Individual Application

The Facts

The applicant company having sold concrete for the construction of houses by a cooperative, following an earthquake taking place in a province, initiated debt enforcement proceedings against the said cooperative in order to collect the relevant amount. However, the cooperative raised a complaint arguing that pursuant to the relevant statutory provisions, the cooperative’s assets, rights and claims were classified as state-owned property, and that, therefore, the state-owned property shall not be subjected to attachment, as set forth in the Enforcement and Bankruptcy Code no. 2004. Thereupon, the impugned attachment was lifted. The applicant then initiated a process whereby it could collect the amount receivable upon the selling by auction of all assets and rights of the debtor following the latter’s bankruptcy. Then, the cooperative's bankruptcy was ordered. The cooperative's subsequent claim regarding its continued possession of the goods registered in the assets book was accepted. The bankruptcy was suspended on the ground that the bankrupt had no assets. Upon appeal, the Court of Cassation upheld the decision.

The Applicant’s Allegations

The applicant claimed that its right to property had been violated for the failure to conclude the debt enforcement and bankruptcy proceedings initiated by it for the collection of its receivable and the impossibility of its collection by any other means as the cooperative’s assets were regarded as State-owned property.

The Court’s Assessment

It is obvious that the relevant provision of Law no. 2004, which bans the attachment of State-owned property, serves to prevent any interruption likely to occur in any public service and duty which are to be performed uninterruptedly. Otherwise, it will be inevitable to experience disruptions in the performance of public services. It is beyond any doubt that non-attachment of the part of the cooperative’s property allocated for the purposes set forth in Law no. 7269 pursued a legitimate aim based on the public interest of meeting the need for shelter without delay.

On the other hand, in fulfilling its positive obligations, the State must also take into consideration the interests of the creditor. In this regard, it should also be taken into consideration that the applicant’s receivable was related to the sale of concrete which was used during the construction of the aforementioned houses.

In other words, application of the same provisions for the debts incurred due to the construction of the houses with the other kind of debts, thus resulting in the impossibility of their collection, was consistent neither with the purpose of Law no. 7269 nor the balance of interests. Otherwise, the high risk of being unable to receive payment for the costs of the service and materials purchased by the cooperatives for the construction of houses will apparently create an obstacle to their completion.

It is a requirement of the social state to make certain arrangements to encourage the society to make sacrifice in order to meet the housing needs of the people who have sustained damages as a result of earthquake. However, it would not be fair to expect this sacrifice only from those who sell construction materials or provide services to cooperatives.

The applicant company was thereby put under a responsibility that should have been undertaken by the society as a whole. As such, the applicant was imposed a heavy burden by virtue of certain statutory provisions. Nor could the applicant company effectively avail of the procedural safeguards inherent in the right to property. Accordingly, the State failed to fulfil its positive obligations under the right to property.

Consequently, the Court has found a violation of the right to property.