DECISION No 15 OF 21 DECEMBER 2010 ON CONSTITUTIONAL CASE No 9/2010
It is unconstitutional to exclude the municipalities' private property from the execution of monetary receivables against them and to make such claims subject to the special enforcement procedure designed to be applied against state institutions .
Acting on Art . 150, para 3 of the Constitution of the Republic of Bulgaria (the Constitution) the Ombudsman of the Republic of Bulgaria approached the Constitutional Court. The proceedings were initiated on 25 March 2010 . The Ombudsman challenged the constitutionality of Art. 519 and Art. 520 of the Code of Civil Procedure (CCP, DV, No 59/2007, last amendment, DV, No 100/2010):
„ Execution against state institutions and municipalities
Art . 519. (1) Execution of monetary receivables against state institutions and municipalities shall not be admitted.
(2) The monetary receivables against state institutions and municipalities shall be paid off from the credit of their budget, envisaged for that. For that purpose the writ of execution shall be submitted to the financial body of the respective institution. If there is no credit, the superior institution should do what is necessary in order to provide such in the next budget at the latest.
Execution against establishments subsidized by the budget
Art. 520. (1) Execution on the funds in the bank accounts of state-financed establishments, received as a subsidy from the republican (national) budget shall not be admitted.
(2) The execution of monetary receivables on other property – privately owned by the debtors of para 1 – shall be executed under the rules of this Division.”
The Constitutional Court was asked to rule on the unconstitutionality of Art . 519 and Art. 520 of the CCP as texts that violate civil rights and freedoms , specifically Art . 17, para 3, Art . 19, paras 1 and 2, Art . 57 and Art 121 of the Constitution and that , by doing so , conflict with the principle of the inviolability of private property , of the equality of private proprietors in conditions of market economy and of the equality of the parties in a lawsuit , as, in the understanding of the Ombudsman, the challenged texts give a privilege to state institutions and municipalities which, at their discretion, can decide when and how to pay off what they owe to citizens.
The Constitutional Court discussed the motives and arguments as stated in the challenge and in the positions of the parties , and the verified facts and circumstances and to rule , took into consideration the following :
1. The Constitution is not lavish on the economic and financial foundation of the State. There is not a separate chapter in the Constitution devoted to that; the relevant matter is compressed into Chapter One, ,,Fundamental Principles”, (Arts. 17, 18 , 19 and 20 ) and the broad principles-delineated frame is left to the lawmaking authority to put substance into it.
In the Code of Civil Procedure passed in 1952 ( abolished ) the ban on enforcement against state institutions along with a similar ban valid for some other agencies is unambiguous (Art. 399, para 1). The subsequent amendments (1961) codified the procedure to apply to the settlement of monetary receivables that fall outside the enforcement procedure but for which there is an enacted court decision.
The Constitution of 1991 saved the rule of Art. 399, para 1 of the CCP (abolished) that had existed prior to the Constitution and continued to exist. The amendment of 1997 ( Act Amending the CCP, DV, No 124/1997) while it formally abolished the express ban (para 1) on enforcement against state institutions, spared the state-owned enterprises (para 2) which continued to be subject to the special regime of payment of monetary receivables following enacted court decisions. The amendment to the CCP (abolished) in 2002 (DV, No 105/2002) extended the special regime of the payment, following enacted court decisions, of monetary receivables claimed from state institutions over the municipalities and healthcare institutions that are subsidized by the republican (national) budget and/or municipal budgets.
The original text of the new CCP ( entry into force on 1 March 2008) was explicit ( Art . 519, para 1) on the ban on enforcement against state institutions and added a prescription of the special settlement procedure ( para 2). The municipalities and state-financed institutions face a restricted ban which covers their bank accounts that are their subsidy from the republican (national) budget. The amendment to the CCP of February 2010 “activated” Art. 519 and Art. 520 of the CCP and it is these articles that are totally challenged in this constitutional case.
2. The Court asked the question why the legislating authority established this special procedure in the CCP. As already mentioned, the National Assembly, the legislating authority and a constituted party to the case, did not present a position. The motivation of bills and the verbatim records show that the purpose for which the legislating authority passed the existing overall arrangement of Art. 519 and Art. 520 of the CCP was to make sure the state institutions, municipalities and state-financed agencies perform their public functions efficiently. That performance can be upset if enforcement is allowed against them in which the enforcement creditor is free to choose the way. Should this be allowed, the government may, in such a financial constraint, cease to make the transfers and the activity of state institutions may be paralyzed. The Court established that this purpose fits into the general Constitution frame since the exercise of state power (Art. 1, para 2 of the Constitution) by the bodies that the Constitution and the laws provide for is the pillar of statehood and for that the State Budget must provide the financing to enable the functions of the State in keeping with the principles of the separation of powers (Art. 8) and of local self-government.
