Type of act
Decision
Date
03-12-2009 year
To the case

Decision №10

София, 03 декември 2009г.

Конституционният съд в състав:

Chairman:

Евгени Танчев

Members:

Емилия Друмева
Георги Петканов
Владислав Славов
Ванюшка Ангушева
Димитър Токушев
Цанка Цанкова
Благовест Пунев
Стефка Стоева
Пламен Киров
Румен Ненков
Красен Стойчев

DECISION № 10 OF 3 DECEMBER 2009 ON CONSTITUIONAL CASE № 12/ 2009

The Prosecutor General challenged the constitutionality of Art. 2 of the Act Arranging the Rights of Citizens with Long-Term Housing Savings Deposits (AARCLTHSD); of § 7, item 1 in the part in relation to para 3 of Art. 7; of § 10; of § 11, para 3 and of § 12 of the Transitional and Concluding Provisions of the Act Amending the Act Arranging the Rights of Citizens with Long-Term Housing Savings Deposits (AAAARCLTHSD).

As the Prosecutor General sees it, Art. 2 of the AARCLTHSD contravenes Art. 4, para 1 of the Constitution for in a state committed to the rule of law, laws shall not discriminate. However, the article challenged strips some citizens who keep long-term (multi-annual) housing savings deposits of entitlement to compensation. Art. 2 of the AARCLTHSD contravenes Art. 17, para 5 of the Constitution given the fact that some citizens who keep long-term housing savings deposits are stripped of entitlement and get no compensation in return. The challenge maintains that § 7, para 1 of the AAAARCLTHSD Transitional and Concluding Provisions in the part in relation to Art. 7, para 3 of the AARCLTHSD contravenes Art. 4, para 1 and Art. 17, para 5 of the Constitution as citizens who acquired an abode or proceeded with the construction of an abode prior to 3 August 1992 are stripped of entitlement to compensation in cash. In the opinion of the Prosecutor General § 11, para 3 of the AAAARCLTHSD Transitional and Concluding Provisions contravenes Art. 4, para 1 and Art. 17, para 5 of the Constitution as citizens whose names were entered into the final lists but who could not acquire an abode or could not proceed with the construction of an abode within five years of the entry into force of the AAAARCLTHSD are stripped of entitlement to get their lev deposits indexed. And finally, the Prosecutor General sees § 10 and § 12 of the AAAARCLTHSD Transitional and Concluding Provisions as noncompliant with Art. 4, para 1 and Art. 17, para 5 of the Constitution for they take away acquired rights, in a way which in future will be an invalidation ex lege of housing compensatory bills that are securities and expropriate private property without any compensation in parallel for certain bearers.

1. The principle of the state committed to the rule of law undoubtedly determines and directly affects the exercise of public power by all institutions of the State. That principle makes it binding on the legislating authority when it performs its functions, including the decisions it takes, to comply with certain principles and rules. In the legislating process the principle of the state committed to the rule of law takes the form of a requirement to the existing legislation inasmuch as the procedure of passage and of the wording but also in terms of the substance and the position of a piece of legislation in the law system. The idea is to make the legislating process subservient to the spirit and to the letter of the Constitution rather than to a haphazard factor or to the might of the ruler.

The Constitution lists the main elements to make the legislating authority subservient to the principle of the state committed to the rule of law. Any piece of legislation, in terms of the passage procedure and substance, shall not disagree with the principles and individual provisions of the Constitution (Art. 5, para 1). Further, the criminal law shall not be retroactive (Art. 5, para 3), nor shall be the tax legislation, as the Constitutional Court has ruled. Other elements of the principle of the state committed to the rule of law vis-à-vis the legislating process are the obligation to promulgate and the vacatio legis rule (Art.5, para 5), the equality of citizens before the law (Art. 6), and the strict respect for the reservation expressed in the Constitution that a certain matter shall be treated but in a law.

