in the collection of revenue. This being the position, the result of
invalidating the subsequent notifications while simultaneously giving
effect to repeal of the 1974 Notification would lead to an absurd
result which was never intended by the government. Thus, rather
than breaking down the process of substitution into two distinct steps
of repeal and enactment and analysing the effect of the invalidation
disjunctively, in Central Provinces Manganese Ore and DK Trivedi
& Sons, the Court asks whether it is plausible that the legislature
intended to independently repeal the substituted provision. In the
absence of clear evidence of such legislative intent, the process of
substitution is invalidated in its entirety and the original, unamended
provision continues to have legal force.
59. The position adopted in Central Provinces Manganese Ore and
DK Trivedi & Sons also finds support from decisions in the US.
We have already noted Justice Hidayatullah’s reliance on the US
Supreme Court’s decision in Frost v Corporation Commissioner.63
However, decisions in state Courts of the United States following
Frost are even more explicit in their reasoning. For example, in
Texas Company v Cohn64 the Supreme Court of Washington was
tasked with determining whether a 1937 taxation statute continued

63 278 U.S. 505.
64 8 Wash 2d 360 (17 April 1941, Supreme Court of Washington).
[2024] 11 S.C.R. 79

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

in force after a 1939 statute had replaced it, but the subsequent
statute had been invalidated by the Court. Justice Drive, speaking
for the Supreme Court of Washington sitting en banc held:
“The 1939 petroleum products tax law specifically repealed
the 1937 statute, but it is the position of the appellants
that, when the repealing act was wholly vitiated as
unconstitutional by the Inland case, its repealing clause
also fell. Therefore, they assert, the 1937 statute has never
been legally repealed and has remained in full force and
effect in contemplation of law, assuming, of course, that
it is constitutional.
This position, we think, is sound. It is too apparent to require
much comment that the legislature, when it enacted the
1939 act, attempted to set up a new and complete fuel oil
tax law in place of the 1937 statute. The earlier law was
repealed only to clear the decks and give the new act
unobstructed operation and effect. It does not appear
that the legislature intended in any event, to repeal the
prior law. Under such circumstances, the repeal clause
falls within the unconstitutional statute of which it is part.”
(emphasis supplied)
The approach adopted by the Supreme Court of Washington was to
examine the totality of the legislative circumstances and proceedings,
and absent any express intention of the legislature to independently
repeal the 1937 law, hold that the repeal of the 1937 law was reversed
by the 1939 law being invalidated. Thus, the 1937 law continued
in force. This reasoning was also adopted by the Supreme Court
of Pennsylvania in Mazurek v FM Ins Company, Jamestown.65
In that case, an 1857 statute allowed individuals to sue insurers
in the county where the insured property was located. The 1857
statute was repealed by a 1921 law, but Section 344 of the 1921
law preserved the jurisdiction of individuals to sue insurers in the
jurisdiction where the insured property was located. The 1921 law
was later invalidated, and a question arose as to whether the 1857
law and the preservation of jurisdiction by Section 344 could still be
given effect. Justice Maxey held that it could be:

65 320 Pa 33 (Pa. 1935) (25 November 1935, Supreme Court of Pennsylvania)
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“The only question is whether where, as here, an
act expressly repeals another act and provides a
substitute for the act repealed and the substitute is found
unconstitutional, is the other act so expressly repealed, to
be judicially accepted as repealed. Such a construction
is not warranted unless it clearly appears that the
legislature would have passed the repealing clauses
even if it had not provided a substitute for the acts
repealed. Not only was there no such intention on the part
of the legislature in the present case, but it is apparent that
exactly the opposite was intended. The precise question
now being discussed has not heretofore been passed upon
by this court. However, other courts have enunciated the
principle that a repealing clause expressly repealing a
prior statute is itself ineffective where the substitute
for the prior statute provided in the repealing statute
is unconstitutional, and where it does not appear that
the legislature would have enacted the repealing clause
without providing a substitute for the act repealed
[citations omitted]. There is no doubt that the legislature
in enacting section 344 of the Act of 1921 intended to
preserve to courts of countries in which insured properties
were located the jurisdiction in insurance cases created
by the Act of 1857. It is a legitimate inference that the
Act of 1857 would not have been repealed by the Act
of 1921 if the legislature had known that section 344
of that act would be declared invalid for defect in the
title of the act.”
(emphasis supplied)
The above extracts make it evident that the appropriate test in cases
of substitution is whether the legislature intended to repeal the law
if they knew that the law they were enacting would not have legal
effect. Looked at from another perspective, the question is, would
the legislature have given effect to the repeal if they did not also
simultaneously intend to enact an alternative provision or statute.
These decisions from the United States of America are of particular
relevance, as like in India, courts in the United States have long
followed the doctrine of judicial review and invalidation of both primary
and secondary legislation. Therefore, the experience of American
[2024] 11 S.C.R. 81

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

courts on the consequences of a legislation being struck down is
undoubtedly of assistance in the Indian context where courts are
similarly empowered.
60. Although the decisions of Central Provinces Manganese Ore and
DK Trivedi & Sons were rendered by a three-Judge Bench and a
two-Judge Bench of this Court respectively, they were also endorsed
by a Constitution Bench of five judges of this Court in Supreme
Court Advocates-On-Record Association v Union of India.66
The NJAC Decision is particularly relevant to the case before us
because it expressly concerns the legal consequences arising out
of the invalidation of a constitutional amendment. In the NJAC
Decision, a Constitution Bench of this Court was seized of a challenge
to the Ninety-Ninth Constitutional (Amendment) Act, 2014.67 The
amendment replaced the collegium-led system of appointing judges
with a National Judicial Appointments Committee. The Constitution
Bench invalidated the ninety-ninth amendment as violating the basic
structure. However, the Union of India contended that upon the
invalidation of the ninety-ninth amendment, the earlier collegium-led
system of judicial appointments would not revive because Article
124(2) in its original form (upon which the collegium-led system is
based) had been repealed by the ninety-ninth amendment. A majority
of four judges in the NJAC Decision all rejected this argument and
held that the earlier system of judicial appointments would stand
revived upon the invalidation of the ninety-ninth amendment.68The
opinion of Justice JS Khehar(as the learned Chief Justice then was)
expressly relied on the decision in Central Provinces Manganese
Ore. The learned Judge held:
“412.10 What needs to be kept in mind as we have
repeatedly expressed above is that the issue canvassed
in the judgements relied upon [by the Solicitor General of
India] was the effect of a voluntary decision of a legislature
in amending or repealing an existing provision. That
position would arise, if Parliament had validly amended
or repealed an existing constitutional provision. Herein,
the impugned constitutional amendment has definitely

66 [2015] 13 SCR 1 : (2016) 5 SCC 1 : 2015 INSC 285 (“NJAC Decision”).
67 “Ninety-ninth amendment”
68 NJAC Decision [413] (Khehar J); [963] (Lokur J); [989] (Joseph J); [1110] (Goel J).
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the effect of substituting some of the existing provisions
of the Constitution, and also, adding to it some new
provisions. Naturally substitution connotes that the
earlier provision ceases to exist and the impugned
constitutional amendment by a process of judicial
review has been set aside. Such being the position,
whatever be the cause and effect of the impugned
constitutional amendment, the same will be deemed to
be set aside and the position preceding the Amendment
will be restored. It does not matter what are the stages
or steps of the cause and effect of the Amendment, all
the stages and steps will stand negated, in the same
fashion as they were introduced by the Amendment, when
the amended provisions are set aside.”
(emphasis supplied)
Justice Khehar endorsed the approach whereby the invalidation
of an amendment would also reverse any repeals brought about
by the amendment. The learned Judge rejected the approach of
disaggregating the process of substitution into the two steps of repeal
and enactment. When Parliament acted to substitute one provision
with the other, it cannot be said to have intended to independently
repeal the original provision absent clear evidence to the contrary.
Where no intention to independently repeal the existing provision of
law is to be found, the effect of invalidating a substitution is that the
entirety of the substitution stands at nullity. In the NJAC Decision,
Justice Khehar also opined on the dire consequences of the
pre- existing appointment process for judges not reviving. He wrote:
“413. … it would have to be kept in mind that if the
construction suggested by the learned Solicitor General
was to be adopted, it would result in the creation of a void.
We say so, because if neither the impugned constitutional
provision nor the amended provisions of the Constitution
would survive, it would lead to a breakdown of the
constitutional machinery inasmuch as there would be a
lacuna or a hiatus insofar as the manner of selection and
appointment of Judges to the higher judiciary is concerned.
Such a position, in our view, cannot be the result of any
sound process of interpretation..,”
[2024] 11 S.C.R. 83

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

The above extract highlights a key issue originally expounded by
Justice Hidayatullah in Laxmibai and reiterated by Central Provinces
Manganese Ore and DK Trivedi & Sons; namely, that giving effect
to the repeal while simultaneously invalidating the enactment could
lead to a lacuna in the law, rendering a provision unworkable, or as
in the case of the NJAC Decision, lead to a “constitutional crisis”.
61. The opinion of Justice MB Lokur in the NJAC Decision also highlights
another aspect of this issue that must be kept in mind. Justice Lokur
assessed the outcome of non-revival of the unamended text vis-à-vis
the principles expressed in the judgement. The learned Judge wrote:
“961. … If the contention of the learned Solicitor General
is accepted, then on the facts of the case, the result
would be calamitous. The simple reason is that if the 99th
Constitutional Amendment Act is struck down as altering
the basic structure of the Constitution and if Article 124(2)
in its original form is not revived then Article 124(2) of
the Constitution minus the words deleted (by the 99th
Constitution Amendment Act) and minus the words struck
down (those inserted by the 99th Constitution Amendment
Act) would read as follows:
“(2) Every Judge of the Supreme Court shall be
appointed by the President by warrant under his
hand and seal and shall hold office until he attains
the age of sixty-five years:”
962. This would give absolute power to the President to
appoint a Judge to the Supreme Court without consulting
the Chief Justice of India (and also to appoint a Judge
to a High Court). The result of accepting his submission
would be to create a tyrant […]
963. This was put to the learned Solicitor General and it
was also put to him that if his submissions are correct,
then it would be better for the Union of India to have the
99th Constitution Amendment Act struck down so that
absolute power resides in the President making him/her an
imperium in imperio so far as the appointment of Judges
is concerned. The learned Solicitor General smiled but
obviously had no answer to give. It must, therefore, be
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held that the constitutional provisions amended by the
99th Constitution Amendment Act spring back to life on
the declaration that the 99th Constitution Amendment Act
is unconstitutional.”
The above extract highlights how following a two-step approach
advanced by the appellants may result in a situation where the
ultimate consequence of invalidating an amendment is a graver
perpetuation of the harms sought to be prevented by the striking
down of the amendment. The Constitution Bench in the NJAC
Decision invalidated the Ninety-Ninth Amendment on the ground
that it interfered with judicial independence which is part of the basic
structure of the Constitution. But as Justice Lokur’s opinion points
out, disaggregating the substitution and giving effect to the repealing
portion of the amendment while also invalidating the new enactment
would lead to a situation where judicial independence was further
compromised. Such an approach would be neither legally tenable
nor normatively desirable.
62. We may briefly advert to three more decisions on the relationship
between the principles of the judgement in question and the outcome
of invalidating an amendment to demonstrate the significance of
this issue. In the NJAC Decision, it was evident that absent the
pre-existing regime reviving, the principles set out in the judgement
would be significantly undermined. However, the opposite may also
be true. This may be seen from the decision in BN Tewari v Union
of India,69 which was a writ petition under Article 32 filed on the heels
of the decision of this Court in T Devadasan v Union of India.70
The case concerned a Union Public Service Commission (UPSC)
notification reserving 12.5 per cent of seats for candidates from
the Scheduled Castes and 5 per cent of seats for candidates from
the Scheduled Tribes. In 1952, the UPSC instituted a carry-forward
rule whereby unfilled reserved seats each year were added to the
subsequent year’s reserved seats for up to two years. This rule
was subsequently amended in 1955, challenged in T Devadasan,
where the carry forward rule “as modified in 1955” was struck down

69 [1965] 2 SCR 421
70 [1964] 4 SCR 680 : 1963 INSC 183
[2024] 11 S.C.R. 85

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

as unconstitutional.71 In BN Tewari, the petitioners contended that
it was only the 1955 substitution that was invalidated, and as a
result the 1952 carry-forward rule was revived and continued to be
in effect. Justice KN Wanchoo, speaking for a Constitution Bench
of this Court, negatived this contention by noting:
“6. … It is true that in Devadasan case, the final order of
this Court was in these terms:
“In the result the petition succeeds partially and the
carry forward rule as modified in 1955 is declared
invalid.”
That however does not mean that this Court held that the
1952-rule must be deemed to exist because this Court said
that the carry forward rule as modified in 1955 was declared
invalid. The carry forward rule of 1952 was substituted by
the carry forward rule of 1955. On this substitution the carry
forward rule of 1952 clearly ceased to exist because its
place was taken by the carry forward rule of 1955. Thus
by promulgating the new carry forward rule in 1955, the
Government of India itself cancelled the carry forward rule
of 1952. When therefore this Court struck down the carry
forward rule as modified in 1955 that did not mean that
the carry forward rule of 1952 which had already ceased
to exist, because the Government of India itself cancelled
it and had substituted a modified rule in 1955 in its place,
could revive it. We are therefore of the opinion that after
the judgment of this Court in Devadasan case there is no
carry forward rule at all, for the carry forward rule of 1955
was struck down by this Court while the carry forward rule
of 1952 had ceased to exist when the Government of India
substituted the carry forward rule of 1955 in its place.”
The Court in BN Tewari found that after the rule was amended in
1955, the 1952 rule ceased to exist and even after the 1955 rule was
struck down, the 1952 rule did not revive as it had been repealed
by the Government itself. At first glance, the decision in BN Tewari
also supports the “Pen and Ink” theory propounded by the appellants
and results in an identical outcome to that in ATB Mehtab Majid.

71 T Devadasan [22] (Mudholkar J).
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We have already adverted to the limitations and inconsistencies
with this approach as highlighted in the cases of Laxmibai, Central
Provinces Manganese Ore, and DK Trivedi & Sons. However, this
case also demonstrates the practical difficulties that may arise if an
unconstitutional provision revives. In T Devadasan, the Court had held
the underlying basis for the carry forward rule to be unconstitutional.
If the Court in BN Tewari had found the carry forward rule stood
revived, it would have resulted in the revival of a rule that was (at
the time) ex-facie unconstitutional and repugnant to the holding in
the T Devadasan. Thus, in addition to the narrower issue of whether
a pre-existing rule is revived, the Court in BN Tewari was also
mindful of the relationship between the unamended provision and
the decision to invalidate the amendment. BN Tewari is an example
of where allowing the unamended rule to revive would have revived
a (at the time) unconstitutional rule.
63. The need to assess not only the entirety of the legislative
circumstances but also the judicial decision invalidating the amending
statute is also apparent from the decision in Shaukat Khan v State
of Andhra Pradesh.72 The case concerned the Hyderabad Inams
Abolition Act, 1955 which was eventually repealed as amended by
the Andhra Pradesh (Telangana Area) Abolition of Inams Act, 1967.
During proceedings concerning the validity of the 1955 Act before this
Court, the High Court of Andhra Pradesh Act invalidated the entirety
of the 1967 legislation. Before this Court, a question arose that as
the 1967 statute had repealed the 1955 law, and the 1967 statute
itself had been struck down, whether the 1955 was now in force.
Justice P Jaganmohan Reddy, speaking for a two-Judge Bench of
this Court observed:
“10. On the main question whether the impugned Acts
were revived by reason of the High Court of Andhra
Pradesh striking down Act 9 of 1967, a perusal of that
judgment would show that the Division Bench considered
the question and held that as the inam lands had already
vested in the Government on July 20, 1955, there was
no need to abolish inams which already stood abolished
long before the date when the impugned Act, namely, Act
9 of 1967, was enacted.”

72 [1975] 1 SCR 429 : (1974) 2 SCC 376 : 1974 INSC 118
[2024] 11 S.C.R. 87

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

The learned Judge quoted the judgment of the High Court of Andhra
Pradesh where the High Court had held:
“The effect of the impugned Act in pith and substance is
really not agrarian reform but to destroy the rights of the
inamdars and others who were assured compensation
under the repealed Act.”
Based on this finding of the High Court, Justice Jaganmohan Reddy
concluded:
“10. … The striking down of Act 9 of 1967 must be
construed in the light of the reasoning given by the
learned Judges of the Division Bench of the Andhra
Pradesh High Court that the Abolition Act 8 of 1955 and
the Amendment Act 10 of 1956 had already achieved the
result which Act 9 of 1967 was intended to achieve, and
once the inams had already vested in the Government,
compensation had to be paid in accordance with the terms
of those laws and cannot again be re-opened by vesting
the inams which had already vested as if they had not
already vested in the Government. This postulates the
existence of the Acts impugned before us as a ground
for striking down Act 9 of 1967, so that when the High
Court says that the latter Act 9 of 1967is void it could not
have intended to say that even the Acts now impugned
before us did not revive.”
This Court in Shaukat Khan observed that the High Court of Andhra
Pradesh had invalidated the 1967 statute precisely on the ground
that the inams had already vested in the state government under the
1955 law and the regime of compensation could not subsequently be
altered by the 1967 statute. This reasoning presupposes the existence
of the 1955 laws being in force. The High Court could not invalidate
the 1967 law but also simultaneously enforced the repeal of the 1955
statute which it had expressly stated would govern compensation.
Thus, where a court assesses whether a law revives or not after an
amendment or subsequent enactment is invalidated, the court must
assess both the totality of the legislative circumstances but also the
logical consequences that flow from the decision to invalidate the
statute or provision in question.
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64. An even more explicit demonstration of this rationale can be found
in Indian Express Newspapers (Bombay) v Union of India.73
The case concerned a 1977 notification under Section 25 of the
Customs Act, 1962 granting a wholesale exemption from customs
duty on newsprint. However, by a fresh notification in 1981, the
Union Government amended its policy and stated that for the
printing of newspapers, books and periodicals, the exemption from
customs duty would only apply beyond 10 per cent. In effect, the
1981 notification imposed a 10 per cent ad valorem customs duty
on imported newsprint from newspapers and periodicals. The 1981
notification was struck down by a three-judge bench of this Court
on the ground that it impermissibly restricted the freedom of speech
guaranteed by Article 19 of the Constitution.74 On the secondary
question of whether the earlier 1977 notification stood revived, the
Court held that it did. Justice ES Venkataramiah, as the learned
Chief Justice then was, speaking for the Court held:
“107. … We may also state that the legal effect on an
earlier law when the later law enacted in its place is
declared invalid does not depend merely upon the use
of words like, ‘substitution’, or ‘supersession’. It depends
upon the totality of the circumstances and the context in
which they are used.
[…]
109. Hence, if the notification dated July 15, 1977 cannot
revive on the quashing of the impugned notifications, the
result would be disastrous to the petitioners as they would
have to pay customs duty of 40% ad valorem from March
1, 1981 to February 28, 1982 and 40% ad valorem plus
Rs 1000 per MT from March 1, 1982 onwards. […] Such
a result cannot be allowed to ensue.”
The Court in Indian Express Newspapers (Bombay) observed
that the consequence of the pre-existing law not reviving would in
fact result in greater prejudice to the petitioners than if there had
been no judgment of the court at all. If after the 1981 notification

73 [1985] 2 SCR 287 : (1985) 1 SCC 641 : 1984 INSC 231
74 Ibid [102] (Venkataramiah J).
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

was invalidated, the 1977 notification granting a general exemption
from customs duty on newsprint did not continue in force, the net
outcome would be a higher customs duty on news publishers. This
was because the original notification itself was framed in the manner
of an exemption from customs duty. The above extract makes it
clear that in addition to the question of whether the legislative intent
was indivisible, the issue of the legal effect of invalidation in cases
of substitution must take into account the facts of a given case, the
rationale for invalidation, and the practical effect of the unamended
text being revived or not.
iv. Analysis and Conclusions concerning Article 31-C
65. Based on the above precedents, certain principles governing the
consequence of an amendment resulting in a substitution being
invalidated come to the fore. It is not appropriate to separate an
amendment which substitutes certain words with certain other words
into multiple steps and examine the legal effect of invalidation on
each of these steps independently. This is because when a legislature
enacts a substitution, it is only removing certain text to make space
for the new text it wishes to enact. Simply put, the legislature would
not remove the text in question without at the same time inserting
alternate text. Given that the legislative intent is composite and
indivisible, to remove and insert simultaneously, a judicial approach
which disaggregates these two steps and treats them differently
would amount to the courtre-writing the law contrary to the legislative
intent. As the decisions from the United States note, in such cases,
there are two expressions of legislative intent, the original text and
the amended text. If the amended text is invalidated, the only valid
expression of legislative intent is the original text. If a court were to
find that even the original text could not be given legal effect because
it had been repealed, this would result in a third outcome, a legal
vacuum which was neither intended by the legislature that enacted
the original text nor by the legislature which adopted the amended
the text. Crucially, this third outcome would fail to give effect to either
legislative intent despite there being no constitutional fault in the
original provision. As the decisions in Laxmibai, Central Provinces
Manganese Ore, and DK Trivedi & Sons note, if a court were to not
only invalidate the newly inserted text but also hold that the old text
stands repealed it could lead to absurd outcomes or render the text
wholly unworkable. The practical effect of such an outcome would be
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that a judicial decision invalidating an unconstitutional amendment
would also inadvertently nullify a valid and constitutional provision
which the legislature would never have repealed without providing
a replacement.
66. Insofar as the argument that the original rule had been repealed by
the legislature itself and thus ought not to be given effect, as noted
above, this reasoning is negated by the inference that the legislature
would never have repealed the original text without simultaneously
adopting the amended text. While a court cannot give effect to text
that the legislature has repealed, as noted in Shamarao Parulekar, a
case where a legislature has engaged in substitution, and the newly
enacted text has been invalidated, is materially different. There may
exist a narrow sub-set of cases where it is evident from the legislative
circumstances or external aids to statutory interpretation, that the
legislature would have in fact repealed the provision or words in
question independent of its enactment of an alternative provision.
Therefore, it is incumbent on courts to ask the question posed by
Justice Beg in Central Provinces Manganese Ore, is there “intention
to repeal, without a substitution”? Although some of the precedents
discussed frame the question as ‘would the legislature have repealed
the original text if it knew a court would invalidate the amended
text?’, a more appropriate framing of the question would be, “Would
the legislature have repealed the original text without giving effect
to the amended text?” for this is the result of a court invalidating the
amended text. If in cases where a legislature has repealed text and
inserted other text, there is clear evidence that the legislature would
have repealed the text in question independent of its decision to give
effect to new or alternate language, then a court can continue to give
effect to the repeal despite invalidating the new text. This is because,
in such cases, the legislative intent is not composite or indivisible,
and it is evident that the legislature contemplated that the original text
would be repealed independent of whether the new text was given
effect or not. However, absent such clear legislative intent, where a
legislature substitutes a text by amendment and the amendment is
invalidated, it is presumed that the unamended text stands revived.
67. This analysis of whether legislative intent is composite or not is
relevant to the case of substitutions. However, there is another
reason why the argument of the appellants that repealed text can
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

never be enforced after a court invalidates an amendment may be
flawed, and that is the case of a repeal simpliciter. Let us imagine
a situation where Parliament were to by constitutional amendment,
repeal protections concerning tenure or salary granted to constitutional
functionaries such as Judges or Election Commissioners. This would
be a case of an amendment that only repealed constitutional text.
Such an amendment would likely violate the basic structure of the
Constitution. If this Court were to invalidate such an amendment,
could it be contended that the protections do not revive? The only
logical relief in such a case is the revival of those protections. These
protections would be enforceable despite the fact that they have been
omitted from the statute book or constitutional text by the legislature.
This would not be a case of the court re-writing the law but merely
nullifying the effect of the repeal. Thus, it cannot be said that a court
cannot nullify the effect of a repeal. The case of substitutions is
admittedly more complicated, as the Court must investigate whether
the legislative intent to repeal and enact is composite and indivisible.
However, once it is demonstrated that the legislature would not have
repealed without simultaneously enacting, there can be no doubt that
a court can reverse both the effects of the enactment and the repeal.
68. Finally, in addition to looking at the totality of the legislative
circumstances, the court must also examine the consequence of the
original text reviving or not reviving vis-à-vis the principles espoused
in the judgement. Ordinarily, where an unconstitutional provision is
struck down, it is presumed that the original text is constitutional and
thus there are no adverse consequences flowing from its reviving.
However, there may exist cases where the underlying or original rule
itself is unconstitutional or that to revive the situation that existed
prior to the amendment would either severely undermine the legal
principles set out in the judgement invalidating the amendment or
result in some other adverse consequences. In such cases, courts
have the flexibility to appropriately shape reliefs. Having clarified
the position of law, we now apply the tests outlined above to the
question concerning Article 31-C before us.
69. By Section 4 of the Forty-Second Amendment the words “the principles
specified in clause (b) or clause (c) of article 39” in Article 31-C were
replaced with the words “all or any of the principles laid down in Part
IV.” This is a case of substitution. Section 4 of the Forty-Second
Amendment was subsequently struck down in Minerva Mills. As
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noted above, where an amendment substituting certain text with
certain alternate text is invalidated, the effect is that the unamended
text continues in force. This is because the legislative intent of repeal
and enactment in such cases is composite and cannot be separated.
To give effect to the repeal and not the enactment would result in
an outcome which does not correlate with legislative intent, and, as
Justice Hidayatullah noted in Laxmibai “leave the original section
truncated” resulting in absurd outcomes. This would in effect invalidate
the original, valid and constitutional provision despite there being
no constitutional fault with it nor the legislature intending to repeal
it. Thus, the presumption would be that after Minerva Mills, the
unamended Article 31-C would continue in force. Indeed, it is evident
that cases such as Bhim Singh and Sanjeev Coke proceeded on
this presumption.
70. The only plausible exception to this presumption would be if it could
be demonstrated that Parliament, when enacting the Forty-Second
Amendment would have repealed the words “the principles specified
in clause (b) or clause (c) of article 39” independent of their enactment
of the words “all or any of the principles laid down in Part IV.” In
this case, no reference to the broader legislative proceedings or
external aids is necessary to arrive at the inference that Parliament
would not have independently repealed these words. The text of
the amendment adopted by Parliament itself makes it abundantly
clear that there was no independent intention to repeal. The effect of
Section 4 of the Forty-Second Amendment was to expand the scope
of the immunity provided by Article 31-C to legislation. Under the
unamended Article 31-C, immunity was only provided to legislation
if it gave effect to the Directive Principles found in clause (b) or
clause (c) of Article 39. However, by Section 4 of the Forty-Second
Amendment, the scope of this immunity was significantly expanded
to immunise legislations that gave effect to any or all of the Directive
Principles in Part IV of the Constitution. Thus, the intention of
Parliament in enacting Section 4 of the constitutional amendment
was undoubtedly to expand the scope of the immunity granted by
Article 31-C. This being the situation, it cannot be suggested that
Parliament would have repealed the words “the principles specified
in clause (b) or clause (c) of article 39” if it did not simultaneously
enact the broader language expanding the scope of Article 31-C. If
Parliament had independently repealed these words, it would have
[2024] 11 S.C.R. 93

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

not just reduced the scope of Article 31-C but altogether eliminated
the effect of the Article. Without the words “the principles specified
in clause (b) or clause (c) of article 39” in Article 31-C, the provision
would have been rendered nugatory. Given Parliament’s manifest
intention to expand the scope of Article 31-C by Section 4 of the
Forty-Second Amendment, it is not plausible to hold that Parliament
independently sought to repeal the words “the principles specified in
clause (b) or clause (c) of article 39” from Article 31-C. Therefore,
it is evident that the legislative intent of Parliament when adopting
Section 4 of the Forty-Second Amendment was composite, to repeal
and enact (i.e., to substitute) through one single action. This Court
cannot therefore disaggregate the steps of repeal and enactment
and give effect to the repeal even after invalidating the enactment.
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.
71. The final question is whether the revival of the unamended text of
Article 31-C would in some way manifestly contravene the principles
laid down in the judgment of Minerva Mills or result in some other
adverse consequence. The text of the unamended Article 31-C was
challenged, and the first part of the Article was upheld by thirteen-
judge decision in Kesavananda Bharati while the latter half of the
Article was invalidated. Therefore, the first half of unamended Article
31-C, which is the subject matter of the present controversy, was
undoubtedly constitutional as held by the thirteen-judge decision
in Kesavananda Bharati and further by the Constitution Bench
in Waman Rao. Therefore, if as a consequence of the decision
in Minerva Mills, the unamended Article 31-C continues in force,
there can be no question of any unconstitutionality or adverse
consequences associated with the unamended Article 31-C. Indeed,
both the Constitution Benches in Minerva Mills and Waman Rao
expressly noted that the first half of Article 31-C had been held
to be constitutional in Kesavananda Bharati. Further, given that
the unamended Article 31-C has been given effect for over four
decades as demonstrated by the decisions in Bhim Singh and
Sanjeev Coke, no argument can be raised concerning any legal
or practical difficulties with the operation of the unamended Article
31-C. Given these findings, we conclude that the unamended Article
31-C continues in force.
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72. One final observation may be made. The principles discussed in this
section of the judgement concerning the consequences of a substitution
being invalidated emanate from cases concerning the invalidation
of statutory provisions or delegated legislation. While constitutional
amendments undoubtedly stand on a different footing legally, there
is no reason that these principles concerning statutory interpretation
would not apply equally to constitutional amendments. Indeed, the
respondents before us highlighted a reason for them to apply with even
greater force to constitutional amendments. The underlying rationale
of the basic structure doctrine concerning constitutional amendments
is that the amendment must not impermissibly deviate from the core
principles that structure and govern our constitutional democracy.
An amendment can be invalidated when it modifies, obliterates,
or adds some feature to the Constitution that is anathema to the
principles that emerge upon a structural reading of the constitutional
text. While Parliament undoubtedly has a constitutional prerogative
to amend the Constitution and continually give constitutional
character to the citizens’ democratic aspirations, the question in
basic structure review is a question of the degree of deviation from
the principles that undergird the Constitution. If an amendment is
invalidated because it causes a drastic deviation from the principles
that govern our constitutional democracy, the consequences must
be a return to those principles. Article 31-C represented a delicate
balance between the goals of Part IV and the rights of Part III of
the Constitution. This balance was held to not impermissibly deviate
from the core principles that govern our Constitution by the thirteen
judges’ decision of this Court in Kesavananda Bharati. However,
in Minerva Mills, Section 4 of the Forty-Second Amendment was
held to violate these core principles that form the basic structure.
The logical result of such a ruling is that the constitutional text must
return to within the fold of the basic structure. To give effect to the
repealing portions of Section 4 of the Forty-Second Amendment
while also invalidating the enactment would not result in a return
to a constitutional text that is in conformity with the basic structure.
Rather, it would result in a novel third outcome, the constitutionality
of which would be uncertain, untested, and may itself violate the
basic structure. Therefore, the consequence of invalidating Section
4 of the Forty-Second Amendment must be that the unamended
Article 31-C is revived.
[2024] 11 S.C.R. 95

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

D. Article 39(b)
73. The second question framed for our determination is:
“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.”
74. To answer this question, we will first briefly summarise the submissions
of the counsel on this issue. Next, we will address the arguments
that relate to the judicial discipline followed in the judgments of this
Court which have given rise to the reference. Finally, we analyse the
interpretation of Article 39(b) adopted in the judgements that have
been doubted and determine the correctness of such an interpretation.
i. Submissions
a. Submissions of the appellants and intervenors
75. Mr Zal Andhyarujina,learned senior counsel, and Mr Sameer Parekh,
learned counsel for the appellants broadly made the following
submissions:
a. Article 31C gives primacy to the Directive Principles contained in
Articles 39(b) and overrides the fundamental rights guaranteed
in Articles 14 and 19. As this is a significant immunity, the
requirements of Article 39(b) must be strictly complied with
and read narrowly;
b. Article 39(b) requires that there must not only be a ‘material
resource’, but such resource must also be ‘of the community’. If
the material cannot be traced to the ‘the community’, it cannot
be the subject of the policy;
c. The object that must be “distributed” under Article 39(b) is the
“ownership and control” of the resources. The mere distribution
of the resources, without disturbing the element of its ownership
and control cannot be the subject of the policy;
d. From various dictionary definitions of the terms ‘material’,
‘resource’, and ‘resources’, it emerges that ‘material resources
of the community’ mean either natural resources (which are
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those of the country or the nation) or the means of production
which in a large sense can be said to be of community, even
though they may be in private hands;
e. The formulation of ‘material resources’ advanced by Justice
Krishna Iyer in Ranganatha Reddy and subsequently followed in
several judgements of this Court is too wide. Merely because a
privately owned resource meets the qualifier of “material needs”
does not make it a ‘material resource of the community’. The
Constitution does not embody the social theory that because
the individual is a member of the community, his resources
however small are a necessary part of the community;
f. As evidenced from the debates in the Constituent Assembly,
Article 39(b) has been deliberately drafted in language which
provides flexibility to adapt to changing constitutional and
social values. It cannot be restricted to a ‘Marxist reading’ of
the Constitution;
g. Despite the purported socialist aims of the Constituent Assembly
in incorporating the Directive Principles, private property
was included as a fundamental right at the inception of the
Constitution and continues to be given importance in inter alia
Article 300A. This must be considered while interpreting the
“community” element of Article 39(b); and
h. The observations of this Court in Mafatlal on whether Article
39(b) encompasses private property are obiter dicta. The decision
merely proceeds on the basis that the same has been “repeatedly
affirmed by this Court” and the question was not before the Court.
76. Mr H Devarajan, counsel appearing on behalf of the appellants
supplemented the arguments of Mr Andhyarujina and Mr Parekh. In
the context of the MHADA Act, he made the following submissions:
a. If Article 39(b) is to be read to include privately owned resources,
the provision would have to be worded differently. It would either
expressly contain the words “private material resources” or in
any event, not contain the rider after material resources that
they must be “of the community”;
b. ‘Material resources of the community’ refers to resources which
must produce goods or services for the community or be ‘capable
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

of producing wealth for the community’. While dilapidated
buildings in the island city of Mumbai may fall within the ambit
of ‘resources’, they cannot constitute ‘material resources of the
community’; and
c. The minority opinion authored by Justice Krishna Iyer in
Ranganatha Reddy and subsequently followed in Sanjeev Coke
was rendered in the context of ‘nationalisation’ and the same
context cannot be supplanted in the context of the MHADA Act.
77. Ms Uttara Babbar, senior counsel for one of the intervenors75
supplemented the arguments of the counsel for the appellants and
made the following submissions:
a. The decision in Sanjeev Coke and the observations in Mafatlal
that ‘material resources of the community’ include privately
owned resources are not good law. The interpretation of Article
39(b) advanced by Justice Krishna Iyer in Ranganatha Reddy
relied on in these decisions was part of the minority opinion,
from which the majority had distanced itself;
b. Further, in Sanjeev Coke, the Court expressed its ‘misgivings’
about the decision in Minerva Mills. However, this was not
permissible as Minerva Mills was rendered by a bench of co-
equal strength. Similarly, observations in Sanjeev Coke about
the validity of Article 31-C as amended by the Forty-Second
Amendment were beyond the lis before it;
c. In Mafatlal Industries, the nine-judge bench carried forward
the error by relying on the decision in Sanjeev Coke and the
observations of Justice Iyer in Ranganatha Reddy;
d. The words “of the community” used in Article 39(b) must be
understood as distinct from the ‘individual’. An interpretation
of the Article that provides that resources of the individual are
part of the community, renders the use of the phrase “of the
community” otiose;
e. Article 39(b) mandatorily requires “distribution” of “ownership
and control” of the resources in question. This pre-supposes
the acquisition of the resource by the state and cannot include

75 I.A. No. 28541 of 2024.
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laws that provide for the acquisition of private resources by the
state. The protection of Article 31-C and Article 39(b) comes in
only at the stage of distribution and not at the anterior stage of
acquisition of assets by the state or vesting;
f. Acquisition of resources is permissible under the various other
powers of the legislature, including the power of eminent domain
and would get other protections such as the protection of Article
31-A. However, laws which provide for acquisition cannot be
interpreted to be giving effect to Article 39(b) and must meet
the muster of Articles 14 and 19; and
g. The Constituent Assembly discussed the proposal for an
amendment to the draft text of the present Article 39(b). The
proposal entailed that the provision be read as “material
resources…shall be vested in and belong to the country
collectively”. However, this amendment was rejected. The
assembly consciously chose to use the phrase “material
resources…are so distributed”, rather than “material resources
…shall be vested”, indicating that it does not encompass the
acquisition or vesting of private resources.
78. The counsel for the appellants also sought to argue that the
constitutional jurisprudence with regard to fundamental rights has
undergone a sea change since Kesavananda Bharati. In I.R.
Coelho, in the context of Article 31-B, a bench of nine judges of
this Court held that even constitutional amendments by which laws
are inserted in the ninth schedule are amenable to a basic structure
challenge. This Court further held that the essence of Articles 21, 14
and 19 is a part of this basic structure and amendments inserting
laws in the ninth schedule can be tested on this anvil. According
to the appellants, in view of this judgement,it is difficult to envisage
a situation where Articles 14 and 19 can be abrogated by a mere
legislation under the protection of Article 31-C without even requiring
a constitutional amendment. As noted during the course of the
hearing, such arguments essentially involve a challenge to the
constitutionality of Article 31-C itself, which falls outside the ambit
of this judgement and has already been settled by a thirteen-judge
bench of this Court in Kesavananda Bharati. We are not inclined
to address these arguments. However, parties are at liberty to raise
arguments relying on IR Coehlo to advance their submissions on
the constitutionality of the MHADA Act before the regular bench.
[2024] 11 S.C.R. 99

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

b. Submissions of the Respondents and Intervenors
79. Mr R Venkataramani, the learned Attorney General appearing on
behalf of the respondents, contested the interpretation of Article 39(b)
advanced by the appellants and advocated for a wider reading of
the provision. He submitted:
a. Given the constitutional context of Article 39(b) and its relevance
towards realising an egalitarian social order, any narrow reading
of the provision would offend the free play that is desirable in
the working of the provision;
b. Nothing in Article 39 suggests any limitation of the words used
therein. The distinction between public and private resources,
or natural and human-made resources is alien to the spirit of
Article 39 (b) and (c); and
c. A wide range of resources have been considered as part of
the phrase ‘material resources of the community’ and within
the ambit of Article 39(b). These include housing,76 contract
carriages,77 land,78 coke oven plants,79 assets of sick textile
undertakings,80 drugs,81 electricity,82 capital,83 licenses for felling
bamboo,84 refractory plants,85 grant of dealerships of petroleum
products,86 mines and minerals,87 mining lease,88 refund of
excise,89 natural gas90 and the grant of natural resource.91

76 B Banerjee v Anita Pan (1975) 1 SCC 166 : 1974 INSC 246
77 State of Karnataka & Anr v. Shri Ranganatha Reddy & Anr. (1977) 4 SCC 471; State of Tamil Nadu & Ors.
v. L. Abu Kavur Bai & Ors. (1984) 1 SCC 515
78 Maharao Sahib Shri Bhim Singhji v. Union of India & Ors. (1981) 1 SCC 166; Jijubhai Nanbhai Kachar v
State of Gujarat (1995) Supp 1 SCC 596
79 Sanjeev Coke.
80 National Textile Corp Ltd v. Sitaram Mills Ltd, AIR 1986 SC 1234; 1986 INSC 61
81 Union of India v. Cynamide India Ltd. (1987) 2 SCC 720; 1987 INSC 100
82 Tinsukhia Electric Supply Co. Ltd. v. State of Assam & Ors. (1989) 3 SCC 709 : 1989 INSC 128
83 N. Parthasarathy v. Controller of Capital Issues (1991) 3 SCC 153 : 1991 INSC 104
84 Orient Paper and Industries Ltd. v. State of Orissa (1991) Supp 1 SCC 81
85 Assam Sillimanite Ltd & Anr v. Union of India & ors. (1992) Suppl 1 SCC 692 : 1990 INSC 89
86 Mahinder Kumar Gupta v. Union of India, Ministry of Petroleum and Natural Gas, (1995) 1 SCC 85
87 Tata Iron & Steel Co v UOI (1996) 9 SCC 709 : 1996 INSC 770 : 1996 INSC 770
88 Victorian Granites Pvt. Ltd. v. P. Rama Rao & Ors (1996) 10 SCC 665 : 1996 INSC 1018
89 Mafatlal Industries Ltd. & Ors. v. Union of India & Ors. (1997) 5 SCC 536
90 Reliance Natural Resources Ltd. v. Reliance Industries Ltd. (2010) 7 SCC 1 : 2010 INSC 290
91 In Re Natural Resources Allocation (2012) 10 SCC 1,
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80. Mr Tushar Mehta, the learned Solicitor General, supplemented the
arguments of the learned Attorney General. He argued:
a. The interpretation that Article 39(b) includes privately owned
resources, has been a consistent position of this Court and
has acquired the status of stare decisis. The opinion of Justice
Krishna Iyer in Ranganatha Reddy has been followed in
Sanjeev Coke, State of Tamil Nadu & Ors vs. L. Abu Kavur
Bai & Ors.,92 and also by a bench of eleven judges in Mafatlal
Industries. There is no conflict of opinion between different
judgements;
b. The observations in Mafatlal Industries on the interpretation
of Article 39(b) do not constitute obiter dicta. The interpretation
of Article 39(b) is discussed by three opinions in the decision,
including the dissenting opinion and the issue was specifically
argued;
c. The meaning of the phrase “material resources of the
community” cannot be whittled down to only include public
resources and exclude private property. The phrase specifically
uses the word ‘community’ to include the resources of every
individual;
d. The inclusion of the phrase “securing that the ownership and
control” in Article 39(b) indicates that the phrase that follows it
i.e. “material resources of the community” includes resources
which are not public resources. The ‘ownership and control’ of
public resources would not be required to be secured and it
is only private property that is required to be “secured” for the
purposes of ownership and control;
e. The terms ‘ownership’ and ‘control’ are disjunctive and there
may be situations where the state does not acquire ownership
but only acquires control. For instance, if a mineral is found
on private land, the ownership may remain with the private
person, but control over the mineral and the land is taken
over by the government. Therefore, the term ‘and’ must be
read as ‘and/or’;

92 [1984] 1 SCR 725 : (1984) 1 SCC 515 : 1984 INSC 17
[2024] 11 S.C.R. 101

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

f. The securing of ownership and control must be of any identifiable
class of “material resources” and not in general terms as a
wholesale acquisition of all private property without any defined
principle;
g. Article 39(b) leaves it entirely to the wisdom of the legislature
to decide what should constitute ‘material resources’ at a given
point in time, keeping in mind the dynamics of national and
international economic configurations. It allows the legislature to
enact a law for the distribution of particular material resources,
irrespective of its pattern of ownership;
h. The debates in the Constituent Assembly indicate that the
framers of the Constitution deliberately framed Article 39(b) in
the broadest possible terms. The idea was to leave enough room
for future governments to determine the best way of achieving
‘economic democracy’;
i. The deletion of the right to property as a fundamental right,
under the erstwhile Article 31 and Article 19(1)(f), points towards
the inclusion of private property within the ambit of ‘material
resources of the community’ under Article 39(b);
j. Provisions akin to Article 39(b) are present in various constitutions
across the world and have not posed any problems. Even in
the absence of Article 39(b), the formation of any nation State,
includes within itself, the power to acquire an identifiable class of
property or “material resource” from an identifiable “community”
for the larger public or “common good”; and
k. The preservation of ‘material resources’, such as buildings
constitutes the ‘common good’.The principle of ‘inter-
generational equity’ propounded by this Court in the context
of natural resources, provides that resources need to be used
judicially to ensure that future generations are also able to enjoy
the fruits of the resources.
81. Mr Rakesh Dwivedi, senior counsel appearing for the State of
West Bengal advanced the view that this Court should refrain from
laying down a water-tight interpretation of the resources and forms
of distribution that fall within the ambit of Article 39(b). Such an
exercise, Mr Dwivedi urged, is context-specific and must be left for
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experimentation by the Parliament, in view of changing economic
priorities. In the context of this formulation, he broadly made the
following submissions:
a. The phrase ‘material resources” includes privately owned
resources within its ambit. Only resources that are earmarked
for personal use and do not act as a source of income or wealth
are excluded from the phrase;
b. The proposal to amend the existing provision to include
specific resources was rejected by the Constituent Assembly.
Dr Ambedkar stated that it was a deliberate choice to keep the
phraseology extensive to account for future economic priorities.
Thus, Article 39(b) must be construed liberally.;
c. The provision uses the term “community” instead of “State/
Government”. The phrase includes all citizens or sections of
citizens or a community of individuals and thus, encompasses
privately owned resources;
d. Various forms of private property inherently have a bearing
on ecology and the well-being of the community,for instance,
privately owned forests, large ponds, fragile areas and wetlands.
Such properties by their nature, would be included in the phrase
“material resources of the community”.
e. The word “distributed” in Article 39(b) has been used as a part
of the phrase, “so distributed as best to subserve the common
good” and must be widely interpreted. The intent is that the
State may adopt any mode of distribution as long as it subserves
the common good. Such distribution may be piecemeal or the
resources may be kept in the control of a governmental or
private agency, provided the benefits reach the people as a
‘common good’; and
f. Articles 38, 39(b) and (c), must be read together. They indicate
that the provisions are not limited to the material resources
owned by the State and its agencies. They enable the state to
make a law for distributing ownership and control of the material
resources which may be in the hands of private persons to
achieve economic justice and redistribution.
[2024] 11 S.C.R. 103

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

82. Mr Gopal Sankarnaryanan, senior counsel, appearing for an
intervenor, supplemented the arguments advanced by the counsel
for the respondents and the State of West Bengal. He broadly made
the following submissions:
a. The purport of clauses (b) and (c) of Article 39 must be interpreted
in the context of whether Article 31C was meant to apply to laws
dealing with privately owned property or resources. Article 31C
was inserted in the Constitution by the Parliament to overcome
the judgement in RC Cooper, wherein this Court struck down
the nationalisation of the private rights of shareholders and
banks as violative of Article 14;
b. Article 31C is part of a scheme, along with Articles 31A and
31B which were inserted by the first amendment. That both
Article 31-A and 31-B apply to private property is uncontested.;
c. If ‘ownership and control’ of ‘material resources of the community’
excluded private ownership, there would be no challenge under
Article 19 to require protection under Article 31C;
d. Article 39(c) seeks to prevent the “concentration of wealth and
means of production” which could be to the common detriment.
Such phrases cannot be construed to refer to public wealth
and public means of production. A similar interpretation must
be adopted for Article 39(b); and
e. The concept of ‘common good’ alluded to in Article 39(b) is
critical to determine whether the provision includes privately
owned resources. The COVID-19 pandemic has shown us the
need to pool resources, which may often be privately owned,
to protect the health of the community.
ii. Judicial Discipline: Observations in Sanjeev Coke and
Mafatlal
83. Several arguments have been made with regard to the judicial
discipline followed by and the precedential value of the judgements
which lie at the heart of this reference. We will first address these
arguments before analysing the correctness of the interpretation of
Article 39(b) in these judgements.
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a. The resurrection of the minority view in Ranganatha Reddy
by Sanjeev Coke
84. As discussed in Part A of this judgement, the five-judge bench
order referred the correctness of the decision in Sanjeev Coke to
a larger bench of seven judges. One of the apprehensions of this
Court in this reference order was that this Court in Sanjeev Coke,
followed the observations of the minority judgement in Ranganatha
Reddy, despite the majority expressly distancing itself from such
observations. The appellants have also advanced similar contentions.
They argue that the decision in Sanjeev Coke is not good in law as
the judgement follows a minority view which was ‘disagreed’ with
by the majority, and the same error was repeated by subsequent
decisions that have followed Sanjeev Coke. Therefore, we first
explore whether the decision in Sanjeev Coke can be faulted on
the ground of judicial discipline.
85. The judgement at the heart of this controversy before us is
Ranganatha Reddy rendered by a bench of seven judges of this
Court. The issue before this Court related to the constitutional validity
of the Karnataka Contract Carriages (Acquisition) Ordinance, 1976,
followed by the Karnataka Contract Carriages (Acquisition) Act, 1976.
The legislation provided for the nationalisation of contract carriages
in the state. One opinion was authored by Justice NL Untwalia for
the majority, speaking for himself, Chief Justice MH Beg, Justice
YV Chandrachud and Justice PS Kailasam. Justice Krishna Iyer,
speaking for himself, Justice Jaswant Singh and Justice PN Bhagwati,
authored a separate but concurring opinion on behalf of a minority
of the judges.
86. In Ranganatha Reddy, the issue arose before this Court in an
appeal from the judgement of the Karnataka High Court which struck
down the legislation and declared it to be unconstitutional. Justice
Untwalia, speaking for the majority, briefly delineated the findings of
the High Court in the following terms:
“4. We now proceed to state the findings of the High Court
on the various points argued before it not in the order as
finally recorded in para 98 of its judgment at p. 1530 but
in the order the points were urged before us by Mr Lal
Narayan Sinha, learned Counsel for the appellants. They
are as follows:
[2024] 11 S.C.R. 105

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

“(1) The acquisition is not for a public purpose.
(2) The compensation or the amount provided for or the
principles laid down in the Act for payment in lieu of the
various vehicles, permits and other assets is wholly illusory
and arbitrary.”
For the two reasons aforesaid, the Act is violative of
Article 31(2) of the Constitution and is a fraud on it. It is,
therefore, null and void.
(3) The acquisition of contract carriages with inter-State
permits and other assets pertaining to such operators is
ultra vires the legislative power and the competence of
the State Legislature.
(4) Article 31-C does not bar the challenge to the Act
as being violative of Article 31(2) of the Constitution as
there is no reasonable and substantial nexus between
the purpose of the acquisitions and securing the
principles specified in clauses (b) and (c) of Article 39.”
(emphasis supplied)
87. From the above, it is clear that the High Court declared the Act
unconstitutional on several grounds, including a violation of Article
31(2)93 and on the ground of legislative competence. Significantly,
as stated in point (4) of the above extract, the High Court also
decided on the question of whether the legislation had a nexus with
Articles 39(b) and (c) and was consequently protected by Article
31-C. In this regard, the High Court took the view that there was
no substantial nexus between the purpose of the acquisition by the
legislation and the principles laid down in Articles 39(b) and (c).
88. It was in the context of the above findings of the High Court that the
appeal was heard by this Court. The majority judgement, authored
by Justice Untwalia, upheld the constitutionality of the Act on the

93 Article 31(2) was part of the Constitution at the time. It has been subsequently omitted by Section 6
of the Constitution (Forty-fourth Amendment) Act, 1978, w.e.f. 20.06.1979. [It read: “(2) No property,
movable or immovable, including any interest in, or in any company owning, any commercial or industrial
undertaking, shall be taken possession of or acquired for public purposes under any law authorising
the taking of such possession or such acquisition, unless the law provides for compensation for the
property taken possession of or acquired and either fixes the amount of the compensation, or specifies
the principles on which, and the manner in which, the compensation is to be determined and given.”]
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ground that the legislation met the muster of Article 31(2). It was held
that the provisions were for ‘public purpose’ and provided adequate
compensation, as required by the provision. While arguments were
made by the counsel on all the issues raised by the judgement
of the High Court, the majority judgement eventually upheld the
constitutionality of the Act only on the ground of Article 31(2). In
fact, it appears that Justice Untwalia consciously refrained from
making observations about whether the legislation had a nexus
with Article 39(b) and the consequent protection under Article 31C.
This is evidenced by the following observations of Justice Untwalia:
“15. … For the purpose of deciding the point which falls
for consideration in these appeals, it will suffice to say
that still the overwhelming view of the majority of Judges
in Kesavananda Bharati case is that the amount payable
for the acquired property either fixed by the legislature or
determined on the basis of the principles engrafted in the
law of acquisition cannot be wholly arbitrary and illusory.
When we say so we are not taking into account the
effect of Article 31-C inserted in the Constitution by
the 25th Amendment (leaving out the invalid part as
declared by the majority).
…
17. As already stated the High Court took the view that the
amount payable under the Act for the property acquired
would be such that it will be wholly arbitrary and illusory
and leave the many operators in huge debts. Many of
them were plying their contract carriages having taken
loans of considerable sums of money from the various
financiers on hire-purchase system, for whom also Mr
A.K. Sen appeared and argued before us. They would
not only be paupers but huge liability will remain on their
shoulders if the interpretation put by the High Court were
to be correct. Mr Lal Narayan Sinha, learned Counsel
for the appellants, took a very just and proper attitude
in advancing an argument before us which would take
away the basis of the High Court judgment in this regard.
With respect to each and every relevant section on the
question of payment of the amount in lieu of the property
[2024] 11 S.C.R. 107

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

acquired he suggested such a reasonable, harmonious
and just construction by the rules of interpretation that
we found no difficulty in accepting his argument — rather,
were glad to do so. The other side on the interpretation
so put, which we are going to mention hereinafter, felt
satisfied to a large extent. Mr Sinha also advanced some
argument with reference to the valid part of Article
31-C read with clauses (b) and (c) of Article 39 but
very wisely did not choose to heavily rely upon it. On
the interpretation of the statute as canvassed by him,
there hardly remained any necessity of it.
27. On the interpretations aforesaid which we have put
to the relevant provisions of the Act, it was difficult —
rather impossible — to argue that the amount so fixed
will be arbitrary or illusory. In some respects it may be
inadequate but that cannot be a ground for challenge of
the constitutionality of the law under Article 31(2). The
respondents felt quite satisfied by the interpretations
aforesaid and could not pursue their attack on the
vires of the Act on that ground.”
(emphasis supplied)
89. Justice Untwalia also expressly clarified that the majority opinion does
not express any opinion on whether the Act has a reasonable nexus
with Articles 39(b) and (c) and Article 31-C is applicable. Further, the
learned judge observed that while Justice Krishna Iyer has rendered
a separate opinion specifically dealing with the Article 39(b) and (c)
question, the majority must not be understood to be in agreement
with those findings. Justice Untwalia observed:
“37. At the end we may also indicate that under sub-
section (6) of Section 19 all sums deducted by the State
Government under sub-section (3) of Section 10 which
include the sums payable to the secured creditors stand
transferred to the Corporation which is obliged to credit
the sums transferred to the appropriate funds. The
said provision would take within its ambit the liability
of the Corporation to pay forthwith the sum found due
to the secured creditors. Since we have upheld the
constitutional validity of the Act on merits by repelling
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the attack on it by a reasonable and harmonious
construction of the Act, we do not consider it necessary
to express any opinion with reference to Article 31-C
read with clauses (b) and (c) of Article 39 of the
Constitution. Our learned Brother Krishna Iyer, J. has
prepared a separate judgment specially dealing with
this point. We must not be understood to agree with
all that he has said in his judgment in this regard.”
90. Justice Krishna Iyer began his separate opinion, on behalf of
himself and two other judges, with the following question: “We go
wholly with our learned brother Untwalia, J. Then why a separate
afterword?”94The opinion then goes on to frame the questions that
arose from the judgement of the High Court in the following terms:
“50. Back to the challenging problems thrown up by
the High Court’s decision. The facts are there in the
leading judgment and the formulation of the controverted
propositions also needs no reiteration. Broadly speaking,
we strike no note of dissensus but seek to bring out some
social nuances even in consensus. Let us project the pegs
on which our discussion may hang. Incidentally, conceptual
differences about the dimensions of the change visualised
by Article 31-C read with Article 39(b) and (c) are bound
to exist among Judges who, after all, professionally
objectify the social philosophy of the Constitution through
the subjective prism of their own mentalism.
1. What is a “public purpose”, set as a constitutional
limitation in Article 31(2), compliance with which conditions
the immunity from attack based on Article 19(1)(f) or
inadequacy of recompense when any person is deprived
of his property?
1(a). What is the degree of nexus between the public
purpose and the acquisition desiderated by Article 31(2)?
1(b). Can Cooper be judicially resurrected, draped
differently but with the same “compensation” soul, even
after the amendment of Article 31(2)?

