PROPERTY RIGHTS UNDER THE CONSTITUTION

K. SUBBA RAO

Former Chief Justice of India

At the outset an oft-quoted doctrine requires to be clarified. It is stated in two propositions: (1) Nothing can be subject to property which is not recognised by law to be such; (2) When law withdraws such recognition a thing ceases to have the attributes of property. These propositions mean that right to property lasts so long as law gives to a particular item the status of property and if law withdraws that status it ceases to be property.

This legal position introduces economic instability, as the valuable rights of a person to property would be at the mercy of the transitory majorities of legislatures. At the same time the socio-economic conditions of the country may require the regulation of the said right in public interest. This problem was solved by the Constitution by conferring a right to property on a citizen subject to the laws of social control. In this context property under the Constitution means all things and rights recognised by law–statutory, customary and common law–as property before the Constitution came into force. The right to property in all such things and rights has been guaranteed in the manner prescribed by the Constitution.

While originally absolute individual ownership of property was impressed only with moral obligations, now it is controlled and governed by legal obligations in public interest. In short the institution of private law has been transformed to that of public law. The real problem facing modern India is not so much to preserve the unlimited right to property but while maintaining the substraction of individual right and its stability to regulate the use of it in public interest. If undue attachment to acquisition of property is bad, revolutionary zeal to dislocate the structure of property is worse.

Two illustrative definitions of property, one from Anglo-American Jurisprudence the other from Russian Jurisprudence, may help to appreciate the scope of the right to property and the meaning of the expression “Property” under the Indian Constitution. The Fifth and Fourteenth Amendments of the Constitution of the United States of America read: “No person shall be deprived of life or property without the due process of law.”

The following wide definition of property is generally accepted in that country. “Property” in its broader sense is not the physical thing which may be subject to ownership but is the right of dominion, possession and power of dispossession which may be acquired over it: and the right of property preserved by the Constitution is the right not only to possess and enjoy it but also to acquire it in any lawful mode or by following any lawful pursuit which the citizen in the exercise of the liberty guaranteed may choose to adopt.

It will be seen from the said definition that the right to property consists of three elements (1) to acquire (2) to own and possess and (3) to dispose of the same. This apparently unrestricted right to property is subject to the laws of social control reflected in the State’s right of “taxation”, its “police power” and its power of “eminent domain”. The absolute doctrine of the freedom of property propounded by Locke, the makers of French and American Revolutions, Benthem, Spencer, Kant, Regel and others do no longer hold the field. That absolute doctrine had its origin when labour and property was united and the increasing dissociation of the two makes it no longer valid.

The Constitution of U.S.S.R. defines the said concept thus: “Article 4, The economic foundation of the U.S.S.R. is the socialistic system of economy and the socialistic ownership of the instruments and means of production firmly established as a result of the liquidation of the capitalistic system of economy, the abolition of private ownership of the instruments and means of production and the elimination of the exploitation of man by man.

“Article 5. The socialistic property in the U.S.S.R. exists either in the form of “property (belonging to the whole people) or in the form of co-operative and collective farm property. (Property of collective farms, property of Co-operative Societies)”

The other Articles no doubt within the framework of the Soviet Economy recognise private and personal property within narrow limits.

“In political economy there is a current confusion between two very different kinds of private property one of which is based upon the producer’s own labour while the other is based upon the exploitation of the labour of others. The Russian Constitution therefore rejects private ownership of the instruments of production but admits only to a limited extent of private ownership based upon the producer’s own labour.”

There is some misapprehension on the scope of the right to property conferred under our Constitution. An assumption by constant repetition has become a conviction in some minds that the right to property has been so entrenched in our Constitution that it is not possible without amendment to enforce the directive principles. A scrutiny of the relevant provisions of the Indian Constitution as they stood on 26-1-1950 will dispel this assumption. They are Articles 14, 19(1) (f), 19(5), 31, 32, 39 (b) d (c), 226 and 265. The gist of the said provisions may be briefly stated thus: Every citizen has the individual right to acquire, to hold and dispose of property.

A duty is implicit in this right namely that it should be so reasonably exercised as not to interfere with similar rights of other citizens. The exercise of it therefore should be reasonable and in accordance with public interest. The directive principles of State Policy lay down the fundamental principles for the governance of the country and under the relevant principles the State is directed to secure that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.

Indeed the State in exercising the power to enforce this principle does in fact enforce the duty implicit in the exercise of the fundamental right. The conflict between the citizen’s right and the State’s power to implement the said principles is reconciled by putting limitation both on the right and the power. The said fundamental right is not absolute. It is subject to the law of reasonable restrictions in the interest of the general public. The State’s power is also subject to the condition that the law made by it in so far it infringes the said fundamental right should stand the double test of reasonableness and public interest.

The State also has the power to acquire land of a citizen for a public purpose after paying compensation. It has the further power to impose taxation on a person in respect of his property. All the laws made in exercise of the said powers are governed by the doctrine of equality subject to the principle of classification. But, the question of the validity of the said laws of social control and taxation and acquisition is a justiciable issue. Shortly stated under the said provisions the right to property is subject to justiciable laws of social control.

Right Perspective: The Articles place the concept of the right to property in a right perspective. They definitely reject the Russian theory but accept the doctrine of individual right to property subject to the laws of social control. The right to property was conditioned by the social responsibility. The higher judiciary was made the arbiter to maintain the just balance between private rights and public interests. The social order visualized by the Constitution was expected to be brought about smoothly by a process of gradual judicial adjustment.

The fundamental assumption of the Constitution was that every party that was elected to power should be bound by the provisions of the Constitution and should strive to bring about the new social and economic structure of the country in the manner prescribed therein. Under the Constitution both the means and the end were equally important to the evolution of a new society.

