Nine‑Judge Bench on Article 31C Revival and Article 39(b): Community-Centric Test for “Material Resources” and a Calibrated View of Distribution

Introduction

This nine‑judge decision of the Supreme Court of India in Property Owners’ Association v. State of Maharashtra (2024 INSC 835, 5 November 2024) addresses two entrenched constitutional questions that have shaped India’s socio‑economic jurisprudence for five decades:

Whether the unamended Article 31C (as upheld in Kesavananda Bharati) survives after Section 4 of the Forty‑Second Amendment—which had expanded 31C to all Directive Principles—was struck down in Minerva Mills; and
How to correctly interpret Article 39(b)’s phrase “material resources of the community” and the scope of “distribution,” in particular whether privately owned resources are, by default, covered.

The reference arises from challenges to Chapter VIII‑A of the MHADA Act (1986) enabling acquisition of pre‑1940 “cessed” buildings in Mumbai for co‑operative societies of occupiers, backed by a legislative declaration under Article 39(b). The Bombay High Court, applying Article 31C, had upheld the chapter. Over the years, a chain of reference orders escalated to a nine‑judge Bench because (a) several benches had assumed 31C’s survival without deciding it; and (b) the interpretive foundation for Article 39(b) had grown unstable, with a five‑judge bench in Sanjeev Coke relying on a minority concurring opinion in Ranganatha Reddy, and later decisions repeating that approach.

Summary of the Judgment

Article 31C survives: The Court holds that when a constitutional amendment substituting text is struck down on basic‑structure review, the unamended provision revives unless Parliament clearly intended a repeal “without substitution.” Section 4 of the Forty‑Second Amendment stood invalidated in Minerva Mills; therefore, Article 31C reverts to its original, Kesavananda‑upheld form (protecting only laws to secure Article 39(b) and (c) from Article 14 and 19 challenges; the bar on judicial review in the “second half” remains void per Kesavananda).
Article 39(b) recalibrated: “Material resources of the community” may include privately owned resources, but not all private property ipso facto. The words “material” and “of the community” do real work. The Court sets guiding factors to identify when a privately owned resource attains a genuine “community” character, and clarifies that “distribution” has a wide connotation, which can include vesting or nationalisation, provided it demonstrably subserves the common good.
Doctrinal clean‑up: Sanjeev Coke erred in relying on the minority opinion in Ranganatha Reddy; the single line in Mafatlal about private resources was obiter dicta. The majority restores interpretive discipline and supplies a principled test for future cases.
Case disposition: Only the two reference questions are answered. The constitutional validity of MHADA’s Chapter VIII‑A and other tagged matters remain open for a regular Bench, to be decided under the clarified legal position.

Background and Procedural History

Mumbai has thousands of dangerous pre‑1940 cessed buildings. The 1986 MHADA amendment (Chapter VIII‑A) authorises acquisition and transfer of such properties to co‑operative societies of occupiers upon a 70% threshold, with restrictions to ensure rebuilding and continued use for housing. Section 1A declared the Act was to secure Article 39(b).

A Bombay High Court Division Bench upheld Chapter VIII‑A, relying on Basantibai, which had applied Article 31C to the MHADA framework. On appeal, the Supreme Court’s three‑judge Bench flagged the unresolved 31C‑survival issue; a five‑judge Bench then doubted the correctness of Sanjeev Coke’s reliance on the minority in Ranganatha Reddy; a seven‑judge Bench later expressed “difficulty” with the very broad view that private resources are within Article 39(b), and referred the matter to nine judges.

Issues

Does unamended Article 31C (as upheld in Kesavananda Bharati) survive after Minerva Mills struck down the Forty‑Second Amendment’s expansion of 31C?
What is the correct meaning of Article 39(b)’s “material resources of the community” and “distributed,” and can privately owned resources be covered?

Analysis

A. Article 31C: Why the Unamended Provision Revives

The Court traces the trajectory from Kesavananda (upholding the first half of 31C and striking down its judicial‑review bar) to Minerva Mills (invalidating the Forty‑Second Amendment’s expansion of 31C to all Directive Principles) and Waman Rao (reaffirming Kesavananda’s reading of unamended 31C).

