Supreme Court struck down West Bengal Housing Industry Regulation Act 2017 (HIRA) as unconstitutional being repugnant to the RERA
ABCAUS Case Law Citation
ABCAUS 3501 (2021) (05) SC
Important case law relied referred:
Tika Ramji vs State of UP 1956 SCR 393
ITC Ltd. vs Agricultural Produce Market Committee (2002) 9 SCC 232
Zaverbhai Amaldas vs State of Bombay (1955) 1 SCR 799
Deep Chand vs State of UP (1959) Supp (2) SCR 8
Hoechst Pharmaceuticals Ltd. vs State of Bihar (1983) 4 SCC 45
Rajiv Sarin vs. State of Uttarakhand (2011) 8 SCC 708
In the instant Writ Petition, the constitutional validity of the West Bengal Housing Industry Regulation Act 2017 (WB-HIRA) was challenged.
The basis of the challenge were:
(i) Both WB-HIRA (State Enactment) and Parliamentary enactment the Real Estate (Regulation and Development) Act, 2016 (RERA) are relatable to the legislative subjects contained in Entries 6 and 7 of the Concurrent List (interchangeably referred to as ‘List III’) of the Seventh Schedule to the Constitution;
(ii) WB-HIRA has neither been reserved for nor has it received Presidential assent under Article 254(2);
(iii) The WB-HIRA contains provisions which are either directly inconsistent with the corresponding provisions of RERA or is a virtual replica of the RERA.
(iv) When the Parliament had legislated RERA on a field covered by the Concurrent List, it is constitutionally impermissible for the State to enact a law over the same subject matter by setting up a parallel legislation.
WB-HIRA struck down as unconstitutional being repugnant to RERA
The Hon’ble Supreme Court observed that the law RERA received the assent of the President on 25 March 2016, and was published in the Official Gazette on 26th March 2016. The RERA was then partially enforced on 1st May 2016 while the rest of its provisions were enforced on 19th April 2017.
On the other hand, the WB-HIRA received the assent of the Governor of West Bengal on 17th October 2017 and thereafter on 8th June 2018, the State of West Bengal framed rules under WB-HIRA.
The Hon’ble Supreme Court opined that there can be no manner of doubt that the subject of WB-HIRA is not ‘industries’ within the meaning of Entry 24. Both the central legislation – RERA and the State legislation-WB-HIRA have substantially similar provisions.
Thus, subject of both the central and the state legislations – RERA and WB-HIRA falls under Entries 6 and 7 of the Concurrent List to the Seventh Schedule.
The Hon’ble Supreme Court observed that the Article 254 contains provisions for inconsistencies between laws made by Parliament and by the legislatures of the States. Clause (1) of Article 254 stipulates that where a State law is repugnant” to a Parliamentary law which Parliament is competent to enact or to a provision of an existing law “with respect to one of the matters enumerated in the Concurrent List”, then the law made by Parliament is to prevail and the law made by the legislature of a State shall “to the extent of the repugnancy” be void. However, if the State Law contains a provision repugnant to an earlier law of Parliament or an existing law, the law made by the State will prevail in the State if it has been reserved for the consideration of the President and has received such assent.
The Apex Court noted several of its judgment wherein it had been held that a State legislation whose subject matter is identical to a law enacted by the Parliament would be repugnant under Article 254(1).
The Hon’ble Supreme Court opined that within the meaning of Article 254(1), a law made by the legislature of a State can be considered to be repugnant to a provision of a law made by Parliament with respect to one of the matters in the Concurrent List which Parliament is competent to enact.
The Hon’ble Supreme Court observed that the overlap between the provisions of WB-HIRA and the RERA is so significant which leave no doubt that the test of repugnancy based on an identity of subject matter is clearly established.
The Hon’ble Supreme Court stated that the present case is not one where WB-HIRA does not deal with matters which form the subject matter of the Parliamentary legislation but with other and distinct matters of a cognate and allied nature. On the contrary, the WB-HIRA purports to occupy the same subject as that which had been provided in the Parliamentary legislation.
The Hon’ble Supreme Court stated that the WB-HIRA fits, virtually on all fours, with the footprints of the RERA which is constitutionally impermissible.
The Hon’ble Supreme Court said that what the legislature of the State of West Bengal had attempted to achieve was to set up its parallel legislation involving a parallel regime. But the submission which has been articulately presented before the Court on behalf of the State of West Bengal is that Section 88 of the RERA itself allows for the existence of State statutes by enacting Sections 88 and 89, which stipulate that its provisions shall be in addition to and not in derogation of the provisions of any other law for time being in force and override only inconsistent provisions.
The Hon’ble Supreme Court clarified that Parliament envisaged in Section 88 of the RERA that its provisions would be in addition to and not in derogation of other laws for the time being in force. However, it is an indicator that Parliament did not wish to oust the legislative power of the State legislature to enact legislation on cognate or allied subjects. In other words, spaces which are left in the RERA can be legislated upon by the State legislature by enacting a legislation, so long as it is allied to, incidental or cognate to the exercise of Parliament’s legislative authority.
The Hon’ble Supreme Court illustrated situations where valuable safeguards introduced by Parliament by the RERA in the public interest and certain remedies created found to be absent in WB-HIRA.
Accordingly, the Hon’ble Supreme Court held that the WB-HIRA is repugnant to the RERA, and is hence unconstitutional. It was also directed that the striking down of WB-HIRA will not affect the registrations, sanctions and permissions previously granted under the State legislation prior to the date of the judgment.
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