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Report No. 130

Chapter II

The Approach

2.1. The history of freedom movement bears enough testimony to the twin goals promised on attainment of political independence; economic emancipation and social justice. Even then, while framing the Constitution and making the right to property a fundamental right, hindsight reveals that a grave error was committed in making the right to property a fundamental right. Social reconstruction and social justice measures, more or less undertaken in implementation of the Directive Principles of State Policy as set out in Part IV of the Constitution, floundered on the bed-rock of fundamental right to property. Measures after measures were invalidated on the ground that they violated fundamental right to property.

The pendulum swung in one direction to such an extent that when the State enacted a legislation for replacing the management of a company which the directors had threatened to close down, the Court invalidated the legislation on the ground that the legislation authorised a deprivation of property of the company within the meaning of Article 31 without compensation and thereby violated the fundamental right of the company guaranteed by Article 31(2) of the Constitution as it then stood.1 The right to property where there was no deprivation but merely substitution of management thwarted an attempt to infuse life into an industrial undertaking, which had become sick.

From Maharaja Kameshwar Singh's case 1952 SCR 89 to Wamanrao's case (1981) 2 SCC 362 via the cases of Subodh Gopal 1954 SCR 587, I.C. Golaknath (1967) 2 SCR 762, R.C. Cooper (1970) 3 SCR 530", Madhav Rao Seindia (1971) 3 SCR 9 and Kesavananda Bharati (1973) Suppl SCR 1, the fundamental right to property enjoyed such an impregnable position that it almost nullified every attempt at social justice and social reconstruction. This resistance to change evoked a sharp reaction and a demand to abolish the right to property from the array of Fundamental Rights in Part III of the Constitution was stridently voiced.

The protagonists of private property went to the extreme length of saying that what is there to work in our Indian Constitution if the right to property is not accorded the status of a fundamental right. They even ignored the warning given by a former Chief Justice of India in one of his opinions that it was an error to place the right to property in the chapter on Fundamental Rights.2 Even when the right to property was getting entrenched as a road block, a view was expressed in a dissenting opinion that:

'it is futile to cling to our notions of absolute sanctity of individual liberty or private property and to wishfully think that our Constitution-makers have enshrined in our Constitution the notions of individual liberty and private property that prevailed in the 16th century when Hugo Grotius flourished or in the 18th century when Blackstone wrote his commentaries and when the Federal Constitution of United States of America was framed. We must reconcile ourselves to the plain truth that the emphasis has now unmistakably shifted from the individual to the community.

We cannot overlook that the avowed purpose of our Constitution is to set up a welfare State by subordinating the social interest in individual liberty or property to the larger social interests in the rights of the community.3 Yet it was canvassed that unless a human being develops a sense of belonging, he would hardly be able to put in his best effort to contribute to the national good or to the national cake. And unless, it was said, that the national cake is enlarged, what is there to distribute by way of social justice and what social reconstruction is possible? Private property from the point of view of these persons was sacrosanct.

Ultimately a nation cannot be thwarted in its onward march when the right to property became an insurmountable road block. A surgical operation for the improved health of the nation became an urgent necessity and right to property was removed from the array of Fundamental Rights by deleting Articles 19(1)(t) and 31 from the Constitution.4 The earlier approach led a jurist to state that in that approach there was something more than self-luminous judicial policy-making was at stake and that was, in one phrase, 'the economic development of India'.5

1. Dwarakadas Shrinivas v. Sholapur Spinning and Weaving Company Ltd., 1954 SCR 674.

2. Hidayatullah, J., in his concurring opinion in LC. Golaknath case, (1967) 2 SCR 762.

3. S.R. Das, J., in his dissenting opinion in Subodh Gopal Bose's case, 1954 SCR 587

4. The Constitution (Forty-fourth Amendment) Act, 1978.

5. Dr. Upendra Baxi The Little Done: The Vast Undone, 1967 Journal of Indian Law Institute, Vol. 9.

2.2. At the bottom of all this ambivalence was the judicial opinion expressed soon after the Constitution came into force that when Fundamental Rights and Directive Principles of State Policy stand in confrontation to each other, the Directive Principles have to yield supremacy to the Fundamental Rights and run subordinate thereto .1 The ambivalence continued till the decision in Minerva Mills' case (1980) 3 SCC 625 where it was reiterated that Directive Principles specify the socialist goals to be achieved and these are to be achieved without abrogation of fundamental rights. How this is to be achieved in a case of confrontation is left unanswered?

Directive Principles were considered by some commentators on our Constitution 'the humanitarian socialist precepts that were, and are, the aims of the Indian social revolution'.2 At the other extreme end was the opinion by a member of the Constituent Assembly that they were 'veritable dustbin of sentiment socially resilient as to permit any individual of this House to ride his hobby horse into it'.3 Read collectively, directive principles presented a picture of a society towards which the Government would, by affirmative action, strive to reach.

It was always assumed that the Government was solely responsible for transformation of the society and the State was expected to play a vital role in the welfare of the people. It is true that ordinarily fundamental rights and directive principles have to stand in harmony with each other. But if there is a confrontation, the fundamental rights of individuals have to yield to the greatest good of greatest number as represented by the directive principles.

1. State of Madras v Champakam Dorairajan, 1951 SC 226: 1951 SCR 525.

2. Granville Austin The Indian Constitution: The Cornerstone of a Nation, pp. 75-76.

3. T.T. Krishnamachari, as quoted by Granville Austin, Ibid.

2.3. The Law Commission refers to this past history for a limited purpose that again it is dealing with private property in this report. It, therefore, wants to make its approach clear, specific and unambiguous.

2.4. Preamble to the Constitution promised that by effectively using the power conferred by the Constitution on various limbs of the Government, they will strive to set up a society in which will permeate justice, social, economic and political, and furnish equality of opportunity assuring the dignity of the individual. Supplemented by Directive Principles, all the instrumentalities of the State were under a constitutional obligation to strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of national life.

The State shall further strive to minimise the inequalities in income and eliminate inequalities in status, facilities and opportunities not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.1 In order to promote the welfare of people by transforming the existing social order into one in which justice, social, economic and political, shall inform all the institutions of national life, amongst others, the methodology was that the State shall direct its policy towards securing 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 concentration of wealth and means of production to the common detriment.2

1. The Constitution of India, Article 38.

2. Id., Article 39(b) and (c)

2.5. India is a socialist State. One of the fundamental requirements of a socialist State is to provide for social control of means of production. The control of means of production by few individuals results in creating a vested interest. It becomes in fact the starting point of exploitation by those who control the means of production of those who have to serve the controllers of means of production. Socialist State would presage an effective social order in which there would be equitable distribution of the national cake. Concentration of wealth represented by property in the hands of few would be a negation of a socialist State.

Therefore, the State policy was to be directed towards the operation of the economic system in such manner as not to permit concentration of wealth in the hands of few because such concentration is generally presumed to be to the common detriment. Power of wealth is generally put to nefarious uses and its tremendous concentration must be deemed to be anti-social. Therefore, concentration of wealth has always to be curbed by effective State action. Property of every sort is a tangible manifestation of concentration of wealth.

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