Property
Chapter -Five
Syllabus topic 8, "Civil Liberties in India, UK, USA"
Pages 567 to 571 of 676
In one line
Property was a fundamental right in India for twenty eight years, was removed in 1978, and is now a constitutional right outside Part III with no guarantee of compensation in the text.
In the wording a student can write in an exam: the power of the State to take private property is called eminent domain, and article 300A provides that no person shall be deprived of his property save by authority of law, and replaced articles 19(1)(f) and 31, which were omitted by the Forty Fourth Amendment in 1978; the takings clause of the Fifth Amendment provides that private property shall not be taken for public use without just compensation.
What India had
Article 19(1)(f) guaranteed to citizens the right to acquire, hold and dispose of property, subject to reasonable restrictions under article 19(5).
Article 31 protected against deprivation save by authority of law, and clause (2) required that a compulsory acquisition or requisition be for a public purpose and under a law providing for compensation.
Those two articles produced the longest constitutional conflict in Indian history. Land reform legislation was struck down, Parliament amended, the Court read the amendments narrowly, Parliament amended again.
The landmarks. State of West Bengal v. Bela Banerjee, AIR 1954 SC 170, held that the existence of a public purpose must be established objectively and cannot be made conclusive by declaration, and that compensation means a just equivalent of what the owner is deprived of, so a ceiling fixed by reference to a date years before the acquisition was arbitrary. The Fourth Amendment of 1955 answered it by making the adequacy of compensation non-justiciable. I.C. Golak Nath v. State of Punjab, AIR 1967 SC 1643, held that Parliament could not amend Part III to abridge fundamental rights. Kesavananda Bharati v. State of Kerala, AIR 1973 SC 1461, overruled that and produced the basic structure doctrine, in a case about a land legislation challenge.
Articles 31A, 31B and 31C and the Ninth Schedule were the devices by which the legislation was protected, and they are treated with the amendment power.
The Forty Fourth Amendment
In 1978 articles 19(1)(f) and 31 were omitted, and article 300A was inserted in a new Part XII Chapter IV: no person shall be deprived of his property save by authority of law.
Three consequences.
It is no longer a fundamental right, so it cannot be enforced by a petition under article 32; the remedy lies under article 226 or in an ordinary suit. Jilubhai Nanbhai Khachar v. State of Gujarat, AIR 1995 SC 142, states this.
There is no textual guarantee of compensation. Article 31(2) required it; article 300A does not mention it.
Property
Article 30(1A) and the second proviso to article 31A survived, so compensation is constitutionally required in two narrow situations: acquisition of property of a minority educational institution, and acquisition of land within a ceiling limit under personal cultivation.
What article 300A means now
K.T. Plantation Pvt Ltd v. State of Karnataka, AIR 2011 SC 3430, is the modern statement. Article 300A means that a person cannot be deprived of property by executive fiat: there must be a law made by a competent legislature. The property protected includes intangibles such as copyright and every interest the law recognises. Deprivation must be for a public purpose and the law must not be arbitrary, although the article does not itself guarantee compensation in the way article 31(2) once did.
So the guarantee has been rebuilt: legality from the text, and public purpose and non-arbitrariness from article 14 and the rule of law.
The American clause
The Fifth Amendment ends: nor shall private property be taken for public use, without just compensation. It applies to the States through the Fourteenth Amendment.
Three elements.
A taking. Physical appropriation is the clear case. Regulation may also amount to a taking where it goes too far, and the enquiry weighs the economic impact, the interference with distinct investment-backed expectations, and the character of the government action; a regulation depriving land of all economically beneficial use is a taking.
Public use. Read broadly as public purpose, so that transfer to another private party as part of an economic development plan has been held to satisfy it, which produced a strong political reaction and State legislation restricting the practice.
Just compensation. Fair market value at the time of the taking, which is a judicially enforced standard, unlike the Indian position after 1978.
