West Bengal Housing Industry Regulation Act 2017 Is Unconstitutional, In Conflict With Central RERA: Supreme Court

The Supreme Court on May 4 struck down the West Bengal Housing Industry Regulation Act, 2017 (WBHIRA) as ‘unconstitutional’, saying it is in conflict with the Real Estate (Regulation and Development) Act, 2016 (RERA), a Central legislation already in place.

The apex court said that the state of West Bengal had encroached upon the domain of Parliament while enacting WBHIRA as both, the state legislation and the central RERA, deal with the same entry in the concurrent list.

“The provisions of West Bengal HIRA 1993 Act stood repealed after enactment of the HIRA 2016 Act. Our striking down provisions of 2016 Act will not revive 1993 Act in any way. We conclude that HIRA being repugnant to RERA is unconstitutional,” the Supreme Court bench headed by Justice DY Chandrachud said.

“State Legislature has encroached on the subject of the parliamentary legislation which has a higher weightage in matters of entries of concurrent list. This analysis shows there is additional repugnancy between HIRA and RERA,” the bench added.

The top court said that a state legislature cannot enact a law after Parliament has enacted a similar law on a subject.

The bench was deciding on a petition filed by the Forum for People’s Collective Efforts (FPCE), an umbrella association for homebuyers. In its plea, the association had said that if WBHIRA is allowed to continue, it would give way for state legislatures to enter into other fields to legislate under the concurrent list, which is otherwise occupied by central legislations.

“West Bengal had enacted WBHIRA creating a regime parallel to the Parliament-enacted RERA, which has been held to be constitutionally impermissible. WBHIRA was substantially identical to RERA and that too without presidential assent. Our submission that in the Indian federal structure, once Parliament makes a law, a state cannot be permitted to frame identical laws has been accepted by the apex court,” Devashish Bharuka, representing the homebuyers, told Moneycontrol.

“The WBHIRA has not only been declared unconstitutional, but the earlier West Bengal 1993 law has also been declared to be impliedly repealed by RERA,” Bharuka added.

West Bengal is the only state that has not accepted RERA. The Central Real Estate (Regulation and Development) Act (RERA) came into effect on May 1, 2017, exactly a year after it was passed by Parliament. The state had instead implemented its own WBHIRA.

In July 2019, the Supreme Court had directed the West Bengal government to respond to homebuyers’ petition challenging the constitutional validity of WBHIRA.

Experts have said that WBHIRA defeats the purpose of a central RERA. “The first is to do with the force majeure clause or unforeseen circumstances under which a builder may not fulfil conditions laid down under the contract signed with the homebuyers. RERA clearly lays down the circumstances of force majeure such as war, flood, drought, fire, cyclone, earthquake or any other natural calamity. WBHIRA has made an addition to this clause and talks about ‘…any other circumstances as may be prescribed’. This is a major dilution.”

(Source: Moneycontrol)