On the revival question, the Court rejects the “pen‑and‑ink” two‑step theory (omission and insertion) advanced from Koteswar Vittal Kamath as determinative in constitutional substitution cases. Instead, it adopts the “single indivisible process” approach from Central Provinces Manganese Ore and DK Trivedi, as later endorsed by the nine‑judge NJAC decision:

Where Parliament substitutes text, repeal and insertion are a composite, indivisible legislative act; on invalidation, courts undo the substitution’s entire legal effect, restoring the pre‑amendment text unless a clear intention to repeal independently is shown.
A contrary approach risks truncation and legal vacuums (e.g., in NJAC the appointments regime would collapse). Courts must avoid outcomes that undermine basic‑structure review by producing a third, unintended constitutional text.

The Court buttresses this with:

Comparative and Indian precedent: Laxmibai (Nagpur FB), Texas Company v. Cohn, and Mazurek v. FM Insurance (US state courts), Indian Express Newspapers, and Mulchand Odhavji—all warning against creating legislative voids and emphasising totality of circumstances and legislative intent.
Coherence with basic structure: A successful basic‑structure challenge must return the Constitution to within the basic structure’s fold, not to a denuded or uncertain position.

Applying these principles, the Court finds that Section 4 of the Forty‑Second Amendment was meant to expand—not erase—31C; once that expansion fell in Minerva Mills, the Kesavananda‑upheld 31C revives. The Court also reiterates that the second half of original 31C (ousting judicial review) remains void.

B. Article 39(b): “Material Resources of the Community” and “Distribution”

1) Judicial-discipline reset

Ranganatha Reddy (1977): The majority upheld the Karnataka acquisition on public‑purpose grounds and deliberately refrained from 39(b)/31C analysis; Justice V.R. Krishna Iyer’s concurring opinion (for a minority of three), however, advanced the very expansive reading that all resources—natural/man‑made, public/private—are “material resources of the community.”
Sanjeev Coke (1983): A five‑judge bench relied on the minority view from Ranganatha Reddy; the nine‑judge Bench now holds this was a breach of judicial discipline because the seven‑judge majority had explicitly distanced itself from the concurring view.
Mafatlal (1997): The passing observation that 39(b) covers private resources is held obiter dicta and not binding, since the case was about tax refunds and unjust enrichment, not the ambit of 39(b).

2) The Correct Reading of 39(b)

The Court re‑centres the text: Article 39(b) speaks of (i) “ownership and control,” of (ii) “material resources,” (iii) “of the community,” (iv) “so distributed,” (v) “as best to subserve the common good.” A reading that treats all private assets as within “material resources of the community” drains the words “material” and “of the community” of meaning, and risks endorsing a fixed economic ideology the Constitution does not mandate.

The Court:

Draws from Constituent Assembly debates: The framers (notably Dr Ambedkar) deliberately chose broad language to leave room for democratic choice, not to hard‑wire a single economic model. Proposals to list specific resources or to require vesting were rejected.
Warns against constitutionalising one economic dogma and aligns the reading with Article 300A’s contemporary property right and its due‑process protections (Kolkata Municipal Corporation v. Bimal Kumar Shah).

3) When do private resources qualify?

The Court provides a non‑exhaustive set of factors to decide when a privately owned resource is a “material resource of the community”:

Nature and inherent characteristics of the resource;
Its impact on community well‑being (e.g., ecology, essential needs);
Scarcity and finitude;
Consequences of concentration in private hands.

Illustratively, privately held forests, ponds, wetlands, fragile ecological zones, or resource‑bearing lands, as well as scarce utilities like spectrum, mines and minerals, may have a community character. The Public Trust Doctrine supplies constitutional ballast: the State must act as trustee when allocating or controlling such resources and cannot dissipate them to private beneficiaries contrary to the common good (Special Reference on Natural Resources).

4) What does “distributed” mean?

“Distribution” is broad. It can include vesting, nationalisation, public allocation, regulation, or even entrustment to private entities if the structure ensures benefits percolate to the people.
There is no single constitutionally mandated modality (e.g., auctions are not an iron rule); revenue maximisation is not synonymous with “common good.”

