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Property Owners' Association And Others v. State Of Maharashtra And Others
Factual and Procedural Background
The petitioners challenge the constitutional validity of Chapter VIII-A, inserted in 1986 into the Maharashtra Housing and Area Development Act, 1976. The impugned provisions authorize the State to acquire certain properties upon payment of an amount equal to one hundred times the monthly rent. Section 1-A, introduced by the same amendment, declares that the Act seeks to give effect to the policy contained in Article 39(b) of the Constitution. Relying on Article 31-C, the State argued that the legislation is immunised from scrutiny under Articles 14 and 19.
The case was initially heard by a three-judge Bench. During that hearing the appellants attacked the continued validity of Article 31-C, contending that it had not “revived” after portions of the Forty-second Constitutional Amendment were struck down post-Kesavananda Bharati. By order dated 1 May 1996 in Property Owners’ Association v. State of Maharashtra, the matter was referred to a larger Bench of not fewer than five judges.
After extensive argument before the enlarged Bench, the Court concluded that the interpretation of Article 39(b) adopted in earlier cases requires fresh consideration, prompting a further reference to a Bench of at least seven judges.
Legal Issues Presented
- Whether Chapter VIII-A of the Maharashtra Housing and Area Development Act, 1976 is constitutionally valid in light of Article 31-C.
- Whether Article 31-C continues to operate after the partial invalidation of the Forty-second Constitutional Amendment, or whether the doctrine of revival is inapplicable to constitutional amendments.
- The proper interpretation of Article 39(b) of the Constitution and its nexus with legislation providing for State acquisition of property.
Arguments of the Parties
Appellants' Arguments
- Article 31-C no longer survives because subsequent constitutional developments, particularly after Kesavananda Bharati, preclude its automatic revival.
- The doctrine of revival, available to ordinary statutes, does not extend to constitutional amendments; therefore, the original form of Article 31-C cannot be relied upon to shield the impugned Act from scrutiny under Articles 14 and 19.
State's Arguments
- By virtue of Article 31-C, any legislation enacted to give effect to the principles of Article 39(b) is immune from challenge based on alleged violations of Articles 14 or 19.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kesavananda Bharati v. State of Kerala (1973) 4 SCC 225 | Established the basic structure doctrine; background for questioning the survival of Article 31-C. | Referenced to support the appellants’ contention that Article 31-C may not have revived automatically. |
| Property Owners’ Association v. State of Maharashtra (1996) 4 SCC 49 | Earlier order referring the matter to a five-judge Bench. | Cited to explain the procedural history leading to the present larger Bench. |
| State of Karnataka v. Ranganatha Reddy (1977) 4 SCC 471; (1978) 1 SCR 641 | Interpretation of Article 39(b) and applicability of Article 31-C to State acquisition legislation. | Discussed as the original source of the broad interpretation of Article 39(b) adopted by Krishna Iyer, J. |
| Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd. (1983) 1 SCC 147; (1983) 1 SCR 1000 | Constitution Bench approval of Krishna Iyer, J.’s interpretation of Article 39(b). | The Court now observes that the views in this case require reconsideration. |
| State of Maharashtra v. Basantibai Mohanlal Khetan (1986) 2 SCC 516 | Division Bench following the interpretation of Article 39(b) in Sanjeev Coke. | Referenced to show continued reliance on the questioned interpretation. |
Court's Reasoning and Analysis
The Bench reviewed extensive submissions concerning both the survival of Article 31-C and the correct meaning of Article 39(b). It surveyed prior decisions, noting that Krishna Iyer, J.’s expansive reading of Article 39(b) in Ranganatha Reddy was acknowledged but not expressly endorsed by the majority in that case, yet later adopted in Sanjeev Coke and followed in Basantibai. On preliminary consideration, the Bench concluded that the reasoning in Sanjeev Coke, particularly on Article 39(b), merits re-examination. Given the constitutional importance of the issues, especially the interplay between Articles 39(b) and 31-C, the Bench determined that authoritative clarification requires a forum larger than the existing composition.
Holding and Implications
ORDER OF REFERENCE: The matters are referred to a Bench of not less than seven judges; the papers are to be placed before the Hon’ble Chief Justice for appropriate directions.
