When CJI Chandrachud’s Landmark Ruling Restored Right to Private Property in India

On November 5, 2024, Chief Justice of India (CJI) Dhananjaya Y. Chandrachud delivered a historic judgment that rekindled the democratic spirit enshrined in India’s Constitution and struck a significant blow to socialist ideologies embedded in its fabric. This ruling redefined the interpretation of the “Right to Private Property,” a right crucial to both individual liberty and economic growth. The decision has implications for the property rights of all Indian citizens and marks a significant shift in India’s economic and judicial landscape.

Understanding the Historical Significance of the Right to Private Property

In India’s original Constitution, the right to private property was protected under two key articles:

• Article 19(1)(f) – Guaranteed citizens the right to acquire, hold, and dispose of property.
• Article 31 – Prevented deprivation of property by the state unless through lawful authority and assured compensation in case of government acquisition.

These articles provided the foundation for private ownership in India, recognizing it as a fundamental democratic right. Private property rights played a pivotal role in launching the Industrial Revolution globally, underpinning the capitalist system that spurred economic growth. However, these rights in India were curtailed in 1978 with the 44th Constitutional Amendment, which erased Articles 19(1)(f) and 31 from the Constitution, downgrading the right to property from a fundamental right to merely a statutory right under Article 300A.

Why Was the Right to Private Property Removed?

The trajectory toward this fundamental shift began with the First Constitutional Amendment in 1951, introduced by then-Prime Minister Jawaharlal Nehru. This amendment aimed to address the vast disparities in land ownership caused by the zamindari system, wherein a small elite owned extensive tracts of land. Nehru, guided by socialist principles, was determined to redistribute wealth and dismantle the zamindari system. He introduced laws to redistribute land through Land Settlement Acts and safeguarded these acts in the new Ninth Schedule of the Constitution, preventing judicial review of any laws placed within it.

The Ninth Schedule’s introduction sparked intense debate: why wasn’t land redistribution addressed in the original 1950 Constitution? Dr. B.R. Ambedkar, the principal architect of the Constitution, intentionally avoided embedding economic ideologies like socialism or capitalism within its framework. He believed that such structures would infringe upon the liberty of individuals, leaving them beholden to a specific economic ideology. In contrast, Nehru’s vision was to use the Constitution to embed socialist principles to drive social equality. This ideological tension set the stage for further amendments and culminated in the 44th Amendment that removed the right to property as a fundamental right.

The 44th Amendment and Its Far-Reaching Impact

The 44th Constitutional Amendment Act of 1978 marked a major shift. The amendment, passed under the Janata Party government, deleted Articles 19(1)(f) and 31, replacing them with Article 300A, which framed the right to property as a mere legal right. This downgrade meant that private property could be taken by the government without the robust protections previously available to property owners. This amendment resolved the contradiction between socialist policies favoring land redistribution and constitutional protections for private property.

Judicial Interpretation and the Decline of Private Property

The ambiguity around property rights persisted even after the 44th Amendment. In 1977, Justice V.R. Krishna Iyer highlighted Article 39(b) of the Directive Principles of State Policy, which emphasized the distribution of community resources to serve the “common good.” Justice Iyer argued that private property could be interpreted as part of community resources, making it liable for redistribution.

This interpretation was cemented in the Sanjeev Coke Manufacturing Co. vs. Bharat Coking Coal Ltd. case of 1983, in which the Supreme Court ruled that private property could be acquired by the state if it served the larger interests of the community. The case established a precedent that private ownership was subordinate to the state’s control, eroding the sanctity of personal ownership.

The Long Wait for Change

In 1997, the Mafatlal Industries vs. Union of India case called for a re-evaluation of the 1983 ruling. The Supreme Court recommended that a larger nine-judge bench reexamine whether private property could indeed be treated as community resources. After nearly three decades, this long-pending review finally began in April 2024, with CJI Chandrachud leading an eight-judge bench to revisit the issue of private property under Article 39(b).

The 2024 Verdict: A Balanced Approach to Private Property Rights

On November 5, 2024, CJI Chandrachud and his fellow justices delivered a landmark judgment that restored the right to private property in a redefined form. The court asserted that private property cannot be indiscriminately taken by the state under the guise of community resources. The judgment made it clear that while certain private resources might be appropriated in rare instances for the common good, the default presumption favors private ownership, with compensation as an essential prerequisite.

The ruling aligns India with its evolving economic landscape, where socialism is tempered with the liberalization policies adopted since the 1990s. Recognizing the harm caused by Justice Iyer’s rigid interpretation of socialism, the court acknowledged that economic ideology must evolve to reflect the times. Justice Chandrachud emphasized the need for a Constitution that respects private ownership and fosters a stable environment for individuals and businesses.

Key Implications of the Ruling

This landmark decision affects all segments of Indian society, from wealthy business owners to small-scale landowners:

1. Prevents Arbitrary Nationalization of Businesses: The ruling prevents future arbitrary nationalization, safeguarding investments. This stability encourages both domestic and foreign investors to establish and expand businesses within India.
2. Protects Farmers from Land Acquisition Without Cause: In cases where farmland is acquired for stalled projects, this judgment provides greater protections to farmers, reducing instances of unfair or prolonged displacement.
3. Secures Rights for Residents in Slums and Vulnerable Areas: The decision also prevents the government from evicting slum dwellers and other vulnerable populations without due process and compensation, ensuring that their property rights are respected.

A Milestone for Economic and Personal Freedom

With this ruling, CJI Chandrachud and the Supreme Court have revitalized the right to private property in India, restoring a fundamental aspect of individual liberty. While this right is not yet reinstated as a fundamental right, the ruling offers stronger protections and signals a shift away from socialist-era property controls. For many, the decision represents a long-awaited acknowledgment of the importance of private ownership in a modern, democratic society.