94 Ranganatha Reddy [40].
[2024] 11 S.C.R. 109

Property Owners Association & Ors. v.
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2. What are the pervasive ambience and progressive
amplitude of the “directive principle” in Article 39(b)
and (c) in the context of nationalisation of public
utilities?
2(a). Can State monopoly by taking over private
property be a modus operandi of distribution of
ownership and control of the material resources of
the community to subserve tile common good, within
the framework of Article 39 (b)?
2(b). Are distribution and nationalisation antithetical
or overlapping?
2(c). What is the connotation of the expression
“material resources”? Can private buses be regarded
as material resources of the community?”
91. The above formulation by Justice Krishna Iyer of the issues raised
by the High Court is distinguishable from the formulation of the
issues by the majority in paragraph 4 of the judgement, extracted
above. Issues 2, 2(a), 2(b) and 2(c) identified by Justice Krishna
Iyer on the interpretation of Article 39(b), and particularly the
purport of the terms ‘distribution’ and ‘material resources’ were not
even framed as issues by the majority, let alone answered. We
will discuss in detail, the answers given by Justice Krishna Iyer to
these questions at a later stage. For now, it is sufficient to note that
Justice Krishna Iyer inter alia observed that all resources that satisfy
material needs, including privately owned resources, fall within the
ambit of the phrase ‘material resources of the community’ used in
Article 39(b).95
92. There was a resurrection of these observations by Justice Krishna
Iyer in the decision of five judges of this Court in Sanjeev Coke.
As briefly noted above, in this case, the petitioners challenged
the nationalisation of their coke oven plants on the ground that
nationalising certain coke oven plants, while leaving others out
violated Article 14 of the Constitution. The Court proceeded on the
assumption that Article 31C remains in force and protects a legislation
from challenge under Articles 14 and 19 when the Act bears a nexus

95 Ranganatha Reddy [80-84].
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with the principles in Article 39(b) or (c). This Court held that the
Coking Coal Mines (Nationalisation) Act 1972 is a legislation that
gives effect to the policy specified in Article 39(b) and therefore, is
immune from a challenge to its constitutionality under Article 14. To
establish the nexus between the Act and the principles laid down
in Article 39(b), the bench of five judges of this Court (speaking
through Chinappa Reddy, J) analysed the scope of Article 39(b) and
the meaning of both ‘material resources of the community’ and the
concept of ‘distribution to subserve the common good’.
93. The counsel for the petitioner in Sanjeev Coke mirrored the arguments
made by some of the appellants in the case before us. It was urged
that a coal mine or coke oven plant owned by private parties cannot
constitute a “material resource of the community” until it is acquired
by the state. It was argued that to qualify as a material resource of
the community, the ownership of the resource must vest with the
state. A legislation such as the Coking Coal Mines (Nationalisation)
Act, it was urged, may be a legislation for the acquisition of coking
coal mines and coke oven plants belonging to private parties but
cannot be considered to be a legislation in furtherance of Article
39(b). In essence, the petitioners’ case was that acquisition is a
pre-requisite for ‘distribution’ and cannot be considered synonymous
with distribution.
94. This Court rejected this argument and quoted with approval
paragraphs 82 to 83 of the judgment authored by Justice Krishna
Iyer in Ranganatha Reddy for a minority of judges. Relying on
the observations of Justice Krishna Iyer, this Court concluded that
material resources of the community are not confined to public-owned
resources but include “all resources, natural and man-made, public
and private-owned”. In this way, the observations in the minority
opinion authored by Justice Krishna Iyer in Ranganatha Reddy were
resurrected by a five-Judge Bench of this Court in Sanjeev Coke.
b. Sanjeev Coke erred in relying on the observations of the
minority in Ranganatha Reddy
95. The first issue which arises is the precedential value of the
observations made by Justice Krishna Iyer in his opinion in
Ranganatha Reddy and whether a subsequent bench of lesser
strength in Sanjeev Coke was in violation of judicial discipline by
following these observations.
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

96. The law laid down by this Court is binding on subsequent benches
of lesser or coequal strength. A bench of lesser strength cannot
disagree or dissent from the view taken by a bench of a larger
quorum. In case of any doubt, such a bench may only invite the
attention of the Chief Justice and request for the matter to be placed
for hearing before a bench of a larger strength than the quorum of
the bench whose decision was being considered. A bench of coequal
strength may go one step ahead, and express an opinion doubting
the correctness of the view taken by the earlier bench of coequal
strength. Subsequently, the matter may be placed before a larger
bench to lay down the law on the correctness of the decision which
is doubted.96
97. Judges of this Court have the liberty to pronounce separate dissenting
judgment(s). However, it is the decision of the majority of judges
which constitutes the binding judgment.97The binding nature of the
judgement depends on the bench strength and not the numerical
strength of the majority taking a particular view. For instance, if a
judgment is pronounced by a bench of seven judges, with four judges
constituting the majority, and the remaining three judges dissenting
from the view of the majority, the majority judgement will constitute
a binding judgment by a bench of seven judges and not a bench of
four judges. This position of law has been clarified and settled by a
Constitution Bench of this Court in Trimurthi Fragrances (P) Ltd.
v. State (NCT of Delhi).98
98. A dissenting judgment, however, must be distinguished from a
concurring judgment.99 A dissenting judgment is a judgment signed
by a minority of judges, with or without an accompanying opinion,
which expresses non-concurrence with the decision of the majority
of judges of the court.100 However, judges of this Court who agree
with the decision of the majority may also author separate opinions.

96 Central Board of Dawoodi Bohra vs. State of Maharashtra (2005) 2 SCC 673 [12] : 2004 INSC 720
97 Article 145(5), Constitution of India. [It reads: “No judgment and no such opinion shall be delivered by the
Supreme Court save with the concurrence of a majority of the Judges present at the hearing of the case,
but nothing in this clause shall be deemed to prevent a Judge who does not concur from delivering a
dissenting judgment or opinion.”] A similar provision was contained in Section 214(4) of the Government
of India Act, 1935.
98 [2022] 15 SCR 516 : 2022 SCC OnLine SC 1247 : 2022 INSC 975
99 DD Basu, ‘Constitution of India’, Vol 9, p 9917.
100 ADVANCED LAW LEXICON BY RAMANATHAIER, 3rd Edn., Vol. III, p. 2509.
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In such ‘concurring opinions’, the judge (or judges) agree with the
conclusion of the majority, though they separately state their views
on the case or their reasons for concurrence. Such opinions may
be based on different grounds and the judges may give separate
reasons, even about observations on which they concur with the
majority. The majority judgement too is not always contained in a
single opinion. It is common practice for a plurality of judges of this
Court to render separate opinions, and it is from the conclusions and
concurring observations of each of their judgements that a majority
opinion is identified.
99. In order to determine whether the observations in the concurring
opinion of a numerical minority of judges constitute a binding
precedent, we must ask two questions. Firstly, when only the
concurring opinion expounds the law on a particular point, does the
majority opinion indicate a difference of opinion from that view or
distance itself from such reasoning? Secondly, are the observations
in the concurring opinion essential to the ratio decidendi and can they
be regarded as an expression of opinion on behalf of this Court as
a whole?101These requirements are cumulative. For observations in
a concurring opinion to be binding on a smaller or coequal bench,
the observations in the concurring opinion should be both free from
disagreement or difference by the majority of judges and also be a
part of the ratio decidendi of the judgment.
100. The disagreement with the concurring view in the majority opinion
may be express or implied. The majority may expressly state
that it disagrees with or distances itself from the view taken in a
concurring opinion on a particular issue. Alternatively,the discussion
in the majority judgment on that issue may be at odds with the
observations in the concurring opinion. It is the latter situation that
becomes more tricky, particularly, when a single opinion has not
been authored on behalf of the majority. A Constitution Bench of
this Court in Jaishri Laxmanrao Patil v. State of Maharashtra102
has provided some assistance about how to cull out the binding
majority opinion in such a situation, where various judges,discuss
the same question of law albeit differently. The Constitution Bench

101 DD Basu, ‘Constitution of India’, Vol 9, p 9849.
102 [2021] 15 SCR 715 : (2021) 8 SCC 1 : 2021 INSC 284
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(speaking through Justice Ravindra Bhat) relied on the observations
in Rajnarain Singh v. Patna Administration Committee103and
held that to cull out the majority in such cases, the Court must
attempt to ascertain the ‘greatest common measure’ of agreement.
The Court held:
“355. Before we proceed to notice the relevant paragraphs
of the judgment of Indra Sawhney, we need to first notice
method of culling out the majority opinion expressed in
a judgment where more than one judgments have been
delivered. The Constitution Bench of this Court in Rajnarain
Singh v. Patna Admn. Committee, had occasion to find
out the majority opinion of a seven-Judge Bench judgment
delivered by this Court in Delhi Laws Act, 1912, In re.
the Constitution Bench laid down that opinion which
embodies the greatest common measures of the
agreement among the Bench is to be accepted as
the decision of the Court. Thus, for culling out the
decision of the Court in a case where there are several
opinions, on which there is greatest common measure
of agreement is the decision of the Court.”
(emphasis supplied)
101. Therefore, in situations where several opinions are authored, dealing
with the same questions of law, to identify the propositions of law
that are binding on subsequent benches, the greatest common
measure of agreement by a majority of judges would be binding
on future benches.
102. It must be noted, however, that there is a difference between whether
an observation is a binding precedent and whether it is a position of
law that may have persuasive value on subsequent benches. In the
absence of disagreement by a majority of judges (either express or
implied), nothing precludes subsequent benches of this Court from
relying on observations made in a concurring opinion(on behalf of
the minority of judges) which are not discussed by the other judges
at all. It is assumed in such cases, that all judges on the bench have
read the opinions of one another, and did not deem it necessary

103 [1955] 1 SCR 290 : (1954) 2 SCC 82 : 1954 INSC 69
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to either state their express disagreement with the opinion or lay
down a different understanding of the proposition of law (implied
disagreement).104
103. For instance, in Navtej Singh Johar v Union of India,105 one of us
(DY Chandrachud, J) authored a concurring opinion, recognising
the concept of ‘indirect discrimination’. While technically this was
an opinion on behalf of only one judge, the other judgements in the
case did not discuss this issue at all. Neither did the other judges
expressly disagree with the view, nor did they present a view on the
subject that could be seen as being at odds with the view taken in the
concurring opinion. In the absence of such disagreement, express or
implied, subsequent benches of this Court were not precluded from
relying on the observations as having persuasive value. In Lt. Col.
Nitisha & Ors. vs. Union of India & Ors,106 a two-Judge Bench of
this Court relied on the conception of ‘indirect discrimination’ while
analysing an evaluation criteria set by the army, which was facially
neutral but disproportionately impacted women officers. The bench
was not violating judicial discipline merely because a majority of
judges did not expressly agree with the view or discuss the concept
at all. The fact that the observations of the concurring opinion were
not disagreed with or even discussed is sufficient for a subsequent
bench to rely on the same if they choose to do so. In such cases,
the court is not bound by the view but may choose to rely on it.
104. However, the above example is distinguishable from the situation in
Ranganatha Reddy. The majority judgment in Ranganatha Reddy
not only refrained from making observations about the interpretation
of Article 39(b) but also indicated an express disagreement with the
observations in the judgment of Justice Krishna Iyer on the point. It
was to prevent future benches from relying on the observations of
that judgment, by presuming concurrence, that the majority opinion
clarified that it must not be understood to agree with the observations
in the judgement of Justice Krishna Iyer. Thus, it is clear that a
majority of judges of this Court did not adopt the view advanced by

104 Kaikhosrou (Chick) Kavasji Framji v. Union of India (2019) 20 SCC 705 [40-46] : 2019 INSC 378
105 [2018] 7 SCR 379 : (2018) 10 SCC 1 [442-446] : 2018 INSC 790
106 [2021] 4 SCR 633 : (2021) 15 SCC 125 [50] : 2021 INSC 210
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Justice Krishna Iyer on the interpretation of Article 39(b). In such
a situation, the bench of five judges in Sanjeev Coke was bound
by the view of the majority in Ranganatha Reddy, which was a
decision rendered by a bench of seven judges. The view taken by
a minority of three judges and specifically disagreed with by the
majority of four judges could not be relied on by a smaller bench
of five judges in Sanjeev Coke. Not only was the opinion in the
judgment of a minority of judges not binding, but it also could not
be relied on as having persuasive value, since there was a majority
opinion of a larger bench disagreeing with the view.
105. The majority in Ranganatha Reddy did not discuss its interpretation
of Article 39(b) and merely expressed their disagreement simpliciter
with the view of the concurring minority. Therefore, it is undoubtedly
possible that the bench of a lower quorum in Sanjeev Coke was
perplexed about the interpretation of Article 39(b) that it was bound
to follow. In such a situation it was open to the bench to have
brought this to the attention of the Chief Justice and requested for
the matter to be placed before a larger bench. A part of the beauty
of minority opinions undoubtedly lies in the hope of the author
that, in some cases, they may become the law when adopted by
a majority in a future case.107 However, this cannot be done by
compromising on judicial discipline. To this effect, this Court in
Sanjeev Coke erred in relying on the observations in the opinion
of Justice Krishna Iyer in Ranganatha Reddy, when the binding
opinion of the majority of judges expressly stated their inability to
agree with those observations.
c. The error has been carried forward in subsequent decisions
106. Mr Tushar Mehta, the learned Solicitor General of India, has
argued that this Court has consistently upheld the observations
of Justice Krishna Iyer in Ranganatha Reddy and this is not a
case of jurisprudential inconsistency or conflicting decisions. The
observations in Sanjeev Coke on Article 39(b), adopting the minority

107 The famous words of Chief Justice Hughes: “A dissent in a court of last resort is an appeal to the
brooding spirit of the law, to the intelligence of a future day when a later decision may possibly correct
the error into which the dissenting judge believes the court to have been betrayed...... Nor is this always
in vain. In a number of cases dissenting opinions have in time become law.”[HUGHES, THE SUPREME
COURT OF THE UNITED STATES, (1930) American BarAsson. Journal.]
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view in Ranganatha Reddy, have been followed in subsequent
decisions of this Court. These decisions include inter alia S Abu
Kavur Bai, Basantibal Khetan, and Mafatlal. Thus, it was urged,
that this Court should refrain from unsettling a position of law that
has been consistent for several years and has “acquired the status
of stare decisis”.
107. We are not inclined to accept this submission. In Sita Soren v Union
of India,108 a Constitution Bench of this Court, speaking through
one of us (DY Chandrachud, J) had occasion to clarify that the
doctrine of stare decisis is not an inflexible rule of law. This Court
may review its earlier decisions if it believes that there is an error,
or the effect of the decision would harm the interests of the public
or if “it is inconsistent with the legal philosophy of the Constitution”.
In cases involving the interpretation of the Constitution, this Court
would do so more readily than in other branches of law because not
rectifying a manifest error would be harmful to the public interest
and the polity. The period of time over which the case has held the
field is not of primary consequence.
108. As noted above, the decision of the five-judge bench in Sanjeev
Coke was based on an erroneous reliance on the minority opinion
in Ranganatha Reddy. The same error committed in Sanjeev
Coke has been carried forward in subsequent decisions of this
Court ever since. The view of a minority of three judges, expressly
disagreed with by a majority of four judges, has been relied on for
several years, without its validity ever being tested by a larger bench.
Similarly, the disagreement with the minority opinion expressed by
the majority in Ranganatha Reddy has also remained untested,
with the smaller bench in Sanjeev Coke adopting the minority view
without any explanation. Therefore, this bench of nine judges must
test the correctness of the decision in Ranganatha Reddy and the
subsequent decisions relying on the minority opinion in the case.
This exercise has eluded this Court for a long period of time. As
noted above, it is only a bench of a larger quorum (nine judges) that
can test the correctness of an opinion rendered by a smaller bench
(seven judges) and thus, this Constitution Bench must reconsider
the interpretation of Article 39(b) adopted in these judgements.

108 [2024] 3 SCR 462 : (2024) 5 SCC 629 [33] : 2024 INSC 161
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d. The single-line observation in Mafatlal is obiter dicta
109. Another point of contention between the parties has been the
precedential value of the single-line observation of a nine-judge
bench of this Court in Mafatlal that the phrase ‘material resources
of the community’ under Article 39(b) includes privately owned
property. As noted above, the underlying seven-judge referral order
notes that the attention of this Court was drawn to this observation
in Mafatlal. It was in this context that the seven-judge bench order
expressed doubts about the view and referred the question to this
bench of nine judges.
110. The counsel for the appellants contend that the observations in
Mafatlal on this point constitute obiter dicta and do not bind this
bench of coequal strength. On the other hand, the counsel for the
respondents have advanced the view that the issue arose directly
in the case and the observations are binding on this bench.
111. Not every observation in a judgement of this Court is binding as
precedent. Only the ratio decidendi or the propositions of law that
were necessary to decide on the issues between the parties are
binding.109 Observations by the judge, even determinative statements
of law, which are not part of her reasoning on a question or issue
before the court, are termed obiter dicta. Such observations do not
bind the Court. More simply, a case is only an authority for what it
actually decides.110
112. A Constitution Bench of this Court (speaking through Chief
Justice Khare) in Islamic Academy of Education v. State of
Karnataka111pithily observed:
“2. […] The ratio decidendi of a judgment has to be found
out only on reading the entire judgment. In fact, the ratio
of the judgment is what is set out in the judgment itself.
The answer to the question would necessarily have to
be read in the context of what is set out in the judgment
and not in isolation. In case of any doubt as regards any
observations, reasons and principles, the other part of the

109 HALSBURY, 2nd Edn, Vol 19, para 556.
110 Secundrabad Club v. CIT, 2023 SCC OnLine SC 1004 [13] : 2023 INSC 736
111 [2003] Supp. 2 SCR 474 : (2003) 6 SCC 697 [2] : 2003 INSC 391
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judgment has to be looked into. By reading a line here
and there from the judgment, one cannot find out the
entire ratio decidendi of the judgment. […]”
113. In Secunderabad Club v. CIT,112 this Court, speaking through one
of us (Justice BV Nagarathna), had occasion to delineate how to
cull out the ratio decidendi of a judgement and identify the principles
which have precedential value. This Court observed:
“14. […] According to the well-settled theory of precedents,
every decision contains three basic ingredients :
(i) findings of material facts, direct and inferential. An
inferential finding of fact is the inference which the judge
draws from the direct or perceptible facts ;
(ii) statements of the principles of law applicable to
the legal problems disclosed by the facts ; and
(iii) judgment based on the combined effect of (i) and (ii)
above.
For the purposes of the parties themselves and their privies,
ingredient (iii) is the material element in the decision, for,
it determines finally their rights and liabilities in relation
to the subject-matter of the action. It is the judgment that
estops the parties from reopening the dispute. However,
for the purpose of the doctrine of precedent, ingredient
(ii) is the vital element in the decision. This is the ratio
decidendi. It is not everything said by a judge when
giving a judgment that constitutes a precedent. The
only thing in a judge’s decision binding a party is the
principle upon which the case is decided and for this
reason it is important to analyse a decision and isolate
from it the ratio decidendi.”
(emphasis supplied)
114. Further, a simple test that has been invoked by this Court to determine
whether a particular proposition of law is to be treated as the ratio
decidendi of a case is the “inversion test” formulated by Professor

112 [2023] 12 SCR 979 : 2023 SCC OnLine SC 1004 : 2023 INSC 736
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Eugene Wambaugh.113 The test mandates that to determine whether
a particular proposition of law is part of the ratio decidendi of the
case, the proposition is to be inversed. This means that either that
proposition is hypothetically removed from the judgement or it is
assumed that the proposition was decided in reverse. After such
removal or reversal, if the decision of the Court on that issue before
it would remain the same then the observations cannot be regarded
as the ratio decidendi of the case.114
115. In Mafatlal, a Bench of nine Judges of this Court adjudicated on the
rights and remedies available to a citizen against the State in relation
to the refund of unlawfully recovered taxes and imposts. The court
dealt with whether a manufacturer or assessee who has passed
on the burden of an illegally recovered tax is entitled to a refund or
whether a refund in such cases will amount to unjust enrichment.
One of the several arguments made by the counsel appearing for
the Union of India was that this question must be decided in light of
the constitutional values of social and economic justice, including
those laid down in the Preamble and Articles 39(b) and (c). More
specifically, it was urged that Article 265115 must be interpreted in
the context of these constitutional values.
116. Faced with the above argument, the majority opinion authored by
Justice Jeevan Reddy, on behalf of himself and four other judges,
made certain observations which referred to Article 39(b). These
observations are found in paragraphs 84 to 86 of the judgement.
We must take a closer look at these observations, in the context of
the issues before the Court, to determine whether they are part of
the ratio decidendi and central to the decision of this Court.
117. Justice Jeevan Reddy attempted to locate the question of refund of
unlawfully recovered duty within the framework of the “philosophy
and core values” which guide our Constitution. In this context, it
was observed that these values can be located inter alia in the
Directive Principles contained in Part IV, including Article 39(b) and
the Preamble of the Constitution. Justice Jeevan Reddy observed:

113 State of Gujarat v. Utility Users’ Welfare Assn. (2018) 6 SCC 21 [113-114] : 2018 INSC 329
114 Eugene Wambaugh, The Study of Cases (Boston: Little, Brown & Co., 1892)
115 Article 265, Constitution of India. [It reads: “265. Taxes not to be imposed save by authority of law – No
tax shall be levied or collected except by authority of law”.]
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“84. […] Unlike the economically neutral — if not pro-
capitalist — Constitutions governing those countries, the
Indian Constitution has set before itself the goal of “Justice,
Social, Economic and Political” — a total restructuring of
our society — the goal being what is set out in Part IV of
the Constitution and, in particular, in Articles 38 and 39.
Indeed, the aforesaid words in the Preamble constitute
the motto of our Constitution, if we can call it one.
Article 38 enjoins upon the State to “strive to promote
the welfare of the people by securing and protecting
as effectively as it may a social order in which justice,
social, economic and political shall inform all the
institutions of the national life”. Article 39 lays down
the principles of policy to be followed by the State. It
says that the State shall, in particular, direct its policy
towards securing “(b) that the ownership and control
of the material resources of the community are so
distributed as best to subserve the common good; and
(c) that the operation of the economic system does
not result in the concentration of wealth and means
of production to the common detriment”. Refunding
the duty paid by a manufacturer/assessee in situations
where he himself has not suffered any loss or prejudice
(i.e., where he has passed on the burden to others) is no
economic justice; it is the very negation of economic justice.
By doing so, the State would be conferring an unearned and
unjustifiable windfall upon the manufacturing community
thereby contributing to concentration of wealth in a small
class of persons which may not be consistent with the
common good. The Preamble and the aforesaid articles
do demand that where a duty cannot be refunded to
the real persons who have borne the burden, for one
or the other reason, it is but appropriate that the said
amounts are retained by the State for being used for
public good […]
(emphasis supplied)
118. In the next paragraph, Justice Jeevan Reddy made further
observations about ‘philosophy and values’ which must be kept in
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mind while interpreting the Constitution. Significantly, Justice Jeevan
Reddy borrowed from the observations by Justice Krishna Iyer in
Ranganatha Reddy and noted:
“85. […] As observed by Thomas Jefferson, as far back as
in 1816, “laws and institutions must go hand-in-hand with
the progress of the human mind … as new discoveries
are made, new truths are discovered and manners and
opinions change with the change of circumstances,
institutions must advance also and keep pace with the
time…”. The very same thought was expressed by Krishna
Iyer, J. in State of Karnataka v. Ranganatha Reddy
with particular reference to our constitutional philosophy
and values:
“Constitutional problems cannot be studied in a
socio-economic vacuum, since socio-cultural changes
are the source of the new values, and sloughing off
old legal thought is part of the process of the new
equity-loaded legality…. It is right that the rule of law
enshrined in our Constitution must and does reckon
with the roaring current of change which shifts our
social values and shrivels our feudal roots, invades
our lives and fashions our destiny.”
The learned Judge quoted Granville Austin, saying:
“The Judiciary was to be the arm of the social revolution,
upholding the quality that Indians had longed for in colonial
days…. The courts were also idealised because, as
guardians of the Constitution, they would be the expression
of a new law created by Indians for Indians.”
119. Having made these observations, this Court went on to accept the
submission of the counsel for the Union of India and held that the
‘philosophy and core values’ of our Constitution must be kept in mind
while understanding the provisions of the Constitution, including
Article 265. Before reaching this conclusion, the judgement stated in
a single sentence that “the ‘material resources of the community’ are
not confined to public resources” but include all resources, including
privately owned resources. The observations were as follows:
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“86. That “the material resources of the community”
are not confined to public resources but include all
resources, natural and man-made, public and private
owned” is repeatedly affirmed by this Court. (See
Ranganatha Reddy, Sanjeev Coke Manufacturing Co. v.
Bharat Coking Coal and State of T.N. v. L. Abu Kavur Bai),
We are of the considered opinion that Shri Parasaran is
right in saying that the philosophy and the core values of
our Constitution must be kept in mind while understanding
and applying the provisions of Article 265 of the Constitution
of India and Section 72 of the Contract Act (containing
as it does an equitable principle) — for that matter, in
construing any other provision of the Constitution and
the laws. Accordingly, we hold that even looked at
from the constitutional angle, the right to refund of
tax paid under an unconstitutional provision of law is
not an absolute or an unconditional right. Similar is
the position even if Article 265 can be invoked — we
have held, it cannot be — for claiming refund of taxes
collected by misinterpretation or misapplication of a
provision of law, rules, notifications or regulation.”
120. The above observations indicate that the relevance of Article 39(b)
to the judgement was limited to the larger socio-economic values
which it espouses. The ratio decidendi of the majority judgement was
that the constitutional values contained in the Preamble and Part
IV of the Constitution, including Article 39(b) must be considered
while interpreting Article 265 and determining whether a refund of
taxes is permissible to a person who has passed on the burden.
The single-line observation on Article 39(b) encompassing privately
owned property was not relevant to this holding. To hold that this
observation constitutes the ratio decidendi of the judgment would
be to disregard the warning of Chief Justice Khare in Islamic
Academy of Education that “by reading a line here and there
from the judgment, one cannot find out the entire ratio decidendi
of the judgment.”116

116 Islamic Academy of Education [2].
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121. This Court in Mafatlal did not independently conclude that Article
39(b) encompasses private property or justify the relevance of this
proposition to the issues before the court. It was merely stated
that this has been “repeatedly affirmed” by this Court. Even if this
proposition of law is inverted and it is presumed that this Court
observed that private resources do not fall within the ambit of ‘material
resources of the community’, it would not impact the decision or
the issue in question. The underlying values of economic justice
which run through Chapter IV of the Constitution and the Preamble
would remain intact and this Court would have reached the same
conclusion. The tax collected was already within the “ownership and
control” of the government, and in the context of a refund, there is
no question of distributing any privately owned resources. We are
therefore inclined to accept the submission of the appellants that
the issue of whether Article 39(b) includes privately owned property
was not a matter in dispute in Mafatlal. The single-line observation
of Justice Jeevan Reddy in the majority opinion constitutes obiter
dicta and is not binding on this Court.
122. Mr Tushar Mehta, the learned Solicitor General of India contended
that certain observations on Article 39(b) have been made not only
in the majority opinion but also in two other opinions – a concurring
opinion authored by Justice Paripoornan and a dissenting opinion
authored by Justice SC Sen. It was urged that this indicates that the
issue of Article 39(b) was central to the dispute and the observations
of the majority on the inclusion of private property are part of the
ratio of the judgement.
123. Justice Paripoornan concurred with the majority view and accepted
the submission of the counsel for the Union of India that Article 265
of the Constitution must be construed in light of the values in the
Preamble and Articles 39(b) and (c). The observations were in the
following terms:
“304. […] The plea urged was that, if the assessee, is
denied the refund, the State Government could retain the
amount illegally collected, and it would amount to violation
of the constitutional mandate enshrined in Article 265 of
the Constitution. An equitable principle will not hold good
against a constitutional mandate. On the other hand the
counsel for the Union of India, Shri K. Parasaran, brought
to our notice the following portion of the Preamble and
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Articles 39(b) and (c) of the Constitution to contend that
Article 265 of the Constitution cannot be construed in
a vacuo or isolation, but should be construed in the
light of the basic principles contained in other parts
of the Constitution — viz. — the Preamble and the
Directive Principles of State Policy:
“Preamble
WE, THE PEOPLE OF INDIA, having solemnly
resolved to constitute India into a Sovereign
Socialist Secular Democratic Republic and
to secure to all its citizens:
Justice, social, economic and political:
***”
Articles 39(b) and (c):
“39. (b) that the ownership and control of
the material resources of the community
are so distributed as best to subserve the
common good;
(c) that the operation of the economic system
does not result in the concentration of wealth
and means of production to the common
detriment;”
305. Mr Parasaran also urged that it should be borne
in mind that excise duty is an indirect levy or tax which
could be passed on. Innumerable persons bear the brunt.
And it is passed on, ordinarily by prudent businessmen.
[…] The scope of Article 39(b) of the Constitution,
as laid down by this Court in State of Karnataka v.
Ranganatha Reddy, Sanjeev Coke Mfg. Co. v. Bharat
Coking Coal Ltd., State of T.N. v. L. Abu Kavur Bai,was
highlighted. […]
306. On an evaluation of the rival pleas urged in the
matter, I am of the view that the plea of the counsel
for Union of India should prevail.”
(emphasis supplied)
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124. On the other hand, Justice Sen disagreed with the view taken in the
opinions authored by Justice Jeevan Reddy and Justice Paripoornan.
He held that the provisions of Article 39 cannot curtail the interpretation
of Article 265, and the Directive Principles do not permit the state to
use unlawfully collected properties. He observed:
“161. Article 39 of the Constitution has directed the State
to formulate its policy towards securing that the ownership
and control of the material resources of the community are
so distributed as best to subserve the common good and
that the operation of the economic system does not result
in the concentration of wealth and means of production to
the common detriment. These provisions do not in any
way curtail the scope and effect of Article 265. Article
39 does not enjoin that unlawfully collected properties
should be used by the State for the common good. Nor
does it say that the operation of the economic system
should be so moulded as to prevent concentration of
wealth, by unlawful means. Article 39 cannot be a basis
for retaining whatever has been gathered unlawfully
by the Government for common good. Simply stated
the Directive Principles of State Policy do not license
the Government to rob Peter to pay Paul.”
125. The above observations in the opinions of Justice Paripoornan
and Justice SC Sen only further indicate that the argument of the
counsel was limited to whether Article 265 of the Constitution must
be interpreted in light of the constitutional values found inter alia in
the Preamble and Part IV, including Article 39(b).The observations in
these two opinions in no way assist the respondents in establishing
that the single sentence in the majority judgement about the inclusion
of private property constituted the ratio decidendi of the judgment.
126. In any event, the mere presence of an observation in multiple
opinions of the court, be it concurring or dissenting opinions, does
not automatically indicate that they form part of the ratio decidendi.
In order to determine whether the observations form part of the ratio
decidendi,one must go back to the drawing board and determine
whether the observations pertained to an issue which actually arose
between the parties and were necessary to the determination by
the court. In other words, even if a numerical majority of judges or
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opinions of the Court affirm an observation, it would not automatically
constitute the ratio decidendi of the case. It must be independently
established that the observation relates to an issue which was in
dispute before the court.
127. Therefore, the single-line observation in Mafatlal that the phrase
‘material resources of the community’ used in Article 39(b) includes
privately owned resources was obiter dicta and is not binding on
this Court.
iii. Interpreting Article 39(b)
128. Having addressed the contentions regarding judicial discipline and the
precedential value of the judgments which gave rise to this reference,
we turn to the substantive question before us: the interpretation of
Article 39(b).
129. The counsel for the respondents contended that this Court should
refrain from laying down a water-tight interpretation of Article 39(b)
and it should be left to Parliament to determine the ambit of the
provision based on the economic priorities of the day. We are not
inclined to accept such an argument in its entirety. The interpretation
of Article 39(b) has far-reaching consequences, involving judicial
inquiry, which makes it incumbent on this Court to interpret the
provision. These consequences, detailed below, underscore the
necessity of a constitutional interpretation by this Court, while also
highlighting the ramifications of adopting a wide and unmanageable
construction of the provision.
a. Article 39(b) as a pre-requisite to protection under Article 31C
130. As discussed in Part C of this judgement, Article 31C as upheld by
the majority in Kesavananda Bharati remains in force under the
Constitution. Under this provision (as it stands), no law giving effect
to the policy of the State towards securing the principles specified in
clauses (b) or (c) of Article 39(b) can be challenged on the ground
that it is inconsistent with or takes away or abridges any of the rights
conferred by Articles 14 and 19 of the Constitution. Therefore, the first
and perhaps most significant consequence of this Court holding that
a certain statute gives effect to the principles in Article 39(b) is that it
falls within the immunity provided by Article 31C. The constitutionality
of such a legislation cannot be challenged under Articles 14 or 19
of the Constitution.
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131. Prior to the decision in Kesavananda Bharati, if a law merely
contained a declaration that it gives effect to the policy laid down in
Article 39(b), it could not be questioned in any court on the ground
that it does not actually give effect to such a policy. In Kesavananda
Bharati, this part of the provision was struck down. All laws which
purport to give effect to the principles in Articles 39(b) or (c) of the
Constitution are subject to judicial inquiry and review on the question
of whether they actually bear a nexus with the provision. In other
words, the question of whether they do in fact give effect to the
principles in Articles 39(b) and (c) is justiciable.
132. In Kesavananda Bharati, while striking down the second part of the
erstwhile Article 31-C, Justice HR Khanna explained the importance
of the court exercising judicial review on whether the legislation gives
effect to the principles under Article 39(b) and (c). He was particularly
apprehensive of giving the legislature the final authority to determine
whether a law falls within the ambit of Article 39(b). The exclusion
of judicial review was held to be violative of the basic structure of
the Constitution. Justice Khanna observed:
“(xiv) The second part of Article 31-C contains the seed
of national disintegration and is invalid on the following
two grounds:
(3) It gives a carte blanche to the legislature to
make any law violative of Articles 14, 19 and 31
and make it immune from attack by inserting
the requisite declaration. Article 31-C taken along
with its second part gives in effect the power to the
legislature including a State Legislature, to amend
the Constitution in important respects.
(4) The legislature has been made the final authority
to decide as to whether the law made by it is for
the objects mentioned in Article 31-C. The vice of
the second part of Article 31-C lies in the fact
that even if the law enacted is not for the object
mentioned in Article 31-C, the declaration made
by the legislature precludes a party from showing
that the law is not for the object and prevents a
court from going into the question as to whether
the law enacted is really for that object. The
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exclusion by the legislature, including a State
Legislature, of even that limited judicial review
strikes at the basic structure of the Constitution.
The second part of Article 31-C goes beyond the
permissible limit of what constitutes amendment
under Article 368.”
133. The sequitur to this Court striking down the second part of Article
31-C in Kesavananda Bharti is that the court may conduct a judicial
inquiry into whether the legislation which is sought to be saved by
Article 31-C, actually bears a direct and reasonable nexus with the
principles laid down in Article 39(b) or (c), as the case may be. In
this regard, the observations of Justice Mathew in Kesavananda
Bharati are instructive:
“1779. […] a Court will have to examine the pith and
substance, the true nature and character of the law as
also its design and the subject-matter dealt with by it
together with its object and scope. If the Court comes to
the conclusion that the declaration was merely a pretence
and that the real purpose of the law is the accomplishment
of some object other than to give effect to the policy of the
State towards securing the Directive Principles in Article
39(b) and (c), the declaration would not be a bar to the
Court from striking down any provision therein which
violates Articles 14, 19 or 31. In other words, if a law
passed ostensibly to give effect to the policy of the
State is, in truth and substance, one for accomplishing
an unauthorised object, the Court would be entitled
to tear the veil created by the declaration and decide
according to the real nature of the law.”
(emphasis supplied)
134. In view of the decision in Kesavananda Bharati, it has been
consistently affirmed by this Court that the declaration in a statute that
the Act has a nexus with or seeks to give effect to the principles laid
down in Article 39(b) or (c) is subject to judicial review. To determine
whether a statute is within the folds of Article 31-C, the court may
examine the nature and character of legislation to determine whether
there is any direct and reasonable nexus between the law and the
principles in Articles 39(b) and (c). On such an examination, if it
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appears that there is no such nexus, the legislation will not enjoy
the protection of Article 31-C. It has been held by this Court that
“to see the real nature of the statute, the court may also tear the
veil”. If the court concludes that the object of the legislation was
merely a pretence and the real object does not correspond with the
principles laid down in Articles 39(b) and (c), Article 31-C would not
be attracted and the validity of the statute would have to be tested
independent of Article 31-C.
135. It cannot be gainsaid that the impact of a legislation being saved
by Article 31C is significant. The impact of this ‘safe harbour’ was
eloquently described by Chief Justice YV Chandrachud, speaking for a
majority of judges in Minerva Mills. While detailing the consequence
of legislation being protected from a challenge under Article 14 and
19, this Court observed:
“61. Articles 14 and 19 do not confer any fanciful rights.
They confer rights which are elementary for the proper and
effective functioning of a democracy. They are universally
so regarded, as is evident from the Universal Declaration
of Human Rights. Many countries in the civilised world
have parted with their sovereignty in the hope and belief
that their citizens will enjoy human Freedoms. And they
preferred to be bound by the decisions and decrees of
foreign tribunals on matters concerning human freedoms. If
Articles 14 and 19 are put out of operation in regard to
the bulk of laws which the legislatures are empowered
to pass, Article 32 will be drained of its life-blood.
74. Three Articles of our Constitution and only three, stand
between the heaven of freedom into which Tagore wanted
his country to awake and the abyss of unrestrained power.
They are Articles 14, 19 and 21. Article 31-C has removed
two sides of that golden triangle which affords to the
people of this country an assurance that the promise
held forth by preamble will be performed by ushering
an egalitarian era through the discipline of fundamental
rights, that is, without emasculation of the rights to
liberty and equality which alone can help preserve the
dignity of the individual”
(emphasis supplied)
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136. In view of the above, the first consequence of the interpretation
of Article 39(b) by this Court is linked to its reviewing role as a
pre-condition to the protection of Article 31-C. Given that this Court
may judicially review the question of whether a legislation bears a
direct and reasonable nexus with the principles of Article 39(b), the
interpretation of the provision cannot be left solely to the legislature.
This Court must lay down a construction of the provision, which does
not grant the legislature absolute authority to include any legislation
within the fold of Article 39(b) without a governing principle.
b. Article 39(b) as a Directive Principle
137. The unique consequence flowing from Article 39(b) as a pre-condition
to receiving the protection of Article 31-C has been detailed above.
However, the provision also has a special place in the Constitution,
as a part of the Chapter on ‘Directive Principles of State Policy’.
138. Chapter IV of the Constitution is titled ‘ Directive Principles of State
Policy’ and contains Articles 36 to 51. The preambular text of Chapter
IV may be located in Article 37, which reads as follows:
“37. Application of the principles contained in this
Part.— The provisions contained in this Part shall not be
enforceable by any court, but the principles therein laid
down are nevertheless fundamental in the governance
of the country and it shall be the duty of the State to
apply these principles in making laws.”
139. From the text of Article 37, three major principles about the provisions
contained in Chapter IV can be identified. Firstly, unlike fundamental
rights and other provisions in the Constitution, they shall not be
‘enforceable’ by any court. In other words, a breach of a Directive
Principle cannot ground a legal claim. Secondly, the principles laid
down in the provisions are fundamental to the governance of the
country. Thirdly, it is the ‘duty of the State’ to apply these principles
in making laws. These principles raise questions about the purport
of the term ‘fundamental’ in the context of Chapter IV and whether
the duty of the state to apply these principles is a legal or merely
a moral duty. It is undoubtedly true that Article 37 renders Directive
Principles immune from judicial enforcement. However, such
non- enforceability is predicated on the understanding that many of
these principles require fiscal resources for implementation, and thus
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immediate accountability for their non-fulfilment would have burdened
a nascent country. The non-justiciability of these principles does not
diminish their significance and they remain significant despite their
direct non-enforceability through judicial channels.117
140. The rest of the chapter, containing Articles 38 to 51 lays down the
principles which constitute the Directive Principles. These principles
range from equal pay for equal work to the organisation of village
panchayats to humane conditions of work and maternity relief. Initially,
between the 1950s and 1960s, the jurisprudence of this Court reflected
the view that Directive Principles have no role to play in the decision-
making of the courts – they are not directly enforceable, do not play
a role in the interpretation of statutes, and cannot be used to abridge
or interpret fundamental rights in any way. They were viewed as mere
instructions to the legislature and executive, which lay outside the
ambit of judicial inquiry. For instance, an early decision of this Court
in State of Madras v Champakan Dorairjan118 declined to accord
any weight to arguments that sought to invoke Directive Principles
as a justification for allegedly abridging fundamental rights. In this
case, the erstwhile State of Madras sought to justify caste-based
affirmative action policies by invoking Article 46 of the Constitution.119
A seven-judge bench of this Court (speaking through Justice SR
Das) rejected these arguments and opined:
“15. […] The Directive Principles of the State policy,
which by Article 37 are expressly made unenforceable
by a court, cannot override the provisions found in Part
III which, notwithstanding other provisions, are expressly
made enforceable by appropriate writs, orders or directions
under Article 32. The chapter of Fundamental Rights is
sacrosanct and not liable to be abridged by any legislative
or executive Act or order, except to the extent provided in
the appropriate article in Part III. The Directive Principles
of State policy have to conform to and run as subsidiary
to the chapter of Fundamental Rights. In our opinion,

117 Ashok Kumar Thakur v Union of India (2008) 6 SCC 1 [173] : 2008 INSC 473
118 [1951] 1 SCR 525 : AIR 1951 SC 226 [15] : 1951 INSC 26
119 Article 46, Constitution of India: “The State shall promote with special care the educational and economic
interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the
Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation.”
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that is the correct way in which the provisions found
in Parts III and IV have to be understood. […]”
(emphasis supplied)
141. A similar view is advanced by the distinguished constitutional scholar,
HM Seervai in his treatise, ‘Constitutional Law of India’.120 Seervai
adopts the view that Directive Principles have no role to play in
constitutional adjudication by the court and are mere exhortations to
the legislature and executive. In his opinion, the only body that can
hold the government accountable in relation to Directive Principles is
the electorate and the courts must steer clear of this domain. If this
position of law was true, there would be some merit in the argument
of the respondents that this Court should refrain from laying down
an interpretation of Article 39(b) and leave it to the legislature (and
the electorate) to evolve an interpretation for themselves. However,
the jurisprudence of this Court with regard to the role of Directive
Principles has evolved significantly, and the construction of Directive
Principles plays a vital role in various forms of judicial inquiry.
142. Early signs of a shift in the approach of this Court were visible in Mohd
Hanif Qureshi v State of Bihar.121 This Court held that attempts
must be made to harmoniously interpret Directive Principles and
fundamental rights. However, this Court stopped short of granting
Directive Principles any further role vis-à-vis interpreting fundamental
rights. The role of Directive Principles was placed subordinate to
fundamental rights. This Court adopted the view that the government
should undoubtedly frame legislation advancing Directive Principles,
but the fundamental rights in Part III, interpreted autonomously,
would continue to serve as constraints on these endeavours. Similar
observations were echoed by this Court in Golak Nath v. State of
Punjab,122 marking an entry into the era of harmonious construction
of Directive Principles and fundamental rights.
143. Subsequently, in the landmark decisions in Kesavananda Bharati
and Minerva Mills, the insistence of this Court on a harmonious
reading and interplay between fundamental rights and Directive
Principles became even stronger. In Minerva Mills, this Court

120 HM Seervai, Constitutional Law of India, Vol 2 (4th ed, Universal Law Publishing 2002) 1934–40.
121 [1959] 1 SCR 629 : 1957 SCC OnLine SC 17 [12]
122 [1967] 2 SCR 762 : 1967 SCC OnLine SC 14 [16, 19] : 1967 INSC 45
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(speaking through Chief Justice YV Chandrachud) quoted Granville
Austin and observed that Part III and Part IV of the Constitution are
“two wheels of a chariot, one no less important than the other”. This
Court made the following observations:
“56. The significance of the perception that Parts III and
IV together constitute the core of commitment to social
revolution and they, together, are the conscience of the
Constitution is to be traced to a deep understanding of
the scheme of the Indian Constitution. Granville Austin’s
observation brings out the true position that Parts III and
IV are like two wheels of a chariot, one no less important
than the other. You snap one and the other will lose its
efficacy. They are like a twin formula for achieving the
social revolution, which is the ideal which the visionary
founders of the Constitution set before themselves. In
other words, the Indian Constitution is founded on the
bedrock of the balance between Parts III and IV. To give
absolute primacy to one over the other is to disturb
the harmony of the Constitution. This harmony and
balance between fundamental rights and directive
principles is an essential feature of the basic structure
of the Constitution.
57. […] It is in this sense that Parts III and IV together
constitute the core of our Constitution and, combine to
form its conscience. Anything that destroys the balance
between the two parts will ipso facto destroy an essential
element of the basic structure of our Constitution.”
(emphasis supplied)
144. In the background of these decisions, which mandated that fundamental
rights and Directive Principles must be construed harmoniously, an
important principle began to emerge in the jurisprudence of this
Court. Courts began to rely on Directive Principles while adjudicating
on the ‘reasonableness’ of the restriction imposed on fundamental
rights. This has been affirmed in a line of precedent of this Court.123

123 See Indian Handicrafts Emporium v. Union of India (2003) 7 SCC 589 : 2003 INSC 427; M.R.F. Ltd. v.
Inspector, Kerala Govt (1998) 8 SCC 227 [13] : 1998 INSC 423; Workmen v. Meenakshi Mills Ltd. (1992)
3 SCC 336 [27] : 1992 INSC 164; Pathumma v. State of Kerala (1978) 2 SCC 1 : 1978 INSC 7
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We may reiterate the observations in one such case to understand
this position of law.
145. In State of Gujarat v. Mirzapur Moti Kureshi Kassab Jamat,124 a
bench of seven judges reconsidered several questions which were
decided in Mohd Hanif Qureshi. Significantly, this Court had occasion
to lay down the correct position on the role played by Directive
Principles in our constitutional scheme, particularly, with regard to
their role vis-à-vis fundamental rights. The Court moved away from the
view in Mohd Hanif Qureshi that the implementation of a Directive
Principle cannot be considered a valid ground for establishing the
reasonability of the restriction imposed on the fundamental right
guaranteed by Article 19(1)(g). After reviewing several cases on this
point, this Court (speaking through Chief Justice Lahoti) laid down
the law in the following terms:
“41. [….] For judging the reasonability of restrictions
imposed on fundamental rights the relevant considerations
are not only those as stated in Article 19 itself or in Part
III of the Constitution: the directive principles stated in
Part IV are also relevant. Changing factual conditions and
State policy, including the one reflected in the impugned
enactment, have to be considered and given weightage
to by the courts while deciding the constitutional validity
of legislative enactments. A restriction placed on
any fundamental right, aimed at securing directive
principles will be held as reasonable and hence intra
vires subject to two limitations: first, that it does not
run in clear conflict with the fundamental right, and
secondly, that it has been enacted within the legislative
competence of the enacting legislature under Part XI
Chapter I of the Constitution.
…
47 […] The series of decisions which we have referred to
hereinabove and the series of decisions which formulate
the three stages of development of the relationship between
directive principles and fundamental rights undoubtedly

124 [2005] Supp. 4 SCR 582 : (2005) 8 SCC 534 : 2005 INSC 525
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hold that, while interpreting the interplay of rights and
restrictions, Part III (Fundamental rights) and Part IV
(Directive principles) have to be read together. The
restriction which can be placed on the rights listed
in Article 19(1) are not subject only to Articles 19(2)
to 19(6); the provisions contained in the chapter
on directive principles of State policy can also be
pressed into service and relied on for the purpose of
adjudging the reasonability of restrictions placed on
the fundamental rights.”
146. Similarly, in view of the above jurisprudence which mandates
that Directive Principles and fundamental rights be viewed as
‘complementary and supplementary’, Directive Principles have also
acquired a role in interpreting fundamental Rights. Reference may
be made to the decision in State of Kerala v. N.M. Thomas125
and Ashok Kumar Thakur v Union of India,126 where this Court
interpreted the right to equality under Article 14 in light of the Directive
Principles. Similarly, in cases such as Bandhua Mukti Morcha v.
Union of India127 and Olga Tellis v. Bombay Municipal Corpn.,128
this Court expanded the interpretation of Article 21 in light of various
Directive Principles and held that these principles are fundamental
to“understanding the meaning and content of fundamental rights”.
147. In sum,the Directive Principles play an integral role in constitutional
interpretation by this Court. Firstly, fundamental rights are to be
interpreted harmoniously and in light of these Directive Principles.
Secondly, they act as markers of reasonable restrictions on
fundamental rights. Therefore, given the role of Directive Principles
in constitutional adjudication by this Court, it cannot abdicate the
task of interpreting Article 39(b).
iv. Historical Context: Constituent Assembly Debates
148. Most counsel before us have sought to rely on the debates before the
constituent assembly to buttress their understanding of Article 39(b).
Both sides have drawn different inferences from the discussions of the

