Constitution Talk—Provisions that impact our lives

IS THE “RIGHT TO PROPERTY A FUNDAMENTAL RIGHT UNDER OUR CONSTITUTION?

1. PART III of our Constitution in Articles 12 to 30 guarantees to us the set of Fundamental Rights.

2.  The subject being too vast to cover in one Article, I am dealing with only the Banks Nationalisation Act, 1969 in which the question of Right to Property as a fundamental right was argued and decided.

3. THE SC DID NOT STRIKE DOWN THE ACT AS UNCONSTITUTIONAL

  • Instead, it stuck down the Act as unconstitutional only on the ground of INADEQUACY OF COMPENSATION.
  • It did not strike down the Act itself as UNCONSTITUTIONAL for being violative of the right to property as a fundamental right.
  • The Indira Gandhi government promulgated the ordinance nationalising 14 private sector banks.
  • As soon as the Parliament began its monsoon session, she got the ordinance passed as an Act called the ‘Banking Companies (Acquisition and Transfer of Property) Act, 1969’ and every provision was just the same as in the Ordinance.

Right to property under article 31

4. THE SC JUDGMENT BY A 10:1 MAJORITY ON THE PETITION CHALLENGING THE ACT

  • The Judges who were involved in this landmark Judgement are as follows-
    • Justice J.C. Shah.
    • Justice S.M. Sikri.
    • Justice J.M. Shelat. Superceded later
    • Justice Vishishtha Bhargava
    • Justice G.K. Mitter.
    • Justice C.A. Vaidialingam.
    • Justice K.S. Hedge. Superceded later
    • Justice A.N. Grover. Superceded later
    • Justice A.N. Ray. WROTE THE LONE DISSENTING JUDGMENT—became the CJI later
    • Justice Jagmohan P. Reddy.
    • Justice I.D. Dua.

5. As far as the arguments regarding the Parliament’s competence to acquire banking companies was concerned, the Court, very interestingly, rejected both the petitioner’s as well as the respondent’s arguments.

  • The Court said that the term property included all the Rights, liabilities, assets, etc., which were associated with the property.

5.1. The Court declared the Act to be clearly violative of the Article 31, as Article 31 talked about compensation for the acquired property. Now, the term ‘compensation’ meant complete indemnification to the person, whose property was being acquired.

5.2. Since it was frankly clear from the objectives of the Act that equal indemnification was not going to be provided and also, after applying the test of severability, as the Act was not independent enough to stand alone without the part in question, so it was  struck down.

6. The Court, however, for the contention of Articles 19(1)(g) held that the Act was not violative of Article 19(1)(g), as the State had the complete Right to partially or completely monopolise any business that it felt to!!!

Right to property (300A)

7. However, the Court discovered that the Act was in clear violation of Article 14.

  • This was held on the basis of the following reason that the concerned Act barred the 14 banks carrying out NON-BANKING activities within the country, however, other banks, including the foreign banks, had not been stopped from doing so.
  • The Supreme Court, thus, held the Act to be ‘flagrantly practicing discrimination’ and thus, held it to be violative of Article 14.

8. This landmark judgment laid down, unfortunately, that the right to property is NOT a Fundamental Right under our Constitution but it is only a mere Constitutional Right by NOT striking down the nationalisation of banks itself as UNCONSTITUTIONAL!

  • By this judgment the SC conceded to the government the unbridled power to indulge in monopoly BUSINESS at the cost of the people using public money!
  • This, in spite of the fact that Article 19(1)(f) was very much there in the Constitution which read thus:–

8.1. 19(1) (f) guaranteed to the Indian citizens a right to acquire, hold and dispose of property.

8.2. Art 19 (5), however, permitted the state to impose by law reasonable restrictions on this right in the interests of the general public or for the protection of any Scheduled Tribe.

8.3. Apparently the SC interpreted the spirit of Article 19(5) erroneously.

9. INDIRA GANDHI GOVT IMMEDIATELY STRIPS THE POWER OF SC TO ADJUDICATE ON THE COMPENSATION TO BE PAID

9.1. Article 31 was introduced into the Constitution through the 25th amendment to the Constitution In July 1971 by the Indira Regime.

9.2. The 25th Amendment was intended to strip the Supreme Court of the power to go into the quantum of compensation for takeover of property for public use.

9.3. It did this by amending and replacing the word “compensation” for the word “amount” for property acquired or requisitioned.

9.4. The Amendment also introduced a new clause 31(C) in the Constitution, which would prevent a bill from being challenged in the Court, either under Article 14 (equality before the law), Article 19 (right to property, freedom of association, speech, religion etc.) or Article 31 (on deprivation of property except under authority of law), if Parliament certified that the bill was intended to ensure equitable distribution of material resources or to prevent concentration of economic power.

10. Now, compare the pathetic plight of our nationalised banks for years now.

10.1. These banks  soon became “Loans over Phones” shops; a sitting duck for looting for ruling politicians, the corrupt and fake crony entrepreneurs.

10.2. The huge burden fell on the  then Union Govt in 2014 which has infused nearly Rs. Two lakh crs of tax payers’ money to re-capitalise the ailing PSU banks.

10.3. As many as six of the weak PSU banks have been merged with the “stronger banks” in 2020.

11.With all this, not a single Indian PSU Bank, including the SBI finds a place among the global 10 top banks, which ironically has as many as 4 banks of “communist China” in the list!

12.THE “SOCIALIST JANATA PARTY GOVT OUTDOES INDIRA TO SCORE POLITICAL POINTS BY TOTALLY DELETING THE ARTICLE 19(1)(f) THROUGH THE 44TH AMENDMENT OF THE CONSTITUTION IN 1978

12.1. As a consolation, it inserted a new Article 300A in a corner under PART XII of the Constitution titled “FINANCE, PROPERTY, and CONTRACTS AND SUITS”

12.2. It then added Chapter IV under it and inserted Article 300A as a mere one liner which reads:–Persons not to be deprived of property save by authority of law.—

“No person shall be deprived of his property save by authority of law”.

13. SC REITERATES THE POSITION IN AUGUST 2020

13.1. The Bench of Justices Indu Malhotra and Indira Banerjee has reiterated that while right to property is longer a fundamental right as under Part III of the Constitution, it still enjoys Constitutional protection and is a Constitutional right.

13.2. “The right to property may not be a fundamental right any longer, but it is still a constitutional right under Article 300A and a human right as observed by this Court in Vimlaben Ajitbhai Patel v. Vatslaben Ashokbhai Patel and Others.

13.3. In view of the mandate of Article 300A of the Constitution of India, no person is to be deprived of his property save by the authority of law.”

14.The removal of Right to Property as a Fundamental Constitutional Right is in gross misalignment with the Union Government’s much flaunted policies of “Minimum Government; Maximum Governance” and enhancing the “Ease of Doing Business” in order to attract the badly needed FDI in the range of $150-200 bn every year to spur our growth.

15. As long as the Damocles’ sword of a Government takeover of private business hangs over its head, the confidence levels of both Indian and foreign private enterprises shall remain below the threshold levels jeopardising our aspirations of first touching the 50th rank globally in ease of doing business and getting into the first 10 to 15 ranks at any time in the future.

Author Bio

Qualification: Post Graduate
Company: CHIDAMBARAM SHIPCARE PVT .LTD.
Location: CHENNAI, Tamil Nadu, IN
Member Since: 30 Oct 2017 | Total Posts: 3

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