SC annuls Bengal’s real estate act

The Supreme Court struck down the West Bengal Housing Industry Regulation Act, 2017 as unconstitutional for being in conflict with the Real Estate (Regulation and Development) Act, 2016 (RERA), a Central legislation enacted earlier.

The apex court held that the state government 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.

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 WBHIRA should be struck down since it conflicts 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, adding that once Parliament has enacted a law on a subject, it is not open to the state legislature to enact a similar law and lift it word to word.

“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.

While striking down WBHIRA, the court clarified that sanctions and permissions granted under WBHIRA prior to the delivery of the judgment will be valid. Over 1,000 projects have been approved by the authority. “This power has been exercised to safeguard past decisions and prevent chaos,” the court said.

FPCE president Abhay Upadhyay, who resides in Kolkata from where he had raised the demand for a countrywide law on real estate in 2009 after encountering multiple hurdles when a prominent developed failed to deliver a project in Howrah, said the judgment had vindicated the stand that legislations by individual states would defeat the purpose of a central law.

While the case was argued on basis of which law would take primacy, Upadhyay pointed to anomalies in WBHIRA that would now cease to exit. These include allowing any future event to be declared ‘force majeure’ or unforeseeable circumstances by a competent authority and alterations in the definition of parking and garage that were loaded in favour of developers and against buyers’ interest,” he said Confederation of Real Estate Developers’ Association of India president (West Bengal chapter) Sushil Mohta though contended that the minor tweaking was done and a few words changed to suit local geographic and urban conditions and that both laws were meant to protect customers of real estate. “Our members are committed to comply with the law which was in force or which shall come in future,” he said.

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