Immediate Implications: No final adjudication on the validity of Chapter VIII-A occurs at this stage. All substantive questions, particularly the interpretation of Article 39(b) and the operability of Article 31-C, remain open for determination by the forthcoming seven-judge Bench. The order sets no new precedent but underscores the constitutional significance of the issues involved.
Order
1. In these cases the main challenge is to the constitutional validity of Chapter VIII-A which was inserted in 1986 in the Maharashtra Housing and Area Development Act, 1976 which, inter alia, provided for the acquisition of certain properties on payment of hundred times the monthly rent for the premises. By the said amendment, Section 1-A was also inserted in that Act and it contains a declaration that the Act is for giving effect to the policy of the State towards securing the principles specified in clause (b) of Article 39 of the Constitution of India. In view of Article 31-C of the Constitution, the contention of the State was that the validity of any part of the statute on the ground that it violated Article 14 or 19 of the Constitution, was not permissible.
2. The case was heard by a Bench of three Judges. At that time on behalf of the appellants a contention was sought to be raised, inter alia, to the effect that Article 31-C did not survive because of the events subsequent to the decision in Kesavananda Bharati case (1973) 4 SCC 225. It was also submitted before that Bench that the doctrine of revival, as it applied to ordinary statutes, did not apply to the constitutional amendment and when a part of the Forty-second Amendment Act, which amended Article 31-C, had been held to be invalid it did not result in the automatic revival of the unamended Article 31-C.
3. In view of the aforesaid contention which was raised by an order dated 1-5-1996 reported in Property Owners' Assn. v. State of Maharashtra (1996) 4 SCC 49 the matter was referred to “a larger Bench of not less than five Judges for hearing and deciding these matters”.
4. We heard the counsel at length on various issues which arise in these cases. One of the points which arises for consideration relates to the interpretation of Article 39(b) of the Constitution. In State of Karnataka v. Ranganatha Reddy (1977) 4 SCC 471, (1978) 1 SCR 641 validity of the Karnataka Contract Carriages (Acquisition) Act, 1976 was challenged and the question which arose was whether the State Government could acquire and then transfer countersigned portions of inter-State permits to Road Transport Corporation. Two judgments were delivered in that case. Krishna Iyer, J. for himself and two other learned Judges, while concurring with the decision of Untwalia, J. (with whom three other Judges agreed), interpreted Article 39(b) of the Constitution and then came to the conclusion that the Act had direct nexus with Article 39(b) and by virtue of Article 31-C its validity could not be challenged on the ground of it being violative of Article 14 or 19(1)(f) of the Constitution. Untwalia, J. in his judgment observed that:
“[W]e do not consider it necessary to express any opinion with reference to Article 31-C read with clauses (b) and (c) of Article 39 of the Constitution. Our learned brother Krishna Iyer, J. has prepared a separate judgment specially dealing with this point. We must not be understood to agree with all that he has said in his judgment in this regard.”
5. The need to interpret Article 39(b) again arose in the case of Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd. (1983) 1 SCC 147, (1983) 1 SCR 1000 While upholding the validity of the Coking Coal Mines (Nationalisation) Act, 1972 and the two other connected enactments the Constitution Bench adopted the interpretation of Article 39(b) as enunciated by Krishna Iyer, J. in Ranganatha Reddy case (1977) 4 SCC 471, (1978) 1 SCR 641. This interpretation has also been followed by a Division Bench of this Court in State of Maharashtra v. Basantibai Mohanlal Khetan (1986) 2 SCC 516.
6. The interpretation put on Article 39(b) by Krishna Iyer, J. in Ranganatha Reddy case (1977) 4 SCC 471, (1978) 1 SCR 641 was not specifically assented to in the majority decision but in Sanjeev Coke case (1983) 1 SCC 147, (1983) 1 SCR 1000 it is the observations in the judgment of Krishna Iyer, J. which have been followed.
7. Having heard the counsel at length, we are of the opinion that the views expressed in Sanjeev Coke case (1983) 1 SCC 147, (1983) 1 SCR 1000 require reconsideration. Keeping in view the importance of the point in issue, namely, the interpretation of Article 39(b) it will be appropriate if these cases are heard by a larger Bench of not less than seven Judges.
8. The papers be laid before Hon'ble the Chief Justice for appropriate orders.
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