The Supreme Court’s Constitution bench ruling on Tuesday clarified the principles surrounding eminent domain, a legal doctrine that allows the government to take private property for public use, often with compensation.
Rendered with an 8-1 majority, the verdict clarified the interpretation of Article 39(b) of the Indian Constitution, outlining the boundaries of legislative power in acquiring private property for public use and setting down a precedent that is poised to have substantial implications for property rights and the State’s ability to regulate resources deemed vital for the community. Article 39(b) is one of the directive principles of state policy (DPSP) which states 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.”
Chief Justice of India Dhananjaya Y Chandrachud, authoring the majority opinion for seven of the nine judges, noted that Article 39(b) does not serve as a source of legislative power for the acquisition of private property. Instead, he clarified that the power to acquire private resources lies within other constitutional provisions, specifically citing the sovereign power of eminent domain and Entry 42 of List III in the Seventh Schedule, which allows the legislature to enact laws for property acquisition.
“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,” stated the judgment, indicating that private property can still be acquired for public use, provided that the acquisition process adheres to the constitutional principles and legal provisions.
{{/usCountry}}“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,” stated the judgment, indicating that private property can still be acquired for public use, provided that the acquisition process adheres to the constitutional principles and legal provisions.
{{/usCountry}}The ruling delineated that not all private property qualifies as a “material resource of the community”, underscoring that only those privately owned resources that meet specific criteria can be included under Article 39(b).
“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,” held the judgment.
CJI Chandrachud elaborated on several guiding principles that must be considered when determining whether a privately owned resource is of communal significance. Some of the guiding principles enunciated by the judgment included determination of the intrinsic characteristics of the resource in question; the effect of the resource on the well-being of the community; whether the resource is finite or limited in availability and implications of having such resources held by a small number of private owners.
The court further clarified: “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 ruling also reinforced the “public trust” doctrine, which posits that certain resources, such as air, water and forests, are held in trust by the State for the public’s benefit. This principle extends to other vital resources, suggesting that even privately owned materials like wetlands or mineral resources must be managed with the community’s interests at heart.
According to Tuesday’s verdict, while the State can distribute such resources to private entities, it must do so in a manner consistent with public trust obligations, ensuring that the distribution does not lead to exploitation for private gain at the expense of public welfare.
The judgment also emphasised that any legislative action regarding property acquisition must adhere to broader constitutional protections, including Articles 14 (Right to Equality) and 300A (Right to Property). As CJI Chandrachud noted, the mere provision of compensation for acquired properties is insufficient; the acquisition process must also respect procedural safeguards to prevent arbitrary dispossession.
It also favoured a liberal interpretation of the term “distribution” under the Constitution. “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,” held the ruling.
The majority ruling, however, remained emphatic 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”.
The decision will likely shape the future of resource management and property rights in India, balancing individual ownership against the community’s right to access essential resources.