Regarding the challenged texts, the Court concluded that the legislating authority had been cognizant of the law-governed state's requirement that any monetary receivables following an enacted court decision should be callable. The legislating authority deemed it inappropriate to apply non-sequestration of state-owned property to the debtors that are state institutions and established a special procedure which is here challenged and which makes it binding on debtors to comply voluntarily with the court decision and settle the debt due to the creditor by taking money from their budget credit. Under such an arrangement a creditor shall not ask to proceed with a sale of the debtor ' s property . If the debtor ' s budget has no credit available , Art . 519, para 2 of the CCP makes it binding on the superior institution to take the necessary measures so that the next year ' s budget is supplied with the credit ; the creditor ' s interest is not ignored as despite the delay (next calendar year at the latest) the creditor will get what is due plus a legitimate interest accrued during the delay. The Act on the Structure of the State Budget explicitly provides that liabilities under enacted court decisions , not planned in the respective budget for the current year , shall obligatorily be paid by the next budget ( Art . 3 9 , para 5). The ,,specifics ” of the procedure under Art . 519 of the CCP derives from the state institutions' specifics. They are legal entities with a dual status (M. Pavlova): they are bound by the public law in the performance of the state functions that are assigned to them – their core activity is non-economic and in the interest of the public at large, respectively in the interest of the nation; they are bound by the private law as holders of subjective rights and legal liabilities. State institutions are subsidized by the State Budget. The State Budget is a concept ( Art. 55, para 2; Art.84, item 2; Art. 87, para 2; Art. 106) which is present in the Constitution and in the constitutional practices as a recognized and known concept; the State Budget characteristics are steady in the legislation. State institutions, municipalities and state-financed establishments perform public functions and to do that dully approved State Budget allocations are earmarked. The Act on the Structure of the State Budget settles the formulation , adoption , fulfillment and accounting of the State Budget of the Republic of Bulgaria . It is the piece of legislation underlying the annual State Budget Act of the Republic of Bulgaria (SBA) with prescriptions about the planned income and expenses – it is the annual financial plan of the State. The SBA contains provisions that authorize state institutions to spend public money to a certain limit.
3. In general enforcement is the formalized process of pretense to achieve a result and a guarantee by means of pressure on the part of the State. So enforcement is to be understood as pressure by the State on the debtor who faces the enforcement. Enforcement in the civil law as a substitute of voluntary payment is resorted to by the public authorities as they appoint private or state enforcement agents. If enforcement agents approached state institutions, a contradiction would arise. It is logical to ask whether state institutions could , if at all , be pressured into civil law - related debt settlement , i . e . whether the State that holds monopoly over state coercive measures could act as an enforcing agent against itself. This internal contradiction in the legal expression ,,the state institutions as targets of private law enforcement” was recognized by the doctrine a long time ago and reflected in the legislation not only of Bulgaria but also of Germany, France, Belgium and other states. The legal framework adopted to overcome it rests on an administrative law footing: in general the State shall abide by the laws, just like the citizens. However, that abidance is different from that of citizens as the so called nobile officium – that is the idea of the integrity and accountability of the State – emerges. In that context enforcement in order to seize effects and money that are owned by the State is an inapplicable tool because the State and the state property which is to be sold so as to satisfy the claims will have to act as an enforcement agent and as a debtor all in one. The Court concluded that in the concrete constitutional dispute the enforcement under enacted court decisions under Art. 519, para 2 of the CCP is not deleted but assumes a mixed form – the receivables are bound by private law whereas the enforcement is bound by administrative law. The mix-up of private law and public law is intended to be the guarantee that while enforcement will proceed, the State Budget balance won't be menaced and this postulation is not in contravention of the Constitution.
