Legal Dimensions of Property Rights in India

This chapter deals with the advent, advancement, development and application of property laws in India, prior to constitution, as well as after the enactment of the grundnorm. The theory of eminent domain exists since time immemorial and property rights have found mention under the Charter of Magna Carta of 1215 under which rights over property were guaranteed as per the requirements and conditions of different communities.

Indians have desire for civil rights since 19th century and it was for the first time that the Bengal Regulation I of 1824 authorized the acquisition of property privately owned by the State, compulsorily. It was implicit in the policies of the Indian National Congress in 1885, that Indians wanted same rights and privileges that the Britishers enjoyed in India and they had for themselves in England. In 1894 Congress passed a resolution demanding “fixed tenure and immunity from enhancement of land tax for sufficiently long period of not less than sixty years.

The demand for the fundamental rights appeared for the first time by the legislation in the Constitution of India Bill, 1895. Various series of resolutions adopted between 1917 and 1919 by the Indian National Congress, repeated the demands for civil rights and equality of status with Englishman (Article 16 of this Bill laid down a variety of rights including rights over property) . The Indian National Congress at its special session held in Bombay in August 1919 demanded that the proposed Government of India Act should include a “declaration of the rights of the people of India as British citizens.” Further development came in form of inclusion of the provision of seven fundamental rights in Mrs Besant’s “Commonwealth of India Bill” of 1925. In 1926 the Indian National Congress passed a resolution for taking steps in the direction to improve the condition of peasants and for the protection of rights of labours.

As per the directions contained in the Madras Congress resolution of 1927, a committee was set up for the drafting of “Swaraj Constitution” for India on the basis of a “declaration of right”; the committee came into existence on May 1928. Motilal Nehru was provided the chairmanship of the committee and its report came to be known as the Nehru Report, contained an explanation of its draft Constitution. The report to secure right to property as the fundamental rights, which had always been denied to the people under the British reign.

The preamble to the Independence Day pledge that had been taken on 26th January 1930 affirmed the inalienable right of the people of India as of any other people “to have freedoms and to enjoy the fruits of their toil and have the necessities of life, so that they may have full opportunity of growth. This pledge was translated and taken into the historic resolution on Fundamental Rights and Economic Programme adopted by the Karachi Congress in the year 1931. And thereafter, the Joint Parliamentary Committee constituted to provide for constitutional reforms in India (1933-34) felt a need for certain general provision to be inserted in the Constitution Act for safeguarding the expropriation of private property. The committee gave the suggestion stating, that the Constitution should secure the legislation expropriating the property of particular individual should be lawful only and expropriation done for the benefit of public and compensation was to be determined by some independent authority.

In 1934, the Joint Parliamentary Committee refused the request of Indians to include a list of rights in the 1935 Act. Only in 1946 did the British tacitly acknowledge the validity of the Indian view when the Cabinet Mission Plan suggested that to constitute an Advisory Committee on fundamental and minority rights to make recommendations concerning constitutional provisions. By 1947, it became a commonly accepted and shared belief that the state bears major share of responsibility towards the welfare and development of its citizens.

The leaders of the freedom movement made no difference between the positive and negative obligations of the state for these were the two classes under which the basic rights of the Indian citizen had been grouped in the Constitution of India. The Sub-Committee accepted the proposal drafted and presented before them by the Constitutional advisor, B.N. Rau and was classified as fundamental rights including right to property and directive principles in Part III and part IV, respectively.

The Constitution drafted by Prof. K.T. Shah guaranteed a fundamental right over property. Not only the right to property was provided but also allowed reasonable restrictions over the use of such right. Article X prepared by the subcommittee on fundamental right also specifically guaranteed the right of property and limited the power of the state to make reasonable expropriation for public purposes only. It also guaranteed just and adequate compensation for such expropriation against property of an individual for public purposes. The draft report of the sub-committee made five specific rights in which the right to acquire property was one. It was contained in clause 14 of the report which included right to freedom of movement throughout the Union, to reside and settle in any part of the union and to allow any occupation, trade, business or profession throughout the territory. The other four rights were inserted and placed in clause 9 of the same draft.