Ireland and the United Kingdom
Ireland. Article 43 acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods, and that the State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath and inherit property; but it also recognises that these rights ought, in civil society, to be regulated by the principles of social justice, and that the State may accordingly delimit their exercise with a view to reconciling it with the exigencies of the common good.
United Kingdom. No constitutional guarantee. Article 1 of the First Protocol to the Convention protects the peaceful enjoyment of possessions, subject to the State's right to control use and to secure the payment of taxes, and compensation is normally required for a proportionate deprivation. Compulsory purchase is statutory and compensation is statutory.
Property
Comparison
| India | United States | Ireland | United Kingdom | |
|---|---|---|---|---|
| Constitutional status | Article 300A, outside Part III | Fifth Amendment | Articles 40.3.2° and 43 | Article 1, First Protocol |
| Enforceable under the writ for rights | No, article 32 unavailable | Yes | Yes | Under the Human Rights Act |
| Compensation guaranteed by the text | No | Yes, just compensation | Not in terms; implied | Normally required |
| Public purpose | Required, judicially | Public use, read broadly | Common good | Public interest |
| Regulatory taking | No developed doctrine | Yes | Delimitation under article 43.2 | Control of use, article 1 |
A worked example
A statute acquires land for a private industrial project said to serve economic development, providing compensation at a fraction of market value.
India. Article 300A requires a law, and K.T. Plantation requires a public purpose and non-arbitrariness; the adequacy of compensation is not guaranteed by article 300A, though the statute must survive article 14, and the modern land acquisition legislation prescribes compensation.
United States. Public use is satisfied on a broad reading, but just compensation is a constitutional requirement measured by fair market value, so the fraction fails.
Ireland. Article 43.2 permits delimitation for the common good, and the courts require the interference to be proportionate.
United Kingdom. Article 1 of the First Protocol requires a fair balance, and a deprivation without reasonably related compensation is normally disproportionate.
The cases
Facts. State of West Bengal v. Bela Banerjee, AIR 1954 SC 170, concerned the West Bengal Land Development and Planning Act 1948, passed to settle immigrants from East Bengal, which made the government's declaration conclusive on public purpose and capped compensation at the market value of the land as on 31 December 1946 however long afterwards the land was taken.
Held, by the Supreme Court. Both provisions were void. The existence of a public purpose under article 31(2) had to be established objectively and could not be made conclusive by declaration, and compensation means a just equivalent of what the owner is deprived of, so a ceiling fixed by reference to a date years before the acquisition was arbitrary.
Why it matters here. It is the decision that began the compensation conflict and produced the Fourth Amendment, and it states what the Indian Constitution once required and no longer does.
Facts. K.T. Plantation Pvt Ltd v. State of Karnataka, AIR 2011 SC 3430, concerned the acquisition of an estate in Karnataka by a special statute, and required the Court to state the content of article 300A after the Forty Fourth Amendment.
Held, by the Supreme Court. A person cannot be deprived of property by executive fiat; there must be a law made by a competent legislature. The property protected includes intangibles such as copyright and every recognised interest. Deprivation must be for a public purpose and the law must not be arbitrary, though article 300A does not itself guarantee compensation as article 31(2) did.
Property
Why it matters here. It is the modern content of the Indian right, and it shows a guarantee being rebuilt out of legality, public purpose and article 14 after the text was removed.
Facts. Jilubhai Nanbhai Khachar v. State of Gujarat, AIR 1995 SC 142, concerned Gujarat legislation extinguishing the rights of former Girasdars in mines and minerals underlying their lands.
Held, by the Supreme Court. The legislation was upheld. After the Forty Fourth Amendment the right in article 300A is a constitutional right and not a fundamental one, so it cannot be enforced under article 32.
Why it matters here. It states the remedial consequence of the 1978 change, which is the single most examinable point in the chapter.
