Analysing Constitutional Validity Of Gujarat Disturbed Areas Act, 1991

The Gujarat Prohibition of Transfer of Immovable Property and Provision for Protection of Tenants from Eviction from Premises in Disturbed Areas Act, 1991 (hereinafter referred to as “the Act”) was enacted by the Congress government in 1991 to prevent distress sales in riot-affected areas. The Act primarily focuses on regulating immovable property transactions in notified disturbed areas and imposes additional restrictions on transfers by requiring prior approval from the Collector. Despite being neutral in its wording, there have been several reports of the regulatory power being abused by the State Government to segregate the population based on religion, by selectively denying property transfers between Muslim and Hindu parties. This article will examine the same concerns—namely, whether provisions of the Act that permit discretionary power to the government are constitutionally valid, and whether additional restrictions imposed on property transactions are reasonable or violate the fundamental right to residence. 

The need for such legislation arose from the socio-political environment of 1980s Gujarat, which witnessed several incidents of riots and mob violence, specifically targeting Muslims and other marginalized sections of the society. In these incidents, such communities were forced to sell their property far below market price to members of other communities, indirectly compelling them to leave their neighbourhood. To declare such transactions void and regulate property transactions, an ordinance was promulgated by the Gujarat Government in 1985, which was later enacted as the said legislation. However, in recent times, the Act's use has completely deviated from its original purpose and has shifted to specifically denying property purchases by Muslims in Hindu-majority or other localities, thereby indirectly forcing them to live in Muslim neighbourhoods, resulting in residential segregation and infringing upon the fundamental right to residence. 

To understand the Act in brief, Section 3 allows the State Government to declare areas as 'disturbed', considering the intensity and duration of riots or mob violence (or such other factors) that might have disturbed the public order. Section 4 renders void all immovable property transactions made in the disturbed area during a specified period prescribed by the State Government under Section 3. Furthermore, Section 5 imposes additional restrictions by making prior approval from the Collector mandatory for the transfer of immovable property in such notified areas. In the following chapters of this article, I analyse these sections in detail to determine whether they are ultra vires the Constitution.

Declaration of Disturbed Area

Section 3(1) of the Gujarat Disturbed Areas Act 1991 states that:

“Where the State Government, having regard to the intensity and duration of a riot or mob violence and such other factors in any area of the State, is of the opinion that public order in that area was disturbed for a substantial period due to such riot or mob violence, it may, by notification in the Official Gazette, declare such an area to be a disturbed area and specify the substantial period (hereinafter referred to as 'the specified period').”

In other words, Section 3(1) of the Act empowers the State Government to declare an area as 'disturbed' based primarily on riots, mob violence, public disorder and its intensity and duration. At first glance, these provisions seem clear and well-defined when interpreted in line with the Act's objectives. However, upon closer examination, they lack specific guidelines and objective criteria for declaring an area as 'disturbed' beyond the mere occurrence of riots or mob violence. The provisions are also silent on the definition of intensity and duration, which are essential for identifying truly disturbed areas where state intervention and a blanket prohibition on transfers are imperative.

The legislature's inaction in defining these factors allows the State Government to declare any area as disturbed, even in cases where ordinary legal mechanisms (discussed in the next chapter) would have been sufficient to prevent distress sales. Blanket restrictions on transfers can only be justified through a strict classification of areas, backed by explicit statutory definitions. Hence, it is the duty of the State Legislature to provide specific and objective definitions in its statutory framework, rather than leaving the said to administrative discretion or judicial interpretation. 

A similar stance was taken by the Supreme Court in H.R. Banthia v. Union of India, where several sections of the Gold Control Act, 1968, were declared unconstitutional. The Court held that expressions used to grant discretionary power to the administrative authority in granting a license, such as "anticipated demand," "existing dealers," and "public interest," were vague and incapable of objective assessment. A similar necessity for specific guidelines was also emphasized by the Supreme Court in State of Punjab v. Khand Chand.

Additionally, Section 3(2) of the Act fails to prescribe a definite period after which the Act would cease to apply in such disturbed areas. It also does not mandate periodic reviews, assessments, or public consultations which indirectly allows the State Government to apply the Act perpetually into notified areas.

Such skeletal enactments, devoid of specific guidelines and technical definitions, and delegating essential legislative functions to the executive, violate the rule of law and cannot be permitted—especially when they impose restrictions on fundamental rights. The arbitrary exercise of power granted by these provisions has resulted in the unreasonable classification of localities and metropolitan cities in Gujarat, thereby violating Article 14 of the Constitution. 

