Context-

The right to property has had a tumultuous history in post-colonial India, marked by intense conflicts between the courts and the legislature. The Supreme Court's decision in the Kolkata Municipal Corporation case has reignited the debate over property rights and fair compensation.

Historical Context and Legal Precedents

• The Bela Banerjee Case : The genesis of this power struggle dates back to the case of Bela Banerjee, which involved the interpretation of Articles 19(1)(f) and 31(2) of the Constitution (before amendment). The Supreme Court of India held that the word compensation in Article 31(2) postulated “a just equivalent of what the owner has been deprived of”. To undo this interpretation, the Constitution (Fourth) Amendment was passed in 1955 amending, among other things, Article 31(2) to expressly state that the courts could not look into the inadequacy of compensation.
• Legislative Retaliation and Judicial Ingenuity : To retaliate, the courts then devised an ingenious plan: they held that although the final compensation was non-justiciable, the principles fixed by the legislature to arrive at such determination would be open to scrutiny.

The Legislative Response

• The Constitution (Twenty-Fifth) Amendment Act, 1971 : Parliament, for its part, realized that the word “compensation” in Article 31(2) was the source of all mischief. Vide the Constitution (Twenty-Fifth) Amendment Act, 1971, the word “compensation” was substituted by the word “amount” which kept the interpretation of the courts at bay. Thus, the acquisition of property could now be effected through the medium of eminent domain (the state) by paying the landowner an “amount” (as distinguished) from “compensation”. The adequacy of such “amount” was consequently not open to judicial review.
• Judicial Interpretation in Kesavananda Bharati : Though the validity of the Constitution (Twenty-Fifth) Amendment Act, 1971 was upheld in Kesavananda Bharati, the Supreme Court watered down the intended effect of the amended Article 31(2) by an interpretive process. The majority in Kesavananda Bharati took the view that though the adequacy of the amount paid was not justiciable, the courts could still examine whether the principles fixed for determining such compensation were relevant, which in effect, reinstated what Justice Shah had said in the bank nationalization case.

A Shift in Political Climate

• The Constitution (44th Amendment) Act, 1978 : After the defeat of Congress in the general election of 1977, the Janata Party, which came to power, passed the Constitution (44th Amendment) Act, of 1978. The right to property under Article 19(1)(f) was deleted from Part III and rehabilitated as a constitutional right under Article 300-A. Article 31, which had witnessed much controversy in the matter of the determination of compensation, was also deleted. The ripple was felt instantly.
• Judicial Observations and Scholarly Opinions : Justice K.K. Mathew, who was one of the dissenting judges in Kesavananda Bharati, observed that ownership of property has a direct correlation to the quality of the civilization and its culture and hence opined that “…there is no justification to exclude the fundamental right to own and acquire property from the category of basic features of the Constitution even if it is assumed that the concept of basic structure is a tenable one”.

In 1980, it was argued that the deletion of Article 31 was a mistake. It stated that the power granted by Entry 42 of the concurrent list is for 'acquisition' and not 'confiscation.' As long as the conditions that acquisition must be for a public purpose and must be accompanied by compensation were explicitly included in Article 31(2), there was no need, and perhaps no justification, to treat them as inherent aspects of the provision.”

• Article 300A and Its Implications : Article 300A reads that “no person shall be deprived of his property save by authority of law”. This, still meant that the “law” cannot be valid unless the acquisition or requisitioning is for a public purpose and there is also a provision in the law for paying compensation.

Modern Judicial Interpretation

• Supreme Court’s Evolving Stance : In the years that have followed the deletion of Articles 19(1)(f) and 31, the Supreme Court has held that the right to property is not only a constitutional right but also a human right. In the case of M.C. Mehta, the Supreme Court held that to be a valid law, it must be just, fair, and reasonable. In other words, though the right to property was not a fundamental right, a law that deprived a person of his property must answer to the requirements of Articles 14, 19, and 21. In B.K. Ravichandra, the Court went a step further and observed that the phrasing of Article 300A had a striking resemblance to Articles 21 and 265 and hence its guarantee could not be read down.
• The Kolkata Municipal Corporation Decision : The recent decision of the Supreme Court in Kolkata Municipal Corporation has fleshed out seven different facets that are protected under Article 300-A. These are:

○     The right to notice;

○     The right to be heard;

○     The right to a reasoned decision;

○     The duty to acquire only for public purpose;

○     The right of restitution or fair compensation;

○     The right to an efficient and expeditious process;

○     The right of conclusion.

The Court has concluded that the absence of even one of these features would render the law susceptible to challenge. The right to restitution or fair compensation judicially affirms the position prevailing when the unamended Article 31 was in force, and the interpretation expounded in the Bela Banerjee case on the aspect of payment of compensation. A person deprived of land by the state in the exercise of its power of eminent domain is entitled to be paid compensation that is just and reasonable. The Court, in Kolkata Municipal Corporation, has reiterated that deprivation or extinguishment of that right is permissible only upon restitution, be it in the form of monetary compensation, rehabilitation, or similar means. Thus, the requirement of paying compensation, i.e., money’s worth of the property acquired, which was the original position in the Bela Banerjee case, has now been reinstated. The wheel has come full circle.

Conclusion

The decision in Kolkata Municipal Corporation vindicates the prophetic words that in enacting the Forty-Fourth Amendment and deleting Articles 19(1)(f) and 31, Parliament has unwittingly provided property rights with a level of protection never before seen, either in British or independent India. This evolution reflects the inherent tension and balance between legislative intent and judicial interpretation, ensuring that the right to property, while no longer a fundamental right, still maintains significant safeguards through constitutional and human rights principles. It is in the line of, an oft-quoted maxim with property rights that of President John Adams: “Property is surely a right of mankind as real as liberty”.

Source- The Hindu