The Right to Property
Chapter Eighty-Seven
Syllabus topic 6, "Emerging regime of new rights and remedies"
Pages 416 to 421 of 711
In one line
Property is the only right the Constitution ever took out of Part III, and what is left is a promise that the State will not take your land except by a law, which is worth more than it sounds.
In the wording a student can write in an exam: article 19(1)(f), the right to acquire, hold and dispose of property, and article 31, the right against compulsory acquisition without compensation, were both omitted by the Constitution (Forty-fourth Amendment) Act 1978, with effect from 20 June 1979. The same amendment inserted article 300A in Part XII, under a new Chapter IV headed Right to Property: "No person shall be deprived of his property save by authority of law." The right is therefore a constitutional right and not a fundamental right, and cannot be enforced under article 32; but on K.T. Plantation Pvt Ltd v. State of Karnataka a public purpose is a pre-condition of deprivation, the obligation to pay is inferred in the article, and the depriving law must be just, fair and reasonable.
Why the law has this at all
The Constitution of 1950 guaranteed property twice, in article 19(1)(f) and article 31, and the States immediately set about abolishing the zamindari system. The two things could not both happen. Compensation provisions and the equality guarantee made agrarian reform slow and expensive, and courts struck down or delayed reform statutes.
Parliament's answer was not to argue about the guarantee but to move the legislation out of its reach. That is the history of articles 31A and 31B, taken in full in [Saving of Laws: Articles 31A, 31B and 31C]. After twenty-eight years of amendments and a Schedule of protected statutes, the guarantee protected almost nothing that mattered, and the Forty-fourth Amendment deleted it.
So this chapter is about a demolition and what was left standing, which is the question the syllabus is really asking: what is a constitutional right that is not a fundamental right worth?
The dismantling, in the Constitution's own footnotes
Do not date these from memory. The Constitution's own footnotes record each step.
- Article 31A, saving laws for the acquisition of estates, was "Ins. by the Constitution (First Amendment) Act, 1951, s. 4, (with retrospective effect)", and its clause (1) was substituted by the Fourth Amendment 1955, also with retrospective effect. A second proviso, protecting land within the ceiling limit under personal cultivation, was added by the Seventeenth Amendment 1964, from 20 June 1964.
- Article 31B, validating the Acts listed in the Ninth Schedule, was "Ins. by the Constitution (First Amendment) Act, 1951, s. 5 (w.e.f. 18-6-1951)".
- The Forty-fourth Amendment 1978 then did four things on the same day, 20 June 1979: it omitted sub-clause (f) of article 19(1) by section 2; it omitted the sub-heading "Right to Property" by section 5; it omitted article 31 by section 6; and by section 34 it inserted article 300A.
- The same amendment tidied article 31A by section 7, substituting "article 14 or article 19" for "article 14, article 19 or article 31", because article 31 no longer existed.
The Right to Property
The provisions that remain
Article 300A, headed Persons not to be deprived of property save by authority of law, is one line: "No person shall be deprived of his property save by authority of law."
Article 31A(1) provides that, notwithstanding article 13, no law providing for five described things, the first being "the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights", shall be deemed void as inconsistent with the rights conferred by "article 14 or article 19". A State law gets the protection only if it was reserved for the President and received his assent.
Article 31B provides that none of the Acts and Regulations specified in the Ninth Schedule "shall be deemed to be void, or ever to have become void" on the ground of inconsistency with any right in Part III, "and notwithstanding any judgment, decree or order of any court or Tribunal to the contrary".
Broken down
"No person". Not "no citizen". Article 19 was confined to citizens; article 300A is not, so a company and a foreigner are within it. "Deprived of his property" is wider than acquisition: it covers the State taking the thing and the State extinguishing rights in it.
"save by authority of law". This is the whole of the express guarantee, and it is the rule of law in one clause: an executive order is not enough, and a law is required. K.T. Plantation put the point historically: in enacting article 300A Parliament "has only borrowed Article 31(1)", which the Court glossed as the rule of law doctrine, "and not Article 31(2)", which it said had embodied the doctrine of eminent domain. The old article's compensation machinery was not carried over.
What is missing. No word about compensation, none about public purpose, and no mention of the article in article 32. On the text alone a statute confiscating property for no reason and no payment would satisfy article 300A. The case law exists to answer that.