On April 14, 1947, when the sub-committee again gathered to reconsider the clauses in the draft prepared by Alladi Krishna Swami Ayer they started the discussion on the necessity and importance of imposing limitations on the right to freedom in situations of grave emergency and danger to the security of the state. The sub-committee decided to bring the five rights in the two draft clauses i.e. clauses 9 & 14 under a single provision. The consolidated provision constituted clause 10 of the report of the subcommittee of which sub clause (f) dealt with the right to property.

Subsequently, the entire clause was changed and modified by the amendments of Dr. B.R.Ambedkar and Alladi Krishnaswamy Ayer incorporated as clause 8 with sub clauses (e) and (f) with the further consequential change that sub-clause (d) and (f) were renumbered as (d) & (e) respectively. When clause 8 came up for consideration before the Constituent Assembly on April 30, 1947, JJM, Nicholas Roy pointed out that proviso to sub-clause (e ) was put in purposely in order to save the landed and other interests of minorities and tribal people. He pressed for the word ‘reasonable’ to be removed so as to exclude the judicial review. Intervening in the debate, Jawaharlal Nehru supported the deletion of the word ‘reasonable’ for the proviso to sub clause (e) Munshi moved three amendments. The third amendment proposed that the right to “hold or dispose of” property should also covered under be sub-clause (e) which promised the right “to acquire property” etc. Clause 19 of the interim Report of the Advisory Committee prohibited the government from acquiring property for public use without payment of reasonable compensation for such acquisition. While redrafting the constitution clause 8(e) and clause (19) became clauses 15(1) (f) and 25. In January 1948 once again it was renumbered as Arts.13 (f) and 24. Article 13 read :

(1) Subject to the other provisions of this Article, all citizens shall have the right…….to acquire, possess and dispose of the property; and ……..(2) Nothing in Sub-clauses (d), (e) and (f) of the said clause shall effect the operation of any existing law, or prevent the state from making any law, for imposing restrictions on the exercise of any of the rights conferred by the said sub-clauses either for public interest or for the protection of the interests of any aboriginal tribes.

The expression “due process of law” in relation to property rights was considered by the sub-committee on Fundamental Rights on March 26, 1947. Two days later the members reiterated and reinforced their earlier decision providing that no private property could be acquired for public use unless the law provides for the payment, according to principles previously determined for just compensation for the property acquired. When this matter went to the Advisory Committee, Govind Vallabh Pant said that if the Clause ‘just compensation’ was adopted, the measures for the acquisition of private property for public purpose might be challenged in courts on the grounds of inadequacy of compensation and the cases will remain hung awaiting for final verdict of the Supreme Court which might take several years, therefore, all social progress could be brought to a stand nil. He further pointed out that the word ‘public use’ is ambiguous and therefore, if this included governmental as well as social purpose it would create difficulties by pressing the state to pay compensation adequately. Rajagopalachari pointed out that question of just compensation being raised in court will paralyse the government functioning.

According to Ayer, the word ‘Compensation’ carried with it the idea of ‘Just compensation’. If the word ‘just’ was kept, every case will go to the Federal Court. Therefore the word ‘just’ was to be dropped. Even though some of the members did not wish to support this provision, according to them compensation itself meant just and fair compensation. Regarding zamindari abolition, they said that it would be unfair not to give zamindars just and fair compensation. Closing the debates Sardar Patel observed that the discussion had gone on a wrong track. It was not correct to assume that the object of the clause was to provide for the acquisition of zamindaris, as by the time the clause became law most of the zamindaris would have been liquidated. Compensation would be paid for possession of property by the state, and there would be no expropriation. In the light of this explanation, the clause was adopted by the assembly without any alteration. When the Draft Constitution was circulated for eliciting opinion, a number of amendments and suggestions were received from the members.

Ultimately after great deal of consultation, the drafting committee brought forward a compromise redraft of Article 24. The amendment was moved in the constituent assembly on September 10, 1949, by Jawaharlal Nehru who observed at the outset that although the Article had given much discussion and debate the questions involved were relatively simple. He said that there were two pathways- one from the point of view of the individual’s right to property and the other from that of the community’s interest, but these two approaches did not necessarily conflict with each other. Nehru further said that the draft Article was the result of a great deal of consultation and the result in fact of the attempt to bring together and