Laws often need to be reshaped to reflect the evolving needs and values of society. The recent Supreme Court verdict by a nine-judge Constitution Bench, led by Chief Justice D.Y. Chandrachud, underscores this adaptability. In a landmark decision with a 7-2 majority, the court ruled that the government does not have absolute authority to acquire private property, even if intended for public benefit. This judgment overturns the Supreme Court's 1977 ruling by a seven-judge Constitution Bench, led by Justice V.R. Krishna Iyer, which endorsed broad governmental power to take over private property for societal welfare.

This shift reflects changing economic realities and societal expectations. The court acknowledged that the social and economic structures in place during Justice Krishna Iyer’s tenure are no longer applicable, reinforcing the need for updated interpretations that align with contemporary economic policies and individual rights. Chief Justice Chandrachud’s judgment emphasized that the Supreme Court is not endorsing any particular economic ideology, marking a clear distinction from the earlier socialist approach that was more common in the era of Justice Krishna Iyer. However, the majority ruling drew dissent from Justices Sudhanshu Dhulia and B.V. Nagaratna, who objected to specific remarks by Chief Justice Chandrachud about Justice Krishna Iyer’s approach. These remarks were later removed to honor the sentiments of the dissenting justices.

Central to the court’s reasoning is Article 39(b) of the Constitution, which permits the acquisition of private property to ensure equitable distribution of resources for the public good. However, the current judgment clarifies that this authority has limits. While the government can acquire private assets to serve broader social interests, these actions must align with modern interpretations of public welfare and respect private ownership rights.

Chief Justice Chandrachud’s opinion emphasized the need to evaluate the type and societal role of resources before asserting the public good. Environmental and essential natural resources—forests, minerals, wetlands, and spectrum—fall within the scope of Section 39(b) and can be requisitioned for the public interest but the court emphasized that resources should be assessed based on their role in social welfare, indicating that not all private assets fall within this remit.

The case in question originated in Maharashtra, where the state government sought to take over old rental buildings in Mumbai, refurbish them with the consent of 70% of the residents, and repurpose them for public use. This judgment reflects a careful balance between public good and private rights, underscoring a gradual move away from state-centered economic policies toward a market-based approach.