Naturally the Constitution does not give an exhaustive and systematically knit catalog of the different aspects that the legislating process in a state committed to the rule of law shall respect. Yet these aspects can be inferred from the logic and the set of principles that the Constitution stands upon. The principle of the state committed to the rule of law makes it binding on the legislating authority to be consistent and predictable and to prevent the passage of pieces of legislation that contradict each other. The pieces of legislation that the legislating authority passes shall guarantee legal security, including the respect for rights that individuals and corporate entities have acquired under the law while the legislating authority shall abstain from amendments that are beneficial to the State but detrimental to the individuals and corporate entities.  In a state committed to the rule of law the legislating authority shall draft pieces of legislation that are in tune with rightful interest within the model that the Constitution sets rather than bring in restrictions and privileges incidentally or haphazardly or grant privileges and rights that cannot materialize. And finally, in a state committed to the rule of law such cases must be treated in a way which is one and the same for all rather than let differentiation in the pieces of legislation on the basis of criteria that are non-inherent to the Constitution.

The legislating authority that functions thus within the framework of the Constitution legitimizes the pieces of legislation that it passes and advances the concept that the principle of the state committed to the rule of law while it does not boil down to the understanding that laws shall be abided by, preaches that the laws passed shall be in tune with the principles that form the platform of a democratic rule.

The Constitution vests the legislating power to the National Assembly (Art. 62 and Art. 84), and thus recognizes the National Assembly’s prerogative to decide as it sees appropriate on the passage, amendments, supplements or revocation of one piece of legislation or another or of one text or another in the same piece of legislation as this prerogative is the core function of any Legislature. The National Assembly is the only authority that is free to decide whether and how to legislate about relations in a society that are subject to sustainable rules, unless the Constitution makes it binding to pass a law on the specific matter. It is impossible for the National Assembly’s judgment about the parameters and substance of the legislation according to the principle of the state committed to the rule of law to ignore the Constitution prescriptions and the follow-up specific provisions of the Law on Normative Acts inasmuch as they contain requirements that the legislating authority is bound to comply with exactly on account of the principle of the state committed to the rule of law. So in general the legislating authority is free to judge whether and what conditions the passed pieces of legislation should contain to regulate certain relations in the society but in tune with the spirit and the letter of the Constitution and of the Law on Normative Acts.

The conditions as set in Art. 2, para 1 of the AARCLTHSD for citizens who keep housing savings deposits to get financial compensation on the whole do not conflict with the principle of the state committed to the rule of law. The AARCLTHSD is intended to abolish relations that date back to 31 December 1990, before its passage. In that sense the regulation concerns the status quo. As the Government and the municipal authorities ceased to be bound to sell abodes, this was detrimental to the citizens who might have enjoyed that right and it is therefore a question of justice that they get financial compensation. As the possession of a housing savings deposit per se was not sufficient to buy an abode from the Government or from a municipal council given the abolished legislation, the Government did not make a commitment to compensate financially all holders of housing savings deposits and in general the holders of deposit accounts that had been opened prior to 31 December 1990. Therefore the satisfaction of the Prosecutor General’s request for financial compensation of all holders of housing savings deposits as of 31 December 1990 implies that the AARCLTHSD denounces the status quo and formulates a new justification to make it binding on the Government to financially compensate citizens.

The legislating authority correctly agrees that the entitlement to financial compensation had a justification in a piece of legislation that existed in the past; however, when the legislating authority revised this legislation it justifiably recognized the fact that changes that had occurred in Bulgaria’s socio-economic life had to be complied with. Hence the justified revision of item 1 of Art. 2, para 1 of the AARCLTHSD in relation to the requirements that were originally posed to citizens to make them eligible to acquire an abode as they buy it from the Government or from a municipal council and to get financial compensation accordingly. That criterion is part of the status quo and subject to update as appropriate. Regarding items 2 and 3 of Art. 2, para 1 of the AARCLTHSD, these repeat the status quo ante that justified for entitlement to buy an abode from the Government or from a municipal council.

However, item 4 of Art. 2, para 1 of the AARCLTHSD by which the legislating authority put in place a completely new standalone requirement that was not there when the housing savings deposit account was opened, that new requirement seeks to minimize the number of rightful claimants to financial compensation. However, it is the view of the Constitutional Court that no recourse should be made to criteria tolerated by the Constitution that was existing when they were introduced in order to reconstitute categories that were in place. Changes in circumstances shall not justify the addition of further restrictions that the Constitution does not tolerate to an already restrictive policy. Art. 6, para 2 of the Constitution disallows the curtailment of rights on the grounds of property status. Property status shall not be the justification for the differentiation of legal arrangement, including acquired rights. So whenever a Legislature creates a set of rules that are intended to do away with the status quo, it will be fair to recognize the changes in the situation, however not with the help of criteria that the Constitution will not tolerate.