Some authors describe the ideology of democracy which accepts individual right to property subject to the laws of social control as democratic socialism. Democratic socialism believes in human dignity and individual initiative. It does not accept nationalisation of property except under extraordinary circumstances and instead pleads for social control of economic power.

Legislative power: The State has control through its legislative power over the property rights of the people. One of the limitations put on the said power by the Supreme Court is that compensation payable for the property acquired shall not be illusory and the principle of compensation shall be reasonable and relevant to the acquisition of property. If that condition was not satisfied it would be a fraud on power.

Some people asked how the appalling poverty of the people should be removed without confiscation of other’s property and how could the State afford to give reasonable compensation for all the property required for distribution among landless, for slum clearance and for carrying out the national projects?

The simple answer to this criticism is two-fold. (1) India is a democratic State and not a totalitarian State and (2) Neither the original Constitution nor the amendments dispensed with the payment of compensation.

The non-justiciability of the adequacy of compensation puts on the State a greater responsibility to pay reasonable compensation, for by conferring such a power on the State the Constitution assumed its impartiality and objectivity. It could not have been the intention of the Constitution that under the cloak of non-justiciability the State could defraud its citizens.

Instead of this ideological debate and dialectics, jurists, research scholars and economists may investigate the problem for evolving reasonable principles of compensation relevant to the social and economic conditions of our country. The broad principles of compensation were well-settled by the Privy Council in Chemudu and Vijayanagaram cases. Indeed sections 23 and 24 of the Land Acquisition Act embodied the law on the subject.

The market value was considered to be the value to the owner in its actual condition at the date of the notification under section 4 of the Land Acquisition Act with its then existing advantages and disadvantages and defects and with all its future possibilities. Different modes of valuation to arrive at the market value were also accepted by the court depending upon the nature of the property and the availability of evidence. Comparable sales, capitalisation of rent, expert valuation are some of the modes. Further potentialities, special adaptability and the loss caused by injurious affection to the other properties of the owner of the land acquired have to be valued.

In England the principle of “re-instatement” applies to those persons who are deprived of their lands or buildings by compulsory acquisition for special purposes such as churches, hospitals, schools and businesses of special nature. In such cases the owner has to be re-instated in some other suitable area. Under the Acquisition of Land (Assessment of Compensation) Act of 1919 solatium of compulsory acquisition and value for potentialities were excluded. There is also the Norwegian socially justifiable compensation doctrine. All this I have stated only to show that the valuation of property is not an exact science. The last word is not said on the subject. There is every scope for evolving new principle, based on reason, equity and the economic and social conditions of a particular society.

Another Problem: There is another problem which is not finally solved but requires further elucidation. Can the fundamental right to property be waived? The Supreme Court in Basheshwarnath’s case held by majority that a fundamental right flowing from Article 14 could not be waived by a citizen or other person who is benefited by reason of the said provision. As regards the right to property: two judges held it cannot be waived; two did not express any view but one judge held that it could be waived. The main reason given for holding it could be waived is that the right to property is solely for the benefit of the individual and therefore it could be waived. In my view, none of the fundamental rights could be waived. There is no scope for making a distinction on the analogy drawn from American decisions that some rights were conferred for individual benefit and some were conceived in public interest.

The entire part III has been introduced in public interest. The Constitution attempted to preserve to the people their fundamental rights against infringement by the institutions created by it. The said rights and their limitations were crystallized and embodied in the Constitution. It does not permit importation of any further limitation on the said rights, other than those contained in Part II by any extraneous doctrines. It is suggested that Articles 19 (f) and 31 which deal with property are specially connected with the interest of the individual and the interests of the public do not come into the picture and therefore they can be waived.

Underlying Fallacy: There is an underlying fallacy in this suggestion. The right to acquire property; the right not to be deprived of property except by law and the right to one’s property not to be compulsorily acquired except for a public purpose and on payment of compensation are given in the interest of the public. They are Constitutional safeguards against expropriation or interference with the property of a citizen in exercise of arbitrary power. The said rights are conceived in the interest of the security and the stability of the State.

The relevant provisions are based on the assumption that stability in property rights is for the good of society. Though there may be scope for different scales in the matter of the laws of social control depending upon the nature of the right sought to be controlled there is none in the matter of the application of the doctrine of waiver. It was said with some plausibility that if the doctrine of waiver could not apply to the fundamental right to property, it would lead to the anomalous result that no person could give up the right to his property to the State. This is based upon a misapprehension of the scope of the doctrine of waiver.

Waiver means an unilateral agreement not to enforce one’s rights. While a person cannot waive his right to property, he can certainly enter into bilateral agreements with the State in respect of his property in accordance with law. A person therefore cannot waive any of his fundamental rights including the right to property.

Amendments: To sum up, thus, the Constitution conferred individual right to property and to do business on citizens subject to justiciable laws of social control. The said constitutional ideology was sought to be substituted by amendment by totalitarian philosophy in that the said amendments enabled the State in the exercise of its arbitrary power to confiscate property directly or indirectly or nationalise any business carried on by a citizen. What was more, they supported the release of arbitrary power from judicial checks in that regard.

No doubt the Supreme Court, by construction imposed certain limitations on that power, but they may not prove effective against determined exercise of arbitrary power. What the Constituent Assembly apprehended and provided against has actually happened. The makers of the Constitution and some of them were of the highest calibre and character the Nation could produce visualized the situation that arbitrary power even benevolent might destroy property rights among others honestly believing it was for the good of the country though in fact it was not.

They also knew that in modern democracies the executive controlled the majority of the Parliament, and it could push through any law it liked. They knew further that in India for a long time to come there would not be enlightened public opinion. They therefore provided for judicial check on both executive and legislative action. But it has proved unavailing against the strong majority of a single party continuously in power for two decades.

Back