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Property rights riddles by MJ Antony

Laws dealing with land and property have led to a maximum number of constitutional amendments and litigation in the Supreme Court over the decades. Even after these, the law and its interpretation are hazy. Some of the Supreme Court’s judgments are awaiting reconsideration by larger Benches — one was in the files for nearly 15 years and another for six years. Successive chief justices have avoided opening the chamber of legal riddles.

In the past few months, the Land Acquisition Act and its state variations were under heavy fire from the courts. Last week, the Constitution Bench delivered two lengthy judgments discussing property rights in the context of acquisitions. In both appeals, the reward for persevering litigants was the right to compensation for their property. The acquisition laws in the states were not clear on this subject and the high courts had denied compensation to the owners.

Though the owners’ right to compensation sounds like common sense, the five judges had to tread a labyrinthine path to arrive at their conclusion. After the 44th Amendment to the Constitution in 1978, a citizen has no constitutionally guaranteed right to acquire, hold or dispose of property. It is no longer a fundamental right. Therefore, an aggrieved citizen cannot move the Supreme Court or a high court alleging infringement of his fundamental right. All that is left is an ordinary right under Article 300A that says “no person shall be deprived of his property save by authority of law.” There is no indication of the right to compensation, let alone a fair and just amount. Therefore, the assertion of the Constitution Bench on the right to compensation is significant. State laws have to recognise this right.

In the unanimous judgment in the case, KT Planation vs State of Karnataka, the court declared that “the right to claim compensation is inbuilt in Article 300A.” When a person is deprived of his property, the state has to satisfy this claim. In addition, the law taking away the property should specify the public purpose and it is subject to judicial review. Thus, what was lost by downgrading the fundamental right to property to an ordinary right was partly salved.

The same Constitution Bench reiterated this right in another case last week, Rajiv Sarin vs State of Uttarakhand. It said, under Article 300A, “a person can be deprived of his property, but in a just, fair and reasonable manner.” The court set guidelines for computing compensation and asked the authorities “to determine and award compensation following a reasonable and intelligible criterion enunciated above.”

But the issues related to property rights are far from solved. For instance, the right of the property owner vis-à-vis that of the state, which is enjoined to advance the Directive Principles of State Policy in Chapter IV of the Constitution, is yet to be sorted out by a larger Bench.

Article 31C, inserted by the 25th Constitution amendment in 1971, protected laws that purported to advance the directive principles from challenge in a court of law. One amorphous provision that has deep implication is Article 39(b) that says the state shall secure that “the ownership and control of the material resources of the community are so distributed as best to subserve the common good.” In the celebrated Kesavananda Bharti case, a 13-judge Bench struck down part of Article 31C that granted excessive power on the state to take over property.

The truncated provision still survives and is the subject of intense dissent among Constitution Benches since 1981. Judges wrangled over the remnant of the Article, which led to a reference of various questions to a nine-judge Bench in 1996 in the case Property Owners’ Association vs State of Maharashtra. The Pandora’s box is lying tightly shut.

In more recent times (2005), an issue that has profound implications for property rights was also referred to a larger Bench and has since fallen out of the judicial radar (Subramaniam Swamy vs Union of India). The question is whether a law that “manifests arbitrariness and unreasonableness” can be struck down since these elements are anathema to the equality provision in Article 14 of the Constitution.

In the KT Plantation case, the court hinted at more problems. The acquisition of property can lead to a lot of contingencies, like deprivation of livelihood, but that in itself is no ground to strike a law down. “But at the same time, is it the law that a constitutional court is powerless when it confronts a situation where a person is deprived of his property for a private purpose with or without providing for compensation?” Such are some of the weighty questions in the minds of judges. Answers to these issues pending before the court have become urgent as blood is being spilt over right to property.