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SC strikes down West Bengal Housing Industry Regulation Act, 2017 for being in conflict with Central law, RERA 2016

The Supreme Court on Tuesday struck down the West Bengal Housing Industry Regulation Act, 2017 (WBHIRA) as unconstitutional for being in conflict with Central legislation already occupying the field, i.e. the Real Estate (Regulation and Development) Act, 2016 (RERA).

The Court held that State of West Bengal encroached upon the domain of Parliament in enacting WBHIRA since both WBHIRA and RERA deal with the same entry in the concurrent list and a significantly large number of provisions of WBHIRA overlap with RERA.

“From our analysis of RERA and WBHIRA, two fundamental features that emerge are that WBHIRA overlaps with RERA and is copied word to word and it does not complement RERA. Both the statutes refer to same entry in the concurrent list,” the Court said.

The State has enacted a parallel mechanism and regime entailed under RERA, the Court concluded.

Once parliament has enacted a law on a subject, it is not open to State legislature to enact a similar law and lift it word to word, the Court said.

“The overlap is so significant that test of repugnance based on identity of subject matter is established. West Bengal has attempted to establish a parallel regime which is not constitutionally permissible,” the Court ruled.

The State legislature has encroached on the subject of the parliamentary legislation which has a higher weightage in matters of entries of concurrent list, the Court added.

The judgment was delivered by a Bench of Justices DY Chandrachud and MR Shah in a plea by NGO Forum for People’s Collective Efforts, which contended that the WBHIRA should be struck down since it conflicts with RERA [Forum for Peoples Collective Efforts v. State of West Bengal].

The Court, however, clarified that striking down of WBHIRA will not affect the sanctions permissions granted under WBHIRA prior to the delivery of the judgment.

“This power has been exercised to safeguard past decisions and prevent chaos,” the Court said.

The WBHIRA was challenged on the ground that while Article 254(2) allows law made by State on a Concurrent list subject to survive over Central law on the same subject, such State law to receive the assent of the President.

In this case, the same was not obtained.

RERA was enacted by the Central Government in 2016. In August the same year, West Bengal notified the draft Real Estate (Regulation and Development) Rules, 2016 under the RERA. To finalise these rules, a stakeholder meeting was also arranged in 2017, for which the petitioner was also invited. However, no further action was taken thereafter.

Instead, the WBHIRA, 2017 was notified in March 2018 and rules under the WBHIRA was also published in June 2018.

The petitioner assailed the same before the Supreme Court contending that that it is in direct conflict with the earlier framed RERA, a Central legislation.

The petitioner pointed out that both legislations deal with subjects falling under Entries 6 (property transfer), 7 (matters of contract) and 46 (matters concerning the jurisdiction of courts other than Supreme Court) of the Concurrent List in the Constitution of India.

Thus, it was contended that while both the Central and State governments may make laws on such subjects, the State law would have to yield to the Central law if there is any conflict between the two.

It was further highlighted by the petitioner that the only way for State law to survive would be in terms of Article 254 (2) of the Constitution.

Article 254 (2) allows for a conflicting State law on a concurrent list subject to prevail over a central law, if it receives the assent of the President. However, it was argued by the petitioner that such assent was not received with respect to WBHIRA.

“It is an admitted position that the State of West Bengal neither reserved the impugned State Act for consideration of the President nor had ever obtained the President’s assent inspite of the fact that the entire field stood occupied by RERA, 2016 enacted by the Parliament.”

The Court while striking down the law said that it will not result in revival of 1993 WBHIRA.

“The provisions of WBHIRA 1993 act stood repealed after enactment of the HIRA 2016 act. Our striking down provisions of 2016 act will not revive the 1993 act in any way,” the Court ruled.

 

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