Where the immunities were tested
Facts. Waman Rao v. Union of India, AIR 1981 SC 271, (1981) 2 SCR 1, decided 9 May 1980 by a Bench of five. The Maharashtra Agricultural Lands (Ceiling on Holdings) Act 1961, as amended to lower the ceiling, was challenged. Earlier appeals had failed while the Emergency was in force; after it was revoked the petitioners obtained a review so that arguments they had been unable to make could be made.
The Right to Property
Held. The petitions were dismissed. The First Amendment 1951, which introduced article 31A with retrospective effect, and section 3 of the Fourth Amendment 1955 "do not damage any of the basic or essential features of the Constitution or its basic structure and are valid". The ceiling Acts fell squarely within article 31A(1)(a), since "estate" is defined to include land held or let for purposes of agriculture, so they could not be attacked under articles 14, 19 or 31. On the Ninth Schedule the Court drew the line the subject now turns on: all amendments adding laws to it before 24 April 1973 are valid, and amendments made on or after that date are open to challenge for damaging the basic structure, that being the day Kesavananda Bharati was decided.
Why it matters. It is the origin of the 24 April 1973 cut-off, which students routinely attribute only to Coelho. And it explains why the property guarantee could not survive: the Court upheld the First Amendment because agrarian reform "has made the constitutional ideal of equal justice a living truth", preferring redistribution to the guarantee that stood in its way.
Facts. I.R. Coelho v. State of Tamil Nadu, decided on 11 January 2007 by a Bench of nine. The copy of this report the book holds carries no report reference, so none is printed. The question referred was the nature of the protection article 31B gives to laws added to the Ninth Schedule after 24 April 1973. Behind it lay the Gudalur Janmam Estates Act 1969, struck down so far as it vested forest lands because that was not agrarian reform protected by article 31A, and then placed in the Schedule by the Thirty-fourth Amendment.
Held. The validity of each amendment is judged on its own merits by "the actual effect and impact of the law on the rights guaranteed under Part III", which is the impact test. Laws added to the Ninth Schedule on or after 24 April 1973 must be tested against the basic features "as reflected in Article 21 read with Article 14, Article 19, and the principles underlying them". The protection is not blanket. Along the way the Court recorded what the property right is not: the detailed discussion in Kesavananda Bharati "to demonstrate that the right to property was not part of basic structure" itself shows that some other fundamental rights are.
Why it matters. It closes the Ninth Schedule as a hiding place, and it fixes the position of property in the basic structure doctrine. Property is not a basic feature, so Parliament could delete it; articles 14, 19 and 21 are, so the Schedule cannot hide a law that damages them.
The Right to Property
What a right outside Part III is worth
Facts. K.T. Plantation Pvt Ltd v. State of Karnataka, AIR 2011 SC 3430, (2011) 9 SCC 1, decided 9 August 2011 by a Bench of five. Karnataka acquired the Tatgunni Estate near Bangalore, some 470 acres that had belonged to the painter Svetoslav Roerich and the actress Devika Rani Roerich, by the Roerich and Devika Rani Roerich Estate (Acquisition and Transfer) Act 1996. The appellants, who claimed under a sale, challenged the Act and claimed enhanced compensation.
Held. The appeals were dismissed. The Acquisition Act, having received the President's assent, was "protected by Article 31A of the Constitution ... and hence immune from challenge under Article 14 or 19". On article 300A the Court answered the reference in these terms:
- "Public purpose is a pre-condition for deprivation of a person from his property under Article 300A and the right to claim compensation is also inbuilt in that Article", and where a person is deprived the State must justify both.
- Nil compensation is not the same as no compensation. "A law seeking to acquire private property for public purpose cannot say that 'no compensation shall be paid'." A law awarding nil compensation may stand where the State undertakes the liabilities charged on the property, and the onus is on the government.
- The law itself must qualify: it "must be 'just, fair and reasonable' as understood in terms of Articles 14, 19(1)(g), 26(b), 301, etc.", and must not be arbitrary, excessive or disproportionate.
- Since the deletion of article 19(1)(f), "the available grounds of challenge are Article 14, the basic structure and the rule of law, apart from the ground of legislative competence." Such a statute "is, therefore, amenable to judicial review".
