​All or any: On resources and Supreme Court verdict

That the Constitution has an economic philosophy rooted in socialist principles, mainly embodied in its Directive Principles of State Policy, is well understood. However, a question that has often arisen for judicial review concerns how far the state’s obligation to subserve the common good and prevent the concentration of wealth and means of production can be allowed to go against fundamental rights of individuals. The state’s obligation to ensure that the ownership and control of “material resources of the community are so distributed as to subserve the common good” and to prevent the working of the economic system to the common detriment is found in Articles 39(b) and (c). The recent verdict of a nine-judge Bench of the Supreme Court, holding that not all private resources would fall under the ambit of ‘material resources’ of the community in Article 39, is notable for its examination of whether the underlying economic thought should be given an expansive view, or there are limitations on what sort of private property can be the subject of state action. The Court’s majority opinion rejects the expansive view taken in a few precedents in favour of any private resources, including those individual-owned, falling under its ambit. In tune with present-day economic realities, it holds that this directive principle cannot be seen through any particular ideological prism, and disapproves of such earlier formulations.

The majority view is that while, theoretically, private resources could be part of the community’s resources, the relevant consideration for the state to acquire or distribute them in pursuit of the common good will depend on “non-exhaustive factors”: the nature of the resources and their characteristics, whether such acquisition is essential for the community, the scarcity of such resources, and the consequences of their being concentrated in private hands. Land acquisition has always been based on the principle of eminent domain, while allocation of natural resources will require fair and transparent processes. On the other hand, nationalisation of utilities, services and industries has required constitutional justification through the Directive Principles. The majority is right in holding that the Constitution-makers consciously worded Article 39 in broad terms so that they do not tie down future regimes to any particular strand of economic thought. However, Justice Sudhanshu Dhulia’s dissent has significance. Highlighting the continuing inequality in society, he has questioned the majority for seeking to limit the scope of the “material resources”, when the better approach would have been to leave it to the wisdom of the legislature.