Distinctions
| Before 1978 | After 1978 | |
|---|---|---|
| Where the right sits | Articles 19(1)(f) and 31, Part III | Article 300A, Part XII |
| Remedy | Article 32 | Article 226 or a suit |
| Compensation | Article 31(2), later non-justiciable as to adequacy | Not guaranteed by the text |
| Public purpose | Article 31(2) | Judicially required, K.T. Plantation |
| Who holds it | Citizens, article 19(1)(f) | Any person |
What beginners get wrong
"Property is no longer a right in India." It is a constitutional right under article 300A; what it is not is a fundamental right.
"Article 300A guarantees compensation." It does not. The requirement of public purpose and non-arbitrariness is judicial, and compensation comes from the acquisition statute.
"The Forty Fourth Amendment was an attack on rights." It also inserted the safeguards on emergency and article 359, and the removal of property was a deliberate constitutional choice about redistribution.
"Article 19(1)(f) was available to everybody." It was a citizens' right; article 300A protects any person.
Limits and criticism
A right without a remedy under article 32 is weaker in a system where article 32 is itself a fundamental right.
The compensation question moved from the Constitution to the legislature, which is either a democratic gain or a loss of protection depending on the view taken of the 1950s conflict.
The American public use requirement has been read so broadly that it does little work, which is why the real protection there is compensation and not purpose.
Regulatory takings have no Indian doctrine, so a regulation that destroys the value of property without acquiring it is addressed, if at all, through article 14.
Quick revision
- Articles 19(1)(f) and 31 were omitted by the Forty Fourth Amendment in 1978.
- Article 300A: no person shall be deprived of his property save by authority of law.
- Jilubhai, AIR 1995 SC 142: a constitutional right, not a fundamental one; article 32 is unavailable.
- K.T. Plantation, AIR 2011 SC 3430: a law of a competent legislature, a public purpose, non-arbitrariness; intangibles included.
- Bela Banerjee, AIR 1954 SC 170: public purpose objectively established; compensation as a just equivalent, under the old article 31(2).
- Fifth Amendment: no taking of private property for public use without just compensation, applied to the States through the Fourteenth.
- Ireland: article 43 natural right, delimited by the principles of social justice and the exigencies of the common good.
Property
Test yourself
1. What exactly changed in 1978? Articles 19(1)(f) and 31 were omitted from Part III by the Constitution (Forty Fourth Amendment) Act, and article 300A was inserted in Part XII, providing that no person shall be deprived of his property save by authority of law. The right ceased to be a fundamental right, so a petition under article 32 no longer lies, as Jilubhai Nanbhai Khachar v. State of Gujarat, AIR 1995 SC 142, holds; the textual guarantee of compensation in the old article 31(2) disappeared; and the holder changed from a citizen to any person.
2. What content has article 300A been given? In K.T. Plantation Pvt Ltd v. State of Karnataka, AIR 2011 SC 3430, that a person cannot be deprived of property by executive fiat, so there must be a law made by a competent legislature; that the property protected includes intangibles such as copyright and every interest the law recognises; and that a deprivation must be for a public purpose and the law must not be arbitrary. What the article does not do is guarantee compensation in the manner of article 31(2), so the amount payable is a matter for the acquisition statute.
3. Set out the three elements of the American takings clause. A taking, which covers physical appropriation and also regulation that goes too far, judged by the economic impact, the interference with distinct investment-backed expectations and the character of the government action, a regulation destroying all economically beneficial use being a taking. A public use, read broadly as a public purpose, so that a transfer to another private party under an economic development plan may qualify. And just compensation, measured by fair market value at the time of the taking, which is a judicially enforced constitutional requirement.
4. Why did India remove property from Part III? Because of a twenty eight year conflict between land reform legislation and the property articles. State of West Bengal v. Bela Banerjee, AIR 1954 SC 170, required a just equivalent by way of compensation and objective proof of public purpose; the Fourth Amendment answered by making adequacy non-justiciable; the sequence continued through Golak Nath and Kesavananda Bharati, and through articles 31A, 31B, 31C and the Ninth Schedule. The Forty Fourth Amendment ended it by taking the right out of Part III altogether, leaving redistribution to the legislature and a residual legality guarantee in article 300A.
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.