The Constitutional Court did not agree with the opinion that Art. 2, para 1 of the AARCLTHSD contravenes Art. 17, para 5 of the Constitution as the financial compensation of certain individuals who hold housing savings deposits is a kind of receivables. The logical and systematic interpretation of Art. 17 of the Constitution unambiguously indicates that when the Court speaks of ,,property”, it implies ,,chose in possession” and not ,,assets” in general or ,,property in a broad meaning”. It is inadmissible to mix up the right to ownership as chose in possession and the fundamental Constitution-proclaimed right to property which forms the substantial foundation of the existence of the individual and thus substitutes the property right with the subjective right in the public law domain.

2. The Prosecutor General thinks that Art. 7, para 3 of the AARCLTHSD is noncompliant with the Constitution as the approach it takes to all holders of housing savings deposits is not one of equal treatment. From the very date of adoption in 1991 the AARCLTHSD which was promulgated on 4 October determines that holders of housing savings deposits as of 31 December 1990 shall be entitled to financial compensation. When in 1992 the legislating authority changed the Act, it put into it additional requirements to be met in order to be eligible to get financial compensation which was made conditional upon the date of entry into force of the Act Amending the Act on the Resolution of the Housing Problems of Citizens with Long-Term Housing Savings Deposits as the heading of the Act was at that time. However, the changes in the Act were not of a nature that would affect its philosophy and exclude the group of citizens who held housing savings deposits as of 31 December 1990 and had proceeded with the construction of their abodes prior to 3 August 1992.

3. The challenge maintains that § 11, para 3 of the AAAARCLTHSD Transitional and Concluding Provisions is anticonstitutional as the contested text decrees eligibility for lev indexation only for the persons whose names were entered into the final lists and who acquired an abode or proceeded with the construction of an abode within five years reckoned from the date of entry into force of this Act. The Constitutional Court does not accept this view. Indeed, the legislating authority puts in place a new requirement while it allows sufficient time and over that period reckoned from the date of the AAAARCLTHSD’s entry into force citizens can readjust their conduct. The legislating authority is free to judge on the way the settlement will proceed in time, the more so the purpose is to abolish the status quo rather than let it protract as time goes.

4. The challenge maintains that the compensatory housing bills are securities and so the legislating authority violates Art. 4, para 1 and Art. 17, para 5 of the Constitution with the act of desecuritization. In the Constitutional Court’s view § 10 of the AAAARCLTHSD and the related § 12 of the AAAARCLTHSD Transitional and Concluding Provisions do not contravene Art. 4, para 1 of the Constitution. The abolished procedure under § 9 of the AAAARCLTHSD Transitional and Concluding Provisions is very incomplete and general and hinders enforcement. Such an approach in a legal arrangement is not in unison with the principle of the state committed to the rule of law. On the other hand, the legislating authority is free to judge whether it can let issue such bills and on how these bills should be used. What is essential is to avoid violation of acquired rights of citizens who hold housing savings deposits for which the legislating authority seeks a legal arrangement. According to § 13 of the AAAARCLTHSD Transitional and Concluding Provisions the local commissions shall ex officio reinstate the citizens’ status of eligibility so that they can get financial compensation after the desecuritization. As regards individuals and corporate entities who hold such compensatory bills, in order to use them in privatization transactions, they have run an unjustified financial risk with the then existing legal arrangement and given essential gaps in the legislation of trade in securities and hasty mix up with the compensatory bills under the Act on Indemnification of the Owners of Nationalized Properties. The more so that when individuals and corporate entities acquired compensatory housing bills under the abolished § 9 of the AAAARCLTHSD Transitional and Concluding Provisions, they were aware that there shall be no financial compensation since it stands for acquisition of an abode in the meaning of the AARCLTHSD.

 


Председател: Евгени Танчев

Dissenting opinion on a decision: