Context:

While hearing a case to decide whether the government can acquire and redistribute private property, a nine-judge Bench of the Supreme Court has chosen to address the question: does Article 31C still exist?

Article 31C:

• About: It protects laws enacted to ensure the “material resources of the community” are distributed to serve the common good (Article 39(b)) and that wealth and the means of production are not “concentrated” to the “common detriment” (Article 39(c)).
  • As per Article 31C, these directive principles (Articles 39(b) and 39(c)) cannot be challenged by invoking the right to equality (Article 14) or the rights under Article 19 (freedom of speech, right to assemble peacefully, etc).

• Introduction of Article 31C: Article 31C was introduced by the Constitution (Twenty-fifth) Amendment Act, 1971.
  • The Statement of Objects and Reasons for the amendment mentioned the “Bank Nationalization Case” (Rustom Cavasjee Cooper vs Union Of India, 1970). 
  • In this case, the Supreme Court stopped the Centre from acquiring control of 14 commercial banks by enacting The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969.
  • The court held that the ‘right to compensation’ was not appropriately ensured by the Banking Act.
• Invalidation of Act by Supreme Court Bench: An eleven-judge Bench struck the Act down by referring to the now-repealed Article 31(2).
  • As per Article 31(2), the government could not acquire any property for public purposes under any law unless the law fixes compensation for the property, or specifies the principles on which compensation will be based.

The Journey of Article 31C:

• Challenges to 25CAA: The 25th amendment was challenged in the Kesavananda Bharati case (1973) which held that the Constitution has a “basic structure” that cannot be altered, even by a constitutional amendment.
  • As a part of this verdict, the court struck down the last portion of Article 31C which states “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”.
  • This allowed the court to scrutinize legislations enacted to advance Articles 39(b) and 39(c), assessing whether these laws genuinely aligned with the principles advocated in these provisions.
• The Constitution (Forty-second) Amendment Act: It was enacted in 1976, which expanded the protection under Article 31C to “all or any of the principles laid down in Part IV of the Constitution”, under clause 4. 
  • As a result, every single directive principle (Articles 36-51) was protected from challenges under Articles 14 and 19 of the Constitution.
  • Reasons for the amendment stated that it was meant to give precedence to the directive principles “over those fundamental rights which have been allowed to be relied upon to frustrate socio-economic reforms for implementing the directive principles”.
• Minerva Mills v. Union of India,1980: In this case, the SC struck down clauses 4 and 5 of the amendment. 
  • The five-judge Bench held that Parliament’s power to amend the Constitution was limited, and it could not be used to remove these limitations and grant itself “unlimited” and “absolute” powers of amendment.
• Dilemma that needs to be resolved: Did the court’s annulment of a portion of the 25th Amendment effectively nullify Article 31C in its entirety?
  • Did it reinstate the post-Kesavananda Bharati stance where Articles 39(b) and (c) remained safeguarded?

The Ongoing Case in SC:

• Challenge to MHADA: The court is hearing a challenge to Chapter VIII-A of the Maharashtra Housing and Area Development Act, 1976 (MHADA). 
  • This chapter, introduced by an amendment in 1986, allows the government to acquire “cessed” properties(old, dilapidated buildings)in Mumbai at the request of the occupants, citing the obligation under Article 39(b).
  • Occupants of cessed properties that house poor tenants despite becoming increasingly unsafe are required to pay a cess to the Mumbai Building Repair and Reconstruction Board which oversees repair and restoration projects.
• Challenge to 1986 Amendment: In 1991, the Property Owners’ Association in Mumbai challenged the 1986 amendment at the Bombay High Court. 
  • However, the Bombay High Court upheld the amendment, citing the protection granted by Article 31C to laws enacted in furtherance of Article 39(b).
  • This decision was appealed at the SC in December 1992, where the question eventually became whether “material resources of the community” under Article 39(b) included private resources such as cessed properties.

Various Arguments in SC:

• Status of the Original Article 31C after the 42nd Amendment: It has been argued that the original version of Article 31C was ‘substituted’ with the expanded version provided in the 42nd Amendment. 
• This means the older version ceased to exist once the Amendment came into force. Therefore, when this new Article 31C was struck down in Minerva Mills, the older provision would not automatically be revived.
• Application of the Doctrine of Revival:  The doctrine of revival must apply in this case, and the post-Kesavananda Bharati position on Article 31C must be restored. 
  • To explain the doctrine and justify its application, observations in the case where the court struck down the Constitution (Ninety-ninth) Amendment Act have been relied upon.
  • The old collegium system for judge appointments would be revived once the 99th amendment was struck down.
  • 99th Amendment introduced the National Judicial Appointments Commission.
• Automatic Revival of Pre-Amendment Provisions: If the process of substitution and insertion through a constitutional amendment is deemed invalid, the provisions existing before the amendment automatically resurface and regain validity. 
  • This inference stands as a reasonable conclusion.