Why it matters. This is the answer to the chapter's question. The Court accepted that the right to property "parted company with the other two rights" and "took the position of a statutory right", and then held that the statute taking property must still show a purpose, justify its compensation and survive the rule of law. What 1978 removed was the label and the article 32 remedy. What it left is judicial review.
Then and now
| Articles 19(1)(f) and 31, to 1979 | Article 300A, since 1979 | |
|---|---|---|
| Status | Fundamental right | Constitutional right, outside Part III |
| Held by | Citizens only | Any person, including a company |
| Remedy | Article 32 or article 226 | Article 226, or an ordinary suit |
| Compensation | Expressly required by article 31 | Not in the text; inferred in K.T. Plantation |
| Grounds of challenge | The whole of Part III | Article 14, legislative competence, the rule of law, the basic structure |
The Right to Property
A worked example
A State passes an Act vesting in itself a private museum and its collection, with compensation fixed at the 1975 book value. Nalini, the trustee, wishes to challenge it.
Step one, which article? Article 300A. Article 19(1)(f) has not existed since 20 June 1979, so the old learning about reasonable restrictions on holding property is unavailable to her.
Step two, can she go straight to the Supreme Court? No. Article 32 guarantees the right to move that Court for the rights conferred by Part III, and article 300A is in Part XII. She goes to the High Court under article 226.
Step three, is there a law? Yes, so the express words of article 300A are satisfied, and on the text alone she would lose here.
Step four, what does K.T. Plantation add? Three requirements: a public purpose, which the State must show; a justification for the amount, since the obligation to pay is inferred in the article; and that the Act be just, fair and reasonable, not arbitrary or disproportionate.
Step five, what will the State plead? If the Act can be brought within one of the five classes in article 31A it is immune from articles 14 and 19, but only if it was reserved for and assented to by the President. A museum is not an estate, so that defence is unlikely.
Step six, and if the Act were put in the Ninth Schedule? On Waman Rao and Coelho an amendment doing that today is tested against the basic structure as reflected in articles 21, 14 and 19. Article 31B is not the sanctuary it was.
What it does NOT mean
It does not mean property is unprotected. Executive action alone cannot take it, the taking needs a public purpose, and the depriving law is reviewable. The change is in the label and the forum.
It does not mean article 300A requires compensation in terms. The obligation is inferred, and the State discharges it by justification, not by a fixed measure of market value.
It does not mean the right to property is part of the basic structure. Coelho records the opposite. That is precisely why the Forty-fourth Amendment could remove it.
Quick revision
- Property was guaranteed by articles 19(1)(f) and 31. Both were omitted by the Forty-fourth Amendment 1978, sections 2 and 6, from 20 June 1979, which by section 34 inserted article 300A in Part XII: "No person shall be deprived of his property save by authority of law."
- It protects any person, not only citizens; it is not enforceable under article 32, but is under article 226.
- Article 31A (First Amendment 1951, clause (1) substituted 1955) immunises five classes of law from articles 14 and 19; a State law needs the President's assent.
- Article 31B (First Amendment 1951) immunises the Acts in the Ninth Schedule from the whole of Part III.
- Waman Rao (1980): article 31A and the First and Fourth Amendments are valid; Ninth Schedule additions before 24 April 1973 are safe, additions on or after that date are testable.
- I.R. Coelho (2007, nine judges): the impact test; property is not part of the basic structure.
- K.T. Plantation (2011): public purpose is a pre-condition; the obligation to pay is inferred in article 300A; nil compensation is not no compensation; the law must be just, fair and reasonable and is reviewable.
The Right to Property
Test yourself
1. Name the amendment that removed the fundamental right to property, the two provisions it omitted, the provision it inserted, and the date all of that took effect.
2. Article 300A says nothing about compensation or public purpose. On what reasoning did K.T. Plantation read both into it?
3. What practical difference does it make to a litigant that article 300A sits in Part XII rather than Part III?
4. Distinguish the immunity in article 31A from the immunity in article 31B, and say which one K.T. Plantation turned on.
5. Explain the significance of 24 April 1973 to a law affecting property, and name the two cases that fix it.
6. "The right to property was abolished in 1978." Correct that in two sentences.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.