125 [1976] 1 SCR 906 : (1976) 2 SCC 310 : 1975 INSC 224
126 [2008] 4 SCR 1 : (2008) 6 SCC 1 : 2008 INSC 473
127 [1984] 2 SCR 67 : (1984) 3 SCC 161 [10] : 1983 INSC 203
128 [1985] Supp. 2 SCR 51 : (1985) 3 SCC 545 [33] : 1985 INSC 151
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members of the Constituent Assembly. To address these arguments
and understand the intention behind the introduction of Article 39(b)
in the Constitution, we will review the debates and discussions in
the assembly that are relevant to the issue at hand.
a. Debates about the purpose of Directive Principles
149. On 4 November 1948, Dr BR Ambedkar moved a motion to introduce
the draft constitution and delivered a landmark speech, explaining
the intentions and ideas behind various provisions of the draft
constitution. Dr Ambedkar elucidated the purpose behind including
Directive Principles in the Constitution. He stated that they are a
novel feature of our Constitution and the only other Constitution
which embodies such principles is that of Ireland. He dismissed the
criticism that such principles are merely ‘pious declarations’ which
do not have any binding force. Dr Ambedkar observed:
“If it is said that the Directive Principles have no legal
force behind them, I am prepared to admit it. But I am not
prepared to admit that they have no sort of binding force
at all. Nor am I prepared to concede that they are useless
because they have no binding force in law.”
150. According to Dr BR Ambedkar, the Directive Principles are akin to
the ‘Instrument of Instructions’ issued to the Governor-General and
the Governors of the colonies by the British Government under the
Government of India Act 1935. The only difference was that the
Directive Principles are in the form of instructions to the Legislature
and the Executive. He stated that while future governments may not
be answerable for a breach of such principles in a court of law, they
would respect these principles, knowing that they are answerable
for them before the electorate. Dr Ambedkar noted the importance
of such instructions in the following terms:
“The inclusion of such instructions in a Constitution
such as is proposed in the Draft becomes justifiable for
another reason. The Draft Constitution as framed only
provides a machinery for the government of the country.
It is not a contrivance to install any particular party
in power as has been done in some countries. Who
should be in power is left to be determined by the
people, as it must be, if the system is to satisfy the
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tests of democracy. But whoever captures power will
not be free to do what he likes with it. In the exercise
of it, he will have to respect these instruments of
instructions which are called Directive Principles. He
cannot ignore them. He may not have to answer for
their breach in a Court of Law. But he will certainly
have to answer for them before the electorate at
election time. What great value these directive principles
possess will be realized better when the forces of right
contrive to capture power.”
(emphasis supplied)
151. On 19 November 1948, the Constituent Assembly discussed some
of the provisions in Part IV of the draft Constitution. An amendment
was moved by Mr Damodar Swarup Seth to draft article 30, which
corresponds to Article 38 of the present constitution, in the following
terms:
“Sir, I move that for article 30, the following be substituted:
“30. The State shall endeavour to promote the welfare,
prosperity and progress of the people by establishing
and maintaining democratic socialist order and for the
purpose the State shall direct its policy towards securing :—
(a) the transfer to public ownership of important means of
communication, credit and exchange, mineral resources
and the resources, of natural power and such other large
economic enterprise as are matured for socialisation;*
(b) the municipalisation of public utilities;
(c) the encouragement of the organisation of agriculture,
credit and industries on co-operative basis.”
152. Mr Seth advanced the view that the principles laid down in draft
article 30 must be made more specific and convey a clear indication
about the ‘economic nature of the social order to be established’.
He was of the view that the provision must expressly state an
endeavour to establish and maintain a ‘democratic socialist order’,
which in his view, was necessary to mitigate the ‘capitalistic order’
He opined:
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“Sir, my reason for submitting this amendment is that I
feel that as it is worded, the article is somewhat indefinite
and vague, and does not convey any clear indication as to
the economic nature of the social order to be established.
We all know that the society in which we now live is of a
capitalistic order or character and in this society we see
the exploiter and exploited classes both existing side by
side; and the exploiting class is naturally the top-dog and
the exploited class the under-dog. In such a society we
clearly see that the real welfare of the masses, of the
toiling millions can neither be secured nor protected, unless
the society is made clear of the exploiter class, and that
can only be possible when we establish a socialist
democratic order, and transfer to public ownership the
“important means of production, communication, credit
and exchange, mineral resources and the resources
of natural power and such other large economic
enterprise as are matured for socialisation;” bring
about the “municipalisation of public utilities”; and
“the encouragement of the organisation of agriculture,
credit and industries on co-operative basis”.
153. The response of Dr BR Ambedkar to this proposal is particularly
instructive. He opposed the amendment and stated that there
was a misunderstanding among members who proposed such
amendments. He was of the view that along with a ‘parliamentary
democracy’, the Constitution sought to establish as an ideal, the
concept of an ‘economic democracy’. However, he noted there are
various ways in which this ideal of ‘economic democracy’ can be
achieved – ranging from individualism to socialism to communism.
Dr Ambedkar observed as follows:
“…. As I stated, our Constitution as a piece of mechanism
lays down what is called parliamentary democracy. By
parliamentary democracy we mean ‘one man, one vote’.
We also mean that every Government shall be on the anvil,
both in its daily affairs and also at the end of a certain
period when the voters and the electorate will be given an
opportunity to assess the work done by the Government.
The reason why we have established in this Constitution
a political democracy is because we do not want to install
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by any means whatsoever a perpetual dictatorship of any
particular body of people. While we have established
political democracy, it is also the desire that we should
lay down as our ideal economic democracy. We do not
want merely to lay down a mechanism to enable people to
come and capture power. The Constitution also wishes to
lay down an ideal before those who would be forming the
Government. That idea is economic democracy, whereby,
so far as I am concerned, I understand to mean, ‘one
man, one vote’. The question is : Have we got any
fixed idea as to how we should bring about economic
democracy ? There are various ways in which people
believe that economic democracy can be brought
about; there are those who believe in individualism
as the best form of economic democracy; there are
those who believe in having a socialistic state as the
best form of economic democracy; there are those who
believe in the communistic idea as the most perfect
form of economic democracy.”
154. According to Dr Ambedkar, the idea was to leave enough room for
different schools of economic thought and for the electorate to decide
which ideals are the best way to achieve ‘economic democracy’. With
this intent in mind, the language used in the Directive Principles was
‘not fixed or rigid’. He stated:
“Now, having regard to the fact that there are various ways
by which economic democracy may be brought about,
we have deliberately introduced in the language that
we have used, in the directive principles, something
which is not fixed or rigid. We have left enough room
for people of different ways of thinking, with regard to
the reaching of the ideal of economic democracy, to
strive in their own way, to persuade the electorate that
it is the best way of reaching economic democracy,
the fullest opportunity to act in the way in which they
want to act.
Sir, that is the reason why the language of the articles in
Part IV is left in the manner in which this Drafting Committee
thought it best to leave it. It is no use giving a fixed,
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rigid form to something which is not rigid, which is
fundamentally changing and must, having regard to the
circumstances and the times, keep on changing. It is,
therefore, no use saying that the directive principles
have no value. In my judgment, the directive principles
have a great value, for they lay down that our ideal is
economic democracy. [..]
I think, if the friends who are agitated over this question
bear in mind what I have said just now that our object
in framing this Constitution is really twofold : (i) to
lay down the form of political democracy, and (ii) to
lay down that our ideal is economic democracy and
also to prescribe that every Government whatever,
it is in power, shall strive to bring about economic
democracy, much of the misunderstanding under
which most members are labouring will disappear.”
155. An insight may also be gleaned from Dr Ambedkar’s response to a
proposal by Professor KT Shah to include the phrase “India shall be
a Secular, Federal, Socialist Union of States” in draft Article 1 of the
Constitution.129 Dr Ambedkar opposed the proposal with a two-fold
response. First, he reiterated his position that the Constitution is not
a mechanism to install a particular political party, structure of social
organisation or economic policy. To lay down such a policy about
how social and economic life is to be organised, in his view, would
“destroy democracy” and take away citizens’ liberty to choose the
method of social organisation that suits their needs. He stated that
while at that point in time, a socialist organisation may be deemed
to be beneficial, future generations may devise a different form of
social organisation. Second, he conceded that the several Directive
Principles, including Article 31(ii), which corresponds with the present
Article 39(b) are already “socialistic” in their direction and thus, the
amendment was ‘superfluous’. The observations of Dr Ambedkar
are extracted below:
“Mr. Vice-President Sir, I regret that I cannot accept the
amendment of Prof. K. T. Shah. My objections, stated
briefly are two. In the first place the Constitution,

129 Constituent Assembly Debates, Vol VII (15th November 1948)
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as I stated in my opening speech in support of
the motion I made before the House, is merely a
mechanism for the purpose of regulating the work of
the various organs of the State. It is not a mechanism
whereby particular members or particular parties are
installed in office. What should be the policy of the
State, how the Society should be organised in its
social and economic side are matters which must
be decided by the people themselves according to
time and circumstances. It cannot be laid down in
the Constitution itself, because that is destroying
democracy altogether. If you state in the Constitution
that the social organisation of the State shall take a
particular form, you are, in my judgment, taking away
the liberty of the people to decide what should be
the social organisation in which they wish to live. It
is perfectly possible today, for the majority people
to hold that the socialist organisation of society is
better than the capitalist organisation of society. But
it would be perfectly possible for thinking people to
devise some other form of social organisation which
might be better than the socialist organisation of
today or of tomorrow. I do not see therefore why
the Constitution should tie down the people to live
in a particular form and not leave it to the people
themselves to decide it for themselves. This is one
reason why the amendment should be opposed.
The second reason is that the amendment is purely
superfluous. My Honourable friend, Prof. Shah, does not
seem to have taken into account the fact that apart from
the Fundamental Rights, which we have embodied in the
Constitution, we have also introduced other sections
which deal with directive principles of state policy. If my
honourable friend were to read the Articles contained
in Part IV, he will find that both the Legislature as well
as the Executive have been placed by this Constitution
under certain definite obligations as to the form of
their policy.
[…]
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What I would like to ask Professor Shah is this: If these
directive principles to which I have drawn attention are
not socialistic in their direction and in their content, I
fail to understand what more socialism can be.”
(emphasis supplied)
b. Debates about the text of Article 39(b)
156. On 22 November 1948, the Constituent Assembly debated a
proposed amendment to Article 31 of the draft Constitution, which
corresponds to Article 39 of the present Constitution. Professor KT
Shah proposed that clause (ii) of Article 31 of the draft constitution,
which corresponds to Article 39(b) of the present Constitution, be
substituted as follows:
“Mr. Vice-President, Sir, I beg to move:
“That for clause (ii) of article 31, the following be substituted:
‘(ii) that the ownership, control and management of the
natural resources of the country in the shape of mines
and mineral wealth, forests, rivers and flowing waters
as well as in the shape of the seas along the coast of
the country shall be vested in and belong to the country
collectively and shall be exploited and developed on
behalf of the community by the State as represented by
the Central or Provincial Governments or local governing
authority or statutory corporation as may be provided for
in each case by Act of Parliament’;”
(emphasis supplied)
157. Professor Shah contended that the clause in its then existing form
could lend itself to “any interpretation” and expressed an apprehension
that if the clause is left vaguely worded it would fail to serve its
purpose and “make the proper development of the country or the
just redistribution of its wealth, or bringing in a fair measure of
social justice, only an empty dream.” Therefore, he suggested that
the existing clause should be substituted with the draft provision
extracted above.
158. Professor Shah was of the view that there could be no dispute about
the proposition that as regards the natural resources described in the
substituted clause, no human being lent any value in their creation
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by their own labour. Therefore, it was urged, that they are ‘gifts of
nature’ and should belong to all people collectively. He stated that
if they are to be developed, they must be for and on behalf of the
community. He vehemently opposed the utilisation of such resources
by ‘private monopolists’, who in his opinion, only sought ‘profit for
themselves’. He noted as follows:
“The creation or even the presence of vested interests,
of private monopolists, of those who seek only a profit
for themselves, however useful, important, or necessary
the production of such natural resources may be for the
welfare of the community, is an offence in my opinion
against the community, against the long-range interests of
the country as a whole, against the unborn generations,
that those of us who are steeped to the hilt, as it were,
in ideals of private property and the profit motive, do not
seem to realise to the fullest.
In the resources that are mentioned in my amendment not
only is there no creation of any value or utility by anybody’s
proprietary right being there, but what is more, the real
value comes always by the common effort of society, by
the social circumstances that go to make any particular
interests or resources of this kind valuable.”
159. In essence, Professor Shah was of the view that the ultimate
ownership, direct management, conduct and development of the
natural resources such as mines, mineral wealth and the other natural
resources detailed in his proposed amendment, must only be in the
hands of the state. He opined as follows:
“Take mines and mineral wealth. Mines and mineral
wealth, as everybody knows, are an exhaustible, – a
wasting asset. Unfortunately, these, instead of having
been guarded and properly protected and kept for the
community to be utilised in a very economical and thrifty
manner, have been made over to individual profit-seeking
concession-holders and private monopolists, so that we
have no control over their exploitation, really speaking,
for they are used in a manner almost criminal, so that
they can obtain the utmost profit on them for themselves,
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regardless of what would happen if and when the mines
should come to an end or the stored up wealth of ages
past is exhausted.
I suggest, therefore, that we allow no long range interests
of private profit–seekers involved in the utilisation of these
mines and the mineral wealth, that on the proper utilisation
of these mines and mineral wealth depends not only our
industrial position, depend not only all our ambitions,
hopes and dreams of industrialising this country, but what
is much more, depends also the defence and security of
the nation. It would, therefore, I repeat, be a crime against
the community and its unborn generations if you do not
realise, even at this hour, that the mineral wealth of the
country cannot be left untouched in private hands, to be
used, manipulated, exploited, exhausted as they like for
their own profit.
It is high time, therefore, that in this Constitution we lay
down very categorically that the ultimate ownership, the
direct management, conduct and development of these
resources can only be in the hands of the State or the
agents of the State, the representatives of the State, or
the creatures of the State, like Provinces, municipalities,
or statutory corporations.
Another argument may also be advanced here in support
of my view. By their very nature, these resources cannot
be exploited economically or efficiently unless they become
monopolies. In one form or another, they have to be
developed in a monopolistic manner. Now monopolies
are always distrusted so long as they remain in private
hands and are operated for private profit. If they are to be
monopolized, as I believe inevitably they will have to be,
then it is just as well that they should be owned, managed
and worked by the State.”
160. Professor Shah stated that the draft provision only provided for vague
State control, in the form of a mandate to “sub-serve the common
good”. He opined that in order to have a positive guarantee of the
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‘proper, social, and wholly beneficial utilisation’ of resources, it was
essential to ensure that their ownership, control and management
were vested in the public hands. He noted:
“It is not enough to provide only for a sort of vague State
control over them as the original clause does; it is not
enough merely to say that they could be so utilised as
to “sub serve the common good,” every word of which
is vague, undefined and undefinable, and capable of
being twisted to such a sense in any court of law,
before any tribunal by clever, competent lawyers, as to
be wholly divorced from the intention of the draftsman,
assuming that the draftsman had some such intention as
I am trying to present before the House. We must have
more positive guarantee of their proper, social and
wholly beneficial utilisation; and that can only be
achieved if their ownership, control and management
are vested in public hands.
Considerations, therefore, of immediate wealth, of the
necessity of industrialisation, of national defence, and
of social justice have moved me to invite this House to
consider my amendment favourably, namely, that without
a proper full-fledged ownership, absolute control and direct
management by the State or its representatives of these
resources, we will not be able to realise all our dreams in
a fair, efficient, economical manner which I wish to attain
by this means.”
(emphasis supplied)
161. Finally, before concluding, Professor KT Shah clarified that his
proposed amendment deliberately did not include ‘land’ in the list
of resources, because “the various measures that have been in
recent years adopted to exclude landed proprietors – zamindars to
oust them and take over the land, would automatically involve the
proposition that the agricultural or culturable land of this country
belongs to the country collectively, and must be used and developed
for its benefit.”
162. Mr Shibban Lal Saxena supported the amendments moved by
Professor KT Shah to draft Article 31(ii). He opined that the proposed
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amendments, in essence, suggested that the system of our State
shall be ‘socialist’. He urged Dr Ambedkar “at least to incorporate
the spirit of those amendments somewhere in the Constitution”. In
the specific context of the amendment proposed to Article 31(ii), he
opined that the enunciation is “very wide”, such that any system
of economy could be based on it. The clause in its existing form,
according to Mr Saxena, left it open to future Parliaments to evolve
an economic plan of their choice. However, he was of the view,
that there must at least be a Directive Principle that states that key
industries of the country shall be owned by the State. He noted:
“Now, this enunciation “ownership and control of the
material resources of the community to be distributed so as
to sub serve the common good” is a very wide enunciation
of a most important principle. The enunciation is so general
that any system of economy can be based upon it. Upon it
can be based a system of socialist economy where all the
resources of the country belong to the State and are to be
used for the well being of the community as a whole. But
a majority in the next Parliament can also come forward
and say that the New Deal evolved by Roosevelt is the
best system, and it should be adopted. This clause leaves
it open to any future parliament to evolve the best plan of
their choice. But I feel personally that we should today at
least lay down that the key industries of the country shall
be owned by the State.
[…]
Unless we lay down in the Constitution itself that the key
industries shall be nationalized and shall be primarily
used to serve the needs of the nation, we shall be
guilty of a great betrayal. Even if the principle is not
to be enforced today, we must lay down in this clause
(ii) about directive principles that the key industries
shall be owned by the State. That is, according to the
Congress, the best method of distributing the material
resources of the country. I therefore think that Professor
Shah’s amendment has merely drawn attention to this
fundamental principle.”
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163. Mr Jadubans Sahay disagreed with the text of Professor KT Shah’s
proposed amendments as he was of the view that it was ‘loosely
worded’. However, he stated that he was in support of the principles
and the spirit underlying the amendment. In his opinion, the
Constituent Assembly should not have refrained from incorporating
in the Constitution, at least in the form of a Directive Principle, that
the ‘means of production’ and the natural or material resources shall
belong to the community and through it to the State. The ultimate
goal, he urged, must be that all means of production and the ‘gifts
of nature’ which belong to the country should belong to the State or
the community. He opined:
“…But I may state for the information of the House that,
so far as the principles which underlie his amendment are
concerned, I support them. The spirit of it also I support.
I fail to see why this august Assembly which meets only
once in every country, is not keen to the extent of clearly
and boldly incorporating in this article that the means of
production and the natural or material resources of the
country shall belong to the community and through it
to the State. I cannot understand this, though the large
majority of the amendments, if you scrutinise them, will be
found to favour the principles underlying the amendment
of Professor Shah. I cannot understand how it is that the
Congress, the predominantly majority party here, is not
pressing this thing.”
“… After all this is a directive principle. I am not asking
you to incorporate it so that the capitalists and the big
purses of the country may not have the opportunity
to work the mines and the minerals. This is only a
directive principle. Are we not going to keep it as
our goal that all means of productions and the gifts
of Nature which belong to this vast country should
belong to the State or to the community? I am sorry,
Sir, that the bogey has been raised by the capitalists that
if you talk like this they will cease to produce. I know the
large majority of friends here will not be deterred by this
bogey raised by the capitalists, because production is not
for the welfare of the community. It is for the welfare of the
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capitalists. They produce for profits. Honourable Members
of this House know it better than myself that they produce
for profit and they will continue to produce as long as they
make profit and, if not, they will not. So we should not be
deterred by this slogan. …
Sir, in this Chapter and particularly in this article are
we not going to suggest that ultimately we have to
nationalise them, are we not going to suggest that is
the aim of the nation, is the target of the nation?[…]”
(emphasis supplied)
164. Mr S Nagappa supported the existing text of clauses (ii) and (iii) of
Article 31 and believed that they were intended for the benefit of
the “poor man”. He opined that, while it would have been better if
the clause had been drafted in more unequivocal language, they
represented a “ray of hope for the future”. In his opinion, as long as
these clauses stood, there was “no possibility of capitalism thriving
in India”. He too was in vehement support of the goal to “nationalize
industries and means of production”.
165. Dr BR Ambedkar opposed the amendments proposed by Mr KT Shah.
In his opinion, the language of the draft provision used “extensive
language”, which could potentially include the propositions moved
by Professor KT Shah. He noted as follows:
“With regard to his other amendments, viz., substitution
of his own clauses for sub-clauses (ii) and (iii) of Article
31, all I want to say is this that I would have been quite
prepared to consider the amendment of Professor Shah
if he had shown that what he intended to do by the
substitution of his own clauses was not possible to be
done under the language as it stands. So far as I am able
to see, I think the language that has been used in the
Draft it a much more extensive language which also
includes the particular propositions which have been
moved by Professor Shah, and I therefore do not see
the necessity for substituting these limited particular
clauses for the clauses which have been drafted in
general language deliberately for a set purpose. I
therefore oppose his second and third amendments.”
[2024] 11 S.C.R. 149

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

166. Eventually, the motion to amend the provision was put to vote. The
proposal to substitute the provision was negatived and it was thus
introduced in its present form.
c. Inferences from the discussions in the Constituent Assembly
167. Before laying down the principles which emerge from the above
discussions, two caveats must be kept in mind.
168. Firstly, debates and discussions in the Constituent Assembly serve
a limited purpose in constitutional interpretation. A review of the
debates and discussions in the Constituent Assembly may aid
in gleaning the principles and intent behind introducing various
provisions of the Constitution. However, these principles do not
control the meaning of the provision.130 This Court must interpret
provisions of the Constitution in consonance with changing times,
values and in the present case, even changing economic priorities.
The Constitution is a living document. The ideas and the thinking
of the framers of the Constitution cannot remain frozen for time
immemorial. As a Constitution Bench of this Court noted in K.S.
Puttaswamy v. Union of India,131 the Constitution governs the lives
of over 125 crore citizens of this country and must be interpreted to
respond to the changing needs of society at different points in time.
This Court, speaking through one of us (Justice DY Chandrachud),
observed:
“130. Now, would this Court in interpreting the Constitution
freeze the content of constitutional guarantees and
provisions to what the Founding Fathers perceived? The
Constitution was drafted and adopted in a historical context.
The vision of the Founding Fathers was enriched
by the histories of suffering of those who suffered
oppression and a violation of dignity both here and
elsewhere. Yet, it would be difficult to dispute that many
of the problems which contemporary societies face
would not have been present to the minds of the most
perspicacious draftsmen. No generation, including

130 S.R. Chaudhuri v. State of Punjab (2001) 7 SCC 126 : 2001 INSC 373
131 [2017] 10 SCR 569 : (2017) 10 SCC 1 [476] : 2017 INSC 1235
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the present, can have a monopoly over solutions or
the confidence in its ability to foresee the future. As
society evolves, so must constitutional doctrine. … ”
(emphasis supplied)
169. Secondly, when the framers of the Constitution debated on the
scope of Article 39(b) and other Directive Principles, the safe harbour
provision under Article 31C did not exist. As discussed earlier in this
judgement, Article 31-C was only introduced over twenty years later in
1971, by the twenty-fifth amendment to the Constitution. Therefore, the
discussion in the Constituent Assembly on the scope of Article 39(b)
was limited to viewing the provision as akin to any other Directive
Principle –as an aspirational principle for future governments. Dr
Ambedkar noted in his speech on 4 November 1948 that Directive
Principles including Article 39(b) were instructions to the executive
and legislature on “how they should exercise their powers”. At the
time of these discussions, the framers of our Constitution could not
have contemplated that legislation which bears a nexus with the
principles of Article 39(b) would be protected from a challenge under
Part III rights contained in Articles 14, 19 and the erstwhile Article
31 of the Constitution. Therefore, while interpreting Article 39(b) in
the context of the present-day Constitution which contains Article
31C, we must be cautious in drawing overbroad conclusions from
the discussions in the Constituent Assembly.
170. With these two caveats in mind, the following inferences may be
made from the discussions in the Constituent Assembly about the
nature of the Directive Principles:
a. Dr Ambedkar’s landmark speech on 4 November 1948 evinces
that Directive Principles, including the present-day Article 39(b)
were understood to be guiding principles or ‘instructions’ to the
executive and legislature. While they would not be enforceable
under law, it was believed that the values enshrined in them
would assume importance at the time of elections and the
electorate would hold future governments accountable. This
purpose attributed to Article 39(b) in the Constituent Assembly
is substantially different from the current roles that it serves in
our constitutional structure – both as a pre-condition to Article
31C and often as a tool to interpret rights contained in Part III
of the Constitution;
[2024] 11 S.C.R. 151

Property Owners Association & Ors. v.
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b. The discussions in the Constituent Assembly indicate the
objection of Dr Ambedkar to any proposals to expressly lay
down a particular form of social structure or economic policy
for future governments in the Constitution.He noted that the
Constitution, including in the Directive Principles, did not intend
to prioritise one form of government or economic structure over
the other but instead only laid down the ideal of ‘economic
democracy’;
c. Dr Ambedkar did not intend to locate the idea of ‘economic
democracy’ within a single economic or political school of
thought. Instead, it was believed that future governments and
electorates would identify the socio-economic structure which
best suits the needs of society. It was to be left to future
generations to persuade the electorate and determine the “best
way” of achieving the ideal of an ‘economic democracy;’ and
d. When members such as KT Shah and Damodar Seth sought
greater inclusion of what they termed as ‘socialistic’ thought,
Dr Ambedkar’s response was always that such principles
can be accommodated within the ambit of the widely worded
provisions, as they exist. Not only were such proposals to
specify an economic structure opposed by Dr Ambedkar but
in all the examples discussed above, they were also negatived
by a majority when the draft amendments were put to a vote.
171. We now turn to an analysis of the amendment proposed by Professor
KT Shah to Article 31(ii), which corresponds with the present-day
Article 39(b). As discussed above, Professor Shah sought to substitute
the article with the following provision:
“(ii) that the ownership, control and management of the
natural resources of the country in the shape of mines
and mineral wealth, forests, rivers and flowing waters
as well as in the shape of the seas along the coast of
the country shall be vested in and belong to the country
collectively and shall be exploited and developed on
behalf of the community by the State as represented by
the Central or Provincial Governments or local governing
authority or statutory corporation as may be provided for
in each case by Act of Parliament’;”
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172. The proposed amendment to Article 31(ii) sought to make the
language of the provision more specific and lay down a ‘socialist’
economic order. It specified a list of natural resources to be covered
by the provision, and also expressly stated that these resources
would be vested in the state which would exploit them on behalf
of the community. The opposition to the existing provision was that
it allowed future Parliaments to evolve an economic plan of their
choice instead of laying down that key industries would be owned
by the state.
173. Once again, following his view in earlier debates, Dr Ambedkar
opposed the amendment, which sought to lay down the specificities
of a ‘socialist’ economic order. His exact response, however, was
significant – he stated that the proposed amendment was already
covered by the “extensive language” of the existing provision. This
response has been central to the submissions of the counsel for the
appellants and respondents before us.
174. Ms. Uttara Babbar, senior counsel, submitted that the keyword in the
amendment was ‘vested’. She argued that the proposed amendment
differs from the current provision, as it sought to include the vesting
of certain natural resources, which may otherwise be privately owned,
in the state. According to her, the rejection of the amendment by
the Constituent Assembly indicates that the existing provision does
not include the ‘vesting’ of resources in the state, but only pertains
to the distribution of resources already owned and controlled by
the state. Regarding Dr Ambedkar’s statement that the proposed
amendment is already included within the provision, she contended
that this was limited to the fact that the natural resources listed in the
proposed amendment were covered by the existing clause. In the
absence of any discussion on the “vesting” of such resources in the
state, she argued that Ambedkar’s response cannot be interpreted
to incorporate such an understanding.
175. On the other hand, Mr Tushar Mehta learned Solicitor General for
India and Mr Rakesh Dwivedi, senior counsel appearing for the
State of West Bengal contend that Dr Ambedkar’s response to the
proposed amendment indicates that the clause includes within its fold
the vesting or acquisition of privately owned resources as well. The
provision, according to them,was deliberately framed in expansive
terms, to include all types of resources, including privately owned
[2024] 11 S.C.R. 153

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State of Maharashtra & Ors.

resources. The idea was to keep the provision widely worded so
that future governments could mould it according to the economic
priorities and dynamics of the day.
176. In our view, Dr Ambedkar’s objection to the proposed amendment
must be interpreted in view of his earlier observations on the nature
of the Directive Principles and his vehement objection to any
attempts to lay down a rigid ‘economic structure’ in the Constitution.
Dr Ambedkar was clear that he was opposed to laying down any
particular school of economic thought in the Directive Principles,
notwithstanding a passing remark about the socialistic direction of Part
IV, discussed above. This passing remark too may be understood in
light of the Directive Principles being used as a tool by the framers to
accommodate ideological dissenters who would otherwise lose out in
constitutional negotiations. As Directive Principles were understood
as non-justiciable exhortations, the framers often made strategic
concessions in their text to accommodate diverse views and ensure
the deliberations did not break down.
177. However, in view of the fact that Article 39(b) has evolved beyond
a non-justiciable directive,we must pay heed to Dr Ambedkar’s
prescient warning that the Constitution must not be interpreted in
a way that imposes a rigid economic structure. With this principle
in mind, Dr Ambedkar’s response to the proposed amendment to
Article 39(b) cannot be interpreted to indicate that the provision
encompasses all private property, and any legislation to convert
private ownership to public ownership would fall within its ambit.
At best, the response suggests that natural resources including
rivers and seas may be vested in the state for the “common good”
in certain specific cases.
178. With this historical context in mind, we now turn to examine how
this Court has interpreted the provision over time, including in the
judgments that have been called into question in the present reference.
v. Interpretation of Article 39(b) that has been doubted
179. The genesis of this reference lies in the judgement of this Court in
Ranganatha Reddy. A seven-judge bench of this Court adjudicated on
the constitutionality of the Karnataka Contract Carriages (Acquisition)
Act, 1976, which dealt with the acquisition of private contract carriages
by the State. The legislature was of the view that nationalisation was
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necessary because private contract carriages were being operated in
a manner “detrimental to the public interest” and the nationalisation of
the carriages would prevent misuse and provide better facilities. The
legislation contained a declaration stating that it is in furtherance of
the principles contained in Articles 39(b) and (c) and thus protected
by Article 31-C. The Karnataka High Court struck down the legislation
as unconstitutional on various grounds, including inter alia that it was
not protected by Article 31-C.
180. As noted earlier in this judgement, the majority decision, authored by
Justice Untwalia, upheld the constitutional validity of the legislation
but did not discuss the question of whether the legislation was
in furtherance of Article 39(b) and thus, protected by Article 31-
C. However, the contours of Article 39(b) were discussed in the
concurring opinion authored by Justice Krishna Iyer (on behalf of
himself and two other judges), and it was held that legislation was
saved by Article 31-C. Justice Krishna Iyer framed the questions
with regard to Article 39(b) in the following terms:
“50. […]
2. What are the pervasive ambience and progressive
amplitude of the “directive principle” in Article 39(b) and
(c) in the context of nationalisation of public utilities?
2 (a). Can State monopoly by taking over private property
be a modus operandi of distribution of ownership and
control of the material resources of the community to
subserve the common good, within the framework of
Article 39 (b)?
2(b). Are distribution and nationalisation antithetical or
overlapping?
2 (c). What is the connotation of the expression “material
resources”? Can private buses be regarded as material
resources of the community?”
181. Justice Krishna Iyer held that the purpose behind the provision is
to allow for the “restructuring of the social order” and each word in
the provision contributes to this “social mission”. He warned against
a “ritualistic construction” of the provision which would weaken this
purpose. He observed:
[2024] 11 S.C.R. 155

Property Owners Association & Ors. v.
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“80. […] The key word is “distribute” and the genius of
the Article, if we may say so, cannot but be given full
play as it fulfils the basic purpose of restructuring the
economic order. Each word in the article has a strategic
role and the whole article a social mission. It embraces
the entire material resources of the community. Its task
is to distribute such resources. Its goal is so to undertake
distribution as best to subserve the common good. It re-
organizes by such distribution the ownership and control.
83. Two conclusions strike us as quintessential. Part IV,
especially Article 39(b) and (c), is a futuristic mandate
to the State with a message of transformation of the
economic and social order. Firstly, such change calls
for collaborative effort from all the legal institutions of the
system: the legislature, the judiciary and the administrative
machinery. Secondly and consequentially, loyalty to the
high purpose of the Constitution viz. social and economic
justice in the context of material want and utter inequalities
on a massive scale, compels the Court to ascribe expansive
meaning to the pregnant words used with hopeful foresight,
not to circumscribe their connotation into contradiction
of the objectives inspiring the provision. To be Pharisaic
towards the Constitution through ritualistic construction
is to weaken the social-spiritual thrust of the founding
fathers’ dynamic faith.”
(emphasis supplied)
182. While holding that Article 39(b) includes the nationalization of motor
vehicles, Justice Krishna Iyer had occasion to interpret the phrase
“material resources of the community”. In essence, Justice Krishna
Iyer interpreted the term “material resources” to cover “all national
wealth” including all resources – natural and manmade, private
and public. The only qualifier according to Justice Iyer is that the
resource must “meet material needs”. He adopted the view that an
individual is a member of the community, and thus, all resources
of the individual are part of the “community”. According to Justice
Iyer, if privately owned resources are excluded from the ambit of
Article 39(b) it would defeat the underlying purpose of the provision,
which is redistribution of wealth. Further, he clarified that not only
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private ‘means of production’, but also ‘private resources’ are
included within the fold of Article 39(b). These observations lie at
the heart of the controversy before this Court, and the correctness
of this interpretation of ‘material resources of the community’ has
been challenged by the appellants before us. The observations are
reproduced below.
“81. “Resources” is a sweeping expression and covers
not only cash resources but even ability to borrow (credit
resources). Its meaning given in Black›s Legal Dictionary is:
“Money or any property that can be converted into supplies;
means of raising money or supplies; capabilities of raising
wealth or to supply necessary wants; available means or
capability of any kind.”
And material resources of the community in the context
of re-ordering the national economy embraces all the
national wealth, not merely natural resources, all the
private and public sources of meeting material needs,
not merely public possessions. Everything of value
or use in the material world is material resource and
the individual being a member of the community
his resources are part of those of the community.
To exclude ownership of private resources from the
coils of Article 39(b) is to cipherise its very purpose of
redistribution the socialist way. A directive to the State
with a deliberate design to dismantle feudal and capitalist
citadels of property must be interpreted in that spirit and
hostility to such a purpose alone can be hospitable to the
meaning which excludes private means of production or
goods produced from the instruments of production. Sri
A.K. Sen agrees that private means of production are
included in “material resources of the community”
but by some baffling logic excludes things produced.
If a car factory is a material resource, why not cars
manufactured? “Material” may cover everything worldly
and “resources”, according to Random House Dictionary,
takes in “the collective wealth of a country or its means
of producing wealth: money or any property that can be
converted into money assets”. No further argument is
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needed to conclude that Article 39(b) is ample enough
to rope in buses. The motor vehicles are part of the
material resources of the operators.”
(emphasis supplied)
183. The next part of Article 39(b) that Justice Krishna Iyer discussed, in
his concurring opinion, is the term “distribution”. More specifically,
the opinion explores whether “nationalisation”can be understood
to be a form of “distribution” which subserves the “common good”.
Justice Krishna Iyer held that a narrow interpretation cannot be given
to the term. After referring to the dictionary definition of the term
‘distribution’, it was observed that the nationalisation of resources,
which essentially entails classifying and allocating industries/
services/utilities between the private and public sectors, is a form
of ‘distribution’. Moreover, nationalisation has been held to be a
distributive process which is for the “good of the community”. The
observations are reproduced below.
“82. The next question is whether nationalisation can
have nexus with distribution. Should we assign a narrow
or spacious sense to this concept? Doubtless, the latter,
for reasons so apparent and eloquent. To “distribute”,
even in its simple dictionary meaning, is to “allot, to
divide into classes or into groups” and “distribution”
embraces “arrangement, classification, placement,
disposition, apportionment, the way in which items, a
quantity, or the like, is divided or apportioned; the system
of dispersing goods throughout a community”. (See
Random House Dictionary). To classify and allocate
certain industries or services or utilities or articles
between the private and public sectors of the national
economy is to distribute those resources. Socially
conscious economists will find little difficulty in
treating nationalisation of transport as a distributive
process for the good of the community. You cannot
condemn the concept of nationalisation in our Plan
on the score that Article 39(b) does not envelop it. It
is a matter of public policy left to legislative wisdom
whether a particular scheme of take-over should be
undertaken.”
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184. The next decision with a bearing on the interpretation of Article 39(b)
is Bhim Singhji. As briefly discussed earlier,a five-judge Constitution
bench of this Court adjudicated on the constitutionality of the Urban
Land (Ceiling and Regulation) Act 1976. The legislation inter alia
provided for the imposition of a ceiling on vacant land in urban
agglomerations and for the acquisition of land in excess of the
ceiling limit, to prevent the concentration of urban land in the hands
of a few. Chief Justice YV Chandrachud, Justice Bhagwati, Justice
Krishna Iyer and Justice Sen, constituting a majority of four judges
held that the Act gave effect to the principles laid down in Articles
39(b) and (c), and, thus was protected by Article 31-C.Initially, when
the judgement was pronounced, Chief Justice YV Chandrachud (for
himself and Justice Bhagwati) authored a short judgment stating
that detailed reasons would follow. Eventually, Chief Justice YV
Chandrachud (for himself and Justice Bhagwati) issued an order
stating that the learned judges agreed with the reasons stated in
the opinion of Justice Krishna Iyer.132 Justice Sen concurred with
the majority on the question of whether the Act was in furtherance
of Articles 39(b) and (c) but disagreed on some other aspects.
Justice Tulzapurkar authored a dissenting opinion, striking down
the legislation as unconstitutional and held that the Act did not give
effect to the principles in Articles 39(b) and (c) so as to be saved
by Article 31C.
185. The opinion of the majority authored by Justice Krishna Iyer held
that a law that inhibits the concentration of urban land in the hands
of a few and ensures equitable distribution falls within the ambit of
Article 39(b) and (c). He observed:
“10. […]Article 39(b) and (c) of the Constitution are
directly attracted and there is no doubt that the fullest
exploitation of the material resources of the community
undoubtedly requires distribution of urban land geared
to the common good. It is also a notorious fact that
concentration of urban land in private hands is an
effective forbiddance of the maximum use of such land
for industrial purposes at a critical juncture when the
nation is fighting for survival through industrialisation.

132 Maharao Sahib Shri Bhim Singhji v. Union of India (1986) 4 SCC 615
[2024] 11 S.C.R. 159

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

It needs no argument to conclude that the objective of the
legislation as set out in the long title and in the statutory
scheme is implementation of Part IV of the Constitution.
The directive principles of State Policy being paramount
in character and fundamental in the country’s governance,
distributive justice envisaged in Article 39(b) and (c) has
a key role in the developmental process of the socialist
republic that India has adopted. […]
11. The taking over of large conglomerations of
vacant land is a national necessity if Article 39 is a
constitutional reality. “Law can never be higher than
the economic order and the cultural development of
society brought to pass by that economic order.”
(Marx). Therefore, if Article 38 of the Constitution which
speaks of a social order informed by economic justice, is
to materialise, law must respond effectively and rise to the
needs of the transformation envisioned by the founding
fathers. […]”
186. Although Justice Krishna Iyer did not cite his concurring judgement
in Ranganatha Reddy, he made certain observations which may
help contextualise his observations on Article 39(b) in Ranganatha
Reddy. He observed that the acquisition of private resources by the
state to favour another private owner is not within the scheme of
Article 39(b). In some circumstances, according to Justice Krishna
Iyer, even a private industry may serve the common good and
certain professions and industries may remain in private hands, “in
the transitional stage of our pluralist economy undergoing a fabian
transformation”.
“16-A. […] It is not and never can be compulsory taking
from some private owners to favour by transfer other
private owners. The prevalent pathology of corrupt use
of public power cannot be assumed by the court lest the
same charge be levelled against its echelons. The wide
definition of “industry” or the use of general words like
‘any person” and “any purpose” cannot free the whole
clause from the inarticulate major premise that only
a public purpose to subserve the common good and
filling the bill of Article 39(b) and (c) will be permissible.
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Even a private industry may be for a national need and
may serve common good. Even a medical clinic, legal
aid bureau, engineering consultant’s office, private
ambulance garage, pharmacist’s shop or even a funeral
home may be a public utility. Professions for the people,
trade at the service of the community and industry in
the strategic sector of the nation’s development may
well be in private hands in the transitional stage of our
pluralist economy undergoing a fabian transformation.
Why should lands allotted to such private industries or
professionals be condemned? The touchstone is public
purpose, community good and like criteria. If the power is
used for favouring a private industrialist or for nepotistic
reasons the oblique act will meet with its judicial waterloo.
To presume as probable graft, nepotism, patronage,
political clout, friendly pressure or corrupt purpose is
impermissible. […].”
187. The next decision that is relevant to the interpretation of Article 39(b)
is Sanjeev Coke – a decision of a Constitution Bench of five judges
of this Court. As noted earlier in this judgement, the observations
of this Court in this case have been specifically doubted in the
reference orders before us. This Court was adjudicating on the
constitutionality of the Coking Coal Mines (Nationalisation) Act, 1972,
which provided for the acquisition of coking coal mines, along with
their coking oven plants. In addition to these coking oven plants,
twelve coking oven plants which were owned by independent
persons, such as the petitioners, were also nationalised under the
legislation. The petitioners contended that the legislation violated
Article 14 as other coking oven plants were not being nationalised,
although they were similarly placed. The Union of India defended
the legislation on its merits and also argued that the legislation
was protected by Article 31-C as it gives effect to the principles
in Article 39(b). According to the legislature, the Act providing for
the nationalisation of the coking coal mines and coke oven plants
was “with a view to reorganising and reconstructing such mines
and plants for the purpose of protecting, conserving and promoting
scientific development of the resources of coking coal needed to
meet the growing requirements of the iron and steel industry and
for matters connected therewith or incidental thereto”.
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Property Owners Association & Ors. v.
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188. The counsel for petitioners in the case argued that a law which
violates the “broader egalitarian principle” embodied in Article 14
cannot be considered to be giving effect to the principles laid down
in Article 39(b). To further this argument, the counsel relied on the
observations made by Justice Bhagwati in his dissenting opinion in
Minerva Mills, wherein the learned judge upheld the constitutionality
of an amendment to Article 39(b) by the forty-second Amendment.
Justice Bhagwati, in essence, had observed that when a law gives
effect to a Directive Principle, such a law would always conform to
the principle of “real and substantive” equality, even if it may conflict
with the formalistic doctrinaire view of equality. This argument was
rejected by the Court and it was held that if the law to further the
Directive Principle must necessarily be non-discriminatory or based
on a reasonable classification then there is no purpose left in Article
31-C. It would be valid on its own. Hence it was held that a law
designed to promote a Directive Principle, even if it came into conflict
with the formalistic and doctrinaire view of equality before the law,
would advance the broader egalitarian principle and the constitutional
goal of social and economic justice for all. If the law was aimed at
the broader egalitarianism of the Directive Principles, Article 31-C
was held to protect the law from a challenge under Article 14.133
189. On the question of whether the Act gives effect to Article 39(b), the
counsel for the petitioners argued that a coal mine or coke oven plant
owned by private parties could not constitute “material resources of
the community”. It was urged that to qualify as a “material resources
of the community”, the ownership of the resource must vest in the
state. The legislation may be considered as a legislation for the
acquisition by the State of coking coal mines and coke oven plants
belonging to private parties but it is not a legislation towards securing
the principles in Article 39(b). It was argued that the keyword in Article
39(b) is “distribute” and material resources had first to be acquired
by the State before they could be distributed. A law providing for
acquisition could not, it was urged, be considered a law for distribution.
190. This argument was rejected by this Court (speaking through Justice
Chinappa Reddy). The Court observed that the expression “material
resources of the community” means all things capable of producing

133 Sanjeev Coke [16, 17].
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wealth for the community and cannot be limited to only public-owned
resources. Further, the words must – the learned Judge held -
be understood in the context of the constitutional goal of setting
up a ”socialist” republic, which has always been the goal of the
Chapter on Directive Principles. Further, it was held that the term
“distribution”cannot be given a narrow construction, and includes
the “transformation of wealth from private ownership into public
ownership”. This Court relied on the observations in the concurring
opinion authored by Justice Krishna Iyer in Ranganatha Reddy to
buttress these observations. These findings on the meaning of the
phrases “material resources of the community” and “distribution” are
at the heart of the reference before us and have been reproduced
in full below.
“19.[…]
The expression “material resources of the community”
means all things which are capable of producing
wealth for the community. There is no warrant for
interpreting the expression in so narrow a fashion as
suggested by Shri Sen and confine it to public-owned
material resources and exclude private-owned material
resources. The expression involves no dichotomy.
The words must be understood in the context of the
constitutional goal of establishing a sovereign, socialist,
secular, democratic republic. Though the word “socialist”
was introduced into the Preamble by a late amendment of
the Constitution, that socialism has always been the goal
is evident from the Directive Principles of State Policy.
The amendment was only to emphasise the urgency.
Ownership, control and distribution of national productive
wealth for the benefit and use of the community and
the rejection of a system of misuse of its resources for
selfish ends is what socialism is about and the words and
thought of Article 39(b) but echo the familiar language
and philosophy of socialism as expounded generally by
all socialist writers.
[…]
[2024] 11 S.C.R. 163

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

We may also look at it this way. When we say that the
State of Himachal Pradesh possesses immense forest
wealth or that the State of Bihar possesses immense
mineral wealth, we do not mean that the Governments
of the States of Himachal Pradesh and Bihar own the
forest and mineral wealth; what we mean is that there is
immense forest and mineral wealth in the territories of the
two States, whether such wealth is owned by the people
as a whole or by individuals. Again, when we talk of, say,
a certain area in Delhi being a Bengali, Punjabi or South
Indian area, we do not mean that the area is owned by
Bengalis, Punjabis or South Indians but only that large
numbers of Bengalis, Punjabis or South Indians live in that
area. When Article 39(b) refers to material resources of the
community it does not refer only to resources owned by
the community as a whole but it refers also to resources
owned by individual members of the community. Resources
of the community do not mean public resources only but
include private resources as well. Nor do we understand
the word “distribute” to be used in Article 39(b) in the limited
sense in which Shri Sen wants us to say it is used, that
is, in the sense only of retail distribution to individuals. It
is used in a wider sense so as to take in all manner and
method of distribution such as distribution between regions,
distribution between industries, distribution between classes
and distribution between public, private and joint sectors.
The distribution envisaged by Article 39(b) necessarily takes
within its stride the transformation of wealth from private
ownership into public ownership and is not confined to
that which is already public-owned. The submissions of
Shri Sen are well-answered by the observations of Krishna
Iyer, J. in State of Karnataka v. Ranganatha Reddy […]”
191. Additionally, this Court also held that the fact that only a part of the
industry, and not the industry as a whole was being nationalised was
irrelevant to the question of whether Article 39(b) would be attracted.
It was held that the distribution between public, private and joint
sectors and the extent and range of any scheme of nationalisation are
essentially matters of state policy which are inherently inappropriate
subjects for judicial review.
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192. The next decision of this Court which discussed the meaning and
content of Article 39(b) and has been referred to in the underlying
reference orders is Abu Kavur Bai. Akin to Ranganatha Reddy,
this is another case which dealt with the nationalisation of transport
services. In that case, the constitutionality of the Tamil Nadu State
Carriages and Contract Carriages (Acquisition) Act 1973, which sought
to nationalise the transport industry in stages, was under challenge.
The transport service and part of the assets of the operators were
acquired by the State under the legislation. The Madras High Court
declared the Act as being violative of Article 31(2) and outside the
protective umbrella contained in Article 31C.
193. The Constitution Bench of this Court (speaking through Justice Fazal
Ali) upheld the constitutionality of the legislation. This Court held that
the legislation gave effect to the principles in Articles 39(b) and (c)
and was thus saved from a challenge under Article 31(2), due to the
application of Article 31-C. The judgment relied on the decisions in
Ranganatha Reddy and Sanjeev Coke to arrive at this conclusion.
This Court held that the reason for the inclusion of Article 31-C was
based on the theoretical aspiration that means of production, key
industries, mines, minerals, public utilities, and services may be
taken gradually under public ownership, management and control.
Nationalisation, it was held, was necessary to achieve the goal of
building an egalitarian society.134
194. It was argued before this Court that the nationalisation of the entire
transport services along with the vehicles and workshops does not
serve “any public good” and does not prevent the concentration
of wealth in the hands of a few. Moreover, it was argued that the
taking over of vehicles, tools, implements and workshops was not
contemplated by Article 39(b) as they constituted movable properties
and not “material resources”. This Court rejected these arguments.
Relying on the decision in Ranganatha Reddy, where a similar
legislation in the State of Karnataka was upheld by this Court, it
was held that the state has nationalised the carriages to provide
expeditious transport at reasonable rates to the members of the
public and prevent misuse by private operators, which constitutes

134 Abu Kavur Bai [29-31].
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an important public purpose.135 This Court relied on the definition in
various dictionaries and the observations of this Court in Sanjeev
Coke and held that the term “material resources” used by Article 39(b)
is wide enough to cover both movable and immovable properties.136
195. Finally, this Court addressed the argument that the nationalisation
policy codified in the legislation does not envisage ‘distribution’,
because the property that is taken over is not distributed to various
members of the community for their benefit. This Court, in line with its
earlier observations, rejected this argument. Referring to definitions
of the term ‘distribution’, it was held that ‘distribution’ must not be
given a narrow construction which will defeat the purpose of Article
39(b).This Court held that the nationalisation of transport services
fell within the ambit of ‘distribution’ and observed:
“92. It is obvious, therefore, that in view of the vast range
of transactions contemplated by the word ‘distribution’ as
mentioned in the dictionaries referred to above, it will not
be correct to construe the word ‘distribution’ in a purely
literal sense so as to mean only division of a particular
kind or to particular persons. The words, apportionment,
allotment, allocation, classification, clearly fall within the
broad sweep of the word ‘distribution’. So construed, the
word ‘distribution’ as used in Article 39(b) will include
various facets, aspects, methods and terminology of
a broad-based concept of distribution. In other words,
the word ‘distribution’ does not merely mean that
property of one should be taken over and distributed
to others like land reforms where the lands from the
big landlords are taken away and given to landless
labourers or for that matter the various urban and
rural ceiling Acts. That is only one of the modes of
distribution but not the only mode. In the instant case,
as we have already pointed out, distribution is undoubtedly
there though in a different shape. So far as the operators
were concerned they were mainly motivated by making
huge profits and were most reluctant to go to villages or

135 Abu Kavur Bai [74, 75].
136 Abu Kavur Bai [78-83].
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places where the passenger traffic is low or the track is
difficult. This naturally caused serious inconvenience to
the poor members of the community who were denied the
facility of visiting the towns or other areas in a transport.
By nationalising the transport as also the units the
vehicles would be able to go to the farthest corner
of the State and penetrate as deep as possible and
provide better and quicker and more efficacious
facilities. This would undoubtedly be a distribution for
the common good of the people and would be clearly
covered by clause (b) of Article 39.”
196. The above principles laid down in Ranganatha Reddy, Sanjeev
Coke and Abu Kavur Bai have been followed in decisions which
dealt with the nationalisation or acquisition of certain resources by
the state. These resources include electrical energy [Tinsukhia
Electric Supply Co. Ltd. v. State of Assam137 and Maharashtra
State Electricity Board v. Thana Electric Supply Co.138], refractory
plants [Assam Sillimanite Ltd. v. Union of India139] and land
[Basantibai Khetan]. In the interests of brevity, we will not reiterate
the findings in each of these decisions. However, it may be noted
that these decisions followed the view in Ranganatha Reddy,
Sanjeev Coke and Abu Kavur Bai on two broad aspects. Firstly,
the phrase ‘material resources of the community’ includes privately
owned resources and cannot be restricted to resources owned by
the state. Secondly, nationalization or the vesting of these private
resources in the State falls within the expression “distribution” and
subserves the common good.
197. Another significant decision where a Constitution Bench of this
Court explored the meaning of Article 39(b) is Natural Resources
Allocation, In re, Special Reference No. 1 of 2012.140 Unlike the
decisions discussed above, this was not a case where the protection
of Article 31-C was sought to protect a legislation, instead, Article
39(b) was relied on by this Court to determine whether there is a