The requirement that the challenged provision introduces, viz. that the writ of execution shall be submitted to the debtor's financial agency, i.e. an agency which is alien to the creditor-debtor relationship, does not disagree with the Constitution prescriptions. That requirement arises from the specifics of budgetary relations in the State. The financial agency of the debtor institution and the binding pressure by a superior body are lawful, not arbitrary ; if credit is not available these two must take the measures needed to guarantee that the settlement will be an item on the next year's budget. The Court perceived the purpose and the meaning of the challenged legal texts as the provision of the needed and reasonable balance between the interest of the State and the private creditors' interests and judged that the challenged Art. 519 of the CCP about the non-admissibility of execution against state institutions was compliant with the Constitution.
4. Regarding municipalities , a question was put whether the special procedure that Art . 519 of the CCP provides for against the state institutions can apply , if at all , to execution of monetary receivables against municipalities given the fact that the Act Amending the CCP ( DV, No 13/2010) put municipalities on a par with state institutions with respect to the special provision of Art. 519 of the CCP and whether that total equivalence is in compliance with the Constitution .
In general the Constitution lays stress on local self-government as a fundamental principle in the organization of a law-abiding state – ,, The Republic of Bulgaria shall be an unitary State with local self-government ”(Art. 2, para 1). Local self - government is a key component of the Constitution - established form of state government and is practiced in a municipality (Art. 136, para 1) ; local self-government gives a municipality its purpose and meaning. The self-government of a municipality is a matter of proportionality between the State as a common and all-embracing union and the municipality as a smaller center of standalone administrative activities within the State. The Constitution defines the municipality as a separate legal entity (Art. 136, para 3). As municipalities are within the State and the State holds sway over the Legislature and the Judiciary, the municipal authorities, at local level, act on behalf of the Executive, i.e. they perform the functions that the State has ceded them, that is, local self-government. Municipal authorities are administrative public authorities, hence the traditional definition that the theory of law gives of a municipality as ,,a local (administrative) legal entity ”.
A principle in the Constitution is that a municipality shall be entitled to own municipal property, which it shall use to the interest of the territorial community (Art.140 ), and that a municipality shall have its own budget (Art. 141, para 1). In this case the Constitutional Court had to see how the rule of Art. 519, para 2 of the CCP can apply to a debtor municipality. The Court found that indeed in the hypothesis of Art . 519 of the CCP with a debtor municipality there exists no ,,superior body ” typical of public administration and that , furthermore , the legislating authority had not described the path of a writ of execution against a debtor municipality, the way it had done that for a state institution. Does this conclusion imply inapplicability?
By Constitution the mayor shall be the executive power within a municipality (Art. 139, para 1, sentence one). The mayor shall be supported by the municipal administration, including its financial office. In the composition of Art . 519, para 2 of the CCP , given the inexistence of legislation , by analogy the writ of execution shall be served to the municipal financial office, respectively to the mayor of the municipality. In his activity a mayor shall be guided by the law, the acts of the municipal council and the decisions of the populace (Art. 139, para 2 of the Constitution) while special legislation – the Act on Local Self-Government and Local Administration (ALSGLA), the Municipal Budgets Act (MBA), etc. – provide for the mayor's prerogatives and relationships with the local self-government body that the municipal council is. The municipal council shall adopt and amend the annual budget of the municipality (Art. 21, para 1, item 6 of the ALSGLA) while t he draft budget of the municipality shall be made on the basis of the proposals of the mayors and heads of budget units (Art. 11, para 1, item 4 of the MBA). The municipal budget shall be changed during the current year in the way it has been adopted (Art. 18 of the MBA) . Therefore, the municipal council which is not a ,,superior body” typical of state institutions in the meaning of Art. 519, para 2 of the CCP, is the municipal public authority that decides on the municipal budget draft, approval and change, including the entry of liabilities under enacted court decisions in the expenditure column and the mayor of the municipality shall be in charge of drafting the budget.
The Court made this conclusion interpretatively as it interpreted the challenged CCP text regarding the municipalities in conformity with the Constitution and proceeded from the constitutional postulation that the State shall ensure the normal work of the municipalities through budget appropriations and other means (Art. 141, para 5 of the Constitution). In parallel , however , the Court found that a debtor municipality was not bound by any legislation and this gap is to blame for the inapplicability of the whole legal construction of Art . 519, para 2 of the CCP vis-à-vis the municipalities and the inapplicability of the ,,necessary measures” that the law makes it binding on them to take in the event of non-availability of a credit in the budget to guarantee that the payment would be made within a reasonable time. There is no referral to existing special pieces of legislation – the Municipal Budgets Act, the Act on the Financial Management and Control in the Public Sector, the National Audit Office Act, the Act on the Internal Audit in the Public Sector, etc . The principle of the state committed to the rule of law calls that constitutional principles be advanced and detailed by an unambiguous and internally coherent legislation and the legislating authority is bound to abide by this principle.
