The Supreme Court of India.
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The verdict of the nine-judge bench of the Supreme Court which held that not every resource of an individual can be considered a “material resource of the community” is a case of judicial view keeping pace with the dominant social and economic vision of the times. The matter has been pending before the court for three decades and these decades were the era of economic liberalisation which gave more importance to the individual right to own and enjoy property than to the society’s claim on it as a matter of common good. The court ruled that not all private property can be deemed “material resource of the community” for redistribution under Article 39(b) of the Constitution. The Directive Principle outlined under it mandates that the state 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.”
There have been varied and even contradictory rulings on the matter which have in the past been referred to larger benches. The nine-judge bench has now underlined the need for a nuanced and context-specific approach which would vary from case to case. The majority judgement held that the previous interpretation of the matter – in a minority judgement in the 1978 Ranganatha Reddy case by Justice Krishna Iyer – went against the intent of the Constitution by imposing a single economic dogma. The interpretation might have reflected the importance given to redistribution of resources according to socialist principles which influenced thinking in those times. The court has now recognised that no ideological and dogmatic view of economic policy is enshrined in the Constitution. So it is not right to allow Directive Principles to dominate the private property rights of individuals. The state has a responsibility to ensure fair distribution of resources but it has to act within the limits laid down for individual rights.
The court has outlined specific criteria for determining if a private asset falls within the community’s material resources, such as its inherent characteristics, scarcity and impact on societal welfare. While individual ownership is protected, this will not stand in the way of making essential resources, such as natural reserves or spectrum, available for the public benefit, if necessary. The court has underlined the need to align economic policy with the constitutional rights of individuals and sought to correct an imbalance which existed till now. It has pointed out that its role is not to lay down economic policy, but to facilitate the “intent of the framers to lay down the foundation for an economic democracy”. The ruling will be used to test legislations and executive decisions in the coming days.