137 [1989] 2 SCR 544 : (1989) 3 SCC 709 : 1989 INSC 128
138 [1989] 2 SCR 518 : (1989) 3 SCC 616 : 1989 INSC 127
139 [1990] 1 SCR 983 : (1992) Supp 1 SCC 692 : 1990 INSC 89
140 [2012] 9 SCR 311 : (2012) 10 SCC 1 : 2012 INSC 428
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constitutional mandate for the distribution of natural resources in
a particular way. In view of the observations of a two-judge bench
of this Court on the allocation of spectrum, the President made a
reference to this Court. One of the main questions before this Court
was whether auctions are the only constitutionally permissible means
for the state to dispose of natural resources.
198. The Constitution Bench held that declaring auctions as a
constitutional mandate would be impermissible as it would distort
the constitutional principles in Article 39(b). This Court held that
Article 39(b) lays down a ‘restriction’ on the object of distribution of
natural resources, i.e. that such distribution must be to achieve the
“common good”. Further, the term “distribution” was held to have
a wide connotation, not restricted to only one mode of allocation
such as auctions. This Court held:
“113. […] The overarching and underlying principle
governing “distribution” is furtherance of common good.
But for the achievement of that objective, the Constitution
uses the generic word “distribution”. Distribution has broad
contours and cannot be limited to meaning only one method
i.e. auction. It envisages all such methods available for
distribution/allocation of natural resources which ultimately
subserve the “common good”.
199. Further, this Court held that although auctions may be the best way
to maximise revenue, revenue maximisation is not always the best
way to subserve the ‘common good’. In some cases, according to
this Court, revenue considerations may assume a secondary position
vis-à-vis developmental considerations. This Court held:
“119. The norm of “common good” has to be understood
and appreciated in a holistic manner. It is obvious that the
manner in which the common good is best subserved is
not a matter that can be measured by any constitutional
yardstick—it would depend on the economic and political
philosophy of the Government. Revenue maximisation
is not the only way in which the common good can be
subserved. Where revenue maximisation is the object of
a policy, being considered qua that resource at that point
of time to be the best way to subserve the common good,
auction would be one of the preferable methods, though
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not the only method. Where revenue maximisation is
not the object of a policy of distribution, the question of
auction would not arise. Revenue considerations may
assume secondary consideration to developmental
considerations.
120. […] Economic logic establishes that alienation/
allocation of natural resources to the highest bidder
may not necessarily be the only way to subserve
the common good, and at times, may run counter to
public good. Hence, it needs little emphasis that disposal
of all natural resources through auctions is clearly not a
constitutional mandate.”
200. Notably, this Court relied on the decisions in L Abu Kavur Bai and the
decision of Ranganatha Reddy to arrive at the above propositions.
In essence the decision in Special Reference No. 1 does two things.
Firstly, it restates the wide interpretation of ‘distribution’ and holds that
no single mode of distribution is mandated by Article 39(b). Secondly,
it interprets the phrase ‘common good’ to have a wide import and
clarifies that revenue maximisation by the government is not always
the only way to subserve the common good. Importantly, this was not
a decision where Article 39(b) was invoked to prevent a challenge
under Article 14 but to interpret the constitutional mandate about
the distribution of natural resources, in light of the ‘negative’ right to
equality in Article 14 and the ‘positive’ mandate in Article 39(b). In a
sense, this is an example of harmoniously construing fundamental
rights (Article 14) and the Directive Principles (Article 39(b)) to
understand underlying constitutional principles and mandates.
201. The broad precepts which emerge from these decisions may be
summarised thus:
a. The purpose behind Article 39(b) is to allow the state to carry
out a ‘restructuring of the economy’. The goal of the article is
to prevent the concentration of wealth in a few hands;
b. The term “material resources of the community” refers to things
capable of producing wealth for the community and includes
all resources– natural and man made, private and public. The
resources of the individual are the resources of the community
and thus, privately owned property is covered by the phrase;
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c. The nationalisation of privately owned resources may give effect
to Articles 39(b) and (c). The expression ‘distribution’ must be
given a wide construction so as to include the acquisition of
private resources by the state; and
d. The decisions which advance the above precepts ground their
interpretation of Article 39(b) in the observations of Justice
Krishna Iyer in Ranganatha Reddy and the subsequent
affirmation in Sanjeev Coke and Abu Kavur Bai.
202. In view of the above, the following questions fall for the consideration
of this Court:
a. Do all privately owned resources fall within the ambit of ‘material
resources of the community’?
b. Is the acquisition of private resources by the state a form of
distribution recognised by Article 39(b)?
vi. Correctness of the above interpretation of Article 39(b)
203. Article 39(b) is not a source of legislative power. The inclusion
or exclusion of ‘privately-owned resources’ from the ambit of the
provision does not impact the power of the legislature to enact laws
to acquire such resources. The power to acquire private resources,
in certain situations, continues to be traceable to other provisions in
the Constitution, including the sovereign power of eminent domain.
Acquisition of property, for instance, is a Concurrent list subject in Entry
42 of List III of the Seventh Schedule. Further, where a legislation
falls within the ambit of Article 39(b), the law is only protected against
a challenge under Articles 14 and 19 of the Constitution. Even if a
law is in furtherance of Article 39(b) and protected by Article 31C,
it is susceptible to a challenge to its constitutionality under other
provisions of the Constitution, including Article 300-A. Similarly, a
law which falls outside the ambit of Article 39(b), may still be valid.
All other benefits and protections granted by the Constitution under
inter alia Articles 31A and 31B continue to be applicable to such a
law. With this in mind, we turn to determining the correctness of the
above interpretation of Article 39(b), i.e. that all private property is
covered within the ambit of Article 39(b).
a. The interpretation is inconsistent with the text of Article 39(b)
204. Five significant elements emerge from the text of Article 39(b), which
has been reproduced in paragraph 2 of this Judgement. These are:
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a. The provision relates to “ownership and control”;
b. The ownership and control of “material resources” is dealt with
by the provision;
c. The material resources which the provision covers are those
which are “of the community”;
d. The policy of the state must be directed to secure the
“distribution” of the ownership and control of such resources;
e. The purpose of the distribution must be to “best subserve the
common good”.
205. The question before this Court is whether privately owned resources
fall within the ambit of the phrase ‘material resources of the community’.
To define the phrase ‘material resources of the community’, the law
lexicons and legal dictionaries draw our attention to the definitions
by this Court in Ranganatha Reddy, Sanjeev Coke and Abu Kavur
Bai. These judgements have been doubted in the reference before
us. Thus, we need to consider the terms afresh to understand the
correct interpretation of the phrase. We may begin by looking at the
terms ‘material’, ‘resources’ and ‘community’, independently.
206. Black’s Law Dictionary defines the expression ‘resources’ in the
following terms:
“a factor of production or economy needed for an activity.
Basic resources are labour, land, and capital. Others can
include information, energy, entrepreneurship, expertise,
time and management.”141
207. The term ‘material’ is defined as:
“1. Of or relating to matter; physical (material goods).
2. Having some logical connection with the consequential
facts (material evidence).
3. Of such a nature that knowledge of the item would
affect a person’s decision-making; significant; essential
(material alteration of a document).”142

141 Black’s Law Dictionary, 8th Edition, South Asian Edition, 2015.
142 Ibid.
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208. Similarly, the term ‘community’ has been defined in the following terms:
“anything constitutes a community; a common interest, a
common language, a common government, is the basis
of that community which is formed by any number of
individuals; the coming together of many and keeping
together under given law and for given purposes constitutes
a society.”143
209. None of these definitions indicate that the terms exclude ‘private
property’ from the provision. However, there is a distinction between
holding that private property may form part of the phrase ‘material
resources of the community’ and holding that all private property falls
within the net of the phrase. It is here that the judgment by Justice
Krishna Iyer in Ranganatha Reddy, and the consequent observations
in Sanjeev Coke fall into error. Justice Krishna Iyer cast the net wide,
holding that all resources which meet “material needs” are covered
by the phrase and any attempts by the government to nationalise
these resources would be within the scope of Article 39(b). He
clarified that not only the “means of production” but also the goods
so produced fall within the net of the provision. The illustration which
he provides in Ranganatha Reddy indicates the unworkable nature
of such an interpretation. Justice Krishna Iyer observed, by way of an
illustration, that not only do factories which produce cars fall within
the net of Article 39(b), but even privately owned cars are covered
by the provision.144 Similarly, even in Sanjeev Coke, the net is cast
wide and this Court observed that “all things capable of producing
wealth of the community” fall within the ambit of the phrase. In both
decisions, it was observed that all resources of the individual are
consequentially the resources of the community.
210. It is a settled rule of interpretation that no word in a statute may
be construed as surplusage and be rendered ineffective. While
construing a provision, full effect is to be given to the language
used in the provision.145 This principle is equally applicable to
constitutional interpretation. The provisions of the draft Constitution

143 Ramanathaier, Advanced Law Lexicon, 3rd Edition., Vol. III.
144 Ranganatha Reddy [81]
145 Hardeep Singh v. State of Punjab (2014) 3 SCC 92 [43-44] : 2014 INSC 21; Rohitash Kumar v Om
Prakash Sharma (2013) 11 SCC 451 [27-29] : 2012 INSC 509
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placed before the Constituent Assembly by Dr B R Ambedkar
were debated at length. Often, members of the assembly would
propose amendments which involved alternate phrasing of various
provisions. These were debated thread-bare in the assembly
before the members voted on the final text. As noted earlier in
this judgement, the text of the present Article 39(b) was also the
subject of debate and discussion. An amendment was proposed
by Professor KT Shah, which sought an alternative phrasing of the
provision. After detailed discussions, the assembly ultimately voted
in favour of the current phrasing of the provision. Therefore, while
interpreting the article, we cannot ignore the specific words used
in the provision or render them ineffective.
211. An interpretation of Article 39(b) which places all private property
within the net of the phrase “material resources of the community”
only satisfies one of the three requirements of the phrase, i.e. that
the goods in question must be a ‘resource’. However, it ignores the
qualifiers that they must be “material” and “of the community”. The
use of the words “material” and “community” are not meaningless
superfluities. We cannot adopt a construction of the provision which
renders these terms otiose. The words “of the community” must
be understood as distinct from the “individual”. If Article 39(b) was
meant to include all resources owned by an individual, it would state
the “ownership and control of resources is so distributed as best to
subserve the common good”. Similarly, if the provision were to exclude
privately owned resources, it would state “ownership and control of
resources of the state …” instead of its current phrasing. The use
of the word “of the community” rather than “of the state” indicates a
specific intention to include some privately owned resources.
212. In essence, the text of the provision indicates that not all privately
owned resources fall within the ambit of the phrase. However,
privately owned resources are not excluded as a class and some
private resources may be covered. The resource in question must
meet the two qualifiers, i.e. it must be a “material” resource and it
must be “of the community”. Thus, the judgements doubted in the
reference before us are incorrect to the extent that they hold that
“all resources” of an individual are part of the community and thus,
all private property is covered by the phrase “material resources of
the community”.
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b. The interpretation amounts to endorsing a particular economic
ideology
213. To declare that Article 39(b) includes the distribution of all private
resources amounts to endorsing a particular economic ideology
and structure for our economy. Justice Krishna Iyer’s judgment
in Ranganatha Reddy, which was followed inter alia in Sanjeev
Coke and Bhim Singhji, was influenced by a particular school
of economic thought. This is evident from various observations
made in these judgements. For instance, in Ranganatha Reddy,
Justice Krishna Iyer observed that Article 39(b) constitutes “a
directive to the State with a deliberate design to dismantle feudal
and capitalist citadels of property”.146 In Bhim Singhji, Justice
Krishna Iyer cited Karl Marx in his judgment to observe that taking
over large conglomerations of land is necessary to make Article
39 a “constitutional reality”.147 Interestingly, in the same decision,
Justice Krishna Iyer also expressed his view about the nature of the
economy and observed that our economy was “in the transitional
stage … undergoing a fabian transformation”.148 Similarly, in Sanjeev
Coke, Justice Chinappa Reddy states that “the words and thought
of Article 39(b) but echo the familiar language and philosophy of
socials as expounded by all socialist writers”.149 In essence, the
interpretation of Article 39(b) adopted in these judgements is rooted
in a particular economic ideology and the belief that an economic
structure which prioritises the acquisition of private property by the
state is beneficial for the nation.
214. Significantly, both Justice Krishna Iyer (in Ranganatha Reddy and
Bhimsinghji) and Justice Chinappa Reddy (in Sanjeev Coke)
consistently referred to the vision of the framers as the basis to
advance this economic ideology as the guiding principle of the
provision. However, as noted earlier in this judgement, the vision
of the framers while drafting the Constitution was not to lay down

146 Ranganatha Reddy [81].
147 Bhim Singhji [11].
148 Ibid [16A]; Fabianism refers to a British socialist theory which believes in the gradual transition to a
socialist society and rejects the revolutionary doctrines of Marxism. [Lamb, P. (2023, November 28).
Fabianism. Encyclopedia Britannica. https://www.britannica.com/money/Fabianism]
149 Sanjeev Coke [19].
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a particular form of social structure or economic policy for future
governments. The debates in the Constituent Assembly reflect the
foresight of Dr B R Ambedkar. He was categoric in his constitutional
vision. The Constitution and the Directive Principles, as he expounded
their fundamental principles, rejected the prevalence of one dogma.
The Constitution was framed in broad terms to allow succeeding
governments to experiment with and adopt a structure for economic
governance which would subserve the policies for which it owes
accountability to the electorate. 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’. Thus, the role of this Court is not to
lay down economic policy, but to facilitate this intent of the framers
to lay down the foundation for an ‘economic democracy’.
215. Indeed, it is this spirit and its all-encompassing nature of the
Constitution which has allowed elected governments since
independence to pursue economic reforms and policies based
on domestic conditions, international requirements and political
exigencies of the time. At the time of independence in the 1950s and
1960s, given the early challenges of our republic, the focus of the
government was on planning, a mixed economy, heavy industries,
and import substitution policies. Subsequently, in the late 1960s
and 1970s, there was a shift towards purportedly ‘socialist’ reforms
and policies. Since the decade of the 1990s, or the liberalisation
years, there has been a shift towards pursuing a policy of market-
based reforms.150 Today, the Indian economy has transitioned from
the dominance of public investment to the co-existence of public
and private investment.151 The doctrinal error in the Krishna Iyer
approach was, postulating a rigid economic theory, which advocates
for greater state control over private resources, as the exclusive
basis for constitutional governance.

150 Rahul De, A History of Economic Policy in India: Crisis, Coalitions, and Contingency, 2023 (Oxford
University Press).
151 Ministry of Finance (Department of Economic Affairs), Government of India, The Indian Economy: A
Review, January 2024.
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216. India’s economic trajectory indicates that the Constitution and the
custodians of the Constitution – the electorate – have routinely
rejected one economic dogma as being the exclusive repository of
truth. As participants ina vibrant multi-party ‘economic democracy’,
the ‘People of India’ have voted to power governments which have
adopted varied economic and social policies, based on the country’s
evolving development priorities and challenges. The foresighted vision
of our framers to establish an ‘economic democracy’ and trust the
wisdom of the elected government, has been the backbone of the
high-growth rate of India’s economy, making it one of the fastest-
growing economies in the world.152 To scuttle this constitutional vision
by imposing a single economic theory, which views the acquisition of
private property by the state as the ultimate goal, would undermine
the very fabric and principles of our constitutional framework.
c. The interpretation is incompatible with the right to property
217. The right to property was included in the Constitution as a fundamental
right under Articles 19(1)(f) and Article 31. Subsequently, the
right to property was deleted from Part III of the Constitution by
the Constitution (Forty-fourth Amendment) Act, 1978. However, a
modified version was inserted and the right to property continues
to be constitutionally protected under Article 300A.153 Although no
longer in the nature of a fundamental right, the provision has been
characterised as a constitutional and human right.154
218. A two-Judge Bench of this Court in Kolkata Municipal Corporation
& Anr v. Bimal Kumar Shah & Ors,155 speaking through Justice PS
Narasimha, had occasion to discuss the scope and content of Article
300-A and the constitutional vision in relation to private property.
This Court held that merely providing compensation does not justify
compulsory acquisition by the state unless procedural safeguards
are followed. It was observed that a “post-colonial reading” of the

152 Ministry of Finance (Department of Economic Affairs), Government of India, Economic Survey 2023-24,
July 2024.
153 Article 300A of the Constitution: “Persons not to be deprived of property save by authority of law. – No
person shall be deprived of his property save by authority of law.”
154 Chandigarh Housing Board v. Major General Devinder Singh (2007) 9 SCC 6, 2007 INSC 291;
Lachhman Dass v. Jagat Ram (2007) 10 SCC 448; Vidya Devi v. State of Himachal Pradesh (2020) 2
SCC 569 : 2020 INSC 23
155 [2024] 5 SCR 831 : 2024 INSC 435
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constitutional right to property cannot be limited to the twin conditions
of (a) the acquisition being for a public purpose; and (b) payment of
compensation, and must give way to more meaningful renditions.
This Court observed:
“25. While it is true that after the 44th Constitutional
Amendment, the right to property drifted from Part III
to Part XII of the Constitution, there continues to be a
potent safety net against arbitrary acquisitions, hasty
decision-making and unfair redressal mechanisms. […] To
assume that constitutional protection gets constricted
to the mandate of a fair compensation would be a
disingenuous reading of the text and, shall we say,
offensive to the egalitarian spirit of the Constitution.
26. The constitutional discourse on compulsory acquisitions,
has hitherto, rooted itself within the ‘power of eminent
domain’. Even within that articulation, the twin conditions
of the acquisition being for a public purpose and subjecting
the divestiture to the payment of compensation in lieu of
acquisition were mandated. […]
A post-colonial reading of the Constitution cannot
limit itself to these components alone. The binary
reading of the constitutional right to property must
give way to more meaningful renditions, where
the larger right to property is seen as comprising
intersecting sub-rights, each with a distinct character
but interconnected to constitute the whole. These
sub-rights weave themselves into each other, and as
a consequence, State action or the legislation that
results in the deprivation of private property must be
measured against this constitutional net as a whole,
and not just one or many of its strands.”
219. The right to property under Article 300-A, this Court observed, may
be seen as comprising of the following sub-rights which ensure that
the procedure followed is just, fair and reasonable:
“27.[…] i) duty of the State to inform the person that it
intends to acquire his property – the right to notice, ii) the
duty of the State to hear objections to the acquisition – the
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right to be heard, iii) the duty of the State to inform the
person of its decision to acquire – the right to a reasoned
decision, iv) the duty of the State to demonstrate that the
acquisition is for public purpose – the duty to acquire only
for public purpose, v) the duty of the State to restitute and
rehabilitate – the right of restitution or fair compensation,
vi) the duty of the State to conduct the process of
acquisition efficiently and within prescribed timelines of
the proceedings – the right to an efficient and expeditious
process, and vii) final conclusion of the proceedings leading
to vesting – the right of conclusion.”
220. The interpretation of Article 39(b), both as a pre-cursor to the protection
of Article 31C and as an aspirational Directive Principle, cannot run
counter to the constitutional recognition of private property. To hold
that all private property is covered by the phrase “material resources
of the community” and that the ultimate aim is state control of private
resources would be incompatible with the constitutional protection
detailed above.
d. Determining the ‘materiality’ and ‘community element’ of the
resource
221. We have established above that a construction of Article 39(b) which
provides that all private property is included within the ambit of Article
39(b) is incorrect. However, there is no bar on the inclusion of private
property as a class and if a privately owned resource meets the
qualifiers of being a ‘material resource’ and ‘of the community’, it may
fall within the net of the provision. We agree with the formulation of
Mr Zal Andhyarujina, learned senior counsel that “material resources
of the community” refers to either natural resources (which are those
of the nation) or those resources which in a large sense can be said
to be of community, even though they may be in private hands.
222. The materiality of a privately owned resource and whether it has a
community element cannot be determined in a vacuum and must be
identified on a case-by-case basis. The underlying reference orders,
limit our mandate to examining the correctness of the interpretation
in Ranganatha Reddy and Sanjeev Coke, without assessing the
applicability of Article 39(b) to any specific resources or legislation.
We may, therefore, only outline guiding principles to determine
whether a particular privately owned resource falls within the fold
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of the provision. The following factors may be borne in mind while
determining whether the resource constitutes a ‘material resource
of the community’:
a. The nature of the resource and its inherent characteristics;
b. The impact of the resource on the well-being of the community;
c. The scarcity of the resource; and
d. The consequences of such a resource being concentrated in
the hands of private owners.
223. There are various forms of resources, which may be privately owned,
and inherently have a bearing on ecology and/or the well-being of
the community. Such resources fall within the net of Article 39(b).
To illustrate, non-exhaustively, there may exist private ownership of
forests, ponds, fragile areas, wetlands and resource-bearing lands.
Similarly, resources like spectrum, airwaves, natural gas, mines and
minerals, which are scarce and finite, may sometimes be within
private control. However, as the community has a vital interest in
the retention of the character of these resources, they fall within
the ambit of the expression “material resources of the community”.
224. We may refer to the Public Trust Doctrine that has been evolved by
this Court in a consistent line of precedent, to better understand the
‘community’ element of such resources. 156 This doctrine provides
that the State holds all natural resources as a trustee of the public
and must deal with them in a manner consistent with the nature of
the trust. The doctrine was introduced to Indian jurisprudence by
a two-judge bench decision of this Court in M.C. Mehta v. Kamal
Nath157 This Court, speaking through Justice Kuldip Singh, held
that the doctrine is rooted in the principle that certain resources like
“air, sea, waters and forests” hold such importance to the people,
as a whole, that it would be unjustified to make them a subject
of private ownership. This Court held that the doctrine mandates
the Government to protect the resources for the enjoyment of the
general public, rather than to permit their use for commercial gains.

156 M.C. Mehta v. Kamal Nath (1997) 1 SCC 388 : 1996 INSC 1482; M.I. Builders (P) Ltd. v. Radhey Shyam
Sahu (1999) 6 SCC 464 : 1996 INSC 1482; Fomento Resorts and Hotels Ltd. v. Minguel Martins (2009)
3 SCC 571 : 2009 INSC 39; Intellectuals Forum v. State of A.P. (2006) 3 SCC 549 : 2006 INSC 101;
Vedanta Limited v State of Tamil Nadu, 2024 INSC 175
157 [1996] Supp. 10 SCR 12 : (1997) 1 SCC 388 [22-25] : 1996 INSC 1482
[2024] 11 S.C.R. 179

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Significantly, this does not mean that the state cannot distribute
such resources, sometimes even to private entities, rather while
distributing such resources, the state is bound to act in consonance
with the principles of public trust so as to ensure that no action is
taken which is detrimental to public interest.158
225. The Constitution Bench of this Court in Special Reference No. 1,
adverted to above, had occasion to observe that the Public Trust
Doctrine has expanded beyond resources like air, sea, water and
forests, to include other resources such as spectrum which also have
a community or public element. The Constitution Bench of this Court,
relying on Article 39(b), held that no part of such resources can be
dissipated as a matter of largess, charity, donation or endowment,
for private exploitation. The considerations may be in the nature
ofthe state earning revenue or to “best sub-serve the common good”.
The idea, this Court held, is that one set of private citizens cannot
prosper at the cost of another set of private citizens, because such
resources are owned by the community as a whole.
e. The provision may include the ‘vesting’ of private resources
in the state
226. Mr Zal Andhyarujina and Mr Sameer Parekh, learned counsel for the
appellants contend that the wide-net cast by Justice Krishna Iyer in
Ranganatha Reddy and followed in Sanjeev Coke is not the correct
position of the law. However, they both conceded, as we have held
above, that in certain cases, privately owned resources may be
covered by Article 39(b). On the other hand, other counsel such as
Ms Uttara Babbar, learned senior counsel contend that a privately
owned resource can never fall within the ambit of Article 39(b). They
ground this understanding in the requirement of the provision that
the state must secure the “distribution” of the concerned resources,
rather than the phrase “material resources of the community”. They
argue that the mere vesting of a private resource in the state does
not constitute “distribution” and thus, it cannot fall within the net of
Article 39(b). In other words, they urged that the acquisition of privately
owned resources by the state is a prerequisite to the applicability of
Article 39(b) and only the process of distribution which follows the
acquisition is covered by the provision.

158 Centre for Public Interest Litigation v. Union of India (2012) 3 SCC 1 [74-78] : 2012 INSC 68
180 [2024] 11 S.C.R.

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227. We cannot subscribe to such a narrow interpretation of the word
‘distribution’ On the limited question of whether the acquisition of
private resources falls within the ambit of the term ‘distribution’,
we agree with the principles enunciated in previous decisions
of this Court. The term has a wide connotation. The distribution
may be piecemeal or the resource may be kept in the control of a
governmental agency or a regulated private agency, so long as the
benefits percolate through to the people as a common good. As
noted by this Court in In Re Natural Resources, Article 39(b) only
lays down a restriction on the object of the distribution, i.e. that it
must be to subserve the ‘common good’. However, there is no bar
on the mode of distribution.
228. In some cases, the mere vesting of the resource in the hands of
the government serves the ‘common good’, while in other cases, a
resource may be distributed amongst private players to achieve this
purpose. To illustrate, a large privately owned pond may be acquired
and put in control of a governmental agency or a cooperative society
so that the pond is preserved. Similarly, the material resource of
spectrum may be auctioned to the highest bidder who may be a
private company, who would then utilize the spectrum along with
their technology to best subserve the common good. These are
questions of economic and social policy which fall outside the ambit
of judicial inquiry. As noted above, this Court must not tread into
the domain of economic policy, or endorse a particular economic
ideology while undertaking constitutional interpretation. To hold that
the term “distribution” cannot encompass the vesting of a private
resource would amount to falling into the same error as the Justice
Krishna Iyer doctrine, i.e. to lay down a preference of economic and
social policy.
E. Conclusion
229. In a nutshell, the answers arrived at by this Court to the reference
before us may be summarised in the following terms:
a. Article 31C to the extent that it was upheld in Kesavananda
Bharati v Union of India remains in force;
b. The majority judgment in Ranganatha Reddy expressly
distanced itself from the observations made by Justice Krishna
[2024] 11 S.C.R. 181

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Iyer (speaking on behalf of the minority of judges) on the
interpretation of Article 39(b). Thus, a coequal bench of this
Court in Sanjeev Coke erred by relying on the minority opinion;
c. The single-sentence observation in Mafatlal to the effect that
‘material resources of the community’ include privately owned
resources is not part of the ratio decidendi of the judgement.
Thus, it is not binding on this Court;
d. The direct question referred to this bench is whether the phrase
‘material resources of the community’ used in Article 39(b)
includes privately owned resources. Theoretically, the answer
is yes, the phrase may include privately owned resources.
However, this Court is unable to subscribe to the expansive
view adopted in the minority judgement authored by Justice
Krishna Iyer in Ranganatha Reddy and subsequently relied
on by this Court in Sanjeev Coke. Not every resource owned
by an individual can be considered a ‘material resource of the
community’ merely because it meets the qualifier of ‘material
needs’;
e. The inquiry about whether the resource in question falls within
the ambit of Article 39(b) must be context-specific and subject
to a non-exhaustive list of factors such as the nature of the
resource and its characteristics; the impact of the resource on
the well-being of the community; the scarcity of the resource; and
the consequences of such a resource being concentrated in the
hands of private players. The Public Trust Doctrine evolved by
this Court may also help identify resources which fall within the
ambit of the phrase “material resource of the community”; and
f. The term ‘distribution’ has a wide connotation. The various
forms of distribution which can be adopted by the state cannot
be exhaustively detailed. However, it may include the vesting of
the concerned resources in the state or nationalisation. In the
specific case, the Court must determine whether the distribution
‘subserves the common good’.
230. The reference is answered in the above terms. The Registry is
directed to obtain administrative instructions from the Chief Justice
for placing the matters before an appropriate bench.
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Nagarathna, J.
Table of Contents*

1. Preface: ................................................................................... 3
2. Reference of questions to nine-Judge Bench: ....................... 5
3. Re: First issue: ....................................................................... 10
4. The Constitution of India: A living Tree: ............................... 11
5. Re: Second issue: .................................................................. 20
6. Submissions: ......................................................................... 20
7. My view on the aforesaid observations: ............................... 27
8. From 1950 to 1991: Planned economy to Liberalization,
Privatisation and Globalisation (“LPG”): ............................... 31
9. Back to the second issue: ..................................................... 42
10. The situs of elaboration: ........................................................ 56
11. Articles 37, 38 and 39(b) and (c): ........................................... 58
12. Article 37: ................................................................................ 60
13. Article 38: ................................................................................ 64
14. Article 39: ................................................................................ 65
15. Ownership and Control: ........................................................ 69
16. Material resources: ................................................................ 70
17. Of the community: .................................................................. 71
18. So distributed as best to subserve the common good: ....... 88
19. Common good: ...................................................................... 91
20. Ranganatha Reddy: ............................................................... 103
21. Bhim Singhji: .......................................................................... 109
22. Sanjeev Coke: ........................................................................ 111
23. Abu Kavur Bai: ....................................................................... 115
24. Basantibai: ............................................................................. 117
25. Mafatlal: .................................................................................. 123
26. Summary of Conclusion: ....................................................... 125
27. My Views to the Conclusions arrived at by the learned
Chief Justice: ......................................................................... 132

* Ed. Note: Pagination as per the original Judgment.
[2024] 11 S.C.R. 183

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Preface:
One of the greatest American Judges, Justice Benjamin N. Cardozo
in his book “The Nature of Judicial Process, 1932” wrote:
“The great tides and currents which engulf the rest of men
do not turn aside in their course and pass the Judges by.”
1.1 In the field of constitutional law, progressive and dynamic
interpretation of the Constitution in light of socio-economic
developments in the Country must dominate. To such an organic
text as the Constitution of India, a flexible interpretation must
be given which the changing times require. Neither can there
be canonization of the socialist policy followed by the State nor
can the principles akin to laissez faire economics be ignored at
a time when they have been resurrected by the State itself to
suit the developments of the economy in the Country and for
the benefit of the people of India. Chief Justice Earl Warren’s
statement is apposite as a reminder to our judicial conscience:
(Fortune, November 1955)
“Our Judges are not monks or scientists, but
participants in the living stream of our national life,
steering the law between the dangers of rigidity on
the one hand and of formlessness on the other. Our
system faces no theoretical dilemma but a single
continuous problem: how to apply to ever-changing
conditions the never-changing principles of freedom.”
1.2 Can principles of liberalization, privatisation and globalisation
adopted in India since the year 1991, reforms in the economy
and structural changes that have been brought about in these
last three decades hold a mirror against the socio-economic
policies that were followed in the decades immediately after
India attained independence? As a result, can the judgments of
this Court which interpreted the Constitution to be compatible
with the policies of the State then be considered to be “a
disservice to the broad and flexible spirit of the Constitution”
and the authors of the said judgments being critiqued today?
1.3 I have perused the erudite and comprehensive opinion
authored by Hon’ble the Chief Justice of India Dr Dhananjaya
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Y. Chandrachud on the questions referred to this nine-Judge
Bench. I have also perused the opinion proposed by learned
brother Dhulia, J.
The letter and spirit of the judgment of the learned Chief Justice
has ignited me to pen a separate opinion, concurring with his
opinion on certain issues while giving my own views on certain
other aspects which is also my response to learned brother
Dhulia, J.’s views.
1.4 How does ownership and control of “material resources privately
owned” transform into the “material resources of the community”
for distribution as best to subserve the common good? This is
the thrust of my opinion.
Reference of questions to nine-Judge Bench:
2. The genesis of the reference of the questions for consideration could
be traced to the order dated 01.05.1996 passed by a three-Judge
Bench of this Court reported in Property Owners’ Association
vs. State of Maharashtra, (1996) 4 SCC 49 (“Property Owners’
Association”). The said order was followed by an order dated
21.03.2001 passed by a five-Judge Bench of this Court in the very
same case (SLP (C) No.5302 of 1992 with connected matters); which
for immediate reference is extracted as under:
“In these cases the main challenge is to constitutional
validity of Chapter-VIIIA which was inserted in 1986 in the
Maharashtra Housing and Area Development Act, 1976
which, inter alia, provided for the acquisition of certain
properties on payment of hundred times the monthly rent
for the premises. By the said amendment, Section – 1A
was also inserted in that Act and it contains a declaration
that the Act is for giving effect to the policy of the State
towards securing the principles specified in Clause(b) of
Article 39 of the Constitution of India. In view of Article
31C of the Constitution, the contention of the State was
that the validity of any part of the statute on the ground
that it violated Article 14 or 19 of the Constitution, was
not permissible.
The case was heard by a Bench of Three Judges. At that
time on behalf of the appellants a contention was sought
[2024] 11 S.C.R. 185

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

to be raised, inter alia, to the effect that Article 31C did not
survive because of the events subsequent to the decision
in Kesavananda Bharati’s case 1973 (4) SCC 225. It
was also submitted before that Bench that the doctrine
of revival, as it applied to ordinary statutes, did not apply
to the Constitutional Amendment and when a part of the
Forty-second Amendment, which amended Article 31C, had
been held to be invalid it did not result in the automatic
revival of the unamended Article 31C.
In view of the aforesaid contention which was raised, by
order dated 1stMay, 1996 reported in 1996 (4) SCC 49,
the matter was referred to a larger Bench of not less than
five Judges for hearing and deciding these matters.
We heard the counsel at length on various issues which
arise in these cases. One of the points which arises for
consideration relates to the interpretation of Article 39(b)
of the Constitution. In State of Karnataka and Anr. Etc.
vs. Shri Ranganatha Reddy and Anr. Etc. (1978) 1 SCR
641 validity of Karnataka Contract Carriages (Acquisition)
Act, 1976 was challenged and the question which arose
was whether the State Government could acquire and
then transfer counter-signed portions of Inter State permits
to Road Transport Corporation. Two judgments were
delivered in that case. Krishna Iyar, J. for himself and two
other learned Judges, while concurring with the decision
of Untwalia, J. (with whom three other Judges agreed),
interpreted Article 39(b) of the Constitution and then came
to the conclusion that the Act had direct nexus with Article
39(b) and by virtue of Article 31C its validity could not be
challenged on the ground of its being violative of Article
14 or 19(1) (f) of the Constitution. Untwalia, J. in his
judgment observed that “we do not consider it necessary to
express any opinion with reference to Article 31C read with
Clauses (b) and (c) of Article 39 of the Constitution. Our
learned brother Krishna Iyer, J. has prepared a separate
judgment especially dealing with this point. We must not
be understood to agree with all that he has said in his
judgment in this regard”.
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The need to interpret Article 39(b) again arose in the case
of Sanjeev Coke Manufacturing Company vs. Bharat
Coking Coal Ltd. and Anr. (1983) 1 SCR 1000. While
upholding the validity of Coking Coal Mines (Nationalisation)
Act, 1972 and the two other connected enactments the
Constitutional Bench adopted the interpretation of Article
39(b) as enunciated by Krishna Iyer, J. in Ranganatha
Reddy’s case (supra). This interpretation has also been
followed by a Division Bench of this Court in State of
Maharashtra and Anr. vs. Basantibai Mohanlal Khetan
and Ors. (1986) 2 SCC 516.
The interpretation put on Article 39(b) by Krishna Iyer, J. in
Ranganatha Reddy’s case was not specifically assented
to in the majority decision but in Sanjeev Coke’s case
(supra) it is the observations in the judgment of Krishna
Iyer, J. which have been followed.
Having heard the counsel at length, we are of the opinion
that the views expressed in Sanjeev Coke’s case required
reconsideration keeping in view the importance of the point
in issue, namely, the interpretation of Article 39(b) it will
appropriate if these cases are heard by a larger Bench
of not less than Seven Judges.
The papers be laid before the Hon’ble the Chief Justice
for appropriate orders.”
2.1 Later, on 20.02.2002, a seven-Judge Bench passed an order
referring the matter to a larger Bench. That is how these cases
are before this nine-Judge Bench. For ease of reference the
order dated 20.02.2002 is extracted as under:
“A Bench of five learned Judges has referred to
a Bench of seven learned Judges these matters
for the reason that it was of the opinion that the
view expressed in the case of Sanjeev Coke
Manufacturing Company vs. Bharat Coking Coal
Ltd. &Anr. (1983 (1) SCC 147) required consideration.
Put shortly, the question is as to the interpretation of
Article 39(b) of the Constitution which speaks of the
distribution for the public good of the ownership and
[2024] 11 S.C.R. 187

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

control of the material resources of the community. In
State of Karnataka vs. Ranganatha Reddy &Anr.
(1978 (1) SCR 641), two judgments were delivered. In
the judgment delivered by Krishna Iyer, J., speaking
for himself and two other judges, the view was taken
that material resources of the community covered
all resources, natural and man-made, publicly and
privately owned. The other judgment, delivered by
Untwalia, J., on behalf of himself and three other
Judges, did not consider it necessary to express any
opinion with regard to Article 39(b); it was, however,
made clear in this, the majority judgment that the
learned Judges did not subscribe to the view taken
in respect of Article 39(b) by Krishna Iyer, J.
The view taken by Krishna Iyer, J. in the case of
Ranganatha Reddy was affirmed by a Constitution
Bench in the case of Sanjeev Coke (aforementioned).
Now, in the course of the argument before us, the
learned Solicitor General, appearing for the Union of
India and the State of Maharashtra, has drawn our
attention to the judgment of a Bench of nine learned
Judges in the case of Mafatlal Industries Ltd. vs.
Union of India (1997 (5) SCC 536). Speaking for
himself and four other Judges, Jeevan Reddy, J.
said, “That the material resources of the community
are not confined to public resources but include all
resources, natural and man-made, public and private
owned is repeatedly affirmed by this Court.”, and
reference was made to the cases of Ranganatha
Reddy, Sanjeev Coke and State of Tamil Nadu
vs L.Abu Kavur Bai & Ors. (1984 (1) SCC 515).
Having given due consideration, we are of the opinion
that this interpretation of Article 39(b) requires to be
reconsidered by a Bench of nine learned Judges: we
have some difficulty in sharing the broad view that
material resources of the community under Article
39(b) covers what is privately owned. G
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Given that there is some similarity in the issues here
involved and in the case of I.R.Coelho vs. State of
Tamil Nadu (1999 (7) SCC 580) which already stands
referred to a larger Bench, preferably of nine learned
Judges, we are of the view that these matters should be
heard by a Bench of nine learned Judges immediately
following the hearing in the case of I.R.Coelho.
Given the importance of the matter and the fact that
constitutional issues are involved in I.R.Coelho as also
in this case, we direct that parties shall file skeleton
arguments within eight weeks.
The papers shall be placed before the Hon’ble the
Chief Justice for appropriate directions.”
The aforesaid orders of reference provide the canvas in respect
of which the issues have to be considered and answered.
Therefore, the facts narrated by the learned Chief Justice will
not have any relevance to the merits of the dispute vis-à-vis
the provisions of the Act under challenge.
2.2 The learned Chief Justice has framed and considered two
broad issues in his proposed judgment, which are extracted
hereinunder:
“a. 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?
b. 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?”
Re: First issue:
3. I respectfullyconcur with the opinion expressed by the learned
Chief Justice on the first issue. I am in complete accord with the
[2024] 11 S.C.R. 189

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

reasoning that, in the absence of any indication that Parliament
intended a “repeal without substitution,” the original text of Article
31C as it existed before the Constitution (Forty-Second) Amendment
Act, 1976 must be reinstated following the invalidation of the said
amendment. In Minerva Mills Ltd. vs. Union of India, AIR 1980 SC
1789 (“Minerva Mills”),when the amendment was struck down for
deviating from constitutional principles, the logical consequence that
must follow the declaration of invalidity of the amendment is to revert
to those original principles which the amendment deviated from. This
is by giving effect to Article 31C, to the extent it was upheld in H.H.
Kesavananda Bharati Sripadagalvaru vs. State of Kerala, AIR
1973 SC 1461 (“Kesavananda Bharati”).This represents a return
to the Constitution’s original text, aligning with the basic structure of
the Constitution. Consequently, invalidating Section 4 of the Forty-
Second Amendment should automatically result in the restoration of
the unamended Article 31C.
The Constitution of India: A living Tree:
4. Before dealing with the second issue, I would like to preface the
same with the living tree doctrine of our Constitution.
4.1 Emile Durkheim, the French sociologist who formally established
the academic discipline of Sociology and is commonly cited as
one of the principal architects of modern Social Science, likened
society to a living organism. Given that Constitutions are built to
clothe societies with order, it is only logical that they be treated
as living organisms capable of growth and change. It involves
an understanding of the Constitution as an evolving and organic
instrument. For the living tree theorists, it matters little what the
intentions were at the time of Constitution making. What matters
the most is how the Constitution can be interpreted to contain
rights in their broadest realm. The doctrine suggests that the
past plays a critical but non-exclusive role in determining the
contents of the Constitution. Although the rights and freedoms
under a Constitution may be rooted in the past and historically
determined, they cannot be considered to be frozen by particular
historical anomalies.
4.2 As per Woodrow Wilson, former President of the United States
of America, “a Constitution must of necessity be a vehicle of
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life; that its substance is the thought and habit of the nation
and as such it must grow and develop as the life of the nation
changes.”
4.3 In India, the living tree doctrine has been largely inspired from
Canadian jurisprudence. Its origin in the judicial record seems to
be in a 1938 Federal Court judgment where the then Governor-
General of India referred a question to the Court relating to the
constitutionality of the Central Provinces and Berar Sales of
Motor Spirit and Lubricants Taxation Act, 1938. While expanding
upon what canons of interpretation and construction the Court
would use to answer the question, Sir Maurice Gwyer CJ stated
that “a Constitution of government is a living and organic thing,
which of all instruments has the greatest claim to be construed ut
res magis valeat quampereat (in a manner in which it becomes
operative rather than null).”The Court urged that in the case of
federal constitutions, “a broad and liberal spirit should inspire
those whose duty it is to interpret it” but they were not “free
to stretch or pervert the language of the enactment to further
any interest.”
4.4 Subsequently, in the landmark judgment of State of West
Bengal vs. Anwar Ali Sarkar,AIR 1952 SC 75 (“Anwar Ali
Sarkar”), this Court struck down the West Bengal Special
Courts Act, 1950, holding that it violated Article 14 of the
Constitution. Vivian Bose J. in a separate judgment stated that
provisions of the Constitution must not be interpreted “without
regard to the background out of which they arose.”Justice
Bose articulated that the Constitution must be interpreted
progressively to “give life to a great nation and order its
being,”and not in a manner as would relaunch “discarded tools.”
While being conscious that people who forget their history are
condemned to repeat it, he emphasised that a Constitution
must be interpreted having regard not only to the historical
circumstances under which it emerged, but also in a manner
as would “mould the future as well as guide the present.” It
may be apposite to quote a paragraph from Justice Bose’s
erudite judgment, which brings out many elements embodied
in the living tree doctrine:
[2024] 11 S.C.R. 191

