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Two judges deem CJI’s view on justice Iyer ‘unwarranted’
The Supreme Court's ruling on property rights reveals deep divisions among judges, with a majority criticizing past judgments for economic biases.
The momentous ruling by the Supreme Court on property rights and the interpretation of “material resources of the community” under Article 39 of the Constitution did not just involve intense legal debate on the evolving economic landscape of India, but also revealed a stark division among the judges on the nine-judge bench.
While Chief Justice of India Dhananjaya Y Chandrachud, in a majority opinion that he authored for himself and six other judges, criticised earlier judgments for their perceived economic biases and ideologies, justices BV Nagarathna and Sudhanshu Dhulia vehemently defended the historical context of those rulings, branding the majority’s assessment as “unwarranted” and “harsh.”
The majority judgment asserted that prior interpretations by justices Krishna Iyer in State of Karnataka Vs Ranganatha Reddy (1977) and O Chinnappa Reddy in the Sanjeev Coke case (1982) -- which included privately owned property within the ambit of “material resources of the community” -- were flawed.
In the Ranganatha Reddy case, a seven-judge bench considered the application of Article 39(b) in the context of nationalisation of contract carriages. The majority view of four judges did not favour private property to fall under Article 39(b). However, the minority view pronounced by justice Iyer held to the contrary. Justice Iyer said: “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...To exclude ownership of private resources from the coils of Article 39(b) is to cipherise its very purpose of redistribution the socialist way.”
This minority view later became the basis of a five-judge bench decision in the Sanjeev Coke case where the issue of Article 39(b) arose in the context of nationalisation of coke oven plants. Justice Reddy held private property to be part of material resources of community.
Overruling these views, CJI Chandrachud wrote in his judgment that these earlier rulings endorsed specific economic ideologies that do not align with the flexible and broad economic aspirations of the Constitution. “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,” he asserted.
Underscoring that such interpretations were influenced by a “particular school of economic thought”, the CJI suggested that they advocated an overly State-centric view of property acquisition, which could undermine the constitutional framework and the aspirations for an economic democracy envisioned by the framers of the Constitution. He held that the judiciary should not dictate economic policy but instead focus on facilitating a welfare state, adaptable to changing economic contexts, especially post-1991 reforms.
“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...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,” stated the majority verdict.
The CJI’s opinion referred to various observations made in these judgements. “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’. In Bhim Singhji, justice 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,” stated this judgment. Similarly, in the Sanjeev Coke case, the CJI flagged, justice 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”.
“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,” held the CJI.
However, the CJI’s view was met with strong dissent from justices Nagarathna and Dhulia.
Justice Nagarathna’s dissent underscored the importance of historical context in interpreting past judgments as she criticised the majority’s characterisation of earlier rulings as a “disservice to the Constitution”. The judge asserted that such a view fails to appreciate the socio-economic conditions under which those judgments were delivered.
“Merely because of the paradigm shift in the economic policies of the State… cannot result in branding the judges of this Court of the yesteryear as doing a disservice to the Constitution,” stated her judgment. She underscored the importance of understanding past judgments within their socio-economic context, arguing that they were crafted in light of the challenges facing a newly independent nation. Justice Nagarathna stressed that the evolving nature of economic policies should not lead to a dismissal of previous judicial wisdom.
Furthermore, she noted the transformative impact of the Constitution over the decades and emphasised the continuity of principles from past to present. “The answer lies in the obligation that this Court…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,” the judge maintained.
“The comments on Krishna Iyer, J. are in my opinion unwarranted and unjustified. 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,” justice Nagarathna held.
She added: “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.
Penning a separate dissenting judgment, justice Dhulia echoed Nagarathna’s sentiments, particularly in his defence of the so-called “Krishna Iyer Doctrine.” He described the majority’s criticism of this doctrine as harsh and unwarranted.
“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,” stated his opinion.
Justice Dhulia added: “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.”
He maintained that the expansive interpretation of “material resources of the community” as including privately owned resources is crucial for addressing economic disparities. “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,” held justice Dhulia.
Endorsing the previous rulings by justices Iyer and Reddy, justice Dhulia maintained that while there is a perceived political equality as well as an equality in law in present times, yet the social and economic inequalities continue.
“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,” held justice Dhulia’s dissenting opinion.