The Constitution tasks municipalities with functions of public interest that they are bound to perform and that are to be financially backed up. Drawing on what was already stated the inclusion of these functions into the special procedure scope under Art. 519 and Art. 520 of the CCP is, in principle, compliant with the Constitution.
Art . 140 of the Constitution reads that a municipality shall be entitled to own municipal property which the Municipal Property Act differentiates as public and private. In general public property ( Art . 17 of the Constitution) , be it state or municipal ( Decision № 19/1993 on Constitutional Case № 11/1993), has a special purpose which is to permanently satisfy public needs of national and local importance. To achieve that purpose the public property of the State and of municipalities is excluded from transactions and can neither be disposed of nor usucapted ; the State, respectively, the local municipality can be the owner. The same holds good of the budget account deposits of state institutions and of municipalities; these deposits are bound by the public law and are needed for the various functions of state institutions and local governments. That status of tangible assets and money that are not subject to transactions makes it impossible to go into private possession and to stand up in execution.
The municipalities differ from the state institutions as they own private municipal property and can generate income . That is why the total equivalence of municipalities to state institutions in the provision of Art. 519 of the CCP will be commensurate and compliant with the Constitution if it keeps away from the municipalities' private property.
While the Court recognized that an Act Amending the CCP ( DV , No 13/2010) made the municipalities equivalent to state institutions in the application of the special procedure of Art . 519 of the CCP in order to protect the public interest in accordance with the justification for the said amending act , it drew the conclusion that public interest could not justify the total imposition of the state institution-specific procedure onto municipalities. In the absence of a clear and precise legislation to reflect the municipal specifics – local taxes and fees, target programs, settlements, etc. then the total equivalence effected by the Act Amending the CCP (DV, No 13/2010) goes beyond the protection of public interest as a Constitution imperative for the financially supported implementation of the public authorities' functions. The passage of the Act Amending the CCP did not add any provision or reference to the existing legislation that recognizes that specifics of municipal relations and that guarantees the due payments. The above - stated considerations and reflections about the municipal budget and the municipal council are an interpretation which is based on the Constitution. However, the Court is of the opinion that an interpretation, even when it is conformant to the Constitution, cannot make up for the lack of legislation because Art 519 of the CCP as a ,,special procedure” is an exception of the general process of the satisfaction of creditors' claims with the debtor's assets and a broader interpretation is not to be applied to prescriptions that are exceptions.
Hence the unconstitutionality of the amendment to Art . 519 and Art . 520, para 1 of the CCP effected by the Act Amending the CCP ( DV , No 13/2010) that made the municipalities totally equivalent to state bodies in the ban on the execution of monetary receivables as the amendment violates the Constitution principles of the state committed to the rule of law (Art. 4, para 1) and the principles of the equal legal conditions for economic activity (Art. 19, paras 1 and 2). Art. 519 and Art. 520 of the CCP are partially unconstitutional in the part created by § 1 and § 2 of the Act Amending the CCP (DV, No 13/2010), i.e. the Court pronounced unconstitutional the Act Amending the CCP ( DV , No 13 / 2010). This is admissible given that the Constitutional Court did not go beyond the broader scope of the particulars of the Ombudsman ' s claim which challenged the constitutionality of all the provisions of Art. 519 and Art . 520 of the CCP. As the challenge was partly granted , Art . 519, para 1 of the CCP will part with the application of the specific method of execution of monetary receivables against debtor municipalities ; along with that the debtor municipalities will be reintroduced into the text of Art . 520, para 1 of the CCP to reestablish the status quo ante (prior to the amendment in question, DV, No 13/2010). The Constitutional Court ruled in principle on that matter ( Decision № 22/1995 on Constitutional Case № 25/1995): ,,The entry into force of the Constitutional Court decision that declares unconstitutional a law which … amends an existing law nullifies, from the moment of entry onwards, the force of the latter and of its provisions and also its revocable action on the preceding existing law… The revocation of the amended … preceding law by a law that is declared unconstitutional ceases and the preceding law is reinstated. The reinstatement of the preceding law in the wording prior to its un constitutional revocation or amendment is a consequence of the invalidation of the revocable action of the un constitutional law. ”
In the specific case after the entry into force of the Constitutional Court decision that pronounced unconstitutional the Act Amending the CCP ( DV , No 13/2010), pending the passage of new legal arrangements, Art. 519 and Art. 520 of the CCP will apply in the form prior to the amendment in question as follows:
„ Execution against state institutions
Art. 519. (1) Execution of monetary receivables against state institutions shall not be admitted .