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

“I cannot blot out their history and omit from
consideration the brooding spirit of the times. They
are not just dull, lifeless words static and hide-bound
as in some mummified manuscript, but, living flames
intended to give life to a great nation and order its
being, tongues of dynamic fire, potent to mould the
future as well as guide the present. The Constitution
must, in my judgment, be left elastic enough to meet
from time to time the altering conditions of a changing
world with its shifting emphasis and differing needs.”
4.5 Almost two decades later, in Kesavananda Bharati, the Court
utilised the living metaphor to decide upon the amending
powers of the Parliament. The Court held that the Parliament
could amend the Constitution even to abridge fundamental
rights, “as long as the basic structure of the Constitution
is retained.” In reaching this conclusion, the Court referred to
multiple iterations of the understanding of the living constitution.
Therefore, justification for solidifying the constituent power of
the Parliament to ensure flexibility of the Constitution, was found
in the living Constitution metaphor.
4.6 In Supreme Court Advocates-On-Record Association
vs. Union of India,(1993) 4 SCC 441 (“Supreme Court
Advocates-On-Record Association”), this Court applied
this metaphor while discussing the independence of judiciary.
This Court, in addition to calling it an “ever evolving organic
document,” applied the living tree metaphor to the Indian
Constitution as follows:
“The Framers of the Constitution planted in India a
living tree capable of growth and expansion within its
natural limits. It lives and breathes and is capable of
growing to keep pace with the growth of the country
and its people.”
4.7 Further, in Zee Telefilms Ltd. vs. Union of India, AIR 2005
SC 2677 (“Zee Telefilms”), the living Constitution metaphor
was employed in adopting an expansive understanding of the
term “State” as appearing under Article 12 of the Constitution.
It was held that the term “other authorities” was included under
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Article 12 at the time of framing of the Constitution with a limited
objective of granting judicial review of actions of such authorities
which are created under the Statute and which discharge State
functions. The schism between the private and the public had
become obscure with time and the Court must take note of such
changes. Therefore, the Court concluded that the position of
various institutions in the continuum between the private and
the public need to be revaluated having regard to the organic
blurring of margins of the public-private dichotomy. It was laid
down that the Constitution should be interpreted in light of our
whole experience and not merely in that of what was the state
of law at the commencement of the Constitution. That the
Constitution was a “living organism” capable of change, with
changing circumstances.
4.8 In further expansion of fundamental rights, this Court in Justice
K.S. Puttaswamy (Retd.) vs. Union of India, (2017) 10
SCC 1 (“Puttaswamy”), held that privacy was essential to the
exercise of most fundamental rights and hence, must itself be
regarded as a fundamental right. While engaging in such an
expansive interpretation of the constitutional provisions, the
Court described the Constitution as a “living instrument” that
was resilient enough to ensure its continued relevance. The
Court opined that the Constitution is a “sacred living document
susceptible to appropriate interpretation of its provisions based
on changing needs.” This Court referred to a “brooding spirit”
with several qualities which inspired the Constituent Assembly
and was given the corporeal form of the Constitution of India.
4.9 The living tree metaphor is also evident in several other decisions
of this Court, such as, National Legal Services Authority vs.
Union of India, (2014) 5 SCC 438; Joseph Shine vs. Union
of India, (2019) 3 SCC 39; Navtej Johar vs. Union of India,
(2018) 10 SCC 1; Anuj Garg vs. Hotel Association of India,
AIR 2008 SC 63; Secretary, Ministry of Defence vs. Babita
Punia, (2020) 7 SCC 469; Lt. Colonol Nitisha & Others vs.
Union of India, AIR 2021 SC 1797.
4.10 Thus, we see that throughout the years, this Court has applied
the living metaphor in the adjudication of a wide spectrum of
controversies. While toying with different variants of the living
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Constitution metaphor, the Court has consistently emphasised
on two of the principal elements of the living tree doctrine- the
original understanding in the roots of the constitutional tree; and
the possibility of growth and development, within its natural limits.
4.11 Such is the balance between the two contesting theories of
originalism and the living Constitution. Dr. Jack M. Balkin, a
Professor at Yale Law School, contends that the basic idea of
constitutional interpretation is that interpreters must be faithful
to the original meaning of the constitutional text and to the
principles that underlie the text. But, he suggests, fidelity to the
original meaning does not require fidelity to the original expected
application. Therefore, original expected application is merely
evidence of how to apply text and principle. He explains,
“Each generation is charged with the obligation to
flesh out and implement text and principle in their own
time. They do this through building political institutions,
passing legislation, and creating precedents, both
judicial and nonjudicial. Thus, the method of text
and principle is a version of framework originalism
and it views living constitutionalism as a process of
permissible constitutional construction.”
4.12 I find that this idea is most useful in interpreting Directive
Principles of State Policy. Evidently, with great foresight,
theframers of our Constitution did not limit either themselves
or succeeding generations to any one economic school of
thought. In fact, the speeches of Dr. Ambedkar in the Constituent
Assembly evince that while the economic philosophy adopted
by the Government may swiftly pass from one generation to
another, the ideal of economic democracy finds firm place
within our Constitution. There is no strict economic diktat in the
Constitution for the Parliament to follow; however, the Directive
Principles act as the principles or goals that the Parliament
must regard on its path to progress.
4.13 Krishna Iyer, J. adjudicated on the construction of “material
resources of the community” in the backdrop of a constitutional,
economic and social culture that gave primacy to the State
over the individual in a broad-sweeping manner. As a matter
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of fact, the 42nd Amendment had, inter alia, inserted the word
“Socialist” into the Preamble to the Constitution. By abundant
caution, I must observe that “Socialist” is starkly distinguished
from “Socialism”, which is an economic policy of organising
society and the political economy of the country. Regardless,
on a conspectus understanding of all contributing factors such
as the discussions in Constituent Assembly and the tide of the
times that found in the broad house of economic democracy
a legitimate State policy, can we castigate former judges and
allege them with “disservice” only for reaching a particular
interpretive outcome?
Re: Second issue:
Submissions:
5. Learned senior counsel and learned counsel for the intervenors
contended that Article 39(b) read with Article 31C give primacy
to the Directive Principles as opposed to the fundamental rights
guaranteed under Articles 14 and 19. That unless a material
resource is transformed as a “material resource of the community”,
“the ownership and control” of the said material resource cannot be
distributed by the State. That there is a distinction between “material
needs” and “material resources of the community”. An individual’s
resources cannot be a part of the resources of the community. In other
words, merely because an individual is a member of the community,
his resources cannot be construed as resources of the community.
That “material resources of the community” must produce goods and
services for the community or wealth for the community. The opinion
of Krishna Iyer, J. in State of Karnataka vs. Ranganatha Reddy, AIR
1978 SC 215 (“Ranganatha Reddy”) and the judgment in Sanjeev
Coke Manufacturing Co. vs. Bharat Coking Coal Ltd. (1983) 1
SCC 147 : AIR 1983 SC 239 (“Sanjeev Coke”) were entered in the
context of nationalisation and cannot be applied in other contexts.
It was further submitted that Article 39(b) deals with “distribution of
ownership and control of the material resources of the community”. It
does not deal with acquisition of privately owned material resources
for the purpose of subsequent distribution by the State.
5.1 Learned Attorney General, Sri R. Venkataramani, leading
the arguments on behalf of the respondents and intervenors
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submitted that under Article 39 (b) and (c), there cannot be
a narrow reading of the expression “material resources of
the community”. That there cannot be any limitation on the
said expression. Sri Rakesh Dwivedi, learned senior counsel
appearing for the State of West Bengal contended that the
expression “material resources” excludes only resources which
are meant for personal use; otherwise all other resources would
come within the scope and ambit of the aforesaid expression. The
term “community” cannot be equated with State/Government.
It is a term of wider import and encompasses all citizens who
would form a community of individuals. Similarly, the expression
“so distributed as best to subserve the common good” must
be given the widest interpretation. Also, Article 39 (b) and (c)
must be read in the context of Article 38 which Articles are
meant to achieve economic justice. Sri Gopal Sankarnarayan
contended that if “ownership and control of material resources
of the community” excluded private ownership, there would be
no challenge under Article 19 and the protection of Article 31C
then be redundant.
5.2 With regard to the second issue the learned Chief Justice in
paragraph 202 has raised the following two questions after an
elaborate discussion of the relevant judgments on the subject:
a. Do all privately owned resources fall within the ambit of
“material resources of the community”?
b. Is the acquisition of private resources by the State a form
of distribution recognised by Article 39(b)?
5.3 It is observed by the learned Chief Justice that Article 39(b)
is not a source of legislative power and the power to acquire
private resources, in certain situations, continues to be traceable
to other provisions in the Constitution, including the sovereign
power of eminent domain, which is in Entry 42 - List III of the
Seventh Schedule of the Constitution. Further, even if a law is
in furtherance of Article 39(b) and protected by Article 31C, it
is susceptible to a challenge to its constitutionality under other
provisions of the Constitution including Article 300A.
5.4 In the backdrop of the above principles, the question whether
all private properties are covered within the ambit of Article
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39(b) has been considered. There can be no cavil with regard
to the five significant elements emerging from Article 39(b), but
the question considered is, whether, privately owned resources
fall within the ambit of the phrase “material resources of the
community”. In the context of the definition of the said expression,
it is noted that four opinions, namely, of Krishna Iyer, J. in
Ranganatha Reddy; Chinnappa Reddy, J. speaking for the
Bench in Sanjeev Coke; Fazl Ali, J. speaking for the Bench
in State of Tamil Nadu vs. L. Abu Kavur Bai, (1984) 1 SCC
515 (“Abu Kavur Bai”) and Venkataramiah, J. speaking for
the Bench in State of Maharashtra vs. Basantibai Mohanlal
Khetan, (1986) 2 SCC 516 (“Basantibai”) are doubted in the
reference before us. Therefore, the proposed judgment of the
learned Chief Justice considers the meaning of the expression
“material”, “resources” and “community” independently to
conclude that none of the definitions indicate that the phrase
excludes “private property” from the provision. However, a
distinction is sought to be made between the following two
propositions: holding that “private property” may form part of
the phrase “material resources of the community” on the one
hand and that “all private properties” fall within the net of the
phrase on the other hand.
5.5 It is observed by the learned Chief Justice that the opinion by
Krishna Iyer, J. in Ranganatha Reddy and the consequent
observations in Sanjeev Coke by Chinnappa Reddy, J.fell into
erroras the said judgments cast the net wide by holding that
all resources which meet “material needs” are covered by the
phrase. That in Sanjeev Coke, it was observed by this Court
that “all things capable of producing wealth of the community”
fall within the ambit of the phrase. In other words, all resources
of the individuals are consequentially the resources of the
community.
5.6 While interpreting Article 39(b) of the Constitution, it is opined
by the learned Chief Justice that if Article 39(b) was meant to
include all resources owned by an individual, it would state that
the “ownership and control of resources is so distributed as best
to subserve the common good”. Similarly, if the provision were
to exclude privately owned resources, it would state “ownership
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and control of resources of the State ….” instead of its present
phrasing. The use of the word “of the community” rather than
“of the State” indicates a specific intention to include some
privately owned resources. Therefore, it is opined that not all
privately owned resources fall within the ambit of the phrase.
However, privately owned resources are not excluded as a
class and some private resources may be covered. Of course,
they must be a “material” resource and they must be “of the
community”. Therefore, according to the learned Chief Justice
the judgments doubted in the reference order are incorrect to
the extent that they hold that “all resources” of an individual are
part of the community and thus, all private property is covered
by the phrase “material resources of the community”.
5.7 I again have no cavil to the aforesaid discussion but what
follows is the observation of the learned Chief Justice that
the interpretation given by Krishna Iyer, J. in Ranganatha
Reddy and Chinappa Reddy, J. in Sanjeev Coke, endorse a
particular economic ideology and structure for our economy.
That in substance the authors of those judgments namely,
Krishna Iyer,J. in Ranganatha Reddy and Bhim Singhji vs.
Union of India, AIR 1981 SC 234 (“Bhim Singhji”) and
Chinappa Reddy, J. in Sanjeev Coke were influenced by a
particular school of economic thought, which prioritised the
acquisition of private properties by the State being beneficial
for the nation. That these two judges consistently referred to
the vision of the framers of the Constitution as the basis to
advance their economic ideology as the guiding principle of
the provision.
5.8 As opposed to the above, Dr. Ambedkar has been quoted by
the learned Chief Justice to state that economic democracy in
India is not tied to one economic structure, such as Socialism or
Capitalism, but to the aspiration of a welfare state. The learned
Chief Justice further opines “thus, the role of this Court is not
to lay down economic policy, but to facilitate this intent of the
framers to lay down the foundation for an “economic democracy”.
The Krishna Iyer doctrine does a disservice to the broad and
flexible spirit of the Constitution.” This is the finding on the first
question of the second issue.
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My view on the aforesaid observations:
5.9 While considering the metamorphosis of the Indian economy
from the early challenges to the transition towards liberalization
and market-based reforms and from the dominance of public
investment to the co-existence of public and private investment,
it has been observed by the learned Chief Justice that “the
doctrinal error in the Krishna Iyer approach was, postulating a
rigid economic theory, which advocates for greater state control
over private resources, as the exclusive basis for constitutional
governance. … a single economic theory, which views the
acquisition of private property by the state as the ultimate
goal, would undermine the very fabric and principles of our
constitutional framework.”The above comments on Krishna Iyer,
J. are in my opinion unwarranted and unjustified.
5.10 It is a matter of concern as to how the judicial brethren of posterity
view the judgments of the brethren of the past, possibly by losing
sight of the times in which the latter discharged their duties and
the socio-economic policies that were pursued by the State and
formed part of the constitutional culture during those times.
Merely because of the paradigm shift in the economic policies
of the State to globalisation and liberalisation and privatisation,
compendiously called the “Reforms of 1991”,which continue to
do so till date, cannot result in branding the judges of this Court
of the yesteryears “as doing a disservice to the Constitution”.
5.11 At the outset, I may say that such observations emanating
from this Court in subsequent times creates a concavity in the
manner of voicing opinions on judgments of the past and their
authors by holding them doing a disservice to the Constitution
of India and thereby implying that they may not have been true
to their oath of office as a Judge of the Supreme Court of India.
I may say that with passage of decades after the enforcement
of the Constitution and on India becoming a Republic, the
transformative impact of the Constitution has been deep and
pervasive not only on governance in the Country, whether at the
Central, State or local level but its impact on the Indian judiciary
is also a significant aspect of Indian constitutional development.
As a result, the basic features of the Constitution including the
Preamble, Fundamental Rights, Directive Principles of State
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Policy, Separation of Powers, Judicial Review and Independence
of the judiciary have impacted both governance as well as
the judiciary.Bearing in mind the goals of the Constitution as
enumerated in the Directive Principles of State Policy, Parliament
and State Legislatures have made legislation for giving effect
to such goals and since the inception of our Republican State
it is the obligation on the part of this Court to consider the
correctness of such legislation in light of the vision of the framers
of the Constitution as well as the transformative nature of the
Indian Constitution and the intent of the policy makers and the
law. It is in the above background that the Judges of this Court
have been deciding constitutional issues over the decades. Of
course, no particular line of thinking is static and changes are
brought about by the State by bearing in mind the exigencies of
the times and global impact particularly on the Indian economy.
Such attempts to create an environment suitable to the changing
times have to be also appreciated by the judiciary, of course,
by suitably interpreting the Constitution and the laws. But by
there being a paradigm shift in the economy of this Country,
akin to Perestroika in the erstwhile USSR, in my view, neither
the judgments of the previous decades nor the judges who
decided those cases can be said to have done a “disservice
to the Constitution”. The answer lies in the obligation that this
Court, in particular, and the Indian judiciary, in general, has in
meeting the newer challenges of the times by choosing only
that part of the past wisdom which is apposite for the present
without decrying the past judges. I say so, lest the judges
of posterity ought not to follow the same practice. I say that
the institution of the Supreme Court of India is greater than
individual judges, who are only a part of it at different stages
of history of this great Country! Therefore, I do not concur with
the observations of the learned Chief Justice in the proposed
judgment. I say so for the following narration.
From 1950 to 1991: Planned economy to Liberalization,
Privatisation and Globalisation (“LPG”):
6. Much like many countries finding liberation from colonial rule, the
immediate task before independent India was to alleviate its population
out of poverty and systematically organize its economy. To that end,
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India adopted a mixed economy model wherein both public and private
sectors could coexist. Turning to command economies, the Indian
State sought to triumph over inter-regional disparities in resources
and development through economic planning, an approach that
had proven successful in command economies to bring sustained
transformation of resources and implementation of plans in national
interests rather than inefficient allocation of resources.
6.1 Buttressed by the Bombay Plan, proposed by influential
industrialists, the Industrial Policy Resolution of 1948 and the
over-expansive vision of the State shared by nearly every political
party, the early years of the Indian Government had it play a
dominant role in the setting up of heavy enterprises and being
a controller of the economy and resources. Consequently, the
market was not merely strongly regulated but also led by the
public sector manifesting as state interventions and regulations
with the aim of protecting indigenous industries.
6.2 With that in sight, the Planning Commission was set up
in 1950 to oversee the entire range of planning, including
resource allocation, implementation and appraisal of five-
year plans under the leadership of the first Prime Minister
Jawaharlal Nehru. In 1951, deterred by significant loss of
foreign reserves on food import, India’s First five-year plan
focused on agriculture and irrigation to boost farm output.
Some scholars tout this as a success as the economy grew
at 3.6%, instead of the target of 2.1%. Soon thereafter, the
Second Plan, launched in 1956, saw deficit financing as an
acceptable tool for much needed rapid industrialization and
self-reliance focusing on heavy industries and capital goods.
Coupled with the Industrial Policy Resolution 1956, the Second
Plan initiated the development of public sector and ushered in
the licence Raj. The resolution, adopted by the Parliament in
1956, enumerated as a national objective the establishment
of a socialist pattern of society and categorized industries
into three groups:
- Schedule A: Industries which were to be exclusively in the
public sector. These were industries of basic and strategic
importance;
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- Schedule B: Industries that were to be progressively
stateowned and the State would generally set up new
enterprises but in which private enterprise would be
expected only to supplement the state effort; and
- Schedule C: All the remaining industries, and their future
development was, in general, left to the initiative and
development of private sector. Though, it was left open
to the State and the private sector was still subject to the
licence Raj.
This over-expansion State control enabled it to undertake large
scale projects without either reliance on or negotiations with or
even competition from the private sector. The construction of
the Bhakra-Nangal Dam, Hirakund Dam etc. as well as steel
plants in Rourkela, Bhillai and Durgapur were deified by the
State as new “temples of a modern India”.
6.3 However, the substantial peril of curbing the invisible hand of
the economy and enterprising spirit of the private sector was
that the economic policy stuck reserved and restricted India
to the earmarked industries and ignored new technologies,
innovations and domains that, though transforming, were not
in the horizons of bureaucracy. On the other hand, funds were
also substantially reallocated away from agriculture, thereby,
causing food shortages and a spike in inflation. Furthermore,
the State was forced to import foodgrains which depleted foreign
exchange reserves.
6.4 Under the leadership of Prime Minister Lal Bahadur Shastri,
the Indian Government was convinced that in the domain of
agriculture it needed to loosen its tight strings on centralized
planning and price controls and instead focus on technological
development. With India transforming into a food-sufficient and
self-reliant entity after the Green Revolution and introduction
of the Minimum Support Price regime, the role of the Planning
Commission was trimmed.
6.5 In the second half of 1960s, the severe drought of 1965
increased food grain imports and consequently, exacerbated
the balance of payments crisis. To counter the same, on June,
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1966, the Indian Government devalued the Indian rupee by a
sharp 57%, thereby accelerating inflation while it was actually
aimed at boosting exports.
6.6 Monumentally, to expand the sources of credit and monitor
the banking system as per the control of the Government’s
planning and economic policy, the Government nationalized
fourteen private banks on 20th July 1969. It was thought that
the aim of financial inclusion and ready access to credit for
small agriculturalists could be achieved by State control of the
banking system. Agnostic of immediate profit motive and credit-
worthiness, Banks operated and expanded to the “un-banked.”
However, in due course, it has been observed that limited
competition and poor credit assessment severely hampered
the efficiency and health of the banking system.
6.7 Around the 1980s, there had been a rising realization of the
cons of protectionist policies and the merits of a market-led
economy. Therefore, the sixth five-year plan marked the
beginning of economic liberalization in India and outlined a series
of measures aimed at boosting the economy’s competitiveness.
Notable steps included removal of large-scale price controls,
reductions in import duties and the beginning of the end of
licence Raj. A significant deviation from the policy of 1956, a
joint venture between the Government of India and Suzuki – a
Japanese automaker – rolled off the assembly line in 1983, the
first Maruti car. In the following years, large-scale efforts were
undertaken to usher in information technology and telecom
revolutions in the country along with promoting exports and the
utility of foreign investment and capital goods.
6.8 The political economy of the country from 1950s till the late
1980s had made apparent that the underlying political current
and rhetoric of an idyllic but industrial society based on a
socialistic pattern had been failing to deliver on the hopes of a
modern lifestyle and Indians’ entrepreneurial spirit. This is despite
the five technological missions initiated in mid-1980s. It is not
uncertain that the deficit spending of the 80s led by high external
debt, double-digit inflation, short-term debt reaching 147% of
foreign exchange reserves, etc. shine a light on macroeconomic
crisis that India found itself in at the end of the 1980s. In this
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backdrop, amidst a series of negotiations and policy reforms,
Prime Minister P.V. Narasimha Rao spoke to the nation on July
9, 1991 of the impending need to bring in far-reaching changes
and reforms that would bolster the economy and take it to a
modern globalized world. Recounting the difficulties, he said:
“…For the last eighteen months, there has been
paralysis on the economic front. The last two
governments postponed taking vital decisions.
The fiscal position was allowed to deteriorate. The
balance-of-payment crisis became unmanageable.
Non-resident Indians and foreign leaders became
more and more reluctant to lend money to India.
Consequently, India’s external reserves declined
steeply, and we had no foreign exchange to import
even such essential commodities as diesel, kerosene,
edible oil, and fertiliser. The net result was that when
we came to power, we found the financial position of
the country in a terrible mess. …”
6.9 The New Industrial Policy of 1991 put an end to the shackles
that bound the Indian industry into inefficiency and non-
competitiveness. While the opening up of the economy was
gradual, the Monopolies and Restrictive Trade Practices was
diluted allowing market players to scale up without government
approval and automatic approvals for Foreign Direct Investment
(FDI) with majority holding and qualifiable foreign technological
agreements were assured along with many other solutions. One
of the many recognizable inflection points in India is the Budget
Speech of 1991 delivered by India’s then Finance Minister, Dr.
Manmohan Singh, July 24th, 1991, who whilst paraphrasing
Victor Hugo said, “No power on earth can stop an idea whose
time has come.”
6.10 The reforms that were to follow have been colloquially termed
as Liberalisation, Privatisation and Globalisation. In practice, the
country saw the dismantling of licence Raj, some years later an
active disinvestment framework and quite openly, an expression
of willingness to let globalized market forces signal directions
to the economy. Much need not be laboured on this aspect.
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6.11 Having seen India’s potential and political commitment to a
modern market economy, the International Monetary Fund (IMF)
provided assistance leading to macroeconomic stabilization. In
the years since, several policies such as import liberalization,
unrestricted FDI inflows in some sectors, tax exemptions,
promotion of exports, etc. have been adopted which would
have seemed antithetical to the very idea and core of Indian
economy and societal structure to the most earnest well-wishers
of India only some decades ago.
6.12 While the status of health or inequity indicators is not being used
as an aid for constitutional interpretation, I must also note that
the “LPG policy” of 1991 can also be credited for providing the
much needed impetus to the Central and State Governments
for fulfilling several goals set out in the Directive Principles of
State Policy which had been earlier difficult to achieve.
6.13 The golden thread throughout India’s economic history post-
independence has been to focus on a transformative socio-
economic growth of the people of India by way of experimentation
through various plans, projects and pipe dreams. The mid-1980s
was a turning point when the need for innovation, modernisation
and concomitant avenues for development ushered in the
Reforms of 1991 as the country faced shortages in foreign
exchange reserves and foreign debts were mounting and
there was a crisis of balance of payments. There has been no
looking back since then except to usher in various schemes/
programmes for the welfare of the people which earlier had
not really percolated to the deserving and eligible citizens for
reasons which are well known.
6.14 It is in the period between the late 1960s and early 1980s
that this Court gleaned the thrust to economic policies of
the State and sought to provide a judicial imprimatur for the
success of the economic policies. Thus, bank nationalisation,
road transport nationalisation, amendments to Land Reforms
laws, urban land ceiling laws, acquisition of lands, abolition of
land tenures etc. were upheld by this Court while at the same
time tightening the powers of amendment of the Constitution.
This was by the evolution of the basic structure doctrine
which found its strong voice in Kesavananda Bharati and
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perpetrated in Minerva Mills and Waman Rao vs. Union of
India, AIR 1981 SC 271 (“Waman Rao”) in the year 1980
and in subsequent decades.
6.15 One cannot lose sight of the precarious condition India was in
when it gained Independence in the August, 1947 and at the
dawn of the Republic in January, 1950. The provisions of the
Constitution have hence sought to achieve a transformation in
the socio-economic conditions of the people of India given the
situation as it emerged in the colonial period. The transition
of the Indian economy towards privatization and liberalization
is ultimately for the welfare of the people of India. Heavy
capital investment in the public sector in the early decades
after Independence and its failure to yield good results in the
subsequent decades and the move towards disinvestment and
privatization are all experiments in achieving the constitutional
goals which are static but the path to achieve them may vary
with the passage of time.It is in the above backdrop that the
judgments of this Court must be viewed rather than viewing
the Judges who authored the judgments as doing a disservice
to the Constitution of India.
Back to the second issue:
7. The further observations of the learned Chief Justice are that
“however, there is no bar on the inclusion of private property as a
class and if privately owned resource meets the qualifiers of being
a “material resource” and “of the community”, it may fall within
the net of the provision. Thus, Mr. Zal Andhyarujina’s formulation
that “material resources of the community” refers to either natural
resources (which are those of the nation) or those resources which
in a large sense can be said to be of community, even though they
may be in private hands: not be right”.
7.1 In order to determine whether a particular privately owned
resources falls within the fold of Article 39(b), certain factors have
been delineated by the learned Chief Justice so as to constitute
the same as a “material resource of the community”, namely:
(a) nature of the resource and inherent characteristics;
(b) the impact of the resource on the well-being of the
community;
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(c) the scarcity of the resource; and
(d) the consequences of such a resource being concentrated
in the hands of the private owners.
7.2 The fact that the community may have a vital interest in the
character of the resources and their retention in the private
hands would make them fall within the ambit of the expression
“material resources of the community” is the test which has been
innovated. Placing reliance on the Public Trust Doctrine, it is
observed by the learned Chief Justice that the doctrine mandates
the government to protect the resources for the enjoyment of the
general public, such as, forests, mineral bearing lands etc. rather
than to permit their use for commercial gains. Significantly, this
does not mean that the State cannot distribute such resources,
sometimes even to private entities, rather while distributing
such resources, the state is bound to act in consonance with
the principles of public trust so as to ensure that no action is
taken which is detrimental to public interest (vide Centre for
Public Interest Litigation vs. Union of India, (2012) 3 SCC 1,
paras 74-78 (“Centre for Public Interest Litigation”)) are the
observations of the learned Chief Justice.
7.3 Reliance is placed by the learned Chief Justice on In Re:
Natural Resources Allocation, Special Reference No.1 of
2012 (“Natural Resources Allocation”), reported in (2012) 10
SCC 1, wherein it was observed that the Public Trust Doctrine
has expanded beyond resources like air, sea, water and forests,
to include other resources such as spectrum which also have
a community or public element. That no part of such resources
can be dissipated as a matter of largess, charity, donation or
endowment, for private exploitation.That one set of private
citizens cannot prosper at the cost of another set of private
citizens, because such resources are owned by the community
as a whole.
7.4 On the aspect of “vesting” private resources in the State,
adverting to the arguments of Mr. Zal Andhyarujina and Mr.
Sameer Parekh, as well as Ms. Uttara Babbar, learned senior
counsel, it is opined by the learned Chief Justice that their
argument that the acquisition of the privately owned resource
is a prerequisite to the applicability of Article 39(b) and only the
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

process of distribution which follows the acquisition is covered by
the provision, is a narrow interpretation of the word “distribution”.
Referring to Natural Resources Allocation, it is observed that
Article 39(b) only lays down a restriction on the object of the
distribution, i.e., it must be to subserve the “common good”.
However, there is no bar on the mode of distribution. That
this Court must not tread into the domain of economic policy,
or endorse a particular economic ideology while undertaking
constitutional interpretation. To hold that the term “distribution”
cannot encompass the vesting of a private resource would
amount to falling into the same error as the Krishna Iyer, J.’s
doctrine, i.e. to lay down a preference of economic and social
policy. Ultimately, in paragraph 229, following conclusions have
been deduced by the learned Chief Justice:
“229. In a nutshell, the answers arrived at by this
Court to the reference before us may be summarised
in the following terms:
a. Article 31C to the extent that it was upheld
in Kesavananda Bharati v. Union of India
remains in force.
b. The majority judgment in Ranganatha Reddy
expressly distanced itself from the observations
made by Justice Krishna Iyer (speaking
on behalf of the minority of judges) on the
interpretation of Article 39(b). Thus, a coequal
bench of this Court in Sanjeev Coke violated
judicial discipline and erred by relying on the
minority opinion.
c. The single-sentence observation in Mafatlal
to the effect that material resources of the
community’ include privately owned resources is
not part of the ratio decidendi of the judgment.
Thus, it is not binding on this Court.
d. The direct question referred to this bench is
whether the phrase ‘material resources of
the community’ used in Article 39(b) includes
privately owned resources. Theoretically, the
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answer is yes, the phrase may include privately
owned resources. However, this Court is unable
to subscribe to the expansive view adopted in the
minority judgment authored by Justice Krishna
Iyer in Ranganatha Reddy and subsequently
relied on by this Court in Sanjeev Coke. Not
every resource owned by an individual can
be considered a ‘material resource of the
community’ merely because it meets the qualifier
of ‘material needs’.
e. The inquiry about whether the resource in
question falls within the ambit of Article 39(b)
must be context-specific and subject to a non-
exhaustive list of factors such as the nature
of the resource and its characteristics; the
impact of the resource on the well-being of the
community; the scarcity of the resource; and
the consequences of such a resource being
concentrated in the hands of private players.
The Public Trust Doctrine evolved by this Court
may also help identity resources which fall within
the ambit of the phrase “material resource of
the community”.
f. The term ‘distribution’ has a wide connotation.
The various forms of distribution which can be
adopted by the state cannot be exhaustively
detailed. However, it may include the vesting
of the concerned resources in the state
or nationalisation. In the specific case, the
Court must determine whether the distribution
‘subserves the common good’.”
7.5 My opinion relates to the conclusion in sub-paras(d), (e) and
(f) of the above conclusions, while I am in complete agreement
with sub-para (a) and I have certain observations to make on
the judgments of this Court in Ranganatha Reddy, Sanjeev
Coke, Abu Kavur Bai and Basantibai on the merits of the
said decision.
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Property Owners Association & Ors. v.
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(i) In sub-para (d) while holding that theoretically the phrase
“material resources of the community” may include privately
owned resources, it is also opined that not every resource
owned by an individual can be considered a “material
resource of the community” merely because it meets the
qualifier of “material needs”.
(ii) In sub-para (e), while considering the question whether a
resource falls within the ambit of Article 39(b), the factors
to be considered have been delineated.
(iii) In sub-para (f), it is observed that vesting of the concerned
resources in the state or nationalisation is covered within
the connotation of the term “distribution” which has a wide
connotation and can take various forms.
7.6 My immediate answer to the aforesaid conclusions is that
“material resources” can, in the first instance be divided into
two basic categories, namely: (i) state owned resources and,
(ii) privatelyowned resources. There can be no contra-opinion
to the fact that all state-owned resources, i.e., resources
which belong to the State, are essentially “material resources
of the community” which are held in public trust by the State.
The State can also distribute the same in accordance with its
socio-economic policy and in accordance with law aligned to
the object of Article 39(b) of the Constitution. However, with
regard to the “material resources” which belong to the private
owners, how do such resources get qualified as “material
resources of the community”? In my view, the inquiry does not
merely relate to only the resource and its characteristics; the
impact of the resource on the well-being of the community;
the scarcity of the resource; and the consequences of such a
resource being concentrated in the hands of private players.
In my view, these are not the only factors which have to
be thought of while considering whether a privately owned
material resource is a material resource of the community
or not. In my view, a privately owned material resource can
be transformed and can indeed acquire a status of “material
resource of the community”. What are the material resources
owned by private persons which can be material resources of
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the community? They would not include what can be termed
as “personal effects” of an individual such as movables in the
form of an individual’s apparel, household articles of daily use
such as furniture, personal jewellery, kitchenware and such other
articles. These are articles which are of daily need and use as
submitted by learned senior counsel Sri Rakesh Dwivedi. They
are resources no doubt but not “material” resources within the
meaning of Article 39(b). However, there could be other types of
resources privately owned, such as immovable property, which
could become “material resources”. The expression “of the
community” would in my view include all those privately owned
“material resources” which have the potential to be transformed
as “material resources of the community” excluding personal
effects. According to Black’s Law Dictionary, Ninth Edition, the
expression “personal effects” is defined to mean items of a
personal character. In P. Ramanatha Aiyar’s Advanced Law
Lexicon, Volume 3, 6th Edition, “personal effects” has been
defined to mean things required for satisfying daily necessities
but does not include jewellery. This would generally mean such
tangible property as is worn or carried about the person, or the
designate articles associated with the person, as property having
more or less intimate relation to person of possessor or such
tangible property as attends the person vide H.H. Maharaja
Rana Hemant Singhji vs. CIT, (1976) 1 SCC 996, 999, para 12.
7.7 Thus, to constitute an article as part of “personal effects”, it is
necessary that the article must be associated with the person of
the possessor, must more or less have intimate relation with the
possessor. Thus, any privately owned “material resources”could
be transformed as “material resource of the community”. How
would this happen? Essentially by four different modes, namely,
(i) by nationalisation; (ii) by acquisition;(iii) by vesting of the said
resource in the state, by operation of law under specific statutes
and (iv) by the owner of a materialresource converting such a
resource into a “material resource of the community” by way
of donation or a gift, a creation of a charitable endowment, a
grant or a dedication so that the said material resource is useful
for the community and used or distributed as to subserve the
common good. I shall discuss this aspect later.
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Property Owners Association & Ors. v.
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7.8 Further, the term “distribution” no doubt has a wide connotation
but, in my view, it is only “material resource of the community”
which can be a subject matter of distribution under Article 39(b)
which excludes “personal effects”. In other words, material
resources under the ownership and control of private persons
cannot per se be distributed by the State unless the said
resources are first transformed as “material resources of the
community”. In my view, public/State owned resources are per
se“material resources of the community” and as rightly observed
by the learned Chief Justice, the Public Trust doctrine applies
to such resources. Secondly, such “material resources of the
community” can be distributed as best to subserve the common
good. It is only when the aforesaid twin conditions are satisfied
that the goal or object of Article 39(b) would be achieved.
7.9 In other words, unless and until private ownership and control
of the material resources are transformed or converted into
the “material resources of the community” which is a condition
precedent, there cannot be distribution of the said resources
by the State. It is only when privately owned material resources
are transformed as “material resources of the community” that
the State acquires the right to distribute them to subserve the
common good. Otherwise, the State would merely transfer
privately owned material resource from one owner say, “A” to
another person,say “B” without first making it a “material resource
of the community” which, in my view, is not the intent of the
framers of the Constitution and neither is the same envisaged
under Article 39(b).
7.10 Further, the expression “distribution”need not per se stop with
mere vesting of the privately owned material resources in the
State on nationalisation of the said resources. It could be when
the said resources are further distributed for the common good
that the object and purpose of Article 39(b) would be achieved.
In certain situations, however, depending upon the nature of the
resource and its characteristics or the scarcity of the resource
or the particular policy to be achieved may persuade the State
tonot actually distribute the said resourceamongst the citizens but
to retain it with the State and utilise the same for the common
good, i.e., in public interest. In such an event, the State would
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retain such privatelyowned resources with itself, either by
nationalisation or through acquisition or by way of vesting of
the said resource in the state by operation of law. Therefore,
distribution may not in all cases be“actual distribution”,i.e.,
by making over the “material resource of the community” to
the citizens. But mere vesting of private resource in the State
without anything more would not constitute “distribution”in all
cases unless the policy of the State determines whether such
resources have to remain under the ownership and control of
the State. Till then the State must hold the same in public trust
for the common good. I shall elaborate on the above aspects.
8. The perspective articulated in the proposed judgment of the learned
Chief Justice rests upon certain key deductions, which are culled
out hereinunder:
i. That, the framers of the Constitution did not want to impose
a rigid socio-economic order under which all private property
could vest with the State and any legislation to convert private
ownership to public ownership would fall within the ambit of
Article 39(b).
ii. That, the text of Article 39(b) reveals the following five distinct
elements, each of which must be satisfied for any legislation
to fall within the purview of this provision and be regarded as
advancing the ideal enshrined thereunder:
a. Provision relates to “ownership” and “control”;
b. “Ownership” and “control” is over “material resources”;
c. The material resources which the provision covers are
those which are “of the community”;
d. The policy of the State must be directed to secure
the “distribution” of the ownership and control of such
resources;
e. The purpose of the distribution must be to “best subserve
the common good”.
iii. That, the interpretation of Article 39(b) which brings all private
property under the umbrella of the phrase “material resources
of the community” satisfies only one of the essential elements—
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Property Owners Association & Ors. v.
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namely, that the goods in question constitute a “resource.” This
approach overlooks the critical qualifiers that these resources
must be both “material” and “of the community.”
iv. The language of the provision suggests that not all privately
owned resources fall within the scope of the phrase “material
resources of the community.” However, private resources are
not categorically excluded, and certain privately owned assets
may indeed be encompassed. To fall within this ambit, the
resource must satisfy two essential qualifiers: it must be both
a “material” resource and “of the community.” Consequently,
the judgments questioned before this nine-Judge Bench are
flawed insofar as they assert that “all resources” owned by
individuals are inherently part of the community and thus include
all private property within the scope of “material resources of
the community.”
v. The determination of whether a particular resource falls within
the ambit of Article 39(b) must be assessed in a context-specific
manner, guided by a non-exhaustive set of considerations. These
include the nature and characteristics of the resource, its impact
on the welfare of the community, its scarcity, and the ramifications
of such a resource being concentrated in the hands of private
entities. Furthermore, the Public Trust Doctrine, as developed
by this Court, may also be instructive and guide in identifying
resources that qualify as “material resources of the community.”
vi. The term “distribution” carries a broad and expansive meaning.
The various methods of distribution that the State may adopt
cannot be exhaustively enumerated, but they may include the
vesting of the relevant resources in the State, acquisition of the
resource, or nationalization.
The situs of elaboration:
9. I find myself in agreement with the judgment proposed by the learned
Chief Justice insofar as the observation that not all privately owned
resources fall within the ambit of the phrase “material resources
of the community” is concerned. I also concur with the proposed
judgment as regards the identification of the five elements of Article
39(b). However, I must elaborate on the proposed judgment, on the
legal distinction between how a private resource qualifies as one “of
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the community” and how such a resource is subsequently distributed
to subserve the common good. It is on this crucial point that I have
penned my separate opinion.
9.1 In my considered opinion, a fundamental prerequisite for the
distribution of a resource in a manner that serves the common
good is to first bring that resource within the collective domain
of the community, thereby rendering it a “material resource of
the community”.
9.2 While a public resource owned and/or controlled by the State is
inherently part of the community’s collective domain, a private
resource which is a material resource may be brought within
this pool through various mechanisms, including acquisition,
nationalization, or by operation of law. The act of distributing
a private material resource, however, cannot proceed in
isolation from such preliminary steps to first incorporate such
private material resource into the community’s pool. Thus,
acquisition, nationalization, and vesting by operation of law are
instances of actions that bring a private material resource into
the community’s collective domain, rather than being termed
as methods of distributing such resources. It is this crucial
distinction that need elaboration.
9.3 In my opinion, I propose to discuss in detail the reasons as to
why this material distinction assumes significance in the context
of the instant reference and in light of the relevant Articles of
the Constitution.
Articles 37, 38 and 39(b) and (c):
10. Articles 37, 38 and 39(b) &(c) of the Constitution read as under:-
“37. Application of the principles contained in this
Part.—The provisions contained in this Part shall not be
enforceable by any court, but the principles therein laid
down are nevertheless fundamental in the governance of
the country and it shall be the duty of the State to apply
these principles in making laws.
38. State to secure a social order for the promotion
of welfare of the people.—(1) The State shall strive
to promote the welfare of the people by securing and
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State of Maharashtra & Ors.

protecting as effectively as it may a social order in which
justice, social, economic and political, shall inform all the
institutions of the national life.
(2) The State shall, in particular, strive to minimise
the inequalities in income, and endeavour to eliminate
inequalities in status, facilities and opportunities, not only
amongst individuals but also amongst groups of people
residing in different areas or engaged in different vocations.
39. Certain principles of policy to be followed by the
State.—The State shall, in particular, direct its policy
towards securing—
xxx
(b) that the ownership and control of the material resources
of the community are so distributed as best to subserve
the common good;
(c) that the operation of the economic system does
not result in the concentration of wealth and means of
production to the common detriment;”
Before proceeding further, it would be useful to extract the reply to
the debate on the provisions of Directive Principles in general given
by Dr. Ambedkar as under:
“It is no use giving a fixed, rigid form to something which
is not rigid, which is fundamentally changing and must,
having regard to the circumstances and the times, keep
on changing. It is, therefore, no use saying that the
directive principles have no value. In my judgement, the
directive principles have a great value, for they lay down
that our ideal is economic democracy. Because we did
not want merely a parliamentary form of government to
be instituted through the various mechanisms provided
in the Constitution, without any direction as to what our
economic ideal or as to what our social order ought to
be, we deliberately included the directive principles in our
Constitution. I think if the friends who are agitated over
this question bear in mind what I have said just now that
our object in framing this Constitution is really twofold: (i)
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to lay down the form of political democracy, and (ii) to lay
down that our ideal is economic democracy and also to
prescribe that every government whoever it is in power,
shall strive to bring about economic democracy, much of
the misunderstanding under which most members are
labouring will disappear. (Constitutional Assembly Debates,
Volume VII)”
(Source: “Constitutional Law of India” by Dr. Subhash C.
Kashyap)
Article 37:
10.1 Article 37 states that the provisions contained in Part-IV of the
Constitution (Directive Principles of State Policy) shall not be
enforceable by any Court, but the principles therein laid down
are nevertheless fundamental in the governance of the Country
and it shall be the duty of the State to apply these principles
in making laws. Although Prof. K.T. Shah, a member of the
Constituent Assembly, sought for the Directive Principles being
enforceable and proposed devising a suitable mechanism for
that purpose,the said suggestion was turned down and the draft
Article 29 was added as Article 37 of the Constitution.
10.2 In State of West Bengal vs. Subodh Gopal Bose, AIR 1954 SC
92 (“Subodh Gopal Bose”), this Court held that the Directive
Principles of State Policy are not justiciable or enforceable by
any Court; nevertheless, there is a duty cast on the courts to
interpret the Constitution and the laws in furtherance of the
Directive Principles as under Article 37 it has been stated that
they are fundamental in the governance of the Country. Thus,
it was held that there can be no law which can be in conflict
with the Directive Principles of State Policy,although, the Articles
in Part-IV by themselves cannot be enforced per se in a court
of law.
10.3 It is well-known that the Directive Principles of State Policy
have been borrowed from the Irish Constitution. Article 45
of the Irish Constitution provides that the application of the
Principles of Social Policy shall not be cognizable by any Court,
that the said principles are intended for the general guidance
of the Irish National Parliament. Further the application of the
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

social policy in making of laws shall be the care of the Irish
National Parliament exclusively. Similarly, Article 37 of the
Constitution of India states that the Directive Principles shall not
be enforceable by any Court but they are fundamental in the
governance of this Country and it shall be the duty of the State
to apply the Directive Principles in making laws. Also, there is
a metamorphosis of this provision vide Minerva Mills decided
by this Court by interpreting the same as per the intention of
the framers of the Constitution.
10.4 Moreover, as between fundamental rights and Directive
Principles of State Policy, it is a settled position of law that
the fundamental rights are enforceable whereas the Directive
Principles are to be considered while interpreting Part-III of the
Constitution and they are not per se enforceable. The Directive
Principles are primarily aimed at securing social and economic
freedoms by appropriate State action. They are the social
conscience of the Constitution; they are the goals and aims
sought for achieving a welfare State in India. However, while
considering a challenge to a violation of fundamental rights the
Directive Principles could be considered and it is only when, to
achieve the goals or the aims sought to be promoted through
the Directive Principles,if there is a violation of the fundamental
rights inasmuch as there is a violation of Articles 14, 15 or 16,
that the means of achieving the goals could be struck down.
Thus, fundamental rights ought to be interpreted in light of
the Directive Principles and the latter should, whenever and
wherever possible, be read into the former. It is also said that
fundamental rights and Directive Principles are supplementary
and complementary to each other and the provisions in Part- III
should be interpreted having regard in such a way to the
Preamble and the Directive Principles of the State Policy in
Part-IV. It is said that fundamental rights and Directive Principles
of the State Policy are the two-wheels of the chariot and are
an aid to make social and economic democracy a truism vide
Jilubhai vs. State of Gujarat, AIR 1995 SC 142 (“Jilubhai”).
What is of significance is that the court must give a proper and
meaningful interpretation to the Directive Principles so as to
harmonize them with the objectives enshrined in the Preamble of
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the Constitution, namely, Justice – political, social and economic
with individual rights in the context of Part-III and Part-IV of the
Constitution respectively, vide Mafatlal.
10.5 While in the initial years of the enforcement of the Constitution,
fundamental rights were given primacy, however, there has
been a clear shift in the judicial thinking in considering Directive
Principles being fundamental to the governance of the Country
by courts when laws are challenged on the keystone of there
being an apparent violation of the fundamental rights.
Article 38:
10.6 The thrust of Article 38 is to promote the welfare of the people
by the State by securing and protecting as effectively as it may,
a social order in which social, economic and political justice shall
inform all the institutions of national life. This Article positions
the Indian state as being beyond than what is meant for the
maintenance of law and order. The Indian State being a welfare
State must pursue social, economic and political justice which
must inform all institutions of the national life. While clause
(1) of Article 38 is general in nature, clause (2) inserted by
Section 9 of the Constitution (Forty-fourth Amendment) Act,
1978 w.e.f. from 20.06.1979 is illustrative of the content of the
ideal in clause (1) of Article 38. Clause (2) of Article 38 states
that States shall, in particular,strive to minimise the inequality
in income and endeavour to eliminate the inequality in status,
facilities and opportunities, not only among individuals but also
among groups of people, residing in different areas or engaged
in different vocations. Article 38 envisions social justice for
enhancing human dignity in an egalitarian, social, economic
and political democracy. The said Article essentially speaks of
the social and economic revolution which is an example of the
Constitution of India’s transformative vision. The State takes
the responsibility in bringing abouta welfare State, a just“social
order” where“justice - social, economic and political” prevails and
where there is equity, equality and non-discrimination by bringing
about“equality of status and of opportunity”, as enumerated in
the Preamble of the Constitution. Thus, Article 38 is a keystone
for the implementation of the Directive Principles.
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Property Owners Association & Ors. v.
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Article 39:
11. Article 39 (b) and (c) are relevant for the purpose of this reference.
In the draft Constitution, Article 39 was Article 31 which was debated
upon by the Constituent Assembly and the draft Article 31 was
renumbered as Article 39 of the Constitution. In Waman Rao, it was
observed by the Court speaking through learned Y.V. Chandrachud,
C.J.that the clauses of Article 39 contain Directive Principles which
are vital to the well-being of the Country and the welfare of its people.
Article 39 (b) and (c) which are relevant for the purposes of this case,
say that the State shall direct its policy towards securing that the
ownership and control of the material resources of the community
are so distributed as best to subserve the common good; that the
operation of the economic system does not result in the concentration
of wealth and means of the production to the common detriment. In
Article 39(b), the most significant expression is “distribution”. That
the material resources of the community have to be so distributed
as best to subserve the common good. The task of distribution of
the material resources of the community is the responsibility of the
State. The distribution must be of the material resources of the
community in order to best subserve the common good. What is
the subject matter of distribution is the ownership and control of the
material resources of the community.
11.1 The main objective of Article 39(b) and (c) of the Constitution
is the building of a welfare State with a social order which
is egalitarian so as to bring about a non-violent social
transformation in the Country. That is why Article 37 of the
Constitution states that while the provisions contained in Part
IV (Directive Principles of State Policy) though not enforceable
by any court, the principles therein laid down are nevertheless
fundamental in the governance of the Country and it shall be
the duty of the State to apply these principles in making laws.
11.2 The Directive Principles of State Policy including Articles 39(b)
and (c) though not justiciable but inclined towards social and
economic justice have a goal of the Constitution as enshrined
in the Preamble to be achieved by way of making laws and
implementing them. Thus, the Directive Principles of State
Policy including Articles 39(b) and (c) have to be implemented
through legislation and administrative action in order to carry
out the policy laid down in the legislation.
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11.3 In Kesavananda Bharati, it was observed that there is no
disharmony between the Directive Principles of State Policy
and the fundamental rights, because they supplement each
other in aiming at the same goal of bringing about a social
revolution and the establishment of a welfare State, which
is envisaged in the Preamble so as to make social and
economic democracy a truism in the Country. The Directive
Principles are the core of the Constitutional goals and they
are complementary to each other and sometimes reference
is made to them as the “conscience of the Constitution”.
11.4 The objectives of the Directives are to remove inequality in
the society and to attempt to achieve a fair division of wealth
among the members of the society in order to achieve a just and
equal society. In a way, a law made to ensure implementation
of the Directive Principles is in order to achieve distributive
justice in a welfare State.This goal is enshrined in Article 38
of the Constitution which states that the State shall strive to
promote the welfare of the people by securing and protecting,
as effectively as it may, the social order in which justice -
social, economic and political – shall, inform all institutions
of national life.
11.5 Article 39 (b) states that the State shall, in particular, direct
its policy towards securing – the ownership and control of the
material resources of the community are so distributed as best
to subserve the common good. This Directive Principle has
to be read in the context of Article 39(c) which states that the
State shall, in particular, direct its policy towards securing that
the operation of the economic system does not result in the
concentration of wealth and means of the production to the
common detriment. Therefore, the Indian State must ensure
that the ownership and control of the material resources of
the community are so distributed to subserve the common
good with the object of eliminating concentration of wealth
and means of production in the hands of a few. What is of
significance in Article 39(b) are the following expressions
which shall be discussed:
(i) ownership and control;
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(ii) material resources;
(iii) of the community;
(iv) so distributed; and
(v) as best to subserve the common good.
Ownership and Control:
11.6 While analysing the above, it can be observed that the
expression “ownership and control” is expansively used and
must be given a wide connotation even as the expression
“ownership and control” sometimes may overlap vis-à-vis a
material resource. For instance, a person may have ownership
and control over a material resource, or he may have ownership
but not control over it; while at the other times, a person has
control over a material resource but not ownership over it.
Hence, the intent of the Constitution makers is to give as wide
a connotation as possible in the context of both ownership
and control of material resources.
Material resources:
11.7 As far as “material resources” are concerned, the expression
would not only include tangible but also intangible resources;
natural or physical resources as well as man-made resources
and movable as well as immovable property. Also, the
discussion on what would not constitute “material resources”
in the context of personal effects of individual as discussed in
paragraph 7.6 above is relevant to this discussion. Further, in
my view, the phrase“material resources” cannot be restricted
by the expression “of the community” insofar as understanding
the meaning of the expression is concerned inasmuch as it
would include all private material resources and under the
ownership and/or control of the private persons. For example,
a material resource may be under the ownership of a private
person but controlled by the State. Correspondingly, a resource
may belong to the State but could be controlled by a private
person for instance when a privilege is conferred by the
State to such a private person to control the said resource.
Typically, an example is in the context of mining of minerals,
when a private person may be the owner of a mine but the
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State or its entity may take the same under its control by
way of a lease under provisions of the Mines and Minerals
(Development and Regulation) Act, 1957 enacted in terms
of Entry 52 - List I of the Constitution. Similarly, a mine or
mineral bearing land may belong to the State which could be
made over to a private person by way of a lease wherein the
control of the mines is temporarily handed over to the lessee
for exploitation of the mineral resources, subject to terms
and conditions of the lease.Therefore, in all such cases, the
expression “material resources” would include both public
as well as private resources, i.e., those which are under the
ownership and control of the State or any public body as well
as ownership and control of a private person.
Of the community:
11.8 Thus, material resources would include both public as well
as private resources which belong to private persons. But
what could be distributed is only “material resources of the
community”, and not material resources which are privately
owned. This would mean that material resources of the
private persons cannot per se be distributed by the State
under Article 39(b) unless it becomes “material resources
of the community”.
11.9 In other words, even if, apart from public resources,
private material resources are also to be distributed under
clause (b) of Article 39 of the Constitution,they must first
become “resources of the community”. This is because it
is only material resources “of the community” which can
be distributed which would mean exclusion of distribution
of private resources per se by the State. This implies that
if private resources have to be distributed under clause (b)
of Article 39, the private resources must first become the
“resources of the community”. How do material resources
which are privately owned become “material resources of
the community”? The answer to this question lies in the legal
devices that are adopted by the State to transform private
material resources into the “resources of the community”.
This could be, inter alia, in the following five ways which are
illustrative and not exhaustive in nature:
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

(i) by nationalisation;
(ii) by acquisition;
(iii) by operation of law, such as vesting of private resources
in the State;
(iv) by purchase of the material resource from private
persons; and
(v) by the owner of the material resource converting it as
a material resource of the community by donation, gift,
creation of an endowment or a public trust, etc.
11.10 What is the common denominator in the methods adopted
by the State for converting private material resources into
“material resources of the community”? In all these three
devices, at (i), (ii) and (iii) above,what is of significance is that
when, by a process of nationalisation, acquisition or vesting of
private resources in the State occurs there are certain legal
processes which take place: the first process is to convert
the private resources into resources of the community by
vesting in the State, and the second process is to utilise
these community resources for the purpose of distribution for
the common good. Distribution could be in two ways: firstly,
by actual distribution to the deserving and eligible persons
as per the policy to be implemented. Secondly, the State
could retain ownership and/or control having regard to the
nature of the resources and other relevant factors. The third
process is that the private owners of these resources are fairly
compensated when they lose all rights, title and possession
over such material resources when it becomes a material
resource of the community”.
11.11 Thus, when private persons are so deprived of ownership as
well as the control of the material resources which belong to
them or are controlled by them, they must be compensated
justly and fairly. Otherwise, the conversation of private material
resources into “resources of the community” would be contrary
to Article 300A of the Constitution which states that no person
shall be deprived of his property save by authority of law. In
other words, a person can be deprived of his property by the
State only by authority of law.
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12. I shall discuss the various modes by which privately owned material
resources can be transformed as resources of the community which
I have adverted into in paragraph 11.9.
12.1 How does nationalisation of certain private resources occur?
It could be by way of an enactment of a statute by either the
Parliament or a State Legislature.This is by way of a legislation.
An instance of this is in Ranganatha Reddy wherein privately
owned carriages and buses were taken over by the State of
Karnataka through nationalization by way of an enactment. The
nationalized resources could be utilized as best to subserve
the common good either by the State through its department
or through a corporation, or entity created by the State
Government, such as a Government Company, or a Corporation
or a Society etc. An example is in the case of Rustom Cavasjee
Cooper vs. Union of India, AIR 1970 SC 564 (“RC Cooper”)
where fourteen private banks were nationalized and the said
banks are functioning as nationalized banks.
12.2 Insofar as the acquisition of private material resources is
concerned, it could be by way of a special Statute made for
achieving the particular purposes of acquisition, having regard
to the nature of such resources and such other factors. In the
alternative, acquisition could take place under the prevailing
or extant laws pertaining to acquisition such as the erstwhile
Land Acquisition Act, 1894 (“LA Act, 1894”) which has now
been repealed and substituted by Right to Fair Compensation
and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013 (“2013 Act”). Acquisition could also
be under the respective State laws dealing with acquisition
of land or other immovable property. But acquisition should
be for a public purpose as defined under the laws.
12.3 Mahajan, J. (as the learned Chief Justice then was) speaking
for a Constitution Bench of this Court in State of Bihar vs.
Kameshwar Singh, AIR 1952 SC 252 (“Kameshwar Singh”),
has observed:
“The phrase “public purpose” has to be construed
according to the spirit of the times in which particular
legislation is enacted.
xxx
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

The legislature is the best judge of what is good
for the community, by whose suffrage it comes into
existence....”
A wider approach necessarily means that a comprehensive
signification has to be given to the expression “public purpose”.
12.4 That the law must also keep pace with the realities of the
social and political evolution of the country as reflected in
the Constitution. Therefore, anything that would promote the
welfare of the people as envisaged in the Directive Principles
of State Policy has to be regarded as “public purpose”.
Therefore, what was earlier known as economic justice has
been crystallised as Directive Principles of State Policy.
Hence, the nexus between “public purpose” and Part IV of
the Constitution is relevant.
12.5 If public purpose is established under an enactment, then
how that public purpose would be carried into the provisions
is a matter which is left to the wisdom of the Parliament and
State Legislatures. Whether it would be through nationalisation,
acquisition or it should resort to pay the market price and buy
in the open market any privately owned material resource for
transforming it into a “material resource of the community”
for the purpose of distribution so as to best subserve the
community, is a matter which is within the realm and wisdom
of the State.
12.6 The acquisition could be for the purpose of the State utilizing
the said land or other immovable property for public purpose
in order to subserve the common good or the acquired land
could be allotted to deserving and eligible persons in the form
of house-sites or houses being constructed by the State. This
is an instance of private resources (land or other immovable
property) becoming a property of the community and then being
distributed to subserve the common good. However, acquisition
of land has to be in terms of the rigour that is prescribed
under the provisions of the LA Act, 1894 (now repealed) or in
accordance with the 2013 Act, which is in force, such as the
time frames which have been prescribed for the issuance of
preliminary and final notifications (declaration) under Sections 4
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and 6 of the 1894 Act and hearing of objections under Section
5A of the said Act; holding an enquiry and passing of an award
in terms of Sections 11 and 11A and taking of possession
after making of the award, in which case the land shall vest
absolutely in the Government free from all encumbrances; the
computation of the payment of compensation and the payment
of interest etc. to the land losers. Under the LA Act, 1894, there
could not be acquisition of any land unless it was for a public
purpose. Section 3(f) defined a “public purpose” as under:
“Section 3. In this Act, unless there is something
repugnant in the subject or context,
x xx
(f) the expression public purpose includes-
(i) the provision of village-sites, or the extension,
planned development or improvement of existing
village-sites;
(ii) the provision of land for town or rural planning;
(iii) the provision of land for planned development
of land from public funds in pursuance of any
scheme or policy of Government and subsequent
disposal thereof in whole or in part by lease,
assignment or outright sale with the object of
securing further development as planned;
(iv) the provision of land for a corporation owned
or controlled by the State;
(v) the provision of land for residential purposes
to the poor or landless or to persons residing
in areas affected by natural calamities, or to
persons displaced or affected by reason of the
implementation of any scheme undertaken by
Government, any local authority or a corporation
owned or controlled by the State;
(vi) the provision of land for carrying out any
educational, housing, health or slum clearance
scheme sponsored by Government or by
[2024] 11 S.C.R. 227

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

any authority established by Government for
carrying out any such scheme, or, with the prior
approval of the appropriate Government, by a
local authority, or a society registered under
the Societies Registration Act, 1860 (21 of
1860), or under any corresponding law for the
time being in force in a State, or a co-operative
society within the meaning of any law relating
to co-operative societies for the time being in
force in any State;
(vii) the provision of land for any other scheme
of development sponsored by Government,
or, with the prior approval of the appropriate
Government, by a local authority;
(viii) the provision of any premises or building for
locating a public office,
but does not include acquisition of land for companies.”
A reading of the said definition would clearly indicate as to for
what public purpose immovable property could be acquired.
It is only when the acquisition was for a public purpose could
it be said that the acquisition, though made under the LA Act,
1894, was within the scope and ambit of the said Act. Also,
certain States have their own definitions of “public purpose”
which is not necessary to discuss.
12.7 Further, under the 2013 Act, the acquisition of land as per
Sections 11 and 19 of the said Act and the hearing of the
objections under Section 15 and the holding of an enquiry
under Section 23 and the period within which an award shall
be made under Section 25 and matters to be considered in
determining compensation as per Section 27; the power to
take possession under Section 38 and other provisions, ensure
that the acquisition of land is in accordance with what has
been envisaged therein. Moreover, Section 2 of the 2013 Act
categorically states that when the appropriate Government
acquires land for its own use, hold and control, including for
Public Sector Undertakings and for public purpose, it shall
include the following purposes, namely:—
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“2. Application of Act.–(1) The provisions of this
Act relating to land acquisition, compensation,
rehabilitation and resettlement, shall apply, when the
appropriate Government acquires land for its own
use, hold and control, including for Public Sector
Undertakings and for public purpose, and shall include
the following purposes, namely:—
(a) for strategic purposes relating to naval, military,
air force, and armed forces of the Union,
including central paramilitary forces or any work
vital to national security or defence of India or
State police, safety of the people; or
(b) for infrastructure projects, which includes the
following, namely:—
(i) all activities or items listed in the notification
of the Government of India in the Department
of Economic Affairs (Infrastructure Section)
number 13/6/2009-INF, dated the 27th
March, 2012, excluding private hospitals,
private educational institutions and private
hotels;
(ii) projects involving agro-processing, supply
of inputs to agriculture, warehousing, cold
storage facilities, marketing infrastructure
for agriculture and allied activities such
as dairy, fisheries, and meat processing,
set up or owned by the appropriate
Government or by a farmers’ cooperative
or by an institution set up under a statute;
(iii) project for industrial corridors or mining
activities, national investment and
manufacturing zones, as designated in
the National Manufacturing Policy;
(iv) project for water harvesting and water
conservation structures, sanitation;
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

(v) project for Government administered,
Government aided educational and
research schemes or institutions;
(vi) project for sports, health care, tourism,
transportation or space programme;
(vii) any infrastructure facility as may be notified
in this regard by the Central Government
and after tabling of such notification in
Parliament;
(c) project for project affected families;
(d) project for housing, for such income groups,
as may be specified from time to time by the
appropriate Government;
(e) project for planned development or the
improvement of village sites or any site in the
urban areas or provision of land for residential
purposes for the weaker sections in rural and
urban areas;
(f) project for residential purposes to the poor or
landless or to persons residing in areas affected
by natural calamities, or to persons displaced
or affected by reason of the implementation of
any scheme undertaken by the Government,
any local authority or a corporation owned or
controlled by the State.
(2) The provisions of this Act relating to land
acquisition, consent, compensation, rehabilitation and
resettlement, shall also apply, when the appropriate
Government acquires land for the following purposes,
namely: —
(a) for public private partnership projects, where
the ownership of the land continues to vest with
the Government, for public purpose as defined
in sub-section (1);
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(b) for private companies for public purpose, as
defined in sub-section (1): Provided that in the
case of acquisition for—
(i) private companies, the prior consent of
at least eighty per cent, of those affected
families, as defined in sub-clauses (i) and
(v) of clause (c) of section 3; and
(ii) public private partnership projects, the prior
consent of at least seventy per cent. of
those affected families, as defined in sub-
clauses (i) and (v) of clause (c) of section
3, shall be obtained through a process
as may be prescribed by the appropriate
Government:
Provided further that the process of
obtaining the consent shall be carried out
along with the Social Impact Assessment
study referred to in section 4:
Provided also that no land shall be
transferred by way of acquisition, in the
Scheduled Areas in contravention of any
law (including any order or judgment of a
court which has become final) relating to
land transfer, prevailing in such Scheduled
Areas.
(3) The provisions relating to rehabilitation and
resettlement under this Act shall apply in the cases
where,—
(a) a private company purchases land, equal to or
more than such limits in rural areas or urban
areas, as may be prescribed by the appropriate
Government, through private negotiations with
the owner of the land in accordance with the
provisions of section 46;
(b) a private company requests the appropriate
Government for acquisition of a part of an area
so prescribed for a public purpose:
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

Provided that where a private company requests
the appropriate Government for partial acquisition
of land for public purpose, then, the rehabilitation
and resettlement entitlements under the Second
Schedule shall be applicable for the entire area
which includes the land purchased by the private
company and acquired by the Government for the
project as a whole.”
12.8 Similarly, there are State enactments which allow acquisition
of land from private owners for the purpose of distribution to
eligible persons in order to best subserve the common good.
The acquisition process of privately owned land or other
immovable property ensures that it ultimately vests with the
appropriate Government and transforms the material resource
privately owned as material resource of the community. As
already noted, such land or other immovable property can
be utilized by the State and its authorities, agencies and
instrumentalities so as to best subserve the common good.
Alternatively, the State could distribute the said land to eligible
persons having regard to the nature of the public purpose for
which such land is acquired under the respective Acquisition
Act or any other enactment which provides for acquisition
of land, such as, Town Planning Act or City Development
Authority Act etc.
12.9 However, the public purpose envisaged under the respective
Acts must be to achieve a common good. Therefore, the public
purpose for which acquisition of immovable property is made
must be clearly established in accordance with the provisions
of the respective enactments. Any special statute for acquisition
of private immovable property must be for a public purpose
which is ultimately for achieving a common good.
12.10 Another mode of acquisition of privately owned material
resources such as land or other immovable property for the
purpose of utilizing the same as best to subserve the common
good is by vesting of the same in the State. How does such
privately owned land vest in the State? It could be under an
enactment, such as the Land Reforms Acts of the respective
States, the Urban Land Ceiling Act (since repealed), the Inams
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Abolition Act, Village Offices Abolition Act, Land Tenures and
Ceiling Acts under which lands privately owned or granted by
the erstwhile rulers to certain persons and therefore, in the
possession and control of private persons, on the abolition
of such ownership and control over such lands by the State
enactments, referred to above would vest with the State by
operation of law. For instance, if on the appointed date the
land is in possession and cultivation of tenants, then such
lands covered by the respective tenancies would become
vested in the State and thus be the land of the community
i.e. “material resource of the community” on their vesting in
the State. The State can thereafter grant occupancy rights
of such lands to the tenants or other deserving persons in
accordance with law i.e. by the tenants proving their tenancy
on the appointed date before the Land Reforms Tribunal or as
envisaged in the respective enactments. The mechanism is
for a tenant to seek registration of occupancy rights on proof
of tenancy which is a manner of distribution of the vested land
in the State which gets transformed as material resource of
the community on their vesting in the State.
12.11 Such material resources could also be bought by the State
by paying a valuable consideration instead of acquisition as
in the case of immovable property.
12.12 Another mode is when a private owner of immovable or other
property transforms his ownership and control of material
resources as “material resource of the community” by way
of creation of an endowment or a grant or a donation or gift
made to the State so that the said material resource converted
as a community resource is used by the people at large or
by the State depending upon the exigency of each case and
the policy of the State. Earlier private lakes, pastures/grazing
lands, forest lands, etc., were endowed for public use and
therefore would be transformed as “material resource of the
community”.
12.13 What is significant in all these instances is the fact that private
resources are not straightaway “distributed” or handed over
to other private persons by the State. Private resources
first become the “resources of the community” through the
[2024] 11 S.C.R. 233

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

methods adopted by the State either through nationalisation,
acquisition or vesting of such resources in the State and
once they become resources vested in the State they get
transformed as “material resources of the community”.
Therefore, the expression “material resources” though
including private resources must ultimately get transformed
as “material resources of the community”. “Material resources
of the community” means the community at large would be
entitled to claim a benefit of said resources when they are so
distributed by the State or retained by the State for a public
purpose. In other words, material resources privately owned
or controlled by the private persons cannot straightaway be
construed to be“material resources of the community”.
12.14 The expression “of the community” must be given its true
meaning. This is because it is only material resources of the
community which can be distributed by the State and not
privately owned material resources.
So distributed as best to subserve the common good:
13. The next limb of clause (b) of Article 39 is “distribution” of “material
resources of the community”“as best to subserve the common good”.
Therefore, distribution must be in order to subserve the “common
good” and not solely for private good. This would imply that firstly,
what is to be distributed is “material resources of the community”
and not material resources of the private persons, per se, and
secondly, the distribution must subserve the common good, which
means that it is for the benefit of the public at large. Thus“common
good” cannot be equated to private good which means distributed
to other private persons and not being distributed to the public at
large, unless distribution to other private persons is for the purpose
of the common good and with a public purpose.
13.1 Thus the expression “distribution” as “best to subserve the
common good” would not always envisage allocation or
assignment or transfer to deserving or eligible persons. For
instance, on nationalisation of banks, the Central Government
exercises control over the banks as nationalized banks.
Additionally, for instance, on nationalization of buses , they
could be utilized for the benefit of the general public through
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a State owned department or through a Corporation or entity
created by the State, such as a Government company, a
corporation, a society etc. Similarly, land acquired for a
public purpose could be used by the State for serving the
common good while retaining ownership and control over
it and using it for the benefit of the general public which is
also a public purpose. Alternatively, by allocation of said land
or other immovable property in the form of house sites etc.
being allotted, assigned, transferred, conveyed to eligible and
deserving persons distribution of ownership and control of
material resources of the community to subserve the common
good is achieved.
13.2 As far as the lands or other immovable property which vest
with the State by virtue of operation of law are concerned,
the persons who are entitled to grant of occupancy rights
may make an application under the relevant laws in respect
of the vested land as erstwhile tenants and seek registration
of occupancy rights for the purpose of cultivation on certain
terms and conditions. When in respect of any piece of land,
occupancy rights cannot be granted to an applicant, in such
an event the land which stood vested in the State would
become the State owned land and the same could be utilized
for the purpose of making grants, assignments, allotments or
conveyance to deserving and eligible persons.
13.3 Further, when private owners of material resources make an
endowment, a gift or a donation to the State, their ownership
and control over such resources would vest with the State
and the State could utilize such material resources as best to
subserve the common good. This is the essence of distribution.
Common good:
13.4 What is “common good”? It would mean that while distributing
the material resources of the community there must be
an object which is achieved,such that there would be no
concentration of wealth and means of production in the hands
of a few which is also a Directive Principle in clause (c) of
Article 39. For instance, if a mining lease is to be assigned
to any person who is eligible to take such a lease it must be
[2024] 11 S.C.R. 235

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

done in accordance with law such as by an auctionand giving
due publicity so that it is not with a view to unjustly enrich a
person, as this would be contrary to the notion of common
good. Therefore, there cannot be a transfer of private resources
being in the ownership and control of a private person to
another set of private persons only by excluding the public
at large. In other words, the State cannot act as an agent for
distribution of privately owned material resources by taking
ownership and control of the same and handing it over to
other private persons selectively. That is not distribution for
subserving the common good.
On the other hand, there could also be an instance where
only a particular person/entity would be entitled to claim
distribution of a material resource of the community having
regard to the object and purpose for which the same is to be
distributed which would be for the common good. This is in
the context of privatisation of the “material resources of the
community” which is a recent phenomenon particularly on
the initiation of reforms in the Indian economy since the year
1991. However, private persons/entities who are eligible to
have the ownership and/or control of the material resources
of the community would do so only if it is to subserve the
common good. Therefore, while acting under clause (b), the
Directive under clause (c) must also be borne in mind by the
State inasmuch as the distribution of material resources of
the community must be to subserve the common good and
not result in concentration of wealth and means of production
to the common detriment. In other words, where the object
is to subserve the common good, there would automatically
be provisions excluded which induce concentration of wealth
and means of production to the common detriment.
13.5 Reference may be made to a recent decision of a three-Judge
Bench of this Court in Coal India Ltd. vs. CCI, (2023) 10
SCC 345, (“Coal India Ltd.”) (of which I was a Member).In
the said case, it was mainly contended that the coal mines
operated by the appellants therein pursuant to the provisions
of the Coal Mines (Nationalisation) Act, 1973 would be wholly
outside the purview of the Competition Act, 2002. This was
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for the reason that the very purpose and policy underlying
the Nationalisation Act was to monopolise the operation of
the coal mines and coal mining in the hands of the Central
Government and its agencies such as the appellant therein.
It was contended that it was a monopoly created by the
Nationalisation Act and was accorded protection of Article
31B of the Constitution by inserting the said Act in the Ninth
Schedule and it was not an ordinary monopoly. This was for the
reason that the State has been charged with the duty to bear
in mind the principles of “common good” being secured by the
“distribution of scarce resources”. It was submitted in the said
case that coal, being a mineral of the highest importance in
the economic life of the nation, its equitable distribution so as
to secure the common good, which is the Directive contained
in Article 39(b), led to the creation of a statutorily mandated
monopoly through the Nationalisation Act. Therefore, it could
be wholly inconceivable that the Competition Act would still
be applicable to the appellant therein.
Holding that the Competition Act applied to the appellant
therein and all public sector companies except where the
sovereign function of the government may be involved, this
Court observed in paragraph 100 as under:
“100. The expression “common good” in Article 39(b)
in a Benthamite sense involves achieving the highest
good of the maximum number of people. The meaning
of the words “common good” may depend upon the
times, the felt necessities, the direction that the Nation
wishes to take in the future, the socio-economic
condition of the different classes, the legal and
fundamental rights and also the Directive Principles
themselves. As far as the time dictated content of
common good goes, it simply means that “economics”
itself not being bound in chains, but it is a dynamic
concept. The attainment of common good would be
dependent on the appreciation and understanding of
a generation as to how economic common good is
best achieved. The debate between the advantages
and disadvantages of pursuing the policy of State
[2024] 11 S.C.R. 237

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

intervention in economic policy which emasculates
private enterprise and competition has almost reached
its end. The advantages of a fearlessly competitive
economy have been realised by the Nation. There is
a backdrop to it. In the year 1991, the Nation was in a
manner of speaking compelled to revisit its economic
policy having regard to the precarious condition of
its foreign exchange reserves. The permit raj, which
involved acute regulation of economic activity by the
State with all its attendant evils, cried out for reforms.
A slew of highly liberal reforms in 1991 set the stage
for the Nation to make a paradigm shift. As discussed
in the Raghavan Committee Report, things moved
further in the direction of attaining faster economic
growth. The Act is a measure which is intended to
achieve the same. The role which was envisaged
for the public sector company could not permit them
to outlive their utility or abuse their unique position.
Disinvestment done in a proper manner was perceived
as a solution. However, sans disinvestment, State
monopolies, public sector companies and government
companies were expected to imbibe the new economic
philosophy. The novel idea, which permeates the Act,
would stand frustrated, in fact, if State monopolies,
government companies and public sector units are left
free to contravene the Act. Now that the Nation was
more than 50 years’ old after it became a Republic and
it no longer was the infant it was, Parliament which
best knows the needs of its people, felt that the time
was ripe for ushering in the wholesome idea of fair
competition. Can it be said that free competition as
envisaged under the Act which involves avoidance
of anti-competitive agreements, abuse of dominant
position and regulation of combinations are against
the common good? As to how common good is best
served is best understood by the representatives of
the people in the democratic form of Government.
We must bear in mind the wholesome principle that
when Parliament enacts laws, it is deemed to be
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aware of all the existing laws. Properly construed
and operated fairly, the “Act” would, in other words,
harmonise with common good, being its goal as well.”
Further, this Court in paragraphs 118 to 122, observed as under:
“118. The appellants rely upon the judgment of this
Court in State of T.N. v. L. Abu Kavur Bai, (1984)
1 SCC 515 for the proposition that the scheme of
monopoly or nationalisation subserves public good.
In the said case, the Court was dealing with a case
of nationalisation of transport services. There can
be no quarrel with the proposition that the purpose
of the Nationalisation Act was indeed to subserve
the common good as held in Tara Prasad Singh
v. Union of India, (1980) 4 SCC 179. The purpose
of the vesting under the Nationalisation Act was to
distribute the resource to subserve the common good.
119. We may, in fact, notice the concern of the
Court in Tara Prasad Singh about coal being not
inexhaustible and the need for a wise and planned
conservation of the resources being expressed in
para 39. No doubt, all this was at the time when
the Nation was confronted with the condition of
the mines being what it was as brought out in the
Statement of Objects.
120. We agree with the appellants and as held by this
Court in State of Karnataka v. Ranganatha Reddy,
(1977) 4 SCC 471 that “distribution” is a word of wide
meaning and it is covered by Article 39(b) of the
Constitution. It must be remembered that the Court
had occasion to hold so by way of dealing with the
argument that nationalisation did not have a nexus
with the word “distribution”.
121. The judgment of this Court in Waman Rao v.
Union of India, (1981) 2 SCC 362 holds that laws
passed to give effect to Articles 39(b) and 39(c) could
not be found violative of Article 14. There cannot
be any quarrel. We are, in this case, called upon
[2024] 11 S.C.R. 239

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

to deal with the case based on the actions taken
by the appellant, which is a government company
based on its powers under the Nationalisation Act,
being challenged on the anvil of a later law made
by Parliament, the validity of which, relevantly is not
under challenge.
122. Distribution of coal is intended to subserve
common good holds this Court in Samatha v. State
of A.P., (1997) 8 SCC 191. The content of common
good is itself not a static concept. It may take its hue
from the context and the times in which the matter
falls for consideration by the Court. If Parliament has
intended that State monopolies even if it be in the
matter of distribution must come under the anvil of
the new economic regime, it cannot be found flawed
by the Court on the ground that subjecting the State
monopoly would detract from the common good which
the earlier Nationalisation Act when it was enacted,
undoubtedly, succeeded in subserving. We see no
reason to hold that a State monopoly being run
through the medium of a government company, even
for attaining the goals in the Directive Principles, will
go outside the purview of the Act.”
Ultimately, in paragraph 130, it was opined by this Court that
there was no merit in the contention of the appellants therein
that the Competition Act would not apply to them for the reason
that they were governed by the Nationalisation Act.
13.6 Thus, under Article 39(b), there could be policies made by
the State towards securing the ownership and control over
material resources of the community so as to distribute as
best to subserve the common good. However, as discussed
above this need not be only by way of a legislation, it could
also be by acting under the extant legislations which would
envisage a policy having the letter and spirit of Article 39(b).
In case there is any enactment made in the context of Article
39(b), in such an event, the same cannot be assailed on the
touchstone of Articles 14 or 19, in view of Article 31C of the
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Constitution. In my view, this bar under Article 31C, inter alia,
is in order to achieve the salutary object of clause (c) of Article
39 which envisages that the operation of the economic system
does not result in the concentration of wealth as means of
production to the common detriment. Thus, clause (b) of the
said Article is a means to achieve an end in clause (c). Thus,
both clauses (b) and (c) of Article 39 being complementary and
supplementary to each other have been clearly envisaged in
Article 31C of the Constitution and therefore any policy which
is in the form of an enactment or a law or any action taken to
further the goals of Article 39(b) and (c) cannot be assailed
on the basis of grounds available under Articles 14 and 19.
Thus, Article 31C provides that no such law giving effect to the
policy of the State towards securing the principles specified
in clauses (b) and (c) of Article 39 shall be deemed to be
void on the ground that it is inconsistent with or takes away
or abridges any of the rights conferred by Articles 14 and 19.
13.7 In Ranganatha Reddy, while upholding the legislation for
nationalisation of contract carriages by the Karnataka State,
it was observed by this Court speaking through Untwalia, J.
that “to distribute” means “to allot, to divide into classes or into
groups and “distribution” embraces arrangement, classification,
placement, disposition, apportionment, the way in which
items, a quantity or the like is divided or apportioned; the
system of dispersing goods throughout a community”. Thus,
nationalisation of transport is a distributive process for the
good of the community where the State or its instrumentalities
would take upon themselves to conduct the economic activity
on nationalisation.
13.8 In Sanjeev Coke, a five-Judge Bench of this Court speaking
through Chinnappa Reddy, J.held that the word “distribute”
in Article 39(b) “is used in a wider sense so as to take in all
manner and method of distribution such as distribution between
regions, distribution between industries, distribution between
classes and distribution between public, private and joint
sectors. The distribution envisaged by Article 39(b) necessarily
takes within its stride the transformation of wealth from private-
ownership into public-ownership and is not confined to that
which is already public owned”
[2024] 11 S.C.R. 241

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

13.9 Similarly, in Madhusudan Singh vs. Union of India, (1984)
2 SCC 381 (“Madhusudan Singh”) while upholding land
reforms measures, this Court observed (in para 22) that
the surplus agricultural lands from the landlords could be
distributed amongst the poor suffering landless tillers of the
soil who were at the mercy of the rich landlords or zamindars.
Such land reforms legislations, therefore, were for securing
and giving effect to objects of Article 39(b) clearly intending
to distribute the material resources of the community, viz.,
the agricultural lands, to a large number of tillers of the soil
in order to serve the common good of the aforesaid people
on such land vesting in the State by operation of law under
various legislations.
13.10 In Natural Resources Allocation, auction was considered
to be a manner of distribution of material resources of the
community. This Court observed that the distribution of the
“material resources of the community” must be for the “common
good” which should be the sole guiding factor under Article 39(b)
and the touchstone of testing whether any policy subserves
the “common good”. As regards the means adopted, it should
also be in accordance with law and the principles enshrined
in Article 39(b). The Court also observed that there may be
various methods of distribution of material resources of the
community including natural resources and it depends upon
the wisdom of the executive as to how it would deal in such
matters. In the said judgment, this Court concluded as under:
● Maximization of revenue cannot be the sole permissible
consideration, for disposal of all natural resources, across
all sectors and in all circumstances, therefore disposal
of all natural resources through auctions is clearly not
a constitutional mandate.
● Reading auction as a constitutional mandate would be
impermissible because such an approach may distort
another constitutional principle embodied in article 39(b).
● Out of the two concepts namely, “public trust doctrine”
and “trusteeship” referred in 2G case public trust may
be accepted as public trust mandates a high degree of
judicial scrutiny.
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● A judicial scrutiny of methods of disposal of natural
resources should depend on the facts and circumstances
of each case, in consonance with the principles of equality
and common good. Failing which, the court, in exercise
of power of judicial review.
● While distributing natural resources the state is bound
to act in consonance with the principles of equality and
public trust and ensure that no action is taken which
may be detrimental to public interest.
● The state action including distribution of natural
resources has to be fair, reasonable, non-discriminatory,
transparent, non-capricious, unbiased, without favouritism
or nepotism, in pursuit of promotion of healthy competition
and equitable treatment. It should conform to the norms,
which are rational, informed with reasons and guided by
public interest, etc. and this is the mandate of article 14
of the Constitution of India.
While any policy or law which envisages that the goals
in Article 39(b) or (c) cannot be called in question in a
Court of law on the touchstone of Articles 14 and 19,
nevertheless the implementation of the said policy in a
discriminatory or arbitrary manner could attract Article 14
or the equality clause. Discrimination and arbitrariness
being antithetical to the essence of Article 14, the action
of distribution which is essentially an administrative action
could be challenged before a Constitutional Law on the
basis of the relevant principles applicable in exercise of
judicial review of such administrative action.”
13.11 While any policy or law may envisage that the goals in Article
39(b) or (c) cannot be called in question in a Court of law
on the touchstone of Articles 14 and 19, nevertheless the
implementation of the said policy in a discriminatory or arbitrary
manner could attract Article 14 or the equality clause. Thus,
while the wisdom or correctness of a policy or legislation in
furtherance of the goals and objects of Article 39 (b) and (c)
cannot be questioned vide Article 31C of the Constitution,
it does not bar the questioning of the implementation of the
[2024] 11 S.C.R. 243

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

policy before a court of law. Discrimination and arbitrariness
being antithetical to the essence of Article 14, the governmental
action of distribution which is essentially an administrative
action could be challenged before a Constitutional Court on
the basis of relevant principles applicable in exercise of judicial
review of such administrative action.
I shall now discuss the opinions in the four judgments which
are doubted in the reference order.
Ranganatha Reddy:
14. A seven-Judge Constitution Bench of this Court considered the
correctness of the Karnataka Contract Carriages (Acquisition) Act,
1976 (Karnataka Act No.21 of 1976)(“Karnataka Act”)by which all
private contract carriages in the private ownership of persons were
sought to be nationalised by acquisition of the vehicles. The High
Court had allowed all the writ petitions, struck down the Act as
unconstitutional and declared it null and void. There was a direction
to restore the vehicles with the relative permits and all other assets to
the operators from whom they were taken over. Some consequential
directives for determination of damages in some later proceedings
were also issued.
14.1 The State of Karnataka had filed the appeals before this
Court. One of the contentions raised on behalf of the owners
of the contract carriages was that the acquisition was not for
a public purpose and that the compensation provided was
wholly illusory and arbitrary. The second contention was that
Article 31C does not bar the challenge to the Act as being
violative of Article 31(2) of the Constitution as there is no
reasonable and substantial nexus between the purpose of the
acquisition and securing the principles specified in clauses
(b) and (c) of Article 39. Considering the issue of public
purpose, the majority held that it is beyond the pale of any
controversy now, particularly after the decision of this Court
in Kesavananda Bharati that any law providing for acquisition
of property must be for a public purpose andwhether the law
of acquisition is for public purpose or not is a justiciable issue.
The intention of the legislature has to be gathered mainly
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from the Statement of Objects and Reasons of the Act and
its Preamble and various provisions of the Act, its context
and set up, and the purpose of acquisition has to be culled
out to ascertain whether it is for a public purpose within the
meaning of Article 31(2) of the Constitution.
14.2 Considering the provisions of the Karnataka Act, it was
observed that in substance, the acquisition of the contract
carriages was for nationalisation of the contract transport
service in the State of Karnataka which was for a public
purpose. On the question as to whether the compensation
or amount paid for the property acquired was illusory and,
therefore, in violation of fundamental right under Article 31(2),
it was observed that on an interpretation of the provisions of
the aforesaid Act, the amount so fixed was neither illusory
nor arbitrary. In some respects, it may be inadequate but that
cannot be a ground for challenge of the constitutionality of
the law under Article 31(2) of the Constitution.
14.3 That the State Government on acquisition and the vesting
of the acquired property would enable the Road Transport
Corporation to run the vehicles. Since the constitutional validity
of the Act was upheld, the majority speaking through Untwalia,
J. did not consider it necessary to express any opinion with
reference to Article 31C read with clauses (b) and (c) of
Article 39. It was categorically observed that Krishna Iyer,
J. had prepared a separate opinion especially dealing with
this point but the majority issued a caveat stating that they
had not agreed with all that he had stated in his judgment.
Consequently, the appeals filed by the State were allowed
and the writ petitions filed by the contract carriage operators
were unsuccessful.
14.4 Krishna Iyer, J. for himself and on behalf of Bhagwati and
Jaswant Singh, JJ. penned a separate opinion while agreeing
with the majority on the result. The opinion focussed on judicial
perspective vis-à-vis constitutionality of economic legislation.
It was observed that the quintessence of the Constitution
consists in its Preamble, Articles 38, 39(b) and (c), 31 and
the bunch of Articles 31A, 31B and 31C.
[2024] 11 S.C.R. 245

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

14.5 On the question whether the Karnataka Act was in accordance
with the public purpose, it was observed that the purpose of
a public body, to run a public transport service for the benefit
of the people operating in a responsible manner through
exercise of public power which is controlled and controllable
by society through its organs like the Legislature and, at
times, even the Court, is manifestly a public purpose. It was
discussed further that there may be a wide range of choices
for achieving a public purpose. The State may walk into the
open market and buy the items, movable and immovable, to
fulfil the public purpose; or it may compulsorily acquire from
some private person’s possession and ownership the articles
needed to meet the public purpose; it may requisition, instead
of resorting to acquisition; it may take on loan or on hire or
itself manufacture or produce. All these steps are various
alternative means to meet the public purpose.
14.6 The State may require several items to run a welfare-oriented
administration or a public corporation or answer a community
requirement. If the purpose is for servicing the public, as
governmental purposes ordinarily are, then everything
desiderated for subserving such public purpose falls under
the broad and expanding rubric. The nexus between the
taking of property and the public purpose springs necessarily
into existence if the former is capable of answering the latter.
On the other hand, if the purpose is a private or non-public
one, the mere fact that the hand that acquires or requires
is Government or a public corporation, does not make the
purpose automatically a public purpose. Further, public
purpose is vastly wider than the public necessity, even as a
mere purpose is more pervasive than an urgency. According to
Krishna Iyer, J., “Public purpose” should be liberally construed
and neither socialist jurisprudence nor capitalist legal culture
can govern the concept of public purpose in India’s mixed
economy and expanding public sector, in the context of
progressive developmental programmes.
14.7 At paragraph 37 of the majority judgment, it has been
categorically stated “since we have upheld the constitutional
validity of Act on merits by repelling the attack on it by a
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reasonable and harmonious construction of the Act, we do not
consider it necessary to express any opinion with reference
to Article 31C read with clauses (b) and (c) of Article 39 of
the Constitution. Our learned brother Krishna Iyer, J. has
prepared a separate judgment specially dealing with this
point. We must not be understood to agree with all that he has
said in his judgment in this regard.” Although Krishna Iyer, J.
agreed with the majority on upholding the nationalisation of
Contract Carriages by the State of Karnataka, he nevertheless
made certain observations on behalf of himself, Bhagwati
and Jaswant Singh, JJ. only as a separate afterword. In my
view, the same cannot be considered to be the ratio of the
judgment but an expression of the constitutional philosophy
as understood by them during those decades.
Bhim Singhji:
15. In Bhim Singhji, the Constitution Bench headed by YV Chandrachud,
C.J., dismissed the writ petitions while striking down Section 27(1)
of the Urban Land (Ceiling and Regulation) Act, 1976. Writing the
majority judgment for himself and on behalf of Bhagwati, J., it was
observed by the learned Chief Justice that the Act under challenge
was passed with the object of preventing concentration of urban land
in the hands of a few persons and with a view to bringing about an
equitable distribution of land in urban agglomerations to subserve
the common good. “Common good” being the writing on the wall,
any disposal which does not serve that purpose would be outside
the scope of the Act and therefore lacking in competence in diverse
senses. More significantly, it was observed that private property
cannot, under our Constitution be acquired or allotted for private
purposes though an enabling power like that contained in sub-section
(1) of Section 23 of the aforesaid Act may be exercised in cases
where the common good dictates the distribution of excess vacant
land to an industry, as defined in clause (b) of the Explanation to
Section 23 of the aforesaid Act. It was observed that the governing
test of disposal of excess land being “social good”, any disposal
in any particular case which did not subserve that purpose would
be liable to be struck down as being contrary to the scheme and
intendment of the Act.
[2024] 11 S.C.R. 247

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

15.1 Krishna Iyer, J. agreeing with the learned Chief Justice and
in disagreement with Tulzapurkar and AP Sen, JJ. observed
that the purpose of the enactment was to set a ceiling on
vacant urban land, to take over the excess and to distribute
it on a certain basis of priority. “Common good” was the
guiding factor for distribution and that public purpose, national
development and social justice were the cornerstone of the
policy of distribution. This is different from compulsory taking
from some private owners to favour by transfer other private
owners.
Sanjeev Coke:
16. In Sanjeev Coke, the Constitution Bench of this Court considered
the validity of the nationalisation of coking oven plants of the
appellants therein. In the said case, the validity of Coking Coal Mines
(Nationalisation) Act, 1972 was entitled to protection of Article 31C
of the Constitution. In the said case, the observations of Bhagwati,
J. in Minerva Mills were relied upon in extenso to give a complete
approval of the same with “full concurrence”.
16.1 One of the arguments raised in the said case was that the
word “distribute” in Article 39(b), if given its proper emphasis
would inevitably follow that material resources belong to the
community as a whole, that is to say, to the State or the
public, before they could be distributed as best to subserve
the common good. Since those material resources which
belong to the State only could be distributed by the State, it
was argued that material resources had first to be acquired
by the State before they could be distributed. A law providing
for acquisition was not a law for distribution. This Court did
not appreciate the said submission by Sri Sen. This is also
the argument of Sri Zal Andhyarujina.
16.2 This Court observed that when Article 39(b) refers to material
resources of the community, it does not refer only to resources
owned by the community as a whole but it refers also to
resources owned by individual member of the community.
Resources of the community do not mean public resources
only but include private resources as well.
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16.3 It was further observed that the word “distribute” to be used
in Article 39(b) cannot be construed in the limited sense,
that is, in the sense only of retail distribution to individuals.
It is used in a wider sense so as to take in all manner and
method of distribution such as distribution between regions,
distribution between industries, distribution between classes
and distribution between public, private and joint sectors.
The word “distribute” in Article 39(b) takes within its stride
the transformation of wealth from private ownership into
public ownership and is not confined to that which is already
publicowned. In this regard, reliance was also placed on
the observations of Krishna Iyer, J. in Ranganatha Reddy
referred to above.
16.4 The next question considered was, whether, nationalisation
can have nexus with distribution. It was observed that “socially
conscious economists will find little difficulty in treating
nationalisation of transport as a distributive process for the
good of the community”. Therefore, the observations in this
case talked about the fact that nationalisation of transport is
a part of distributive process for the good of the community.
Ultimately, it was held that expression “material resources of
the community” is not confined to natural resources and it
is not confined to resources owned by the public. It means
and includes all resources, natural and man-made, public
and private owned. Ultimately, it was observed that Coking
Coal Mines (Nationalisation) Act, 1972 is a legislation for
giving effect to the policy of the State towards securing the
principles specified in Article 39(b) of the Constitution and
is, therefore, immune, under Article 31C, from attack on the
ground that it offends the fundamental right guaranteed by
Article 14. Consequently, the writ petitions filed by Sanjeev
Coke Manufacturing Co. were dismissed by a unanimous
judgment.
16.5 In this case, the Constitution Bench arrived at its conclusions
on the validity of the Coking Coal Mines (Nationalisation Act),
1972 and upheld the same but while doing so in paragraphs
10 to 14 observations were made with regard to the judgment
of this Court in Minerva Mills. In fact, paragraph 10 reads as
[2024] 11 S.C.R. 249

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

follows: “We have some misgivings about the Minerva Mills’
decision despite its rare beauty and persuasive rhetoric”. In my
view, these observations were wholly unnecessary as they lose
sight of the outstanding judicial statesmanship exemplified in
the majority judgment authored by learned YV Chandrachud,
Chief Justice, in Minerva Mills. One has to bear in mind the
fact that the hearings in the case of Minerva Mills as well as in
Waman Rao were proceeding contemporaneously but before
different Benches both headed by learned YV Chandrachud,
Chief Justice. Realising the import of the separate opinion
of Krishna Iyer, J. in Ranganatha Reddy and the likelihood
of the said opinion gaining momentum in Minerva Mills as
well as in Waman Rao and rightly so, the then learned Chief
Justice took up on himself the responsibility of pronouncing
the operative portion of the judgment in Minerva Mills in May,
1980 and supplementing the reasons in July, 1980 and the
judgment in Waman Rao was delivered in November, 1980
just prior to Krishna Iyer, J. demitting office. It is another
matter that Bhagwati, J. frowned upon such a strategy adopted
in Minerva Mills and in fact penned a common separate
judgment in Minerva Mills and Waman Rao although the
issues were distinct though overlapping in certain areas which
were minority opinions. In Waman Rao, only a short order
was passed by Bhagwati, J.
16.6 A.N. Sen, J. by his concurring judgment, however, opined
that since there was a review of the judgment in Minerva
Mills pending before this Court, he refrained from dealing
with the said decision and from making any observations or
comments on the same.
Abu Kavur Bai:
17. In this case, the Tamil Nadu Stage Carriage and Contract Carriages
(Acquisition) Act, 1973 was held to be constitutional and protected
under Article 31C as it gave effect to the Directive Principles under
Article 39 (b) and (c). Fazal Ali, J. speaking for the Bench headed by
Y.V. Chandrachud, C.J. observed that in Sanjeev Coke, this Court
had opined that where Article 31C comes in, Article 14 goes out and
therefore, there is no scope for treating Article 14 as included in the
principle of Article 39(b).
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17.1 In paragraph 72, the expression “public purpose” was
discussed and referring to Black’s Law Dictionary (Special
Deluxe Fifth Edition) at page 1107, it was observed that the
term is synonymous with governmental purpose which has
for its objective the promotion of the public health, safety,
morals, general welfare, security, prosperity and containment
of a State. Discussing the expression “material resources
of the community” in Article 39(b), it was observed that the
argument of Sri Sen that material resources has to be first
acquired by the State before they could be distributed and
a law providing for acquisition was not a law for distribution
was not an argument which could be appreciated.
In my view, a law proving for acquisition is not strictly speaking
a law providing for distribution but a law which provides for a
public purpose for which acquisition of immovable property
could be made. It is only after the vesting of the acquired
immovable property with the State that the said property
would be available for distribution as “material resources of
the community”. This could be for either actual distribution to
the eligible and deserving citizens or to be retained by the
State for being utilised for a public purpose on the strength
of the public trust doctrine.
17.2 There was also discussion on the various nuances of the
expression “distribute” and “distribution” in the context of
nationalisation and ultimately, it was held that nationalisation
of State Carriages and Contract Carriages by way of an
acquisition met the twin objects of Article 39 (b) and (c) and
accordingly allowed the appeals of the State and set aside
the judgment of the Madras High Court.
Basantibai:
18. In this case, this Court considered the correctness of the judgment
of the Bombay High Court by which the High Court had declared
sub-sections (3) and (4) of the Maharashtra Housing and Area
Development Act, 1976 (hereinafter referred as, “MHADA”) as void
and had given certain ancillary directions. It is not necessary to
go into the discussion on the merits of the case. However, while
considering the validity of the aforesaid provisions on the touchstone
[2024] 11 S.C.R. 251

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

of Article 14 of the Constitution, this Court, at the outset, proceeded
to observe in paragraph 13 of the judgment as: “We shall proceed to
test the validity of the argument keeping aside for the time being the
observation in Sanjeev Coke Manufacturing Co. vs. Bharat Coking
Coal Ltd., (1983) 1 SCC 147 : AIR 1983 SC 239”. Then reference
was made to Kesavananda Bharati and Minerva Mills. On the
basis of the aforesaid two decisions, it was observed that in order
to ascertain whether the enactment was protected by Article 31C of
the Constitution, the Court has to satisfy itself about the character
of the legislation by studying all parts of it. The question whether an
Act is intended to secure the objects contained in Article 39(b) or not,
does not depend upon the declaration by the legislature but depends
on its contents. The finding was that MHADA provided for reserving
land for securing public amenities without which people could not
live there as well as community centres, shopping complexes, parks,
roads, drains, playgrounds, all being necessary for civic life and
these amenities being enjoyed by all. It was held that this is also
a kind of distribution. Reference was made to Ranganatha Reddy
which dealt with the question whether nationalisation of bus transport
was covered by Article 39(b) and to Krishna Iyer, J’s observations
extracted as under:
“The next question is whether nationalisation can have
nexus with distribution. Should we assign a narrow or
spacious sense to this concept? Doubtless, the latter, for
reasons so apparent and eloquent. To ‘distribute’ even
in its simple dictionary meaning, is to ‘allot, to divide
into classes or into groups’ and ‘distribution’ embraces
‘arrangement, classification, placement, disposition,
apportionment, the way in which items, a quantity, or the
like, is divided or apportioned; the system of dispersing
goods throughout a community’ (see Random House
Dictionary). To classify and allocate certain industries or
services or utilities or articles between the private and
the public sectors of the national economy is to distribute
those resources. Socially conscious economists will find
little difficulty in treating nationalisation of transport as a
distributive process for the good of the community. You
cannot condemn the concept of nationalisation in our
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Plan on the score that Article 39 (b) does not envelop
it. It is a matter of public policy left to legislative wisdom
whether a particular scheme of takeover should be
undertaken.
Two conclusions strike as quintessential. Part IV,
especially Article 39(b) and (c), is a futuristic mandate
to the State with a message of transformation of the
economic and social order. Firstly, such change calls
for collaborative effort from all the legal institutions
of the system : the legislature, the judiciary and the
administrative machinery. Secondly and consequentially,
loyalty to the high purpose of the Constitution viz. social
and economic justice in the context of material want and
utter inequalities on a massive scale, compels the court
to ascribe expansive meaning to the pregnant words
used with hopeful foresight, not to circumscribe their
connotation into contradiction of the objectives inspiring
the provision. To be Pharisaic towards the Constitution
through ritualistic construction is to weaken the social-
spiritual thrust of the founding fathers’ dynamic faith.”
Only the aforesaid portions of Justice Krishna Iyer’s judgment were
distilled by this Court in this case. Consequently, it was held that the
MHADA was brought into force to implement the directive principle
contained in Article 39(b) and hence, even if there was any infraction
of Article 14, it was cured by Article 31C which clearly was attracted
to the case.
18.1 Therefore, it was observed that the MHADA was protected
from challenge owing to the applicability of Article 31C of the
Constitution and it was immune from the challenge under
Articles 14, 19 and 31 of the Constitution.
18.2 It was further observed that land ceiling laws, laws providing
for acquisition of land for providing housing accommodation,
laws imposing ceiling on urban property etc. cannot be struck
down by invoking Article 21 of the Constitution. Consequently,
the judgment of the High Court was set aside to the extent
that sub-sections (3) and (4) of Section 44 of MHADA had
been held unconstitutional and struck down and the appeal
was allowed.
[2024] 11 S.C.R. 253

Property Owners Association & Ors. v.
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18.3 What is significant about the judgment in Basantibai is,firstly,
the case was considered in light of only that portion of the
judgment of Krishna Iyer, J. which dealt with the aspect of
distribution and it did not discuss other aspects of Krishna
Iyer, J.’s judgment which dealt with the question whether
even private property can be equated as “material resources
of the community”. Secondly, in this judgment, it has been
expressly stated that to test the validity of MHADA, the
observations of this Court in Sanjeev Coke were to be kept
aside. Venkataramiah, J. who was the author of the judgment
in Basantibai and a member of the five-Judge Bench in
Sanjeev Coke distanced himself from the observations made
by Chinappa Reddy, J. in Sanjeev Coke as well as the other
observations of Krishna Iyer, J. in Ranganatha Reddy.
18.4 However what is common in all these cases is the fact that
nationalization of contract carriages in Ranganatha Reddy;
nationalization of coal mines in Sanjeev Coke and reserving
of land for public amenities under MHADA were all upheld and
sustained on the touchstone of Article 39(b) and protected
from attack by virtue of Article 31C.
18.5 While Krishna Iyer and Chinappa Reddy, JJ. supported their
reasoning on the touchstone of the word “socialist” in the
Preamble of the Constitution, Venkataramiah, J. in Basantibai
considered the validity of the MHADA de hors the observations
made by Chinappa Reddy, J. in Sanjeev Coke and selected
only certain portions of the separate opinion of Krishna Iyer, J.
in Ranganatha Reddy. Thus, this Court was able to consider
the validity of MHADA on the strength of Articles 39(b) read
with Article 31C without taking note of many of the observations
in Ranganatha Reddy and no observation in Sanjeev Coke
made by the aforesaid learned Judges on their “socialist
philosophy and on socialism”. Basantibai is a judgment which
was delivered in the year 1986, when Perestroika was taking
place even in a country such as Union of Soviet Socialist
Republics(USSR), the home to Socialism, and there was also a
beginning of a new thinking in India too commencing with five
technological missions leading to the Reforms of 1991 which
I have discussed in the earlier part of my opinion.
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19. This Court in Tinsukhia Electric Supply Co. Ltd. vs. State of
Assam, (1989) 3 SCC 709; and Assam Sillimanite Ltd. vs. Union
of India, 1992 Supp. (1) SCC 692, followed earlier judgments of
this Court in Ranganatha Reddy and Sanjeev Coke.
Mafatlal:
20. The context of the case in Mafatlal was a claim for refund made by
a taxpayer owing to an unconstitutional or illegal levy. With regard
to the arguments made by Sri K Parasaran, learned senior counsel
on the distinction between the constitutional values as they obtained
in countries like United States of America, Canada United Kingdom
and Australia and the Indian Constitution which has set the goal
of “justice, social, economic and political” – a total restructuring of
our society as envisaged in Articles 38 and 39 of the Constitution,
certain observations were made by the nine-Judge Bench of this
Court headed by learned Ahmadi, C.J. and speaking through Jeevan
Reddy, J. in paragraphs 84 to 86. In this context, the observations
of Krishna Iyer, J. in Ranganatha Reddy were extracted, which are
very apposite to the reference under consideration and which read
as under:
“Constitutional problems cannot be studied in a socio-
economic vacuum, since socio-cultural changes are the
source of the new values, and sloughing off old legal
thought is part of the process of the new equity-loaded
legality. … It is right that the rule of law enshrined in
our Constitution must and does reckon with the roaring
current of change which shifts our social values and
shrivels our feudal roots, invades our lives and fashion
our destiny.”
It is in the above context that reference was made to the expression
“the material resources of the community” and the exposition by Iyer,
J. in Ranganatha Reddy and in Sanjeev Coke and Abu Kavur
Bai. Therefore, those observations could be construed only in the
context of the submissions made in the said case on the goal of
Justice as envisaged under the Indian Constitution. In this context,
the observations of S.C. Sen, J. who wrote a dissenting opinion
are instructive. He said, “Article 39 cannot be a basis for retaining
[2024] 11 S.C.R. 255

Property Owners Association & Ors. v.
State of Maharashtra & Ors.

whatever has been gathered unlawfully by the Government for
common good. Simply stated, the Directive Principles of the State
Policy do not license the Government to rob Peter to pay Paul.”
They have a persuasive value. Therefore, those observations may
be obiter in nature but have persuasive value in view of my aforesaid
discussion.
21. In Kolkata Municipal Corporation vs. Bimal Kumar Shah, 2024
INSC 435 (“Bimal Kumar Shah”), Justice P.S. Narasimha has
observed that “to hold that all private property is covered by the
phrase “material resources of the community” and that the ultimate
aim is state control of private resources would be incompatible with
the constitutional protection detailed above.”
Summary of Conclusion:
22. Having regarding to the lengthy discussion made above, it is
necessary to have the summary of conclusions as under:
I. Articles 37, 38 and 39 of the Constitution of India which are
part of the Directive Principles of State Policy have to be
interpreted by bearing in mind the changing economic policies
of the State and not in a rigid watertight compartment.The
flexibility of interpretation is having regard to the dynamic
changes in the Indian socio-economic policies meant for the
welfare and progress of the people of India. An interpretation
of the aforesaid Articles or for that matter any other provision
of the Constitution must be viewed in the historical backdrop of
the period in which the interpretation was made by this Court
during the course of adjudication. Any interpretation which was
found to be sound and in consonance with the socio-economic
policy of the State during a particular period of time, cannot
be critiqued at a later point of time in any quarter including
by a court of law merely because the socio-economic policies
of the State have changed over a period of time or there is a
paradigm shift in the thinking and policies of the State.
II. Articles 37 and 38 of the Constitution have to be borne in mind
by the Courts while considering the validity of any policy or
statute which intend to further any of the Directive Principles
of State Policy.
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III. Article 39(b) has to be read in the context of Article 39(c).
Articles 39(b) and (c) supplement and complement each other
and cannot be construed in silos.
Article 39(b) comprises of following five components, namely,
(i) ownership and control;
(ii) material resources;
(iii) of the community;
(iv) so distributed; and
(v) as best to subserve the common good.
(i) The expression “ownership and control” must be given
its widest connotation in the context of “distribution of”
“material resources of the community” “as best to subserve
the common good”.
(ii) “Material resources” can in the first instance be divided into
two basic categories, namely, (i) State owned resources which
belong to the State which are essentially material resources
of the community, held in public trust by the State; and (ii)
privately owned resources. However, the expression “material
resources” does not include “personal effects” or “personal
belonging” of individuals, such as, clothing or apparel,
household articles, personal jewellery and other articles of
daily use belonging to the individuals of a household and
which are intimate and personal in nature and use. Excluding
“personal effects”,all other privately owned resources can be
construed as “material resources”.
Thus, all resources whether they are public resources or
privately owned resources which come within the scope and
ambit of the expression “material resources” as stated above
are included within that expression.
(iii) “Material resources” which are privately owned could be
transformed as “material resources of the community”,inter
alia, in the following five ways:
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a. by nationalisation, which could be either by way of an
enactment made by the Parliament or a State legislature
or in any other manner in accordance with law;
b. by acquisition, which could be by way of a special
enactment made by the Parliament or a State legislature
having regard to Entry 42 – List III of the Seventh
Schedule of the Constitution. Alternatively, the acquisition
could be made under the extant Parliamentary or State
laws dealing with acquisition;
c. by operation of law, such as vesting of private resources
in the State, which could be by virtue of statutes dealing
with land reforms, land tenures, abolition of inams, village
offices or any other law where by operation of law there
would be vesting of private material resources in the
State or in any other manner in accordance with law;
d. by purchase of the material resource from private persons
by the State, its agencies and instrumentalities in the
manner known to law; and
e. by the private owner of the material resource converting
his “material resources” as a “material resource of the
community” by donation, gift, creation of an endowment
or a public trust or in any other manner known to law.
(iv) In (a) to (d) above, the provision of Article 300A which is a
constitutional right to property has to be complied with.
(v) The “material resources of the community” have to be
“distributed as best to subserve the common good”. Distribution
could be in two ways:
Firstly, by the State itself retaining the material resource for
a public purpose and/or for public use; and
Secondly, privately owned material resources when converted
as “material resources of the community” can be distributed
to eligible and deserving persons either by way of auction,
grant, assignment, allocation, lease, sale or any other mode
of transfer known to law either temporarily or permanently
depending upon the mode adopted and unconditionally or
with conditions depending upon:
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(a) nature of the resource and its inherent characteristics;
(b) the impact of the resource on the well-being of the
community;
(c) the scarcity of the resource;
(d) the consequences of such a resource being concentrated
in the hands of the private owners; and
(e) any such factors.
(vi) The expression “common good” would, inter alia, mean that
the distribution of the “ownership and control of material
resources of the community” would not lead to concentration
of the wealth and means of production in the hands of few
which is a Directive Principle in clause (c) of Article 39. Thus,
“distribution of material resources of the community” cannot
violate the Directive Principle in clause (c) of Article 39 of
the Constitution.
IV. The majority judgment of this Court in Ranganatha Reddy
and the judgment in Abu Kavur Bai relate to nationalisation
of contract carriages/State carriages which were upheld
by this Court. Nationalisation of coking coal mines was
upheld by this Court in Sanjeev Coke. In Bhim Singhji and
Basantibai, certain provisions of the Urban Land Ceiling Act
and the provisions of MHADA respectively were upheld on
the touchstone of Article 39(b) of the Constitution.
The nine-Judge Bench in Mafatlal referred to the judgments
of this Court in Ranganatha Reddy, Abu Kavur Bai etc. in
the context of the submission made before,i.e., the Indian
Constitution envisages Justice – social, economic and political,
to all citizens of India as enshrined in the preamble. This was
by way of an obiter but having persuasive value.
My Views to the Conclusions arrived at by the learned Chief
Justice:
23. My views in response to the conclusions arrived at by the learned
Chief Justice to the reference before this Court are summarized as
under:
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Property Owners Association & Ors. v.
State of Maharashtra & Ors.

a. Article 31C to the extent that it was upheld in Kesavananda
Bharati vs. Union of India remains in force.
My view: I agree.
b. The majority judgment in Ranganatha Reddy expressly
distanced itself from the observations made by Justice Krishna
Iyer (speaking on behalf of the minority of judges) on the
interpretation of Article 39(b). Thus, a coequal Bench of this
Court in Sanjeev Coke violated judicial discipline and erred by
relying on the minority opinion.
My view: The majority judgment in Ranganatha Reddy,
no doubt, did not concur with the views of Krishna Iyer, J.
expressed in his separate opinion. However, in Sanjeev Coke
the Constitution Bench of five-Judges independently upheld
what was challenged in the said case, namely, the Coking
Coal Mines (Nationalisation) Act, 1972 and while doing so in
paragraphs 19 and 20 referred to the observations of Krishna
Iyer, J. in Ranganatha Reddy and made certain observations
on the majority judgment in Minerva Mills. However, A.N. Sen,
J. did not express any opinion on the judgment of this Court
in Minerva Mills.
What is significant is that the judgments in Ranganatha Reddy
as well as in Sanjeev Coke upheld the respective Nationalisation
Acts. Therefore, on merits it cannot be held that Sanjeev Coke
violated judicial discipline.One cannot lose sight of the fact
that in Sanjeev Coke this Court did not decide the case only
on the basis of the opinion of Krishna Iyer, J. in Ranganatha
Reddy but on merits on the validity of the Nationalisation Act.
Therefore, Sanjeev Coke is good law insofar as on the merits
of the matter is concerned.
c. The single-sentence observation in Mafatlal to the effect that
“material resources of the community” include privately owned
resources is not part of the ratio decidendi of the judgment.
Thus, it is not binding on this Court.
My view: It may be obiter but has great persuasive value.The
discussion made above may be noted.
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d. The direct question referred to this Bench is whether the phrase
“material resources of the community” used in Article 39(b)
includes privately owned resources. Theoretically, the answer
is yes, the phrase may include privately owned resources.
However, this Court is unable to subscribe to the expansive
view adopted in the minority judgment authored by Justice
Krishna Iyer in Ranganatha Reddy and subsequently relied
on by this Court in Sanjeev Coke. Not every resource owned
by an individual can be considered a “material resource of the
community” merely because it meets the qualifier of “material
needs”.
My view: Yes, privately owned resources except “personal
effects” as explained above can come within the scope and
ambit of the phrase “material resources of the community”
provided such resources get transformed as “resources of the
community” as discussed by me above. To reiterate, it would
not include personal effects as discussed by me in paragraph
7.6 above.
In view of my aforesaid discussion, I find that the controversy
whether every resource owned by an individual can be
considered as “material resource of the community” stands
clarified.
e. The inquiry about whether the resource in question falls within
the ambit of Article 39(b) must be context-specific and subject
to a non-exhaustive list of factors such as the nature of the
resource and its characteristics; the impact of the resource on
the well-being of the community; the scarcity of the resource;
and the consequences of such a resource being concentrated
in the hands of private players. The Public Trust Doctrine
evolved by this Court may also help identify resources which
fall within the ambit of the phrase “material resource of the
community”.
My view: I agree. In addition, I also reiterate my discussion
and conclusion on how privately owned material resource can
be transformed as “material resource of the community”.
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Property Owners Association & Ors. v.
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f. The term “distribution” has a wide connotation. The various
forms of distribution which can be adopted by the state cannot
be exhaustively detailed. However, it may include the vesting of
the concerned resources in the state or nationalisation. In the
specific case, the Court must determine whether the distribution
“subserves the common good”.
My view: The term “distribution” has no doubt a wide
connotation but vesting in the State of a particular privately
owned “material resource” or nationalisation of the same are
only conditions precedent to distribution which have to comply
with Article 300A of the Constitution. Further, a resource which
has vested in the State or a resource retained by a State on
nationalisation could be utilised by the State to subserve the
common good as a material resource of the community.The
public trust doctrine would apply to such material resources.
Alternatively, the State could decide to actually distribute the
“material resources of the community” to eligible and deserving
persons by a way of assignment, lease, allotment, grant, etc.
The same would also come within the scope and ambit of the
expression “distribution”.
24. In my view, the judgments of this Court in Ranganatha Reddy,
Sanjeev Coke, Abu Kavur Bai and Basantibai correctly decided the
issues that fell for consideration and do not call for any interference on
the merits of the matters and as explained above. The observations
of the Judges in those decisions would not call for any critique in
the present times. Neither is it justified nor warranted.
25. Reference is answered in the above terms.
26. The Registry to place the matters before Hon’ble the Chief Justice of
India for seeking orders for being listed before the appropriate Bench.
27. I must place on record my sincere appreciation to the learned
Attorney General, learned Solicitor General and their teams, learned
senior counsel and learned counsel appearing for the respective
parties and learned instructing counsel for their valuable assistance
to this Bench.
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Sudhanshu Dhulia, J.
1. I have the advantage of going through the well-researched and
erudite judgment of the learned Chief Justice D.Y. Chandrachud.
During the hearing of the case itself, it was difficult to ignore the
scope and ambit of the reference and that of Article 31-C in light of
the amendments and judgements pronounced by this Court, as they
had a crucial bearing on the question on Article 39(b) i.e. whether
privately owned resources would be a part of “material resources
of the community”. Logically, therefore, the arguments which were
advanced at the bar, which were both long and scholarly, on both
sides, were on these two crucial questions, and it is for this reason
that the judgment of learned Chief Justice Chandrachud is in two
parts. Part one i.e. Part (C) which is on Article 31-C and part two
i.e. (D), which is on Article 39(b). I completely agree with part
(C) of the judgment i.e. on Article 31-C.
2. In Part (C), the question which had come up for discussion was
whether Article 31-C still protects Article 39(b) and (c) and if it
does, then to what extent? The learned senior counsel Shri Zal
Andhyarujina, learned counsel Shri Sameer Parekh, learned counsel
Mr. H Devarajan for the appellants and learned senior counsel
Ms. Uttara Babbar for one of the intervenors, argued at length
and submitted that after the decision in Minerva Mills v. Union
of India (1980) 3 SCC 625, Article 31-C does not survive, and
logically therefore the laws which are made in furtherance of the
constitutional provisions contained in Article 39(b) and (c) will not
have the protection of Article 31-C. On the other hand, the learned
Attorney General for the respondents i.e., Union of India and Shri
Rakesh Dwivedi, Sr. Advocate for the State of West Bengal would
argue that even prior to Minerva Mills, the majority in the thirteen
Judge Bench decision in Kesavananda Bharati v. State of Kerala
(1973) 4 SCC 225 had upheld the validity of the unamended Article
31-C and to that extent Article 31-C still exists and gives protection
to laws made in furtherance of policies in Article 39 (b) and (c). We
have also heard Shri Tushar Mehta, learned Solicitor General of
India and Senior Advocate Shri Gopal Sankaranarayanan on behalf
of the respondents.
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As I have already expressed my complete agreement on the opinion
given by the learned Chief Justice on this point, nothing further needs
to be said. The unamended Article 31-C to the extent held valid in
Kesavananda Bharati survives.
3. But I am afraid, I cannot accept the finding of the learned Chief
Justice on the second part of his judgment i.e., on the meaning of the
phrase “material resources of the community” given in Article 39 (b).
My reasons for the disagreement are as follows:
The present appeals before us have travelled through three
references, which have been discussed by the learned Chief Justice
in detail, and finally the reference has been made by a Bench of
Seven Judges that the interpretation of Article 39 (b) requires a
reconsideration. The reference is as follows:
“5. Having given due consideration, we are of the opinion
that this interpretation of Article 39(b) requires to be
reconsidered by a Bench of nine learned judges: we have
some difficulty in sharing the broad view that material
resources of the community under Article 39(b) covers
what is privately owned.
6. Given that there is some similarity in the issues here
involved and in I.R. Coelho v. State of T.N. [(1999) 7
SCC 580. Ed.: The nine-judge bench decision therein
is reported as I.R. Coelho v. State of T.N. (2007) 2 SCC
1] which already stands referred to a larger Bench,
preferably of nine learned Judges, we are of the view
that these matters should be heard by a Bench of nine
learned Judges immediately following the hearing in
I.R. Coelho”.
The question as to whether privately owned resources are part of
“material resources of the community” as used in Article 39(b), has
been answered by the learned Chief Justice as “yes”, “the phrase
may include privately owned resources”, but not in the expansive
manner as held by the three learned judges in State of Karnataka
v. Ranganatha Reddy (1977) 4 SCC 471 and later in Sanjeev
Coke Mfg. Co. v. Bharat Coking Coal Ltd. (1983) 1 SCC 147. The
judgment further sets limits on what could be “material resources
of the community”.
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I am unable to accept the above proposition as this view ultimately
holds that not all privately owned resources are “material resources
of the community”. Not only this it further limits the hands of the
legislature to a non-exhaustive list of factors to determine which
resources can be considered as “material resources”. In my opinion
there is no need for this pre-emptive determination.
The definition of “material resources of the community” was purposely
kept in generalized and broad-based terms, with which I intend to
deal in some detail later in this judgment. I entirely endorse the view
taken by the Three learned Judges in Ranganatha Reddy and by
the Five learned Judges in Sanjeev Coke, as to the scope and ambit
of “material resources of the community”. Privately owned resources
are a part of the “material resources of the community”.
4. The question which is there before us is not simply a legal or
constitutional question. The question is as much rooted in our modern
and contemporary history, as it is in law. Therefore, discussions on
the historical background immediately preceding independence as
well as on the debates in the Constituent Assembly are extremely
important, in my consideration.
5. “We may have democracy, or we may have wealth concentrated
in the hands of a few, but we cannot have both.” This expression
is attributed to Justice Louis D. Brandeis,1 an eminent Jurist and a
former Judge of US Supreme Court. Without doubt, when Articles 38
and 39 of the Constitution of India were being incorporated in Part
IV of our Constitution, a similar thought dominated the minds of the
framers of our Constitution. It is for this reason that Granville Austin
calls the Indian Constitution, “first and foremost a social document”.2
Our Constitution is not merely a roadmap for governance, it is also a
vision for a just and equitable society. The members of our constituent
assembly were freedom fighters, social reformers, scholars and
lawyers. The struggle against colonial rule for them was not just
to liberate India politically, but also to change it for the better, both
socially and economically, as inequality reigned everywhere in our

1 Louis Dembitz Brandeis was an associate Judge on the U.S. Supreme Court from 1916-1939. See Mr.
Justice Brandeis, Great American: Press Opinion & Public Appraisal (The Modern View Press, Saint Louis,
1941), pg.42.
2 Granville Austin, The Indian Constitution: Cornerstone of a Nation (Oxford University Press, New Delhi,
Second Impression 2000), Pg. 50.
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society; inequality of wealth, income and status. India’s freedom
struggle therefore was as much a struggle to overthrow the colonial
yoke, as it was to remove inequality and poverty from a deeply
caste ridden society. Nothing articulates this idea better than the
closing speech of Dr. B. R. Ambedkar in the Constituent Assembly
on November 25, 1949. This is what he had said:
“……We must begin by acknowledging the fact that there
is complete absence of two things in Indian Society. One
of these is equality. On the social plane, we have in India
a society based on the principle of graded inequality which
means elevation for some and degradation for others. On
the economic plane, we have a society in which there are
some who have immense wealth as against many who
live in abject poverty. On the 26th of January 1950, we are
going to enter into a life of contradictions. In politics we will
have equality and in social and economic life we will have
inequality. In politics we will be recognizing the principle of
one man one vote and one vote one value. In our social
and economic life, we shall, by reason of our social and
economic structure, continue to deny the principle of one
man one value. How long shall we continue to live this
life of contradictions? How long shall we continue to deny
equality in our social and economic life? If we continue to
deny it for long, we will do so only by putting our political
democracy in peril. We must remove this contradiction at
the earliest possible moment or else those who suffer from
inequality will blow up the structure of political democracy
which this Assembly has so laboriously built up.” 3
6. The Constitution of India has deep roots in our freedom struggle and
its Part III and Part IV are the embodiment of the hope that one day
the tree of true liberty would bloom in India.4
Our effort here should be to find the true meaning of the expression
“material resources of the community”, from its historical perspective
as well, and not to limit this analysis to legalism alone, considering the

3 Constituent Assembly Debates, Vol. XI, Pg.979.
4 Granville Austin, The Indian Constitution: Cornerstone of a Nation (Oxford University Press, New Delhi,
Second Impression 2000), Pg. 50.
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nature of the case. Also we have to go beyond textual interpretation.
Not because text is not important. It is important, but it is only the
starting point, not the end point. The meaning of the text has to be
located within the general context.5
This Bench has to answer whether private properties or privately
owned resources are included in the phrase “material resources of
the community”, given in Article 39(b) of the Constitution of India.
This question has engaged much attention of our Court already.
Initially the question was referred to a Five Judge Constitution Bench
which in turn referred it to a Seven Judge Bench and finally to the
present Nine Judge Bench. The journey this reference has taken, has
already been covered in detail by the Chief Justice in his judgment,
and therefore one need not go into it again.
7. Interpretation of a Constitution is different from interpreting an
ordinary statute. The obvious difference is in the importance of the
Constitution, in the hierarchy of the laws of the land, where the
Constitution occupies the highest place. Not only this, all laws must
adhere to it, and all other laws directly or indirectly find their source
or sustenance from the Constitution. The Constitution therefore sits
at the top of the normative pyramid. In his seminal work ‘Purposive
Interpretation in Law’, Aharon Barak explains the importance of a
Constitution as follows:
“It shapes the character of society and its aspiration
throughout history. It establishes a nation’s basic political
points of view. It lays the foundation for social values, setting
goals, obligations and trends. It is designed to guide human
behavior over an extended period of time, establishing
the framework for enacting legislation and managing the
national government. It reflects the events of the past,
lays a politics, society, and law. The unique characteristics
of a constitution warrant a special interpretive approach
to its interpretation, because “it is a constitution we are
expounding”.6

5 Aharon Barak, The Judge in a Democracy (Princeton University Press, 2006), Pg. 308.
6 Aharon Barak, Purposive Interpretation in Law (Universal Law Publishing Co., 2007), Pg. 370.
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A Constitution is also designed by one generation with an eye towards
many future generations to come, so that it is able to withstand the
vagaries of times. It is a law having special character.7
While interpreting the Canadian Charter of Rights and Freedoms,
which is a part of the Canadian Constitution, Chief Justice Dickson
of the Canadian Supreme Court wrote:
“The task of expounding a constitution is crucially different
from that of construing a statute. A statute defines present
rights and obligations. It is easily enacted and as easily
repealed. A constitution, by contrast, is drafted with an
eye to the future. Its function is to provide a continuing
framework for the legitimate exercise of governmental
power and, when joined by a Bill or a Charter of rights, for
the unremitting protection of individual rights and liberties.
Once enacted, its provisions cannot easily be repealed
or amended. It must, therefore, be capable of growth and
development over time to meet new social, political and
historical realities often unimagined by its framers. The
judiciary is the guardian of the Constitution and must, in
interpreting its provisions, bear these considerations in
mind.” 8
In determining the meaning of a provision of a Constitution, we have
to explore what was in the minds of the framers of the Constitution
and what were the objective realities of the times when it was being
written. In other words, there is both a subjective interpretation and
an objective interpretation. The subjective interpretation would be to
find out what was in the minds of the framers of the Constitution while
incorporating a particular provision. This method, though helpful in
getting to the meaning, will alone not help us. The reason is again
explained by A. Barak:
“The purpose of the constitutional text is to provide a solid
foundation for national existence. It is to embody the basic
aspirations of the people. It is to guide future generations
by its basic choices. It is to control majorities and protect

7 Aharon Barak, Hermeneutics and Constitution Interpretation, 14 Cardozo L. Rev. 767 (1992-93), Pg. 772.
8 Hunter v. Southam Inc (1984) 2 S.C.R 145, Pg. 156. Also see, Aharon Barak, Purposive Interpretation in
Law, Pgs. 370-371.
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individual dignity and liberty. All these purposes cannot be
fulfilled if the only guide to interpretation is the subjective
purposes of the framers of the constitutional text. The
constitution will not achieve its purposes if its vision is
restricted to the horizons of its founding fathers. Even
if we assume the broadest generalizations of subjective
purpose, this may not suffice. It may not provide a solid
foundation for modern national existence. It may be foreign
to the basic aspirations of modern people. It may not be
consistent with the dignity and liberty of the modern human
being. A constitution must be wiser than its creators”.9
Subjective interpretation alone will not give us the full picture and we
have to look at the objective purpose for bringing certain provisions
in the Constitution. Thus, in our interpretation of the Constitution
both subjective and objective purpose is important.
“The objective purpose of a constitution is the interests,
goals, values, aims, policies, and function that the
constitutional text is designed to actualize in a democracy.
A democratic legal system’s values and principles shape
the objective purpose of its constitution”.10
What was it that the Constitution sought to achieve. What are the
foundations on which it stands. What is its purpose and what are
its essential values. The debates of the Constituent Assembly will
shed some light on why and for what purpose certain provisions
were incorporated in our Constitution. But for this we have to first
understand what kind of a society, socially and economically, were
we to build and what kind of Constitution we thought would best
build that society.
8. The earliest indication of what the Constitution of free India was
going to be, can be seen in the Karachi Resolution of the Indian
National Congress, adopted in the year 1931, which was read in
detail before us by Sri Rakesh Dwivedi, Senior Advocate representing
State of West Bengal. Many of the provisions which later came to
be incorporated in Part III & IV of the Constitution can be traced

9 Aharon Barak, Hermeneutics and Constitution Interpretation, 14 Cardozo L. Rev. 767, (1992-93), Pg. 772.
10 Aharon Barak, Purposive Interpretation in Law (Universal Law Publishing Co., 2007), Pg. 377.
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to this Resolution. The Karachi Resolution can also be seen as a
forerunner to Fundamental Rights and Directive Principles of State
Policy which are the heart and soul of the Indian Constitution.11
The Karachi Resolution, inter alia, visualised the role of State in free
India. The resolution, adopted by the All India Congress Committee,
states that “the State shall own or control key industries and services,
mineral resources, railways, waterways, shipping and other means of
transport ”.12 The resolution speaks of democracy as another name
for “socialism” and “socialist principles” of equality, distribution of
wealth and grassroot participation of people.
9. The Constituent Assembly, which was formed in 1946, to frame a
Constitution for free India consisted of members elected by the newly
elected members of the Legislative Assemblies of Provinces (elected
in January 1946), as well as nominated members who represented
the princely States. What kind of Constitution was to be given to
the nation was indicated by Jawahar Lal Nehru in the “Objective
Resolution” which he placed before the Constituent Assembly on
December 13, 1946. This is a watershed event in the making of
the Indian Constitution,13 as it sets forth the task and the objects
to be achieved by the Constituent Assembly. The task before the
Constituent Assembly was “to free India through a new Constitution,
to feed the starving people and clothe the naked masses, and to
give every Indian the fullest opportunity to develop himself according
to capacity.”14
The Objective Resolution moved by Jawaharlal Nehru before the
Constituent Assembly, which was adopted by the Assembly in
December 1946 speaks of secularism and democratic principles
of equality, liberty and fraternity to be a part of our Constitution.
There was an earnest plea before the Assembly by Nehru to adopt
socialist principles in order to uplift the economy and the condition

11 Granville Austin calls Fundamental Rights and Directive Principles of State Policy as “Conscience of the
Constitution”. See Granville Austin, The Indian Constitution: Cornerstone of a Nation (Oxford University
Press, New Delhi, Second Impression 2000), Pg. 50.
12 A. M Zaidi et al., The Encyclopaedia of the Indian National Congress (Vol.-10: 1930-1935): The Battle for
Swaraj (S. Chand & Co. Ltd., 1980), Pg. 183.
13 Rakesh Batabyal (ed.), The Penguin Book of Modern India Speeches (Penguin Books, 2007), Pg. 365.
14 It was said by Jawahar Lal Nehru in Constituent Assembly of India on January 22,1947. See Constituent
Assembly Debates, Vol. II, Pg. 316.
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of the vast majority of its people from poverty and illiteracy. The
Objective Resolution was the harbinger of the constitutional values of
distributive justice and social engineering in the Indian Constitution.
Many of the provisions later became a part of the Directive Principles,
particularly in Articles 38 and 39 of the Constitution of India. This
is what was said by Nehru on Dec 13, 1946 while discussing the
Objective Resolution:
“Well, I stand for Socialism and, I hope, India will stand for
Socialism and that India will go towards the constitution
of a Socialist State….. What form of socialism again is
another matter for your consideration…. [We avoided an
expression which could have given rise to controversy].
Therefore we have laid down, not theoretical words and
formulae, but rather the content of the thing we desire.” 15
Justice O. Chinnappa Reddy in his book “The Court and the
Constitution of India: Summits and Shallows” explains that socialism
is another name for humanism: -
“…….After all, what is the essence of Socialism? Socialism
is no more than humanism or at any rate the essential
step towards humanism. The central problem of socialism
(that is, humanism) is the problem of man, and its most
essential aspect is that of creating conditions for man’s
happiness and full development.” 16
Apart from the fact that “socialism” is now a part of our Preamble,
many of the provisions in Part IV of the Constitution are rooted
in socialist philosophy, such as Articles 38, 39, 39A, 41, 42, 43,
43A and 47. A word on socialism, which has a direct influence on
Article 38 and Article 39 (b) and (c), would be in order. Socialism,
thankfully, is not a rigid concept and over the years has been
adopted and adjusted according to the needs of society. ‘Socialism’
in the context of the Indian Constitution is just another name for
welfare economy. “Indian socialism is about what the Constitution
of India wants to have for the people of India, the establishment of

15 Constituent Assembly Debates, Vol. I, Pg. 62.
16 O. Chinnappa Reddy, The Court and the Constitution of India: Summits and Shallows (Oxford University
Press, 2008), Pg. 139.
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a welfare state.”17 What measures this welfare State has to adopt
in a democracy is given in the Charter of Instructions contained
in Part IV of the Constitution, that is Directive Principles of State
Policy, which we will discuss shortly.
10. In the 1940s, when discussions were on as to what shape the free and
independent nation would take, the nascent industrial class in India
also understood well that the path independent India was to take will
be influenced by socialist principles. The industrial class, though in
many ways a beneficiary of the colonial rule, was essentially nationalist
in character. It gave broad support to the national movement against
imperialism and associated with the nationalist movement both as
a segment of Indian society and as a separate and distinct political
force; though it did not do so through direct participation.18 “The
Indian capitalist class had developed a long-term contradiction with
imperialism while retaining a relationship of short-term dependence
on and accommodation with it.”19
Our industrial community understood well, the role of the State
in heavy industries and infrastructure, which was inevitable, even
desirable, as till that time there was not enough capital in private
hands, which could take large scale infrastructural projects, like dams,
roads, railways and heavy industries. The industrial class recognised
that it was the State alone which has to be the biggest investor and
proponent of industrial revolution in India. For this reason in 1944-
45, a group of industrialists in India took out a paper called “A Plan
Of Economic Development For India”, which is popularly known as
the ‘Bombay Plan’.20 Some even refer to it as the Tata-Birla Plan.
The Bombay Plan was a visionary scheme drafted in the year 1944
by the then leaders of Indian industry and commerce. The plan
recommended an economic policy for the National government,
which would soon be taking power. The following were the prominent
signatories to the plan:

17 O. Chinnappa Reddy, The Court and the Constitution of India: Summits and Shallows (Oxford University
Press, 2008), Pg. 137.
18 Bipan Chandra, Nationalism & Colonialism in Modern India (Orient Longman, 1979), Pg. 158.
19 Bipan Chandra, Nationalism & Colonialism in Modern India (Orient Longman, 1979), Pg. 145.
20 Sir P.Thakurdas, JRD TATA et al., A Plan of Economic Development For India (Part II) (1944). Also see
Sanjay Baru (ed.), The Bombay Plan (Rupa Publications India Pvt Ltd., 2018), Pg. 292.
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1. JRD Tata, one of India’s pioneer industrialists.
2. G. D. Birla, the leader of the Birla group of industries.
3. Sir Ardeshir Dalal, an able administrator and
technocrat.
4. Lala Shriram, a prominent north Indian industrialist.
5. Kasturbhai Lalbhai, a famous Indian Industrialist.
6. D. Shroff, director of a number of prominent industries
including a few of the Tata group.
7. John Mathai, professor of economics at Madras
University and a political personality.
8. Purushottamdas Thakurdas, a Bombay based
businessman and business leader.
According to the Bombay Plan, per capita income in the country
would double in 15 years from the implementation of the plan. It also
laid down policies and methods for securing a better standard of
living, improving medical and educational conditions. It also aimed at
increasing agricultural production by 130% mainly through promotion
of cooperative farming.
But it is the second part of the Bombay plan which is relevant here,
where it recognised nationalisation of key industries and the dominant
role of the State in the economic development of the Country. It
accepted as fait accompli the dominant role of socialism in the
economic policies of the national government, but was nevertheless
determined to retain and carve out a new space for private capital.
It admitted that the existing system based on private enterprise
and ownership has not provided the desired results, particularly
in the distribution of national income and sought to overcome the
weaknesses of private enterprises. This is what the Bombay plan says:
“...On the one hand, we recognize that the existing economic
organization, based on private enterprise and ownership,
has failed to bring about a satisfactory distribution of the
national income. On the other hand, we feel that in spite
of its admitted shortcomings, it possesses certain features
which have stood the test of time and have enduring
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achievements to their credit. While it would be unwise to
blind ourselves to the obvious weaknesses of the present
system, we think it would be equally a mistake to uproot
an organization which has worked with a fair measure of
success in several directions.” 21
According to Professor Aditya Mukherjee, through the Bombay Plan
the industrial class in India sought a compromise in the inevitable
socialist pattern of our national economy:
“The attempt was to incorporate ‘whatever is sound and
feasible in the socialist movement’ and see ‘how far socialist
demands could be accommodated without capitalism
surrendering any of its essential features’. The eventual
plan (Bombay Plan) was, therefore, to seriously take up the
questions of equitable distribution, partial nationalization,
etc., with this objective clearly in mind. ‘A consistent ...
programme of reforms’ was the ‘most effective remedy
against violent social upheavals”. 22
The purpose of discussing the Bombay Plan is to demonstrate that
the 1940s and early 1950s were an era when socialist principles
were acceptable to all classes, though with reservations. The young
nation short of capital, took a conscious decision to imbibe these
principles not only in its economy but also thought it prudent to
include some of the provisions in Part IV of the Constitution; the
Directive Principles of State Policies.
11. Coming now to the Directive Principles of State Polices. On November
4, 1948, while presenting the draft Constitution to the Constituent
Assembly Dr. B. R. Ambedkar elaborated each provision of the
Constitution, and laid particular stress on the Directive Principles
of State Policies:
“The Directive Principles are like the Instruments of
Instructions which were issued to the Governor-General
and to the Governors of the colonies and to those of India
by the British Government under the 1935 Act. Under the
Draft Constitution it is proposed to issue such instruments

21 Sir P. Thakurdas, JRD TATA et al., Introductory, in A Plan of Economic Development For India (Part II)
(1944). Also see Sanjay Baru (ed.), The Bombay Plan (Rupa Publications India Pvt Ltd., 2018), Pg. 292.
22 Aditya Mukherjee, Political Economy of Colonial and Post-Colonial India (Primus Books, 2022), Pg.192.
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to the President and to the Governors. The texts of these
Instruments of Instructions will be found in Schedule IV
of the Constitution. What are called Directive Principles
is merely another name for Instruments of Instructions.
The only difference is that they are instructions to the
Legislature and the Executive. Such a thing is to my mind
to be welcomed. Wherever there is a grant of power in
general terms for peace, order and good government, it is
necessary that is should be accompanied by instructions
regulating its exercise.
The Inclusion of such instructions in a Constitution such
as is proposed in the Draft becomes justifiable for another
reason. The Draft Constitution as framed only provides a
machinery for the government of the country. It is not a
contrivance to install any particular party in power as has
been done in some countries. Who be, if the system is
to satisfy the tests of democracy. But whoever captures
power will not be free to do what he likes with it. In the
exercise of it, he will have to respect these Instruments
of Instructions which are called Directive Principles. He
cannot ignore them. He may not have to answer for their
breach in a Court of Law. But he will certainly have to
answer for them before the electorate at election time.
What great value these Directive Principles possess will
be realised better when the forces of right contrive to
capture power.” 23
Directive Principles of State Policy incorporated in Part IV of the
Constitution of India were therefore to be the “vehicles” for the
change of a backward and semi feudal society, towards a journey
for a modern and equitable society. Socialist principles were thought
to be necessary in making economic policies of the State if this
change was to become a reality. For a fair distribution of wealth and
resources, and for removal of inequality Articles 38 and 39 of the
Constitution were incorporated, which largely contain the democratic
and socialist principles of equality and fair distribution.

23 Constituent Assembly Debates, Vol. VII, Pg. 41.
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12. Initially when Fundamental Rights and Directive Principles of State
Policy were debated and discussed in the Constituent Assembly,
they were to be a part of the same group of rights. Together they
were to be the conscience of the Constitution.24 It was only later
that a division was made between them on the basis of justiciable
and non-justiciable rights; one being placed in Part III and the other
in Part IV of the Constitution. Directive Principles, as we know, are
not enforceable by any court, but as it has been stressed multiple
times by this Court, these are nevertheless the principles which are
fundamental for the governance of the country. This is what Article
37 of the Constitution mandates:
“37. Application of the principles contained in this
Part. – The provisions contained in this Part shall not be
enforceable by any court, but the principles therein laid
down are nevertheless fundamental in the governance of
the country and it shall be the duty of the State to apply
these principles in making laws.”
The heart and soul of Part IV is Article 38 of the Constitution of India,
which reads as under:
“38. State to secure a social order for the promotion
of welfare of the people. – (1) The State shall strive
to promote the welfare of the people by securing and
protecting as effectively as it may a social order in which
justice, social, economic and political, shall inform all the
institutions of the national life.
(2) The State shall, in particular, strive to minimise
the inequalities in income, and endeavour to eliminate
inequalities in status, facilities and opportunities, not
only amongst individuals but also amongst groups of
people residing in different areas or engaged in different
vocations.”
Article 39 of the Constitution of India, which is to be interpreted by
us, has to be read in light of Articles 37 and 38. Article 39 reads
as under:

24 Granville Austin, The Indian Constitution: Cornerstone of a Nation (Oxford University Press, New Delhi,
Second Impression 2000), Pg. 50.
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“39. Certain principles of policy to be followed by the
State. – The State shall, in particular, direct its policy
towards securing—
(a) that the citizens, men and women equally, have the
right to an adequate means of livelihood;
(b) that the ownership and control of the material
resources of the community are so distributed as
best to subserve the common good;
(c) that the operation of the economic system does not
result in the concentration of wealth and means of
production to the common detriment;
(d) that there is equal pay for equal work for both men
and women;
(e) that the health and strength of workers, men and
women, and the tender age of children are not
abused and that citizens are not forced by economic
necessity to enter avocations unsuited to their age
or strength;
(f) that children are given opportunities and facilities
to develop in a healthy manner and in conditions of
freedom and dignity and that childhood and youth
are protected against exploitation and against moral
and material abandonment.”
Not just the above provisions, but several other provisions in the
Directive Principles are based on socialist philosophy of a welfare
State. These are:
Article 39A – Equal justice and free legal aid.25
Article 41 – Right to work, to education and to public
assistance in certain cases.
Article 42 – Provision for just and humane conditions of
work and maternity relief.
Article 43 – Living wage, etc., for workers.

25 Inserted by s.8 of the Constitution (Forty-Second Amendment) Act, 1976.
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Article 43A - Participation of workers in management of
industries.26
Article 47 – Duty of the State to raise the level of nutrition
and the standard of living and to improve public health.
Directive Principles are non-justiciable and therefore Courts cannot
direct an authority to implement any of the Directive Principles
contained in Part IV of the Constitution, unlike in Part III, the
Fundamental Rights. But then should the Courts come in the way
of the State which brings a law in furtherance of the Directive
Principles? Is the State not following its charter of instructions which
are “fundamental in the governance of the Country”? In my opinion,
since the directive principles are fundamental in the governance
of the Country, the Courts should best apply restraint, unless such
implementation is destroying the core principles of the Constitution.
Directive Principles of State Policy lay down the goals which can only
be achieved in a welfare economy. The philosophy behind Directive
Principles is the welfare of the community, that is removal of poverty,
inequality and ensuring fair distribution of wealth. These are some
of its governing features. It has never been its aim to generate profit
and wealth for individuals.
13. Introduction of Directive Principles in our Constitution was a unique
and innovative attempt by the framers of the Constitution, as it had
till then hardly any precedent in the written Constitutions of the
world, except the Irish Constitution, from where these principles
have largely been borrowed. It was still an innovative step for it
expands and elaborates Directive Principles, unlike as given in the
Irish Constitution. While moving the Constitution (First Amendment)
Bill, 1951 in Parliament, the Prime Minister said this:
“The Constitution lays down certain Directive Principles
of State Policy and after long discussions we agreed to
them and they point out the way we have got to travel.
The Constitution also lays down certain Fundamental
Rights. Both are important. The Directive Principles of
State Policy represent a dynamic move towards a certain

26 Inserted by s.9 of the Constitution (Forty-Second Amendment) Act, 1976.
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objective. The Fundamental Rights represent something
static, to preserve certain rights which exist. Both again
are right”.27
Again, while moving the Constitution (Fourth Amendment) Bill, 195428
the Prime Minister stressed on the importance of Directive Principles
and held them to be more important than Fundamental Rights, it
was said as under:
“I would like to draw the attention of the house to something
that is not adequately stressed either in the Parliament or in
the Country. We stress greatly and argue in Courts of Law
about the Fundamental Rights. Rightly so, but there is such
a thing also as the Directive Principles of Constitution…
Those are, as the Constitution says, the fundamentals in
the governance of the Country … if, … there is an inherent
contradiction in the Constitution between the Fundamental
Rights and the Directive Principles of State Policy,…. It is
up to this Parliament to remove the contradiction and make
the Fundamental Rights subserve the Directive Principles
of the State Policy”.29
At the same time, another Member of Parliament M.S. Gurupadaswamy,
while speaking on the Constitution (Fourth Amendment) Bill, 1954
underlined the importance of Directive Principles of State Policy
and its purpose:
“I may point out that the rights that have been given in
the chapter on Directive Principles are more fundamental
than some of the so called Fundamental Rights. I feel
that the principles enunciated in Part III and Part IV of the
Constitution are inconsistent in a way… it is unfortunate
that the Directive Principles are treated as less important
than the so called Fundamental Rights. Some of the
Directive Principles seem to be more fundamental than
the Fundamental Rights. The Fundamental Rights chapter

27 See Justice O. Chinnappa Reddy, The Court and the Constitution of India: Summits and Shallows (Oxford
University Press, 2008), Pgs. 74-75.
28 This bill led to the Constitution (Fourth Amendment) Act, 1955.
29 See Justice O. Chinnappa Reddy, The Court and the Constitution of India: Summits and Shallows (Oxford
University Press, 2008), Pgs. 74-75.
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deals only with liberal rights of individuals and they seem
to conform to the old school of thought which has outlived
its utility, the school of utilitarians and the liberals. As
against this the principles enunciated in Part IV approach
a Socialist pattern. The sincerity or the goodness of
this government will be judged by how far they go to
implement these Directive Principles. It is very easy to
stick to Fundamental Rights and appear progressive while
doing nothing to reduce class difference. But real liberty
will have no meaning unless there is economic equality”.30
14. To reiterate, the purpose of the Directive Principles is the welfare of the
people and of the community. Provisions in Part IV of the Constitution
of India are directions to the State to bring such legislation which
would make the ‘Welfare State’ a reality, as it will be the deeds of
a ‘Welfare State’ which will truly make it a ‘Welfare State’. Directive
Principles have no meaning if they remain in the Constitution as
a pious precept, as some members of the Constituent Assembly
believed. 31 Directive Principles must be enforced through law.
When and how it is done will depend on our Parliament and State
legislatures as it is in their domain, but do they must, for these are
“fundamental for the governance of the Country”. Directive Principles
of State Policy are the guide maps which will take our State towards
a ‘Welfare State’. Justice O. Chinnappa Reddy in Chapter 9 of his
book32 writes:
“To any person interested in the building up of a welfare
state, it is clear that the Directive Principles of State
Policy are at least as fundamental as the Fundamental
Rights and far more important from the point of view of
the objectives to be attained as stated in the preamble
which is the key to the Constitution. It is a mistake to

30 See Justice O. Chinnappa Reddy, The Court and the Constitution of India: Summits and Shallows (Oxford
University Press, 2008), Pgs. 74-75.
31 P.S. Deshmukh said “We do not want to depend on mere platitudes and pious wishes” (Constituent
Assembly Debates, Vol. V, Pg.341). N. Ahmad referred to them as “pious expressions” (Constituent
Assembly Debates, Vol. VII, Pg. 225). B. Das called them “pious hopes and wishes” (Constituent Assembly
Debates, Vol. VII, Pg. 539). Kazi Syed Karimuddin also called them “pious wishes” (Constituent Assembly
Debates, Vol. VII, Pg. 473).
32 See Justice O. Chinnappa Reddy, The Court and the Constitution of India: Summits and Shallows (Oxford
University Press, 2008), Pg. 76.
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suppose, with due respect to some eminent judges who
so supposed, that the Fundamental Rights are more
‘transcendental’ or ‘primordial’ than the Directive Principles.
The difference between the Fundamental Rights and
the Directive Principles lies in this that the Fundamental
Rights are aimed at assuring political freedom to citizens
by protecting them against excessive state action while
the Directive Principles are aimed at securing social and
economic freedoms for citizens by state action. The one
is concerned with the rights of citizens vis-à-vis the state
while the other is concerned with the duties of the state
vis-à-vis the body of citizens. In the words of Ambedkar,
the Fundamental Rights make India a political democracy
and the Directive Principles would make it a social and
economic democracy.”
It is in the Directive Principles of State Policy that we find a vision of
the social revolution that the framers had in mind for our Country. It
aimed at making people of India free in a positive sense, “free from
the passivity engendered by centuries of coercion by society and by
nature, free from the abject physical conditions that had prevented
them from fulfilling their best selves”.33
15. In the beginning of our functioning as a new Republic, the non-
enforceability of Directive Principles vis-à-vis the Fundamental
Rights weighed with the Courts as well as some prominent “Legal
Scholars”,34 which resulted in the importance and significance of
Directive Principles being undermined.
In State of Madras v. Champakam Dorairajan, 1951 SCC OnLine
SC 30, this Court held as under:
“…..The Directive Principles of State Policy which by
Article 37 are expressly made enforceable by a court
cannot override the provisions found in Part III which,
notwithstanding other provisions are expressly made
enforceable by appropriate writs, orders or directions

33 Granville Austin, The Indian Constitution: Cornerstone of a Nation (Oxford University Press, New Delhi,
Second Impression 2000), Pg. 51.
34 H.M. Seervai has been extremely critical of the role of directive principles, to the extent of considering it
almost superfluous and unnecessary.
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under Article 32. The Chapter on Fundamental Rights is
sacrosanct and not liable to be abridged by any legislative
or executive act or order except to the extent provided in
the particular Article in Part III. The Directive Principles
of State Policy have to conform to and run subsidiary to
the Chapter on Fundamental Rights. In our opinion that
is the correct way in which the provisions found in Parts
III and IV have to be understood….” 35
16. A subtle change is seen later in the interpretation of Directive
Principles, where the Court could see that an attempt should be
made to harmoniously construct Directive Principles with Fundamental
Rights. In In Re: Kerala Education Bill, 1957, 1958 SCC OnLine
SC 8, this Court states as under:
“….The directive principles of State policy have to conform
to and run as subsidiary to the Chapter on Fundamental
Rights… nevertheless, in determining the scope and ambit
of the fundamental rights relied on by or on behalf of any
person or body the court may not entirely ignore these
directive principles of State policy laid down in Part IV of the
Constitution but should adopt the principle of harmonious
construction and should attempt to give effect to both as
much as possible.” 36
In Mohd. Hanif Quareshi and others v. State of Bihar and others,
1957 SCC OnLine 629, this Court again stresses on harmonious
interpretation:
“…….a harmonious interpretation has to be placed upon
the Constitution and so interpreted it means that the State
should certainly implement the directive principles but it
must do so in such a way that its laws do not take away
or abridge the fundamental rights.” 37
17. The Constitution mandates that the Parliament and the legislative
bodies of the States must apply Directive Principles in making
their laws. They would be failing in their duty if they ignore this

35 1951 SCC OnLine SC 30, para 15.
36 1958 SCC OnLine SC 8, para 8.
37 1957 SCC OnLine SC 629, para 12.
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Constitutional mandate. It will be the same for the Courts if they fail
to enforce Fundamental Rights which are enshrined in Part III of the
Constitution. These are coordinate functions and must be performed
in harmony.38 The earlier position taken by this Court in judgments
cited above, in my opinion, did not reflect the correct position of
the Constitution. An extremely eloquent expression underlining
the significance of Directive Principles was given by Justice Y.V.
Chandrachud in Kesavananda Bharati:
“…..As I look at the provisions of Parts III and IV, I feel
no doubt that the basic object of conferring freedoms on
individuals is the ultimate achievement of the ideal set out
in Part IV. A circumspect use of the freedoms guaranteed
by Part III is bound to subserve the common good but
voluntary submission to restraints is a philosopher’s
dream. Therefore Article 37 enjoins the State to apply the
Directive Principles in making laws. The freedoms of a few
have then to be abridged in order to ensure the freedom
of all. It is in this sense that Parts III and IV, as said by
Granville Austin, together constitute the ‘conscience of
the Constitution’. The Nation stands today at the cross-
roads of history and exchanging the time honoured place
of the phrase, may I say that the Directive Principles of
State Policy should not be permitted to become ‘a mere
rope of sand’. If the State fails to create conditions in
which the fundamental freedoms could be enjoyed by all,
the freedom of the few will be at the mercy of the many
and then all freedoms will vanish. In order, therefore, to
preserve their freedom, the privileged few must part with
a portion of it.” 39
Kesavananda Bharati, is a landmark decision which is notable
for the strong but positive rupture it makes in our Constitutional
journey and lays down a new path of Constitutional understanding
and interpretation with its “basic structure” doctrine. Kesavananda
Bharati also firmly establishes the importance of directive principles

38 P.K. Tripathy, Spotlights on Constitutional Interpretation (N.M Tripathi Pvt. Ltd., 1972), Pg. 295.
39 [1973] Supp. 1 SCR 1 : (1973) 4 SCC 225, para 2120.
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in our Constitution and in interpretation of the legislative measures
which have been brought about for the enforcement of Directive
Principles.
Later, in Minerva Mills, Justice Y.V. Chandrachud further reiterates
this position:
“Part III and Part IV are like two wheels of a chariot, one
no less important than the other. In other words, Indian
Constitution is founded on the bedrock of the balance
between Parts III and IV. This harmony and balance
between Fundamental Rights and the Directive Principles
is an essential feature of the Basic Structure of the
Constitution.” 40
In State of Kerala v. N.M. Thomas (1976) 2 SCC 310, Justice K.
K. Mathew while concurring with the majority opinion blends equality
in Article 14 and 16 with Part IV of the Constitution of India. What
he says is extremely relevant:
“Today, the political theory which acknowledges the
obligation of Government under Part IV of the Constitution
to provide jobs, medical care, old age pension, etc.,
extends to human rights and imposes an affirmative
obligation to promote equality and liberty. The force of the
idea of a State with obligation to help the weaker sections
of its members seems to have increasing influence in
constitutional law. The idea finds expression in a number
of cases in America involving social discrimination and also
in the decisions requiring the State to offset the effects of
poverty by providing counsel, transcript of appeal, expert
witnesses, etc. Today, the sense that Government has
affirmative responsibility for elimination of inequalities,
social, economic or otherwise, is one of the dominant
forces in constitutional law. While special concessions
for the underprivileged have been easily permitted, they
have not traditionally been required. Decisions in the
areas of criminal procedure, voting rights and education
in America suggest that the traditional approach may

40 [1981] 1 SCR 206 : (1980) 3 SCC 625, para 56.
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not be completely adequate. In these areas, the inquiry
whether equality has been achieved no longer ends with
numerical equality; rather the equality clause has been
held to require resort to a standard of proportional equality
which requires the State, in framing legislation, to take into
account the private inequalities of wealth, of education and
other circumstances”.41
In State of Gujarat v. Mirzapur Moti Kureshi Kassab Jamat and
others (2005) 8 SCC 534, this Court held that such restrictions which
aim at fulfilling the Directive Principles are reasonable as long as
they do not run in “clear conflict” with Fundamental Rights.
A scholarly study on the decisions of Supreme Court of India on social
rights divides the period so far in three phases. The initial phase in
the 1950s, 60s and even early 70s was a time when by and large
this Court treated Directive Principles as subservient to Fundamental
Rights. The second phase is when this Court spoke about harmony
between the two sets of rights and then the third phase beginning in
the 80s and 90s was when some of the rights which fall in Part IV
were read as part of fundamental right to life with dignity.42
18. In his acknowledged scholarly work (the three volumes on Constitution
of India), H.M. Seervai holds Directive Principles of State Policy of
little significance. In the Fourth Edition of his Book “Constitutional
Law of India” he has this to say about the Directive Principles:
“… To my knowledge, no one had been able to dispute
the proposition that if directive principles had not been
enacted, or are struck out, nothing would have happened,
and, in my submission, it is incapable of being disputed.
However, the answer to the second question, “What
would have happened if fundamental rights had not
been enacted or are struck out?” is that the result would
have been a disaster and our country would have been
in danger of being converted into a dictatorship and
Police State”.43

41 (2005) 8 SCC 534, para 67.
42 Shylashri Shankar, Scaling Justice: The Supreme Court, Social Rights and Civil Liberties in India (Oxford
University Press, 2009), Pg. 124.
43 H.M. Seervai, Constitutional Law of India (4th Ed., Vol. II, 1993), Pgs. 1923-1924.
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The learned scholar expressed his scepticism on the importance of
Directive Principles and held them to be superfluous and unnecessary,
and his reasons are at least partly based on the fact that a large
number of democratic countries do not have Directive Principles
and they are also not necessary for a welfare State.44 However, as I
write this opinion, about a dozen countries in the world have adopted
Directive Principles, in one way or the other, in their Constitution,
apart from Ireland and India.
Lael K. Weis in her article ‘Constitutional Directive Principles’ 45
cites examples of eleven Countries (mostly African Countries) who
have borrowed the “Drafting Formula” from the Indian Constitution.
In other words, some of the principles in the Directive Principles
of State Policy of the Indian Constitution have been made a part
of the Constitution of other countries. These are: Constitution
of Papua New Guinea, 1975; Constitution of United Republic of
Tanzania, 1977; Constitution of Sri Lanka, 1978; Constitution of
Zambia, 1991; Constitution of Ghana, 1992; Constitution of Uganda,
1995; Constitution of Gambia, 1996; Constitution of Eritrea, 1997;
Constitution of Nigeria, 1999; Constitution of Swaziland, 2005 and
Constitution of Nepal, 2015.
In our Constitutional journey, without doubt, it is the provisions of Part
III as well as that of Part IV, Fundamental Rights as well as Directive
Principles, which have played the major role in influencing our society,
politically, socially and economically. It is not without reason that
Granville Austin calls Fundamental Rights and Directive Principles
of State Policy, together, as the conscience of the Constitution.
19. Coming back to the direct question before this Court on “material
resources of the community”. A Three Judge Bench of the Supreme
Court in Ranganatha Reddy and later a Five Judge Constitution
Bench in Sanjeev Coke and then to some extent even a Nine Judge
Constitution Bench in Mafatlal Industries v. Union of India (1997)
5 SCC 536 had no difficulty in answering the question that “material

44 H.M. Seervai, Constitutional Law of India (4th Ed., Vol. II, 1993), Pg. 1932; “The framers of our Constitution
borrowed the idea of enacting directive principles from the Irish Constitution. However, a large number
of free democratic countries, federal and unitary, have no directive principles. And contemporary history
shows that the enactment of directive principles is not necessary for introducing a welfare State.”
45 Lael K. Weis, Constitutional Directive Principles, 37 (4) Oxford Journal of Legal Studies 916 (2017), Pg.
923.
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resources of the community” includes privately owned resources.
There is no judgment of this Court which has interpretated the
phrase “material resources of the community”, in any other manner,
or has held that private property is not a part of material resources
of the community. Only doubts have been raised, and it is on these
‘doubts’ that this Nine Judge Bench has finally been constituted to
give its verdict.
There should be no confusion that the expression “material resources
of the community” used in Article 39(b) includes privately owned
resources. This has been the consistent view of this Court, as
already referred above. It could not have been otherwise. To my
mind a reference to material resources in Article 39 (b) without
privately owned resources being a part of it, does not even make
any sense. It is only when we include privately owned resources, as
a part of the “material resources of the community” that the purpose
of Articles 38 and 39 is fully realised. It is only then that the socialist
and democratic principles incorporated in our Constitution get their
true meaning. The aims and objects of our freedom fighters, their
vision for a just and equitable society, the extensive debates in the
Constituent Assembly, the provisions incorporated in Part IV, even
other than Article 39 (b), all have to be taken into consideration and
they leave us with no doubt that privately owned resources are a part
of “material resources of the community”, as given in Article 39(b).
Let us imagine the opposite. What if privately owned resources are
not a part of “material resources of the community”? It would then
mean that material resources will include only public resources. But
public resources are in any case meant to serve the public. It is
only when “private ownership” and “private property” are included
in “material resources” that the provision acquires a meaning. We
also have to read clauses (b) and (c) of Article 39 together, and
in light of Article 38 of the Constitution of India, in order to get a
better perspective. Article 39(c) mandates that our economic system
should not result in concentration of wealth and means of production
(in a few hands). Material resources (both private and public) of
the community must subserve the common good. The debates in
the Constituent Assembly show that efforts made by some of the
members to specify the scope of material resources were turned
down for this reason.
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There is another aspect to the matter. In case private property or
privately owned resources are not considered as a part of “material
resources of the community”, and it would only include public
resources and public property then the laws which are made for
enforcement of these Directive Principles do not actually require the
protection of Article 31-C. Protection of Article 31-C is only required
when private property and privately owned resources are being
acquired to subserve the common good and while doing so it is
violating Article 14 and 19 of the Constitution of India. When public
resources are being utilised for common good, there is no violation of
Article 14 and 19 of the Constitution of India and consequently there
is no requirement of Article 31-C. As we have already referred in the
preceding paragraphs, the unamended Article 31-C to the extent its
validity has been upheld in Kesavananda Bharati still stands as a
part of the Constitution and exists as a protective umbrella to the
laws which are made in pursuance of Article 39 (b) and (c) of the
Constitution of India.
The unamended Article 31-C to the extent held valid in Kesavananda
Bharati is a part of the Constitution and protects the laws made in
pursuance of Article 39 (b) and (c). This has also been discussed
in detail in Minerva Mills, Waman Rao & Others v. Union of India
(1981) 2 SCC 362 and also in Sanjeev Coke.
20. During the Constituent Assembly debates, an amendment was moved
by one of the members, Mr. K. T. Shah, who proposed to elaborate
as to what would be “material resources of the community”. According
to him, these would include all the natural resources, minerals, etc.
This amendment was turned down by the Assembly. Dr. Ambedkar
while denying this amendment also gave his reasons, which were
that it is always better to keep some expressions in general terms
since these are being incorporated in a Constitution. In case one
elaborates the phrase “material resources”, the Constituent Assembly
would be arresting and limiting its meaning. From this it can also be
deducted that according to Dr. Ambedkar, a generalised term would
include the entire resources of the community, including private
property, and that also seemed to be the general consensus.
The precise reasons given by Dr. Ambedkar while disagreeing with
the proposed amendment were as under:
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“I think the language that has been used in the Draft is
a much more extensive language which also includes
the particular propositions which have been moved by
Professor Shah, and I therefore do not see the necessity for
substituting these limited particular clauses for the clauses
which have been drafted in general language deliberately
for a set purpose. I therefore oppose his second and third
amendments”.46
What is important here is that, in turning down the proposed
amendment of Shri Shah, the Constituent Assembly did not think it
correct to limit “material resources” to specified resources alone and
it was deliberately left as a broad-based term – “material resources
of the community”.
In doing so, Dr. B. R. Ambedkar showed great wisdom and acumen
as the Chairman of the Drafting Committee of the Constitution. He
understood well that the Constituent Assembly is not in the process of
making an ordinary statute, it was the Constitution which was being
made. A Constitution has to be drafted in a manner to withstand the
test of several years and generations, and therefore, by necessity
certain provisions and words have to be in general terms, which is
referred to as ‘Majestic Generalizations’.
21. A. Barak assigns three reasons as to why in a Constitution some
expressions have to be broad based and in general terms; of which
two are important. The first is because the constitutional text expresses
a general agreement of the Constituent Assembly (as was the case in
India). “In order to reach agreement, nations generally must confine
themselves to opaque and open-ended terms, reflecting their ability
to reach consensus only at a high level of abstraction”.47
The second is that the constitutional text is designed to regulate
human behaviour of future generations, therefore, by necessity the
language which has to be adopted should be flexible enough to
include new viewpoints, positions and modes of behaviour which
cannot be predicted at the time when the Constitution is being written.
“Otherwise, the constitutional text would be obsolete the day it is

46 Constituent Assembly Debates, Vol. VII, Pgs. 518-19.
47 Aharon Barak, Purposive Interpretation in Law (Universal Law Publishing Co., 2007), Pg. 372.
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enacted. At the same time, a constitutional text must be definitive
enough to bind the branches of government and prevent them from
behaving in the future, in a way that is contrary to the viewpoints,
positions, and social behavior that the text seeks to preserve. The
language of a constitutional text must be both rigid and flexible. “Air
valves” or open-ended terms that can be interpreted in a number
of ways serve this purpose. Constitutions define human rights in
open-textured terms, using “majestic generalities”.48
Dr. Ambedkar understood these concepts well and therefore as we
have seen “material resources of the community” was not elaborated.
In my opinion, the purpose was not to restrict the meaning of “material
resources”, by restricting the phrase only to a few given names
(as Sri K.T. Shah had proposed) but to leave it to the legislature
to include any material resource which would subserve common
good. The choice of the words “material resources” and not “natural
resources”, is also significant.
22. Again, the words ‘ownership’ and ‘control’ have to be interpreted
both conjunctively and disjunctively depending on the purpose and
wisdom of the legislatures. At times, both ownership and control of
material resources are required for public purpose while at some
other instances it would not be necessary to acquire the ownership
but only control of these resources. Shri Tushar Mehta, the learned
Solicitor General of India, laid particular emphasis on this aspect.
It will depend from fact to fact, situation to situation, and that
should always be left to the wisdom of the legislative bodies, as
the learned Attorney General Sri R. Venkataramani and Sri Gopal
Sankarnarayanan, Senior Advocate (representing State of West
Bengal) would also argue.
23. The first clear opinion by the Supreme Court on privately owned
resources being a part of the “material resources of the community”,
though by a minority of three judges, is in Ranganatha Reddy.
The State of Karnataka had challenged before this Court, the order
of the Karnataka High Court, which had set aside a government
scheme and also the provisions in the Karnataka Contract Carriages
(Acquisition) Act, 1976 (hereinafter referred to as “Karnataka Act”)

48 Aharon Barak, Purposive Interpretation in Law (Universal Law Publishing Co., 2007), Pgs. 372-373. Also
see Fay v. New York 332 U.S. (1947) (Jackson, J.), Pg. 261, 282.
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for acquisition of all private owned transport buses, which were to
be plied by the state-owned corporation. The object and reasons of
the Act showed that this was being done to implement Article 39 (b)
and (c) of the Constitution. The High Court, however, held that there
was no “public purpose” in the acquisition. This order of the High
Court was set aside by the Seven Judge Bench, where all the Judges
were unanimous in holding that the High Court was wrong in setting
aside the scheme of the Government as it was indeed for a “public
purpose”. This was done by making a harmonious construction and
reading down certain provisions of the Act. Three Judges (Justice
V.R. Krishna Iyer, Justice P.N. Bhagwati and Justice Jaswant Singh)
out of the seven, in their concurring but separate opinion went
ahead to emphasise as to what the expression “material resources
of the community” would mean in Article 39(b) of the Constitution
of India. This opinion is significant for it is here that we get a clear
and unequivocal description of what constitutes “material resources
of the community”. It is respectfully stated that this opinion holds the
field even today and has been followed by the Five Judge Bench in
Sanjeev Coke and later in many other cases.
24. Although Shri Tushar Mehta, the learned Solicitor General of India,
argued at length to convince this Court that the observations in
Mafatlal are not obiter dicta and it is a binding precedent for this
Court, the argument is not entirely convincing. In Mafatlal, the
question before this Court primarily was of unjust enrichment. The
observations of Justice Jeevan Reddy are only incidental and were
not related to the core issue. I agree with the learned Chief Justice
on this point and I adopt the detailed reasoning given by him in
holding that the majority opinion in Mafatlal constitutes obiter dicta
and is not binding on this Court.
25. Now coming back to Ranganatha Reddy, the reason why a separate
opinion was required, was explained by Justice V.R. Krishna Iyer
and the other two Judges, as under:
“Because, to put it simplistically, a legislation for the
nationalisation of contract carriages by the Karnataka State,
where provision has been made for fair compensation
under present circumstances, has still been struck down
by the High Court on the surprising grounds of absence
of public purpose, illusoriness of compensation State
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takeover being beyond the orbit of Article 39(b) and the
like, and to express ourselves emphatically in reversal ...
on the obvious, yet basic, issue we itemise below which is
necessary to obviate constitutional derailment again. The
public sector, in our constitutional system, is so strategic
a tool in the national plan for transformation from stark
poverty to social justice, transcending administrative and
judicial allergies, that the questions raised and rulings
thereon are of larger import for the country than one
particular legislation and its vires and one particular
Government and its policies. What are those disturbing
interrogatories?” 49
The Three Judges have given a very wide meaning to the term
material resources, stating:
“81……….. material resources of the community in the
context of re-ordering the national economy embraces all
the national wealth, not merely natural resources, all the
private and public sources of meeting material needs, not
merely public possessions. Every thing of value or use in
the material world is material resource and the individual
being a member of the community his resources are part
of those of the community. To exclude ownership of private
resources from the coils of Article 39(b) is to cipherise its
very purpose of redistribution the socialist way. A directive
to the State with a deliberate design to dismantle feudal
and capitalist citadels of property must be interpreted in
that spirit and hostility to such a purpose alone can be
hospitable to the meaning which excludes private means
of production or goods produced from the instruments of
production”.50
(Emphasis supplied)
After Ranganatha Reddy, comes the unanimous decision of the
Five Judge Bench of this Court in Sanjeev Coke where ‘material
resources’ were held to be as follows:-

49 (1977) 4 SCC 471, para 40.
50 (1977) 4 SCC 471, para 81.
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“And material resources of the community in the context
of reordering the national economy embraces all the
national wealth, not merely natural resources, all the
private and public sources of meeting material needs, not
merely public possessions. Every thing of value or use in
the material world is material resource and the individual
being a member of the community his resources are part
of those of the community. To exclude ownership of private
resources from the coils of Article 39(b) is to cipherise its
very purpose of redistribution the socialist way.”
It then goes on to say this:
“We hold that the expression “material resources of the
community” is not confined to natural resources; it is not
confined to resources owned by the public; it means and
includes all resources, natural and man-made, public and
private-owned”.51
26. Since Sanjeev Coke there has been a long list of judgments of this
Court where the findings of Ranganatha Reddy and Sanjeev Coke
have been followed. Some of these are as follows: -
1. State of T.N. v. L. Abu Kavur Bai (1984) 1 SCC 515
Decision by: Y.V. Chandrachud, C.J. and S. Murtaza
Fazal Ali, V.D. Tulzapurkar, O. Chinnappa Reddy and
A. Varadarajan, JJ.
2. Tinsukhia Electric Supply Co. Ltd. v. State of Assam
(1989) 3 SCC 709
Decision by: R.S. Pathak, C.J. and Sabyasachi
Mukharji, S. Natarajan, M.N. Venkatachaliah and S.
Ranganathan, JJ.
3. Madhusudan Singh v. Union of India (1984) 2 SCC
381
Decision by: S. Murtaza Fazal Ali and M.P. Thakkar,
JJ.

51 (1983) 1 SCC 147, para 19.
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4. State of Maharashtra v. Basantibai Mohanlal Khetan
(1986) 2 SCC 516
Decision by: E.S. Venkataramiah And M. P. Thakkar,
JJ.
5. Assam Sillimanite Ltd. v. Union of India, 1992 Supp
(1) SCC 692.
Decision by: Kuldip Singh and M. Fathima Beevi, JJ.
6. Jilubhai Nanbhai Khachar v. State of Gujarat, 1995
Supp (1) SCC 596
Decision by: K. Ramaswamy and N.G. Venkatachala,
JJ.
In my opinion it would be unwise to upset the long-settled meaning
given consistently by several Benches of this Court to the phrase
“material resources of the community”, used in Article 39(b) by the
framers of the Constitution.
Did Sanjeev Coke fall in error in relying upon the observations
of minority judges in Ranganatha Reddy, penned by Justice V.R.
Krishna Iyer, as the opinion of the majority of Judges had expressly
stated their inability to agree with such observations of the minority?
Did Sanjeev Coke break judicial discipline by following the law laid
down by minority, and not following the binding precedent of majority?
And were the future decisions of this Court wrong in following the
decision in Sanjeev Coke too? The question here is essentially one
of the binding nature of a precedent. Was that breached?
27. What is a binding precedent and more precisely what would be the
value of a minority judgment. This aspect needs to be cleared.
In the common law system, which we follow in India, judicial
precedents have to be followed. This we know as stare decisis or
‘stare decisis et non quieta movere’ (stand by the decisions and not
to unsettle what is settled). A co-ordinate bench must follow the law
laid down by another co-ordinate bench. Now, the question is what
is the law laid down on Article 31-C and Article 39 (b) by the majority
of Four Judges in Ranganatha Reddy. With respect, there is none.
The only interpretation on the above provision is by the minority of
Three Judges.
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28. The background of Ranganatha Reddy case must be stated again
in order to get a proper perspective. The State of Karnataka enacted
a statute known as Karnataka Contract Carriages (Acquisition) Act,
1976, by which all the contract carriages which were in private hands
in State of Karnataka, were acquired and thus became a part of the
Karnataka State Road Transport Corporation (hereinafter referred to
as ‘Corporation’). The object and reasons of the Act52 clearly state
that the primary reason for incorporating the Act is to implement
the policy of the State mandated under Article 39(b) and (c) of the
Constitution of India. The scheme of the acquisition as well as the
vires of the Karnataka Contract Carriages (Acquisition) Act, 1976,
was challenged before the Karnataka High Court and these petitions
were ultimately allowed and the Act was declared to be in violation
of Articles 14 and 19 of the Constitution of India. It was held that
the acquisition of private properties in the form of private transport
was not in public interest, and it did not subserve common good.
There again, the defence of the State and the corporation was that
the Act was to implement a policy of the State in line with Article
39(b) & (c) of the Constitution.
The matter was taken in appeal before this Court and was ultimately
referred to a Bench of Seven Judges. All Seven Judges allowed
the appeal and upheld the constitutional validity of the Karnataka
Contract Carriages (Acquisition) Act, 1976, thereby setting aside the
order of the High Court. All the same, the majority of the Judges i.e.
Four out of the Seven Judges upheld the validity of the law by their
reading through a harmonious construction of the Act, and did not
go into the aspect of Article 39 (b) or (c), as well as Article 31-C of
the Constitution of India. This was dealt only in the minority judgment
of Justice Krishna Iyer (minority comprising Three Judges). At this
juncture, we may also note that the very purpose of the Act, the
Constitutional validity of which was challenged before the Supreme
Court, was to implement the policy of the State as mandated under

52 From the Statement of Objects and Reasons of Act 21 of 1976 — A large number of contract carriages
were being operated in the State to the detriment of public interest and were functioning stealthily as
stage carriages. This had to be prevented. Article 39(b) and (c) enjoins upon the State to see that the
ownership and control of the material resources of the community are so distributed as best to subserve
the common good and that the operation of the economic system does not result in the concentration of
wealth to the common detriment.
In view of the aforesaid it was considered necessary to acquire the contract carriages run by private
operators.
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Article 39(b) & (c) of the Constitution of India. It was also the main
argument on behalf of the State Government/the appellant to justify
the acquisition under the Directive Principles of State Policies stated
above. Nevertheless, it is true that the majority of Four Judges,
although upheld the validity of the law and thereby had set aside
the judgment of the Karnataka High Court, did so on the basis of
harmonious reading of the law. This is what they said:
“37... Since we have upheld the constitutional validity of the
Act on merits by repelling the attack on it by a reasonable
and harmonious construction of the Act, we do not consider
it necessary to express any opinion with reference to
Article 31-C read with clauses (b) and (c) of Article 39 of
the Constitution. Our learned Brother Krishna Iyer, J. has
prepared a separate judgment specially dealing with this
point. We must not be understood to agree with all that
he has said in his judgment in this regard”.53
The minority Three Judges concurred with the view of the majority
Four Judges, but gave a separate opinion along with reasons as
to why a separate opinion is necessary, which has already been
referred above. The minority of Three Judges upheld the validity
of the Karnataka Act, primarily, on the touchstone of Articles 31-C
and 39(b) & (c) of the Constitution of India. This is what was said:
“This takes us to the non-negotiable minimum of nexus
between the purpose of the acquisition and Article
39(b). Article 39(c) was feebly mentioned but Article
39(b) was forcefully pressed by the appellant. Better
read Article 39(b) before discussing its full import:
“39. (b) Certain principles of policy to be followed by the
State— The State shall, in particular, direct its policy
towards securing that the ownership and control of the
material resources of the community are so distributed
as best to subserve the common good.”
The key word is “distribute” and the genius of the Article,
if we may say so, cannot but be given full play as it fulfils
the basic purpose of restructuring the economic order.

53 (1977) 4 SCC 471, para 37.
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Each word in the article has a strategic role and the whole
article a social mission. It embraces the entire material
resources of the community. Its task is to distribute such
resources. Its goal is so to undertake distribution as best
to subserve the common good. It re-organizes by such
distribution the ownership and control.
81. “Resources” is a sweeping expression and covers
not only cash resources but even ability to borrow (credit
resources). Its meaning given in Black’s Legal Dictionary is:
“Money or any property that can be converted into supplies;
means of raising money or supplies; capabilities of raising
wealth or to supply necessary wants; available means or
capability of any kind.”
And material resources of the community in the context
of re-ordering the national economy embraces all the
national wealth, not merely natural resources, all the
private and public sources of meeting material needs, not
merely public possessions. Every thing of value or use in
the material world is material resource and the individual
being a member of the community his resources are part
of those of the community. To exclude ownership of private
resources from the coils of Article 39(b) is to cipherise its
very purpose of redistribution the socialist way. A directive
to the State with a deliberate design to dismantle feudal
and capitalist citadels of property must be interpreted in
that spirit and hostility to such a purpose alone can be
hospitable to the meaning which excludes private means
of production or goods produced from the instruments of
production”.54
In other words, the minority judgment agreed with the majority in
upholding the validity of the Karnataka Act, but went ahead justifying
the acquisition under the Karnataka Act, as it was only following
the mandate of the Constitution given in Article 39(b) and (c) of the
Constitution of India which had its protection under Article 31-C of
the Constitution of India. The minority judgment upheld the Karnataka

54 (1977) 4 SCC 471, paras 80-81.
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State of Maharashtra & Ors.

law and the acquisition made therein, by justifying the law on the
basis of Article 31-C and Article 39 (b) and (c) of the Constitution.
The majority had reached a similar conclusion, but by another
reasoning. They did not discuss Article 31-C or Article 39(b) and
(c). Although, the legislation in question was passed by the State
legislature, declaring in its objects and reasons that the Act was
enacted with the purpose of achieving the aim of Article 39 (b) and
(c) of the Constitution of India.
When the Karnataka Act was challenged in the High Court, the State
defended the legislation relying upon Article 39 (b) and (c) in the
light of Article 31-C of the Constitution. The Division Bench of the
High Court rejected the arguments of the State as it saw no public
purpose in the acquisition. Again, when the case came to this Court
in Appeal, the entire argument of the appellant was built on Article
39(b) and (c) and the protection the law had under Article 31-C.
The minority of Three Judges thus were not answering a question
which was never there, but to the contrary, they chose to answer
the fundamental question which was before them.
29. My respectful submission here is that the judgment of Three Judges
in Ranganatha Reddy does not fall under clause (5) of Article 14555
as a dissenting judgment or opinion, though yes it is also true that
what will be called as a judgment and opinion of the Court, will be
what was given by the majority of four Judges since “no judgment
and no such opinion shall be delivered by the Supreme Court save
with the concurrence of a majority of the Judges present at the
hearing of the case..” [Article 145(5)]
When later the opinion of the Three Judges is followed by the Five
Judges in Sanjeev Coke it was done as the Five Judge Constitution
Bench was persuaded by the logic and reasoning of the Three Judges.
In doing this no judicial discipline was broken as the majority of Four

55 Article 145: Rules of Court, etc.:
(1) …
(2) …
(3) …
(4) …
(5) No judgment and no such opinion shall be delivered by the Supreme Court save with the concurrence
of a majority of the Judges present at the hearing of the case, but nothing in this clause shall be deemed
to prevent a Judge who does not concur from delivering a dissenting judgment or opinion.
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Judges did not give a contrary opinion on the subjects. Admittedly,
there was no judgment before Sanjeev Coke which had held a view
contrary to what was held in Ranganatha Reddy.
Coming back to Ranganatha Reddy while answering this question,
the minority of Three Judges did not go against any of the observations
or findings of the majority judges. All they did was give a clear
opinion on a question of law, which they were called upon to do.
That was the crucial question before the Supreme Court which the
Three Judges had answered.
30. The question now is that when in Sanjeev Coke, the Five Judge
Constitution Bench unanimously followed the minority judgement in
Ranganatha Reddy did it violate judicial discipline of not following
the majority but the minority decision. In my opinion, it did not break
any judicial discipline, since in Sanjeev Coke, the Five Judges did not
go against the law laid down by the majority Judges in Ranganatha
Reddy but only adopted the logic of the Three Judges on which the
majority of Four Judges were silent.
31. It is first difficult for me to even come to the conclusion that the
Four Judges in Ranganatha Reddy entirely disagreed with the
minority opinion of Justice Krishna Iyer. It merely says “we must
not be understood to agree with all that he has said in his judgment
in this regard.” This is not exactly a disagreement. The majority of
the Four Judges chose to remain silent on the subject. It cannot
be said that the Four Judges, in any way, said anything contrary
or in opposition to what was laid down by the Three Judges in
Ranganatha Reddy, and therefore, no judicial discipline was broken
by Justice O. Chinnappa Reddy when he authored the unanimous
judgment in Sanjeev Coke by adopting the logic of the Three Judges
in Ranganatha Reddy.
Theoretically speaking there are no judgments of the Supreme Court
which may throw any light on what would be the binding nature of a
judgment of minority judges given on a subject, where the majority
has remained silent.
The logic, however, is very clear, in cases where a Judge or Judges
of the Supreme Court in minority have given a decision on a point
on which the majority has remained silent, that it would be binding
on the High Courts and all other Courts, and for this Court the least
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State of Maharashtra & Ors.

it will have is persuasive value. Reference can be made here to a
decision of this Court in KT Moopli Nair v. State of Kerala 1960
SCC OnLine SC 7. In the above judgment, the Supreme Court
had held that a tax rate of 2 rupees per acre irrespective of the
nature of the land was violative of Article 14, as unequals cannot be
treated as equals. The question which was before this Court was
whether the impugned levy, although levied as a tax on land, was
also applicable on forest land. In other words, it was argued that a
similar tax on forest land was invalid. The majority of the Judges
noticed this submission in Moopli Nair, but did not deal with it.
This was only dealt with by Justice A.K. Sarkar in his dissenting
judgment where it was held that the power to tax under Entry 49 List
II, would include taxation of forest land as well. Consequently, when
a similar matter came before Kerala High Court in V. Padmanabha
Ravi Varma Raja v. Deputy Tahsildar 1962 SCC OnLine Ker 98,
it was held by the High Court that it was bound by the minority
view of Justice Sarkar on the point and held that State legislature
had the competence to levy tax on land on which a forest stood.
Similarly, the Bombay High Court in Mahinder Bahawanji Thakur
v. S.P. Pande 1963 SCC OnLine Bom 28 had held that the minority
decision will have a precedential value on a point when the law has
not been discussed by the majority in their judgment. Allahabad
High Court held a similar view in Sudha Tiwari v. Union of India
2011 SCC OnLine All 253.
The logic therefore would be that the opinion of minority judges on
a point where the majority is silent, can be followed by the High
Courts but in the Supreme Court it will have only persuasive value.
The five learned judges in Sanjeev Coke relied upon the decision of
the minority judges in Ranganath Reddy as they were persuaded
by the logic and the interpretation given by Justice Krishna Iyer to
the phrase “material resources of the community”.
32. There is another aspect to the question which is before us today,
which is if we today hold that privately owned resources are not a
part of “material resources of the community”, we would not only
be unsettling Ranganatha Reddy and Sanjeev Coke and all the
subsequent decisions of this Court, which followed Sanjeev Coke,
but we would also be unsettling the whole body of laws including
Constitution Bench decisions of this Court which have held even
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prior to Ranganath Reddy though indirectly that privately owned
resources are part of “material resources of the community”. There
was a clear presumption in all these cases that privately owned
resources are part of “material resources of the community”.
What is the most important “material resource” of the community
in India? Undoubtedly, it is land. At the time of our independence,
inequality in land distribution was evident throughout the country.
We had big landlords, on the one hand, and landless masses of
poor peasantry on the other, who mostly worked as agricultural
labourers on the large farm lands of these landlords. The abolition
of zamindars, big landlords and middlemen was a pledge the
leaders of the freedom movement had made to the people of this
country. This was also now one of the “charters of instructions” for
the Government as Dr. Ambedkar would put it under Articles 38 and
39 of the Constitution of India. On September 10, 1949, the then
Prime Minister while speaking on Article 2456 before the Constituent
Assembly, emphasised the necessity of abolishing the zamindari
system. He underlined that this was the pledge they had given to
the nation, “and no change is going to come in our way. That is quite
clear. We will honour our pledges”.57
Since land was in the State List i.e., List II of the Seventh Schedule
of the Constitution of India, such changes had to be brought in by
the State Legislatures. Land reform legislations were thus the first
important legislations passed in different States, by and large on
the same lines, taking care of the local provisions and local factors.
These land reform legislations had to first muster the scrutiny of the
respective High Court, where these legislations were challenged by
the landlords and zamindars. High Courts, though were not unanimous
in their verdicts, for example Patna High Court struck down the Bihar
Land Reforms Act, 1950, but the validity of a similar legislation in
Madhya Pradesh was upheld. Similarly, the Constitutional validity
of U.P. Zamindari Abolition Act, 1947 was upheld by the Allahabad
High Court.

56 That came to be enacted as Article 31 of the original Constitution.
57 Constituent Assembly Debates, Vol. IX, Pg. 1195.
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This was done by Allahabad High Court in Raja Suryapal Singh
v. U.P of Govt., 1951 SCC OnLine All 183. One of the grounds
on which the U.P. Zamindari Abolition Act was challenged was that
the acquisition under it was not for ‘public purpose’ and it did not
make provisions for adequate compensation, thus, violating Article
31(2) of the Constitution. The High Court went into the question of
‘public purpose’ as used in the Constitution, and while exploring the
meaning of words ‘public purpose’, enquired as to whether there
are any other provisions which can guide the Court to attribute a
meaning to these words.
The decision of Allahabad High Court came in the very early days of
the Constitution when the relationship between Directive Principles
and Fundamental Rights was yet to be explored. It was a time when
the First Constitutional Amendment had yet to be introduced. We
would like to reproduce here some of the observations of Allahabad
High Court:
“41. Now is there to be found in the Constitution of
India anything to guid the Cts. as to the meaning to
be attributed to the expression “public purpose” when
used therein? We think there is. Chap. 4 contains what
are described as directive principles of State policy, &
although those principles are not enforceable by any Ct.
Article 37 specifically lays down that they are nevertheless
fundamental in the governance of the country & that “it
shall be the duty of the State to apply these principles in
making laws.
42. If then we examine the directive principles we find that
Article 39, cls. (b) & (c) provide:
“(b) that the ownership & control of the material resources
of the community are so distributed as best to sub-serve
the common good;
(c) that the operation of the economic system does not
result in the concentration of wealth & means of production
to the common detriment..
……
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47. If, therefore, the acquisition of property sought to
be affected (effected?) by the impugned Act is for the
purpose of implementing one or more of the directive
principles of State policy it will, in our judgment, be for a
public purpose within the meaning of the Constitution, &
it will be unnecessary for us to consider whether for other
purposes it comes within the meaning which the law has
given to that expression.” 58
33. In order to safeguard land reform laws from the interference of the
Courts, the Constitution (First Amendment) Act, 1951 was introduced.
Though there were other reasons as well, they may not be relevant
for our purposes.
The Statement of Objects and Reasons of the First Constitution
(Amendment) Bill, 1951 states as follows: -
“The main object of the Bill are, accordingly to amend
Article 19 for the purposes indicated above and to insert
provisions fully securing the constitutional validity of
zamidari abolition laws in general and certain specified
State Acts in particular.”
At that time, the Constituent Assembly was working as the provisional
Parliament because the First General Elections were yet to be
conducted. The urgency of the provisional Parliament in bringing the
First Constitutional Amendment was explained by the Prime Minister
on May 16, 1951, who said that the delay was causing injustice to
millions of Indians, and there was an urgent need to incorporate
Article 31A and 31B and the Ninth Schedule to the Constitution. 59
Then explaining the predictable long delay the land reforms would
take in Courts, against which nothing much could be done, he said
as follows:
“It is not good for us to say we are helpless before
fate and the situation which we are to face at present.
Therefore we have to think in terms of these big changes

58 1951 SCC OnLine All 183, paras 41, 42 and 47.
59 PARLIAMENTARY DEBATES (PART II-PROCEEDINGS OTHER THAN QUESTIONS AND ANSWERS),
Pg. 8830. Prime Minister Nehru explained the urgency as follows :-
“……the primary problem is the land problem today in Asia, as in India. And every day of delay adds to
difficulties and dangers apart from being an injustice in itself.”
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Property Owners Association & Ors. v.
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land changes and the like and therefore we thought of
amending article 31. Ultimately, we thought it best to
propose additional articles 31A and 31B in addition to
that there is a schedule attached of a number of Acts
passed by the State Legislatures, some of which have
been challenged or might be challenged and we thought it
best to save them from long delays and these difficulties,
so that this process of change which has been initiated
by the States should go ahead. Many of us present here
are lawyers and have had some training in law which
is a good training and many of us respect lawyers. But
nevertheless a lawyer represents precedent and tradition
and not change, not dynamic process. Above all the lawyer
represents litigation…” 60
In other words, the Parliament could not wait for decisions of Courts
to settle the position in regard to land reforms, as it could take a
long time and every day of delay in bringing land reforms would be
an injustice to the people to whom they had promised these reforms
long before Independence. The Parliament wanted to stabilize the
situation as early as possible and did not want these land reforms to
remain entangled in the legal battles, at least this is what was thought.
34. The First Amendment, inter alia, introduced Articles 31-A & 31-B and
the Ninth Schedule to the Constitution with an aim to strengthen
land reform laws with the innovative Ninth Schedule, providing safe
harbour to such legislations.
The First Amendment was challenged before the Supreme Court in
the famous Shankari Prasad Singh v. Union of India, AIR 1951
SC 458 where it was upheld. The powers of the Parliament under
Article 368 of the Constitution of India of amending the Constitution
were held to be plenary which could also amend the Fundamental
Rights in the Constitution.
Subsequently, decisions of High Courts on land legislations were
challenged before this Court in State of Bihar v. Kameshwar Singh
(1952) 1 SCC 528, but now Article 31A, Article 31B and the Ninth
Schedule were there in the Constitution after getting approval of this
Court in Shankari Prasad.

60 Parliamentary Debates (Part II- Proceedings Other than Questions and Answers), Pgs. 8831-8832.
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Justice S.R Das in Kameshwar Singh underlined the importance of
Articles 38 and 39 in bringing social, economic and political justice.
He stated as under:
“…Indeed, what sounded like idealistic slogans only in the
recent past are now enshrined in the glorious Preamble
to our Constitution proclaiming the solemn resolve of the
people of this country to secure to all citizens justice,
social, economic and political, and equality of status and
of opportunity. What were regarded only yesterday, so to
say, as fantastic formulae have now been accepted as
directive principles of State policy prominently set out in
Part IV of the Constitution. The ideal we have set before
us in Article 38 is to evolve a State which must constantly
strive to promote the welfare of the people by securing and
making as effectively as it may be a social order in which
social, economic and political justice shall inform all the
institutions of the national life. Under Article 39 the State
is enjoined to direct its policy towards securing, inter alia,
that the ownership and control of the material resources
of the community are so distributed as to subserve the
common good and that the operation of the economic
system does not result in the concentration of wealth and
means of production to the common detriment… what,
I ask, is the purpose of the State in adopting measures
for the acquisition of the zamindaries and the interests of
the intermediaries? Surely, it is to subserve the common
good by bringing the land, which feeds and sustains the
community and also produces wealth by its forest, mineral
and other resources, under State ownership or control.
This State ownership or control over land is a necessary
preliminary step towards the implementation of the directive
principles of State policy and it cannot but be a public
purpose… Further, it must always be borne in mind that
the object of the impugned Act is not to authorise the
stray acquisition of a particular property for a limited and
narrow public purpose but that its purpose is to bring the
bulk of the land producing wealth under State ownership
or control by the abolition of the system of land tenure
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Property Owners Association & Ors. v.
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which has been found to be archaic and non-conducive
to the general interest of the community...”61
There was now to be a ceiling on land and the surplus was to be
distributed among the marginal and landless farmers, though further
legislations would be required. It is true that in years to come, in reality,
the rich and powerful landlords defeated much of the provisions of
land reforms, yet the land reforms had its positive effects. Professor
Aditya Mukherjee in his book “Political Economy of Colonial and
Post-Colonial India” states as under:
“Also, though the opportunity to acquire large areas of
surplus lands for redistribution was missed because of
defective and delayed ceiling laws, in the long run the
high population growth and the rapid subdivision of large
holdings over several generations (in the absence of the
practice of primogeniture for over the ceiling limits. In fact,
the number of holding and the areas operated under the
category of large holdings and the area operated under
the category of large holdings, 25 acres or above (even
15 acres and above), kept falling in the decades since
independence right upto the 1990s. Except in certain
small pockets in the country, very large landholdings
of the semi feudal type now became things of the past.
Inequality among landowners was no longer a key issue,
as it was not very skewed any more. By one estimate, by
1976-7 nearly 97 per cent of the operated holdings were
below 25 acres and 87 per cent of the holdings were
below 10 acres.” 62
The eminent scholar of Indian agriculture C.H. Hanumantha Rao
who has also been quoted by Aditya Mukherjee has this to say
about the land reforms: “The law discouraged concentration of
landownership beyond the ceiling level and thus prevented the
possible dispossession of numerous small and marginal holders
which would probably have occurred through a competitive process
in the land market in the absence of a ceiling on landholdings”.63

61 (1952) 1 SCC 528, para 142.
62 Aditya Mukherjee, Political Economy of Colonial and Post-Colonial India (Primus Books, 2022), Pg. 511.
63 C.H Hanumantha Rao, Rural Society and Agricultural Development in Course of Industrilisation: Case of
India, 26 Economic and Political Weekly (1991), Pg. 691.
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What is more important is the fact that essentially land reform
laws were upheld on these principles by the Supreme Court (See:
Kameshwar Singh and Shankari Prasad). In other words, taking
away of material resources from private hands for public purposes
was held to be constitutional by the Supreme Court. For our purposes,
therefore, logically taking away of material resources from private
hands for the good of the community was upheld even before
Ranganath Reddy. We see no reason as to why there can be any
different view now simply because the material resources may not
only be land but some other “material resources”.
35. In 1964, the Government of India appointed a Commission under
the Commission of Inquiry Act, 1952 to inquire into concentration of
wealth. The terms of its reference were as follows:
“(a) to inquire into the extent and effect of concentration
of economic power in private hands and the prevalence of
monopolistic and restrictive practices in important sectors
of economic activity other than agriculture with special
reference to-
(i) the factors responsible for such concentration and
monopolistic and restrictive practices;
(ii) their social and economic consequences, and the
extent to which they might work to the common
detriment; and
(b) to suggest such legislative and other measures that
might be considered necessary in the light of such enquiry,
including, in particular, any new legislation to protect
essential public interests and the procedure and agency
for the enforcement of such legislation.” 64
This Commission gave its report in 1965 called the ‘Report of the
Monopolies Inquiry Commission 1965’, which was prepared after
taking views from leading businessmen, State governments and
various other stakeholders. Chapter II titled ‘Causes of Concentration’
in the report, earmarked the following as the primary reasons for
concentration of wealth in India:

64 Introduction to Report of the Monopolies Inquiry Commission 1965.
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(a) Easier Access to Credit: Big enterprises were able to obtain
credit from banks on much easier terms than small businesses,
which further helped in the growth of concentration, as they can
offer much better security.
(b) Only the Indian industrialists had the skill and knowledge
to successfully run an enterprise. They were able to raise
sufficient capital, from the public through limited liability public
companies, so as to afford licences and import raw materials
and machinery required to proliferate the nascent economy of
independent India.
(c) As a result of the policies to achieve self-reliance, most foreign
enterprises were taken over by a few Indian industrialists as
only they could afford such an acquisition.
(d) Formation of Industrial Conglomerates: During World War II, the
colonial government granted subsidies to certain enterprises
to expand their production capacity in order to support the war
effort. This helped increase their profits and allowed them to
acquire their competitors, leading to an elimination of competition
and concentration of economic power in the hands of those few
select business houses
The Report referred to the provisions in the Constitution to prove the
point that the framers of our Constitution were aware of the tendency
of the national economy, which favoured concentration of wealth in
a few hands and this had to be remedied:
“It would be wrong to think that the dangers of excessive
concentration were not recognised by the Indian statesmen.
The makers of the Indian Constitution were well aware of
this potential danger. It was to impress upon the future
governments of the country the need of fighting this danger
that the following principles were laid down in article 39(b)
and (c) of the Constitution.” 65
The point which is being made here is that private wealth was only
concentrated in a few hands and there was a huge gap between the

65 Report of the Monopolies Inquiry Commission 1965 (Vol-I), Pg. 6.
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rich and the poor and the distribution of wealth was not taking place
as it ought to have as there were provisions in the Constitution to
bring suitable changes.
36. Measures the Government could take in reducing inequality and
redistributing wealth could only be through its laws and the schemes
under the law, but then these laws invariably faced challenges
before the constitutional courts, which significantly delayed their
implementation. One example is the laws for abolition of zamindari
as discussed previously. Another important resource, which the State
sought to take control of in pursuance of achieving the objectives
of Article 39(b) & (c), was financial assistance, to the farmers in
particular. It was not difficult for big enterprises to obtain credit. Also,
the landowning farmers could mortgage their land to obtain credit but
the landless farmers had no collateral to provide as security against
credit before the private banks.
Agriculture was the main source of livelihood for a majority of Indians.
All the same, farmers in our country were perpetually indebted to the
money lenders and had hardly any other resource to look forward
to. The State was required to support the farmers in adopting new
techniques if the food-grains production was to increase. Farmers
needed financial support in the form of credit which could not have
been expected through private banks.
Also, the agrarian reforms in the initial years would have failed to
achieve their purpose if farmers, who benefitted from those reforms,
were not to be supported in agriculture production. No doubt that
agrarian reforms hold great significance in India, but it would be
wrong to say that the abolition of zamindaris would be enough for
the tillers of the soil. Merely handing over the most precious ‘material
resource’ (land) to the farmers was not sufficient; something more
was required to be done. Financial assistance through easy loans
were to be made available to farmers, and they were also to be
provided with genetic seeds (HYV66 seeds), pesticides etc. This
was all to be a part of the Green Revolution of the late 1960s.
Institutional credit support to the farmers would become easier with
the nationalisation of the banking system, besides its impacts on
other parts of the economy.

66 High-Yielding Variety.
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Property Owners Association & Ors. v.
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37. To understand the Bank Nationalisation Case, we have to go back
a few years prior to when these measures were taken by the State.
In State of West Bengal v. Bela Banerjee (1953) 2 SCC 648, a
Five-Judge bench of this Court was dealing with the provisions of
West Bengal Land Development and Planning Act, 1948, under
which the State could acquire land for public purposes including
settling immigrants who had migrated to West Bengal from erstwhile
East Pakistan (now Bangladesh). Proviso to Section 8(b) of this
Act had fixed the market value as the maximum compensation as
on 31.12.1946, for the lands acquired irrespective of the date of its
actual acquisition. This Court held the proviso to be unconstitutional
on the ground that it offended Article 31(2), which at the time,
stood as follows:
“(2) No property, movable or immovable, including any
interest in, or in any company owning, any commercial
or industrial undertaking, shall be taken in possession of
or acquired for public purposes under any law authorizing
the taking of such possession or such acquisition, unless
the law provides for compensation for the property taken
possession of or acquired and either fixes the amount of
the compensation, or specifies the principles on which,
and the manner in which, the compensation is to be
determined and given.”
Justice Shastri, writing for the Constitution Bench, observed that
the legislature has the discretion of laying down principles on which
compensation has to be determined but “such principles must ensure
that what is determined as payable must be compensation, that is, a
just equivalent of what the owner has been deprived of.” 67 Further,
it was observed that principles to determine the compensation are
justiciable and whether they took into consideration all factors which
make up the true value of the property has to be examined.
Apart from this issue of ‘just equivalent’ doctrine, the Government also
realised that the detailed description of the property in the original
Article 31(2) would pose a problem for laws not only essentially
related to acquisition but also for the legislations which incidentally
touched on property rights.

67 (1953) 2 SCC 648, para 6.
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38. To overcome these difficulties, the Parliament introduced the
Constitution (Fourth Amendment) Act 1955, which, inter alia, amended
Article 31(2) and excluded ‘regulatory laws’ from the purview of
‘acquisition’. For this, the elaborate description in the original Article
31(2) in the form of the words ‘moveable or immoveable, including
any interest in, or in any company owning any commercial or
industrial undertaking’ was removed and the question of adequacy
of compensation was made a non-justiciable issue. The amended
Article 31(2) was as follows:
“(2) No property shall be compulsorily acquired or
requisitioned save for a public purpose and save by
authority of a law which provides for compensation for the
property so acquired or requisitioned and either fixes the
amount of the compensation, or specifies the principles on
which, and the manner in which, the compensation is to be
determined and given; and no such law shall be questioned
in any court on the ground that the compensation provided
by that law is not adequate.”
The Fourth Amendment, so far as it relates to Article 31(2), was
aimed at restricting judicial interference on the question of adequacy
of compensation. On 11th April 1955, while discussing the Bill (that
led to the Constitutional (Fourth Amendment) Act, 1955), the then
Prime Minister had said in Lok Sabha that:
“Remember this, that the sole major change is to make
clear one thing which I submitted on the last occasion,
was clear to us at the time this Constitution was framed.
That is to say, according to the Constitution as put forward
before the Constituent Assembly and as it emerged from
the Constituent Assembly, the quantum of compensation or
the principles governing compensation would be decided
by the legislature. This was made perfectly clear. Now, it
is obvious that those who framed the Constitution failed in
giving expression to their wishes accurately and precisely
and thereby the Supreme Court and some other Courts
have interpreted it in a different way. The Supreme Court is
the final authority for interpreting the Constitution. All I can
say is that the Constitution was not worded as precisely as
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the framers of the Constitution intended. What the framers
of the Constitution intended is there for anyone to see.
All that has been done now is to make that wording more
precise and more in accordance with what the framers of
the Constitution at that time meant and openly said. That
is the only thing.” 68
In other words, the Government of the day was of the view that the
framers of the Constitution never intended that compensation be
‘just equivalent’ to what owners are deprived of and in any case,
compensation was to be the sole domain of the legislatures and Courts
cannot go into that aspect. The decisions of this Court, however, go
against this view that Courts are altogether precluded from going
into the question of adequacy of compensation.
39. A Five-Judge bench of this Court in Vajravelu v. Special Deputy
Collector, 1964 SCC OnLine SC 22 dealt with the scope of the
Fourth Constitutional Amendment qua Article 31(2).69 In this case,
this Court declared the Land Acquisition (Madras Amendment) Act,
1961 as unconstitutional on the grounds of violation of Article 14.
Justice Subba Rao observed that though the law fixing the amount
of compensation or laying down principles governing such fixation
cannot be questioned on the grounds of adequacy, yet the legislature
cannot play fraud on the Constitution by determining compensation
on irrelevant principles or making the compensation illusory. This is
what was said:
“To illustrate: a law is made to acquire a house; its value
at the time of acquisition has to be fixed; there are many
modes of valuation, namely, estimate by an engineer,
value reflected by comparable sales, capitalisation of rent
and similar others. The application of different principles
may lead to different results. The adoption of one principle
may give a higher value and the adoption of another
principle may give a lesser value. But nonetheless they are
principles on which and the manner in which compensation

68 Lok Sabha Debates (Part II- Proceedings other than Questions and Answers), Vol-III, Pgs. 4833-4834.
69 See State of Madras v. D. Namasivaya Mudaliar 1964 SCC OnLine SC 169, Union of India v. Metal
Corporation of India 1966 SCC OnLine SC 15. But also see State of Gujarat v. Shri Shantilal Mangaldas
& Ors., AIR 1969 SC 634.
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is determined. The court cannot obviously say that the law
should have adopted one principle and not the other, for
it relates only to the question of adequacy. On the other
hand, if a law lays down principles which are not relevant
to the property acquired or to the value of the property at or
about the time it is acquired, it may be said that they are not
principles contemplated by Article 31(2) of the Constitution.
If a law says that though a house is acquired, it shall be
valued as a land or that though a house site is acquired,
it shall be valued as an agricultural land or that though
it is acquired in 1950 its value in 1930 should be given,
or though 100 acres are acquired compensation shall be
given only for 50 acres, the principles do not pertain to the
domain of adequacy but are principles unconnected to the
value of the property acquired. In such cases the validity
of the principles can be scrutinized. The law may also
prescribe a compensation which is illusory: it may provide
for the acquisition of a property worth lakhs of rupees for
a paltry sum of Rs 100. The question in that context does
not relate to the adequacy of the compensation, for it no
compensation at all. The illustrations given by us are not
exhaustive. There may be many others falling on either
side of the line. But this much is clear. If the compensation
is illusory or if the principles prescribed are irrelevant
to the value of the property at or about the time of its
acquisition, it can be said that the legislature committed
a fraud on power and, therefore, the law is bad. It is a
use of the protection of Article 31 in a manner which the
article hardly intended”.70
Thereafter, this Court summed up the position with the following words:
“Briefly stated the legal position is as follows: If the
question pertains to the adequacy of compensation, it is
not justiciable; if the compensation fixed or the principles
evolved for fixing it disclose that the legislature made the
law in fraud of powers in the sense we have explained,
the question is within the jurisdiction of the court”.71

70 1964 SCC OnLine SC 22, para 15.
71 1964 SCC OnLine SC 22, para 16.
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In short, the entire acquisition, nationalisation, distribution, etc., could
never be properly implemented, or made effective for reasons of
“inadequate compensation”.
40. In July 1969, the President promulgated an ordinance nationalising
14 banks. We would also like to reproduce the extracts from the
speech of the then Prime Minister who addressed the Nation from
the All India Radio on the day when the initial ordinance to nationalise
banks was promulgated. The Prime Minister explained the decision
of nationalising banks as follows:
“...Ours is an ancient country but a young democracy, which
has to remain ever vigilant to prevent the domination of the
few over the social, economic or political systems… To the
millions of small farmers, artisans and other self-employed
persons, a bank can be a source of credit, which is the
very basis for any effort to improve their meagre economic
lot… What is sought to be achieved through the present
decision to nationalise the major banks is to accelerate the
achievement of our objectives. The purpose of expanding
bank credit to priority areas which have hitherto been
somewhat neglected- such as (1) the removal of control
by a few, (2) provision of adequate credit for agriculture,
small industry and exports, (3) the giving of a professional
bent to bank management, (4) the encouragement of new
classed of entrepreneurs, (5) the provision of adequate
training as well as reasonable terms of service for bank
staff- still remains and will call for continuous efforts over
a long time. Nationalisation is necessary for the speedy
achievement of these objectives”.72
This ordinance soon turned into an Act called the Banking Companies
(Acquisition & Transfer of Undertakings) Act, 1969 (Act 22 of 1969),
passed in August 1969. This first phase of Bank Nationalisation
resulted in the famous RC Cooper v. Union of India (1970) 1
SCC 248 where the majority of 10:1 struck down the Act on the
grounds that “Act violates the guarantee of compensation under
Article 31(2)”. It was not the case that RC Cooper held that the

72 A. Moin Zaidi, The Great Upheaval 1969-1972 (Orientalia, 1972), Pgs. 103-105.
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State was incompetent to nationalise the banks but it held that
the Act nationalising the Banks did not apply the right principles in
determining the compensation. RC Cooper discussed Bela Banerjee
and Vajravelu in the following words:
“89. This Court held in Bela Banerjee case that by the
guarantee of the right to compensation for compulsory
acquisition under Article 31(2), before it was amended
by the Constitution (Fourth Amendment) Act, the
owner was entitled to receive a “just equivalent” or “full
indemnification”. In P. Vajravel Mudaliar case this Court
held that notwithstanding the amendment of Article 31(2)
by the Constitution (Fourth Amendment) Act, and even
after the addition of the words “and no such law shall
be called in question in any Court on the ground that
the compensation provided by that law is not adequate”,
the expression “compensation” occurring in Article 31(2)
after the Constitution (Fourth Amendment) Act continued
to have the same meaning as it had in Section 299(2)
of the Government of India Act, 1935, and Article 31(2)
before it was amended viz “just equivalent” or “full
indemnification”.
90. There was apparently no dispute that Article 31(2)
before and after it was amended guaranteed a right to
compensation for compulsory acquisition of property and
that by giving to the owner, for compulsory acquisition of his
property, compensation which was illusory, or determined
by the application of principles which were irrelevant, the
constitutional guarantee of compensation was not complied
with……….” 73
41. The main reason for holding the Bank Nationalising Act as
unconstitutional in RC Cooper was that the principles specified
in Schedule II of the Act, for determining compensation, were not
appropriate. Many important factors like the goodwill of the bank and
the value of unexpired periods of long-term leases were not taken

73 (1970) 1 SCC 248, paras 89 -90.
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into consideration for the determination of compensation. Para 117
and para 121 of the majority judgement summed up the striking
down of Bank Nationalising Act as follows:
“117. We are of the view that by the method adopted for
valuation of the undertaking, important items of assets have
been excluded, and principles some of which are irrelevant
and some not recognised are adopted. What is determined
by the adoption of the method adopted in Schedule II does
not award to the named banks compensation for loss of
their undertaking. The ultimate result substantially impairs
the guarantee of compensation, and on that account the
Act is liable to be struck down.
……………………..
121. Section 4 of the Act is a kingpin in the mechanism of
the Act. Sections 4, 5, and 6, read with Schedule II provide
for the statutory transfer and vesting of the undertaking
of the named banks in the corresponding new banks and
prescribe the method of determination of compensation
for expropriation of the undertaking. Those provisions
are, in our judgment, void as they impair the fundamental
guarantee under Article 31(2). Sections 4, 5, and 6 and
Schedule II are not severable from the rest of the Act. The
Act must, in its entirety, be declared void.” 74
Within a week of the pronouncement of the judgment in RC Cooper,
the Government came up with another ordinance which turned into
the Banking Companies Act, 1970 (Act 5 of 1970). This new Act was
the modified form of the earlier Act and this new Act provided for a
specific amount to each bank nationalised, in order to facilitate the
bank nationalisation. In this way, the first phase of Bank Nationalisation
took place in India.
42. Ultimately the Parliament brought the Constitution (Twenty Fifth
Amendment) Act, 1971 into force which inter alia further diluted the
right to property. This Constitutional Amendment was the direct result

74 (1970) 1 SCC 248, paras 117 and 121.
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of RC Cooper, as it was evident from the Statement of Objects and
Reasons of the Constitution (Twenty-fifth Amendment) Bill, 1971
which reads as follows:
“STATEMENT OF OBJECTS AND REASONS
Article 31 of the Constitution as it stands specifically
provides that no law providing for the compulsory
acquisition or requisitioning of property which either fixes
the amount of compensation or specifies the principles
on which and the manner in which the compensation is
to be determined and given shall be called in question in
any court on the ground that the compensation provided
by that law is not adequate. In the Bank Nationalization
case [1970, 3 S.C.R. 530), the Supreme Court has held
that the Constitution guarantees right to compensation, that
is, the equivalent in money of the property compulsorily
acquired. Thus in effect the adequacy of compensation
and the relevancy of the principles laid down by the
Legislature for determining the amount of compensation
have virtuality become justiciable inasmuch as the Court
can go into the question whether the amount paid to the
owner of the property is what may be regarded reasonably
as compensation for loss of property. In the same case,
the Court has also held that a law which seeks to acquire
or requisition property for a public purpose should also
satisfy the requirements of article 19 (1) (f).
The Bill seeks to surmount the difficulties placed in the way
of giving effect to the Directive Principles of State Policy
by the aforesaid interpretation. The word “compensation”
is sought to be omitted from article 31(2) and replaced by
the word “amount”. It is being clarified that the said amount
may be given otherwise than in cash. It is also proposed
to provide that article 19(1)(f) shall not apply to any law
relating to the acquisition or requisitioning of property for
a public purpose.
3. The Bill further seeks to introduce a new article 31C
which provides that if any law is passed to give effect to
the Directive Principles contained in clauses (b) and (c) of
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article 39 and contains a declaration to that effect, such
law shall not be deemed to be void on the ground that
it takes away or abridges any of the rights contained in
article 14, 19 or 31 and shall not be questioned on the
ground that it does not give effect to those principles. For
this provision to apply in the case of laws made by State
Legislatures, it is necessary that the relevant Bill should
be reserved for the consideration of the President and
receive his assent.
(emphasis supplied)
Amongst others, this Amendment substituted the word ‘compensation’
with the word ‘amount’ in Article 31(2). It also introduced Article 31-C,
making legislations passed under Article 39 (b) & (c) immune from
challenges under Articles 14 & 19 of the Constitution. The laws which
were made subsequently and their challenge before the Courts have
to be seen in the light of the background stated above.
43. It is true that the state of our economy and society has undergone
a change since the Constitution was framed in the late 40s and
first interpreted in the early 50s. Even till the 70s and early 80s,
this Court had no difficulty in interpretating and giving a meaning
to the words ‘material resources of the community’, by including
privately owned resources as its part. Doubts have been raised by
this Court now, which is only significant of the times we presently
live in. When a wider interpretation was given to the words “material
resources” in the 60s, 70s and early 80s, it was in an era where
socialism was still a principle embedded in our constitutional ethos
and definitely in our economy. The political philosophy of that day
also recognised and accepted this principle. Times have changed
since then, and so has the governing philosophy which is now of
a liberal and market driven economy. All the same, as our short
but significant constitutional journey demonstrates the crucial
Constitutional Amendments and its consequence, the landmark
decisions of the Supreme Court relate as much to personal liberty
as to wealth and its redistribution, which again is a part of the
“material resources of the community”, covered under Articles 38
and 39 of the Constitution. These decisions directly or indirectly
touch upon “material resources of the community”. Will we be
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correct in saying today that, private resources are not a part of
the “material resources of the community”. Can this be said in the
light of the present times since ‘Constitution is a living document’!
44. The Constitution is indeed a living document. The words and meanings
in the Constitution are not frozen in time, they change and evolve.
The Constitution cannot be limited to the vision of its founding
fathers.75 To borrow a phrase from Anatole France if we do that then
the dead would be the living and the living the dead.76 “The judge
has an important role in the legislative project: The judge interprets
statutes. Statutes cannot be applied unless they are interpreted.
The judge may give a statute a new meaning, a dynamic meaning,
that seeks to bridge the gap between law and life’s changing reality
without changing the statute itself. The statute remains as it was,
but its meaning changes, because the court has given it a new
meaning that suits new social needs. The court fulfils its role as the
junior partner in the legislative project. It realizes the judicial role by
bridging the gap between law and life.” 77
However, the meaning can change to an extent and no further. It can
expand to an extent and evolve to a limit. Words and expressions
cannot have an entirely opposite meaning to what was initially
prescribed to them. In Video Electronics Pvt. Ltd. v. State of
Punjab (1990) 3 SCC 87, Justice Sabyasachi Mukharji had said:
“Constitution is a living organism and the latent meaning
of the expressions used can be given effect to only if
a particular situation arises. It is not that with changing
times the meaning changes but changing times illustrate
and illuminate the meaning of the expressions used. The
connotation of the expressions used takes its shape and
colour in evolving dynamic situations.” 78

75 Aharon Barak, Hermeneutics and Constitution Interpretation, 14 Cardozo L. Rev. 767 (1992-93), Pg. 772.
76 Anatole France et. al., Crainquebille (Dodd, Mead & Co., Inc., 1922), Pg. 171. “The precise reference is
from the following sentence “That which is written by the dead will be erased by the living. Were it not so,
the will of those who have passed away would impose itself upon those who yet survive; and the dead
would be the living and the living the dead”.
77 Aharon Barak, The Judge in a Democracy (Princeton University Press, 2006), Pgs. 4-5.
78 (1990) 3 SCC 87, para 36.
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45. We have earlier referred to the existing philosophy of the day, the
purpose of Directive Principles and the speech of Dr. Ambedkar on
inequality in the country when the Constitution was being framed.
Has our world changed? Has the inequality in the country decreased?
There are no definite or easy answers to these questions.
Although in absolute terms poverty may have decreased,79 as some
reports indicate. Possibly, the lowest strata of our society in economic
terms may be better off than what it was say 50 years earlier. But this
would not mean that the inequality in our society too has decreased,
or the gap between the rich and the poor has narrowed down. There
are conflicting reports on inequality and poverty.
All the same, UNDP80 Human Development Report shows India to be
lagging behind in human development.81 The Human Development
Index ranks India at the 134th position, out of 193 countries, which
were examined.82 The Global Hunger Index (GHI) Report, which is
based on WHO83 parameters, similarly ranks India at the 105th spot,
out of 127 countries evaluated.84
The least the above figures indicate is that there are still large grounds
which remain to be covered. The economic conditions as they exist
today require the efforts of the State with its welfare measures, inter
alia under Article 39(b) & (c) of the Constitution, as interpreted in
Ranganatha Reddy and Sanjeev Coke.
46. Undoubtedly this Court has given an expansive meaning to the
phrase “material resources of the community”. We have seen the
background and the historical necessity both for the incorporation
of such provisions and its interpretation by this Court.
Ultimately, we the people of India have resolved “to secure to all
its citizens”- justice, liberty, equality and fraternity. The Constitution
of India secures these values for all its citizens and speaks in an

79 National Multidimensional Poverty Index: A progress review 2023, NITI Aayog, Government of India.
80 United Nations Development Programme.
81 As per the UNDP Development Report, India’s Gini coefficient is 0.444. The Gini coefficient measures the
dispersion of income or distribution of wealth among the members of a population, where 1 represents
perfect inequality while 0 represents perfect equality. Available at https://hdr.undp.org/data-center/
human-development-index#/indicies/HDI.
82 Available at https://hdr.undp.org/data-center/human-development-index#/indicies/HDI.
83 World Health Organisation.
84 Global Hunger Index 2024. Available at https://www.globalhungerindex.org/pdf/en/2024.pdf
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expansive language, particularly for the provisions contained in Part
III and Part IV. This is how the Constitution has been interpreted by
this Court all along. It is due to the expansive meaning given by the
Supreme Court to Articles 14 and 21 that we have today an entire
body of case laws, which protects the life and liberty of its people.
47. Articles 14, 19 and 21 of the Constitution have been given an
expansive meaning by this Court, which was never perceived by
the framers of the Constitution. But this is precisely the task of the
Constitutional Courts.
There is a long list of decisions where this Court has protected the
fundamental rights by expanding the scope and ambit of Articles 14
and 21 of the Constitution. To mention some of these:
1. In Maneka Gandhi v. Union of India (1978) 1 SCC 248, this
Court expanded Article 21 many folds by establishing its co-
relationship with Articles 14 and 19. It culminated in a position
of law where a law depriving ‘personal liberty’ has to meet
the requirements of Article 19 and ‘procedure’ under Article
21 has to satisfy Article 14, meaning that such ‘procedure’
cannot be arbitrary but has to be ‘just, fair and reasonable’.
A law which was arbitrary was violative of Article 14 of the
Constitution of India.
2. In MH Hosket v. State of Maharashtra (1978) 3 SCC 544
this Court relied on Maneka Gandhi to recognize the right of
prisoners to free legal assistance including help in filing appeals.
3. In Hussainara Khatoon v. Home Secretary, State of Bihar
(I) (1980) 1 SCC 81, it was held that the right to a speedy trial
is a fundamental right under Article 21 and any law keeping
undertrials behind bars for long cannot be regarded as
‘reasonable, just or fair’.
4. In Sunil Batra v. Delhi Administration (1980) 3 SCC 488
this Court condemned the inhuman and degrading treatment
of prisoners, particularly the use of solitary confinement and
held that fundamental rights do not end at the prison gates.
It was emphasised that prison authorities must respect the
dignity and rights of inmates under Articles 14, 19, and 21 of
the Constitution. Thus, ‘human dignity’, which is apparently
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not a fundamental right was read as a part of Article 21 of the
Constitution of India.
5. In Bijoe Emmanuel v. State of Kerala (1986) 3 SCC 615 this
Court held that expelling students for not singing the National
Anthem, for the reasons that it went against their religious
beliefs as Jehovah’s Witnesses, was a violation of their Right to
Freedom of Religion under Article 25. Further, it was observed
that Article 19 also stood violated as no law required individuals
to sing the national anthem, provided that they do not disrespect
it. Tolerance was read as a part of the fundamental secular
culture of this country.
6. In Vishaka v. State of Rajasthan (1997) 6 SCC 241 this
Court, drawing upon constitutional principles and international
conventions, established guidelines to address sexual
harassment at the workplace, citing the absence of specific
legislation and to ensure the protection of women’s rights to
equality, life, and liberty under Articles 14, 15, and 21.
7. In K.S. Puttaswamy v. Union of India (2017) 10 SCC 1
this Court affirmed right to privacy as a fundamental right
under the Constitution, which was read as a right and a part
of ‘life and liberty’ under Article 21. It was held that privacy
encompasses autonomy, dignity, and the freedom to control
their own personality.
8. In Navtej Singh Johar v. Union of India (2018) 10 SCC 1
this Court invalidated Section 377 of the Indian Penal Code,
1860, on the grounds that it contravenes Articles 14 and 15
of the Constitution by discriminating based on gender identity.
Additionally, it was found to infringe upon the right to life, dignity,
and autonomy guaranteed under Article 21, as well as the right
to freedom of expression under Article 19(1)(a), thereby impeding
the ability of LGBT individuals to realise their identity fully.
The words in Articles 14 and 21 apparently do not give the meaning
which has come to be given to these two Articles now, through a
catena of decisions of this Court. They cover the whole range of
Rights as this is how they have evolved and expanded by this Court
and the High Courts. A Constitutional provision acquires its meaning
only after it is interpreted by a Constitutional Court.
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48. The provisions in Article 39(b) & (c) too have to be read in the
light of Article 38 of the Constitution of India. Once we do that,
we cannot but give an expansive meaning to the phrase “material
resources of the community”.
The meaning which must be given to “material resources of the
community” is what has been given to it in Ranganatha Reddy by
the Three Judges and what has been followed in the Constitution
Bench decision in Sanjeev Coke. To my mind, this has been the
correct interpretation of the phrase “material resources of the
community”. To reiterate what was said by Justice Krishna Iyer in
Ranganatha Reddy:
“… material resources of the community in the context
of re-ordering the national economy embraces all the
national wealth, not merely natural resources, all the
private and public sources of meeting material needs, not
merely public possessions. Everything of value or use in
the material world is material resource and the individual
being a member of the community his resources are part
of those of the community.” 85
49. It is for the legislature to decide how the ownership and control of
material resources is to be distributed in order to subserve common
good. Once the expansive meaning of “material resources of the
community” is determined, there is no necessity of drawing further
guidelines for the legislatures to determine as to what will constitute
material resources. How to control and distribute a material resource
is also the task of the Legislature, but while doing so what has to
be seen is that the control and ownership of the material resource
be so distributed that it subserves common good of the community.
If it does not, then such a legislation can be struck down as the
Judiciary is not deprived of its powers of judicial review. The
legislation in question has to establish a nexus with the principles
specified in Article 39(b) and (c) to be a valid legislation. This is
the law in terms of Kesavananda Bharati and Minerva Mills. To
put it differently what and when do the “privately owned resources”
come within the definition of “material resources” is not for this Court
to declare. This is not required. The key factor is whether such

85 (1977) 4 SCC 471, para 81.
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resources would subserve common good. Clearly the acquisition,
ownership or even control of every privately owned resource will
not subserve common good. Yet at this stage we cannot come out
with a catalogue of do’s and don’ts. We must leave this exercise
to the wisdom of the legislatures.
50. The incorporation of Article 38 as well as Article 39(b) and (c) in
Part IV of our Constitution was based on the prevalent philosophy
of the time and the path of development India chose to follow. The
interpretation given to the above provisions by this Court, particularly
in Ranganatha Reddy and Sanjeev Coke also has its contextual
relevance. Perhaps in some ways situations have changed. What
has not changed, however, is the inequality. There is today a
political equality and there is also an equality in law, yet the social
and economic inequalities continue as cautioned by Dr. Ambedkar
in his speech in the constituent Assembly on November 25, 1949.86
The inequality in income and wealth and the growing gap between
the rich and the poor is still enormous. It will therefore not be prudent
to abandon the principles on which Articles 38 and 39 are based and
on which stands the Three Judge opinion in Ranganatha Reddy
and the unanimous verdict in Sanjeev Coke.
The broad and inclusive meaning given to the expression “material
resources of the community” by Justice Krishna Iyer and Justice
O. Chinnappa Reddy in Ranganatha Reddy and Sanjeev Coke
respectively has stood us in good stead and has lost none of its
relevance, or jurisprudential value, nor has it lost the audience which
appreciates these values.
Before I conclude, I must also record here my strong disapproval on
the remarks made on the Krishna Iyer Doctrine as it is called. This
criticism is harsh, and could have been avoided.

86 “On the 26th of January 1950, we are going to enter into a life of contradictions. In politics we will have
equality and in social and economic life we will have inequality. In politics we will be recognizing the
principle of one man one vote and one vote one value. In our social and economic life, we shall, by
reason of our social and economic structure, continue to deny the principle of one man one value. How
long shall we continue to live this life of contradictions? How long shall we continue to deny equality in
our social and economic life? If we continue to deny it for long, we will do so only by putting our political
democracy in peril. We must remove this contradiction at the earliest possible moment or else those
who suffer from inequality will blow up the structure of political democracy which this Assembly has so
laboriously built up.”
[From: Rudrangshu Mukherjee (ed.), Great Speeches of Modern India, (Random House India, 2007),
Page 218-219]
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The Krishna Iyer Doctrine, or for that matter the O. Chinnappa Reddy
Doctrine, is familiar to all who have anything to do with law or life.
It is based on strong humanist principles of fairness and equity. It
is a doctrine which has illuminated our path in dark times. The long
body of their judgment is not just a reflection of their perspicacious
intellect but more importantly of their empathy for the people, as
human being was at the centre of their judicial philosophy. In the
words of Justice Krishna Iyer himself : “The Courts too have a
constituency – the nation – and a manifesto – the Constitution”.
(Bangalore Water Supply & Sewerage Board. vs A. Rajappa &
Others).87

Result of the Case: Reference answered.

†
Headnotes prepared by: Bibhuti Bhushan Bose

87 [1978] 3 SCR 207 : (1978) 2 SCC 213, Para 7, Page 229.