Test of Proportionality

Sections 4 and 5, respectively, render all transactions made during the specified period void and make the Collector's prior approval mandatory, thereby imposing restrictions on the fundamental right to residence protected under Article 19(1)(e). These restrictions on the transfer of immovable (residential) property have been justified by the State Government under Article 19(5), which permits reasonable restrictions in the interest of the public and Scheduled Tribes. However, the means employed by these provisions are disproportionate and excessive, which must be tested under the proportionality test.

Recognizing the presence of this test in Indian constitutional jurisprudence, the Supreme court in Modern Dental College v. State of M.P., held that any law limiting a constitutional right is permissible only if it is proportional. The Court prescribed a four-pronged test: (a) Proper Purpose, (b) Rational Connection, (c) Necessity, and (d) Balancing. Assuming that the State's interest and rational connection are legitimate, we will only examine the third prong, which assesses the means employed by any statute in achieving its objectives.

The Necessity prong prescribes that the least restrictive means must be employed to achieve the state objectives. However, Sections 4 and 5, through their broad wording, indiscriminately declare every transaction void and unnecessarily interfere with legitimate transactions made based on free consent and fair value.

In contrast, to achieve the same objectives (prevention of distress sales), less restrictive means already exist under the Indian Contract Act, 1872. Section 19 of the Indian Contract Act, 1872 makes a contract or transaction void at the option of the aggrieved party if it was created under coercion, undue influence, or lack of free consent. Expanding the same protections, the State Government could also establish and appoint authorities to receive voluntary declarations from affected parties, raising their grievances about coerced transactions. This would serve as a better mechanism to prevent distress sales whilst maintaining non-interference in legitimate transactions. Thus, these sections do not pass the proportionality test and imposes unnecessary and excessive restrictions on property transactions, thereby violating the fundamental right of residence protected by Article 19(1)(e).

Bar on Judicial Review

Section 8 of The Gujarat Disturbed Areas Act provides that: 

“The decision of the Collector under section 4 or 5, subject to an appeal to the State Government under section 6 and the decision of the State Government on the appeal, shall be final and conclusive and shall not be questioned in any Court.”

This section blatantly ignores the fundamental requirement of an appropriate appellate forum, thereby prohibiting citizens from appealing to the Court of law and vests appellate functions absolutely in the State Government. This allows the State Government to make administrative decisions based solely on its subjective satisfaction, without any accountability before a judicial body—a practice that was held unconstitutional in State of Madras v. V.G. Row.

In the aforementioned case, the Supreme Court, whilst declaring Section 15(2)(b) of the Indian Criminal Law Amendment Act, 1908, unconstitutional, held that executive decisions or advisory boards cannot be substituted for judicial inquiries when fundamental rights, such as the right to association, are affected—even if the decisions of such quasi-judicial bodies are binding on the government. The core principle established in this judgment is that fundamental rights and the restrictions imposed by any law cannot be left to the subjective satisfaction of an administrative body and must be subject to judicial review by an independent judicial authority. As can be observed from prior discussion, Section 8 fails in this regard and allows the State Government's power to remain unchecked.

In the end, the only remedy available to citizens in such a situation is Article 226. However, this remedy is not available as a matter of right, as it falls under the discretionary power of the High Court. This not only affects citizens' right to access justice but also indirectly nullifies the rights of those who lack the resources to approach higher judicial bodies.

Conclusion

As discussed in the introduction part, the arbitrary exercise of power permitted by the legislation has denied citizens, especially Muslims, the right to buy property in their preferred locations, compelling them to live in specific neighbourhoods. This has resulted in religious ghettos and segregated residences in several cities of Gujarat, denying equal opportunities to the residents of such localities.

In Brown v. Board of Education, U.S. Chief Justice Earl Warren, describing the negative effects of segregation, overruled the Separate but Equal Doctrine and held that:

“Segregation with the sanction of law has a tendency to retard the education and mental development of Negro children and deprive them of some benefits they would receive in a racially integrated system. Such a school system also fails to recognize the intangible factors and qualities that, although incapable of objective measurement, are essential for overall development. Segregation based on race or any other factor creates an environment of inferiority and affects the minds and hearts of children, which they may never be able to overcome.”

Similarly, the Gujarat Disturbed Areas Act not only violates the constitutional right of residence but also limits the social mobility of both current and future generations by depriving them of rights linked to their place of residence, such as access to better education, healthcare, and public infrastructure. 

In his final speech in the Constituent Assembly, Dr. Ambedkar remarked on the foundational elements of Democracy and stated that:

“Political democracy cannot last unless there lies at the base of it social democracy. What does social democracy mean? It means a way of life which recognizes liberty, equality, and fraternity as the principles of life.”

However, these values are being undermined by the Act, which also limits interaction between members of different communities and weakens the social and cultural fabric of our nation.

In conclusion, the effects of this legislation must be understood beyond the violation of individual rights, as it causes irreversible damage to our polity. 

Views Are Personal.