The economic philosophy underlining the Constitution is the establishment of a welfare State and an economic system rooted in the fulfilment of the individual, controlled and bounded always by the values of the principles of the society in which he lived. This justifies the selection of the topic ‘property rights under the Constitution’ for these lectures in memory of the gentleman Shri A.D. Shroff who believed in such a philosophy.2

2. At the outset, an oft-quoted doctrine requires to be clarified. It is stated in two propositions: (1) Nothing can be subject of property which is not recognised by law to be such; (2) when law withdraws such recognition, a thing ceases to have the attributes of property. These propositions mean that right to property lasts so long as law gives to a particular item, the status of property, and if law withdraws that status it ceases to be property. This legal position introduces economic instability, as the valuable rights of a person to property would be at the mercy of the transitory majorities of legislatures. At the same time, the socio-economic conditions of the country may require the regulation of the said right in public interest. This problem was solved by the Constitution by conferring a right to property on a citizen subject to the laws of social control. In this context, property under the Constitution means all things and rights recognised by law—statutory, customary and common law, as property before the Constitution has come into force. The right to property in all such things and rights have been guaranteed in the manner prescribed by the Constitution. As regards the future, the law can certainly create new property rights, and once they are created, they automatically acquire the Constitutional protection. If this be not the construction, fundamental right to property will be a mirage for in that event, the Legislature by changing the definition of property can destroy the right to property.

3. What was the meaning of the term ‘property’ in Indian Law before the Constitution? It was a generic term of extensive application. It was indicative or descriptive of every possible interest which a person can have. It was extended to all recognised types of interests which have the characteristic of property rights. Property was classified as movable and immovable, corporeal and incorporeal, real and personal. It may mean a thing or a right which a person has in relation to that thing. The expression “property” in the Indian Constitution was given this wide meaning.

4. Ownership ceased to be what it was. Originally it coincided with personal work. Now it controls other persons. Its unity has broken up into power, profit, interest, rent, etc. It has also given rise to complementary legal institutions such as loan, tenancy, hire, contract of service, etc. While originally absolute individual ownership of property was impressed only with moral obligations, now it is controlled and governed by legal obligations in public interest. In short, the institution of private law has been transformed to that of public law. The real problem facing modern India is not so much as to preserve the unlimited right to property, but while maintaining the substratum of individual right and its stability, to regulate the use of it in public interest. If undue attachment to acquisition of property is bad, revolutionary zeal to dislocate the structure of property is worse.

5. Two illustrative definitions of property, one from the Anglo-American Jurisprudence and the other from the Russian Jurisprudence, may help to appreciate the scope of the right to property and the meaning of the expression “property” under the Indian Constitution. The Fifth and Fourteenth Amendment of the Constitution of United States of America read: “No person shall be deprived of life, property without the due process of law”. The following wide definition of property is generally accepted in that country. “Property” in its broader sense is not the physical thing which may be subject to ownership, but is the right thing which may be subject to ownership, but is the right of domination, possession, and power of dispossession which may be acquired over it; and the right of property preserved by the Constitution is the right not only to possess and enjoy it, but also to acquire it in any lawful mode, or by following any lawful pursuit, which the citizen in the exercise of the liberty guaranteed may choose to adopt.

6. It will be seen from the said definition that the right to property consists of three elements (1) to acquire (2) to own and possess and (3) to dispose of the same. This apparently unrestricted right to property is subject to the laws of social control reflected in the State’s right of “taxation”, its “police power”, and its power of “eminent domain”. The absolute doctrine of the freedom of property propounded by Locke, the makers of French and American Revolutions. Bentham, Spencer, Kant, Hegel and others do no longer hold the field. That absolute doctrine had its origin when the labour and property were united and the increasing disassociation of the two makes it no longer valid.

7. The Constitution of U. S. S. R. defines the said concept thus:

Article 4.—The economic foundation of the U. S. S. R. is the socialistic system of economy and the socialistic ownership of the instruments and means of production, firmly established as a result of the liquidation of the capitalistic system of economy. The abolition of private ownership of the instruments and means of production and the elimination of the exploitation of man by man.

Article 5.—The socialistic property in the U. S. S. R. exists either in the form of ‘property (belonging to the whole people) or in the form of Co-operative and collective farm property (property of collective farms, Property of Co-operative Societies)’.

The other Articles no doubt within the framework of the Soviet Economy recognise private and personal property, within narrow limits. The socialist concept of property is based upon the theory of labour. Karl Marx in his work “Capital” propounded the theory thus: “In political economy there is a current confusion between two very different kinds of private property, one of which is based upon the producer’s own labour, whilst the other is based upon the exploitation of the labour of others. The Russian Constitution, therefore, rejects private ownership of the instruments of production but admits only to a limited extent of private ownership based upon the producer’s own labour.”

8. W. Friedman in his book on “Legal Theory” brings out with clarity the difference between the two doctrines. He says at page 374: “The recognition of freedom of property is a basic right that would still be generally considered as a principle of democracy as distinct from socialism which recognises it only in so far as it does not convey power over the means of production and subject to the needs of the community. But modern democracy by the same process which has led to the increasing modification of individual rights by social duties towards neighbours and community has everywhere had to temper freedom of property with social responsibilities attached to property.”

9. Some authors describe the ideology of democracy which accepts individual right to property subject to the laws of social control as democratic socialism. Democratic socialism believes in human dignity and individual initiative. It does not accept nationalisation of property except under extraordinary circumstances, and instead, pleads for social control of economic power. It wants the State to hold the ring and “to function as control mechanism by rectifying the imbalances that might arise in the economy—such as concentration of economic power, distortion of the price line, uneven development of different regions and sectors, neglect of the interests of the weak social groups including the consumers in the hands of the organised capital or the labour or the like.” To avoid confusion in terminology, I would prefer to describe this doctrine as individual right to property subject to social control rather than by the high sounding doctrine of socialism with or without any qualification. The doctrine of democratic socialism has been lucidly explained by A. B. Shah in his “Planning for Democracy”.

10. There is also some confusion between Socialism and Socialisation. Socialism is an ideology, a system of ideas concerning desirable social changes. “Socialisation is a process of transforming private into public property, ordinarily followed by Governmental operation and management of such enterprises”. Indeed socialisation is recognised in the new Constitution of France, Italy and Germany. Socialisation is associated with the statement of basic rights and a limitation upon the right of private property.

11. The party in power at the centre describes its ideal as “socialistic pattern of society.” The meaning of this concept has not been clearly explained. It means different things to different persons. It looks as if it had been kept designedly vague. The extremists in the party find in it the dogma of statism; the moderates identify it with democratic socialism. If it means only social control of economic power, there is nothing in it to cavil at. It will then be identical with the Constitutional ideology. In that event, the difference between this party and parties other than the communist party is more on emphasis rather than on inherent incompatibility.