(2) The monetary receivables against state institutions shall be paid off from the credit of their budget , envisaged for that. For that purpose the writ of execution shall be submitted to the financial body of the respective institution. If there is no credit, the superior institution should do what is necessary in order to provide such in the next budget at the latest.
Execution against municipalities and establishments subsidized by the budget
Art . 520. (1) Execution on the funds in the bank accounts of municipalities and other state - financed establishments received as a subsidy from the republican (national) budget shall not be admitted .
(2) The execution of monetary receivables on other property – privately owned by the debtors of para 1 – shall be executed under the rules of this Division .”
By an argument of the opposite of the text of the said paragraph 2 of Art. 520 of the CCP, it is inadmissible to resort to enforcement against the municipalities' public property. In addition to the funds which are not subject to sequestration under paragraph 1 of Art. 520 of the CCP, and which are in the form of budget subsidy transfers to the municipalities' bank accounts, such property includes, but is not limited to, some other titles.
5. The Court deems it necessary to note that despite its declaration of the partial unconstitutionality of the challenged provision, the adjudication of all other complaints on their merit is ongoing, for the challenge disagrees with Art. 519 and Art. 520 of the CCP totally.
On the alleged non-compliance with the principle of the inviolability of private property under Art. 17, para 3 of the Constitution
6. The challenge insists that the Constitution principle of the inviolability of private property is violated since the CCP challenged articles establish a different regime while the recognized right to property, in particular ,,the receivables”, shall be bound by a non-discriminating regime regardless of the title holder.
The Court did not find any violation of Art.17, para 3 of the Constitution. Receivables are a title and no doubt covered by the Constitution-extended protection on property by Art. 17, para 1 and para 3 (Decision № 17/1999 on Constitutional Case № 14/1999). The lawmaker is bound by the Constitution to protect the inviolability of private property by means of criminal law and civil law. The challenge disputes just the efficiency of civil law protection of the private property of citizens and of legal entities given the existence of the special action in Art. 519 and Art. 520 of the CCP .
State property ( assets ) is a constitutional concept (Art. 106). It is an element of public authority. With no assets to lean on the State won't be able to perform its public functions of general interest. And when property is involved, relations are in the private law domain where all subjects of law are equal. There the rights and liabilities of the State as a private title holder shall not be dissimilar from the rights and liabilities of any other private title holder. Concurrently, the Constitution and the laws recognize the specifics of the legal status in which the State is a private title holder with multiple competences that derive from the unique situation – the exercise of public power by the state bodies (Art. 1, para 2 of the Constitution). The disagreement with Art. 17, para 3 of the Constitution as the challenge claims fails to recognize the circumstance that the ,,play” of the State in the private law domain is bound by a special legal arrangement. The Constitution devotes texts that deal specifically with the property of the State and of municipalities: ,, The regime applying to the different units of State and municipal property shall be established by law. ” (Art. 17, para 4); ,, The State shall utilize and manage all the state's assets to the benefit of individual and society ” (Art. 18, para 6) . That property (assets) in all its forms (exclusive state property, public and private state and municipal property – Decision № 19/1993 on Constitutional Case № 11/1993) serves the public interests. The public power that the State and municipalities exercise by definition preconditions that their property shall always be used to the benefit of public interest whereas the private property in the possession of individual and legal entities is not intended to serve directly the public interests but is an instrument of the individual's or legal entity's economic stability and prosperity. Therefore, the differentiation of property in terms of title holder is incorporated in the Constitution. The Court found that this is just a different and not a privileging arrangement: had it been otherwise, the differentiation would have been meaningless. The Court remarked that the special procedure in Art. 519 and Art. 520 of the CCP is not the only difference with regard to the other subjects of private law. The special status of the State as a subject of private law is manifest in traditional constructions of the civil law process as a standalone line and as evidence of the lawmaker's well judged consistent line: the inadmissibility of preliminary execution against state institutions of a decision which has not entered into effect (Art. 243, para 2 of the CCP); the inadmissibility of the security of a claim for monetary receivables against the State (Art. 393, para 1 of the CCP). Similarly, legislation other than the CCP provides for the inadmissibility of execution – e.g. that the immovable properties and the chattels, ownership of the community culture centers (chitalishta) , as well as the incomes from it shall not be subject to compulsory execution ( Community Culture Centers Act, Art. 25). The said legal postulations are not challenged as unconstitutional. The Constitution provides for an option to protect title in different ways depending on the kind of property (public or private) and on the type of owner (public body or private person), hence the Court's conclusion that Art. 519 and Art . 520 of the CCP are not unconstitutional in view of the provision of Art. 17, para 3 of the Constitution.