C. Separate Opinions: Points of Convergence and Divergence

Nagarathna, J. (concurring on 31C; nuanced on 39(b)):
- Affirms 31C’s revival; emphasises the Constitution as a living tree and cautions against critiquing earlier judges through a presentist lens.
- Proposes that privately owned “material resources” can be transformed into “material resources of the community” through nationalisation, acquisition, vesting by operation of law, purchase, donation/endowment; excludes “personal effects” (intimate personal belongings) from the ambit.
- “Distribution” includes actual allocation or State retention to serve the common good.
Dhulia, J. (concurring on 31C; broader on 39(b)):
- Endorses the expansive approach of Ranganatha Reddy’s minority and Sanjeev Coke, reading privately owned resources as forming part of “material resources of the community” without setting upfront filters; regards legislative wisdom as primary, subject to the “common good” nexus and judicial review.
- Mounts a historical defence of Directive Principles, socialism as welfare‑state values, and prior case‑law on land reforms, bank nationalisation, and socio‑economic rights; cautions against narrowing 39(b) and criticises the remarks on the “Krishna Iyer doctrine.”

Practical Impact

Article 31C shield remains for laws that truly aim to secure Article 39(b) or (c). Such laws enjoy immunity from Article 14 and 19 attacks, but courts may scrutinise whether the law’s pith and substance bears a real nexus to 39(b)/(c) (tearing the veil if necessary). Other constitutional constraints—e.g., Article 300A, Article 21 and basic‑structure limits—continue to apply.
Higher scrutiny for 39(b) claims: Legislatures and the executive must now demonstrate why a particular privately owned resource qualifies as “material resource of the community” under the Court’s guiding factors, and why the chosen distribution method subserves the common good.
Modes of distribution remain flexible: Vesting, State retention, and allocation to private entities are all permissible, but must satisfy the public trust and common good requirements.
Precedent clarified: Future benches are directed to avoid relying on concurring minority opinions where the majority has signalled disagreement. The Mafatlal sentence on 39(b) is not binding.
Pending and allied matters: The validity of MHADA Chapter VIII‑A, Bombay/Maharashtra rent control questions, and appeals linked to West Bengal land reforms will proceed before regular benches in light of this ruling.

Complex Concepts Simplified

Basic-structure review and revival: When a constitutional amendment is struck down for damaging the Constitution’s core, courts restore the status quo ante; they do not leave the Constitution with a hole.
Directive Principles vs Fundamental Rights: Directive Principles are non‑justiciable goals but “fundamental in the governance of the country.” Under Article 31C (as revived), laws to secure Article 39(b)/(c) enjoy immunity from Articles 14 and 19, but courts can test whether the law genuinely pursues those principles.
“Material resources of the community”: Not everything privately owned qualifies. Factors like scarcity, ecological sensitivity, essentiality, and the risk of harmful concentration help determine whether a resource has an inherent community character.
“Distribution”: A wide rubric: the State may vest, regulate, allocate, or retain control—whatever best subserves common good—without being tied to one method.
Obiter dicta vs ratio decidendi: Only holdings necessary to decide the dispute bind future cases. One‑line observations in broader judgments (e.g., Mafatlal) may be persuasive but are not binding if they were not central to the issues decided.

Key Takeaways

Article 31C, in its Kesavananda‑upheld form, continues to exist and protects laws securing Article 39(b) or (c) from Article 14 and 19 challenges; the judicial‑review bar remains void.
Privately owned resources are not automatically “material resources of the community.” They may qualify if their nature and social function reveal a genuine community character.
“Distribution” under Article 39(b) can include vesting or nationalisation, but the touchstone is common good and adherence to the Public Trust Doctrine.
Sanjeev Coke’s reliance on the Ranganatha Reddy minority was erroneous; Mafatlal’s sentence on 39(b) was obiter.
Courts will scrutinise nexus claims to 39(b)/(c) and may “tear the veil” if the public‑interest rationale is a pretext.

Conclusion

This judgment settles a long‑standing constitutional uncertainty and refocuses Article 39(b) on its textual anchors. It preserves a carefully balanced 31C shield for laws that truly secure equitable distribution (39(b)) and prevent harmful concentration (39(c)), while ensuring that such laws are tested for a genuine community nexus and fidelity to the common good. The Court resists both extremes: it neither constitutionalises any single economic dogma nor strips legislatures of the tools needed for redistribution. Instead, it offers a principled roadmap: identify when a resource is genuinely “of the community,” choose distribution modes that advance the common good, and respect constitutional guardrails such as Article 300A and the Public Trust.

For future litigation—whether in urban housing, resource allocation, land reforms, or regulatory takings—the Court’s calibrated framework provides clarity: prove the community element, justify the distribution as subserving the common good, and expect judicial review to ensure the constitutional promise of social and economic justice is honoured in substance, not merely in form.