On the alleged non-compliance with the principle of equal legal conditions for economic activity under Art. 19, para 2 of the Constitution
7. The challenge insists that the inadmissibility of execution against a state institution or a municipality leads to an obvious toleration of state and municipal property , makes a state body or a municipality a privileged economic actor and as a result , discredits private enterprise , makes the enforcement of an enacted court decision dependent on the will of the debtor institution or debtor municipality and renders meaningless the binding effect of the court decision, thereby violating the principle of equal legal conditions for economic activity (Art. 19, para 2 of the Constitution). Of the opinions of parties concerned in the case two opinions insist that, in addition to the above violation , the principle of equality before the law ( Art . 6 of the Constitution ) is violated .
The Court has repeatedly considered, from different angles, Art . 19 of the Constitution and emphasized that vis -à- vis private property , all actors , including the State and the municipalities, are equal in principle ( Decision № 19/1993 on Constitutional Case № 11/1993). Along with that the constitutional practice has given prominence to cases of various specific legal regimes to govern separate types of relations in private law domain and a conclusion has been drawn that when the law provides for differentiation on one and the same right or liability, this is not to be seen as a violation of the Constitution principle of equality before the law. Differentiation rests on a definite criterion and all actors in a certain group must meet this criterion. Equality before the law is not a right or a liability that is identical for all actors. With no differentiation, the objective and subjective differences that call for differentiated legislation in order to achieve equality before the law would have remained unrecognized (Decision № 6/2010 on Constitutional Case № 16/2009). In this dispute the Court has no reason to depart from the practice so far.
In this constitutional dispute the conditions for all claimants – subjects of private law vis-à-vis the execution against the subjects in Art. 519 and Art. 520 of the CCP – are not discriminatory. Nondiscriminatory legal conditions which must be valid for economic actors refer to a group of business actors that fall under a common denominator and do not imply that all subjects of law will enjoy a nondiscriminatory treatment in principle. Given the above-stated reflections the Court did not find any violation of Art. 19, para 2 of the Constitution but for the amendment to Art. 519 and Art. 520 of the CCP effected by the Act Amending the CCP (DV, No 13/2010).
8. Concerning the state-financed establishments that are debtors in an execution following enacted court decisions, Art. 520 of the CCP precludes execution only on the funds in their bank accounts received as a subsidy from the republican (national) budget (paragraph 1). Arguments that were already presented on the constitutional rule of the guaranteed performance of public functions and of the State Budget specifics are relatable to that legal text. Paragraph 2 of Art. 520 of the CCP provides that all other funds, tangible and intangible assets that are privately owned and constitute an element of the debtor's patrimony, can possibly be subject to execution under the CCP, i.e. of the presentation of the claim under the general procedure, hence the conclusion that to make the state-financed establishments equivalent to the other subjects of law is a law-guaranteed move and that to contest Art. 520 of the CCP as noncompliant with Art. 19, para 2 of the Constitution is an unsustainable move.
On the alleged contradiction with Art. 57 of the Constitution
9. The challenge insists that the contested legal provisions are a privilege as they make it possible for state institutions and municipalities to decide when and how they will pay off their debts and by doing so infringe on the property right of claimants who want to proceed with the execution of receivables following enacted court decisions, hence the permanent restriction of the fundamental Constitution right to property with no proclamation of war, martial law or a state of emergency and with no condition or a time limit to conform to, and so the resultant violation of Art. 57 of the Constitution.
The Court found the challenge to be unsustainable in that part. Art. 57 of the Constitution is in the chapter ,,Fundamental Rights and Duties of Citizens”. That article is placed after the texts about the individual Constitution-enshrined rights and proclaims the attributes that are common for all such rights – they shall be irrevocable, they shall not be abused, they shall not be used to the detriment of the rights or the legitimate interests of others. Considering the claimant, the Ombudsman, and his powers and the substance of Art. 57 of the Constitution, the Court concluded that on this particular point the challenge views the right to property not as title-holding but as a Constitution-granted fundamental right of citizens which forms the material foundation of individual human existence. That right is in the Constitution (Art. 17) but not in the company of the other rights and freedoms of citizens in Chapter Two; it is incorporated in Chapter One in the company of the fundamental principles of constitutional order in the frame of the general provisions about property and the Constitutional Court has referred to that on more than one occasion. However, as a fundamental right, the right to property ,,resides” in the public law domain and not in the private law domain and its beneficiary is the State, respectively the public authorities; the very concept of the Constitution-enshrined right to property is broader than what a civil right implies. A piece of property on which the protection of the fundamental right to property extends comprises effects, receivables included, and public claims to enable the achievement of social rights. As a fundamental right the right to property is intended to guarantee that each individual is free to dispose of property and in this way take the responsibility for his or her life.
Fundamental rights ensure a protected area of freedom or equality; this is the scope of any fundamental right. However, that area is not promised to remain boundless forever ; its borders touch the borders of other fundamental rights, hence the conclusion that rights ,,coexist” with possible restrictions. The very fundamental rights may be the origin of the restriction as can be the fundamental rights of others and the benefits that the Constitution protects. With the exception of the fundamental rights and freedoms that are explicitly enumerated in Art. 57, para 3 of the Constitution, the restriction of fundamental rights is admissible, in principle, providing the essential core of the concrete right is not impaired. The guarantee to that is the Constitution rule that rights may be curtailed by law (Art. 57, para 3 of the Constitution).
In this context the Court judged that the allegation of noncompliance with Art. 57 of the Constitution is to be attributed to the misunderstanding that the Constitution tolerates the restriction of fundamental rights in the event of war, martial law or state of emergency. This misconception contradicts the rule of Art. 57, para 2 of the Constitution reading that fundamental rights shall not be exercised to the detriment of the rights or legitimate interests of others, i.e. the restrictions derive from the ,,rights of others”. Paragraph 2 of Art. 57 of the Constitution reads that fundamental rights shall not be abused in which the Constitutional Court agrees with the concept as expressed in the Supreme Court of Cassation position that it is not to be presumed a priori that rights were abused in the cases as described in Art. 519, para 2 of the CCP in relation to the obligation to provide the credit on the conditions as stated and concludes that Art. 519 and Art. 520 of the CCP are not in contravention of Art. 57 of the Constitution.
The right to property is not among the fundamental rights in Art . 57, para 3 on which the Constitution is adamant that there shall be no limitations under whatever circumstances. An indication is to be found in paragraph 5 of Art. 17 of the Constitution about the possibility to limit the right to property as far as the f orcible expropriation of property for the sake of State or municipal needs under specified conditions. Free enterprise and equal legal conditions for economic activity are not absolute rights either and may be curtailed by law. As the fundamental rights are established in the Constitution it is a rule that all limitations of rights must be based on and derived from the Constitution. Therefore, a law that limits fundamental rights shall be subject to limitations by the very Constitution (in the doctrine this is known as ,,the limits to the limitation”). In other words, the limitations in question must fit into the frame of what the Constitution defines as admissible; otherwise the limitation will run counter to the Constitution.
The exercise of fundamental rights can, in principle, be limited providing a legitimate goal is pursued whose attainment hinges on the limitation of a fundamental right and the challenged provision is the least restrictive mechanism to achieve this legitimate goal, i.e. the classical components of the constitutional requirement of proportionality in the limitations to the exercise of fundamental rights. While the first two of the mentioned components of proportionality could be assumed as existing with respect to the challenged Art. 519 and Art. 520 of the CCP, it is not to be assumed that it would be impossible to attain the goal in a way, other than the said one, which won't undermine the foundation of the law-abiding state; that way could include, without being limited to: better planning and management of the budgets of state bodies and municipalities, improved budgeting, more adequate terms and conditions, monitoring the performance and an account of the fulfillment of contractual obligations.
Hence the Court ' s conclusion that the challenged legal text fits into this frame and thus there exists no disproportionateness nor is Art . 57 of the Constitution violated .
Председател: Евгени Танчев