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2021 (5) TMI 1031 - SC - Indian LawsConstitutional validity of the West Bengal Housing Industry Regulation Act, 2017 - both WB-HIRA and a Parliamentary enactment, the Real Estate (Regulation and Development) Act, 2016 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 or not - WB-HIRA has neither been reserved for nor has it received Presidential assent under Article 254(2) - State enactment containing provisions which are either directly inconsistent with the corresponding provisions of the Central enactment or a virtual replica of the Central enactment - whether it is constitutionally impermissible for the State Legislature to enact a law over the same subject matter by setting up a parallel legislation? HELD THAT - Before the WB-HIRA, the State legislature had also enacted the WB 1993 Act. Upon receiving the assent of the President, the Act was published in the Calcutta Gazette, Extraordinary on 9 March 1994. Some of the salient provisions of the Act are detailed below (i) Section 3 provides for registration of promoters who construct or intend to construct a building and for obtaining permission for construction; (ii) Section 4 provides for the validity of the certificate of registration and for cancellation; (iii) Section 5 provides for appeals; (iv) Section 6 provides for adjudication of disputes by an officer appointed by the State government for adjudication; (v) Section 7 provides that the promoter shall before taking any advance payment for deposit, which shall not be more than 40 per cent of the sale price, enter into a written agreement for sale which shall be registered; (vi) Section 8 restrains additions or alterations without the consent of the transferee and for rectification of defects; (vii) Section 9 contains a prohibition on a promoter creating a mortgage or charge without the consent of the purchaser after entering into an agreement; (viii) Section 10 requires the formation of a co-operative society; (ix) Section 11 provides for the promoter to covey title to the co-operative society; (x) Section 12 provides for insurance against loss or death; (xi) Section 13 provides for penalties; (xii) Section 14 provides for offences by companies; (xiii) Section 15 provides for rule making powers; (xiv) Section 16 provides for exemption to constructions by the State Government Housing Board and by the Housing and Urban Development Corporation; and (xv) Section 17 provides for repeals and the earlier legislation of 1972 is repealed. The above provisions are repugnant to the corresponding provisions which are contained in the RERA. These provisions of the WB 1993 Act impliedly stand repealed upon the enactment of the RERA in 2016, in accordance with Sections 88 and 89 read with Article 254(1) of the Constitution. Hence, it is clarified with abundant caution that the striking down of the provisions of WB-HIRA in the present judgment will not, in any manner, revive the WB 1993 Act, which was repealed upon the enactment of WB-HIRA since the WB 1993 Act is itself repugnant to the RERA, and would stand impliedly repealed. Thus, it is concluded that WB-HIRA is repugnant to the RERA, and is hence unconstitutional. It is also held and declared that as a consequence of the declaration by this Court of the invalidity of the provisions of WB-HIRA, there shall be no revival of the provisions of the WB 1993 Act, since it would stand impliedly repealed upon the enactment of the RERA. Since its enforcement in the State of West Bengal, the WB-HIRA would have been applied to building projects and implemented by the authorities constituted under the law in the state. In order to avoid uncertainty and disruption in respect of actions taken in the past, recourse to the jurisdiction of this Court under Article 142 is necessary. Hence, in exercise of the jurisdiction under Article 142, it is directed that the striking down of WB-HIRA will not affect the registrations, sanctions and permissions previously granted under the legislation prior to the date of this judgment. Petition allowed.
Issues Involved:
1. The challenge to the constitutional validity of the West Bengal Housing Industry Regulation Act, 2017 (WB-HIRA). 2. Legislative history and the context of the Real Estate (Regulation and Development) Act, 2016 (RERA). 3. Comparison of RERA and WB-HIRA, focusing on their provisions and salient features. 4. Analysis of repugnancy between RERA and WB-HIRA under Article 254 of the Constitution. 5. The necessity of Presidential assent for WB-HIRA. Detailed Analysis: A. The Challenge The constitutional validity of WB-HIRA is challenged under Article 32 on the grounds that: - Both WB-HIRA and RERA relate to Entries 6 and 7 of the Concurrent List. - WB-HIRA has not received Presidential assent under Article 254(2). - WB-HIRA contains provisions inconsistent with or replicating RERA. - It is constitutionally impermissible for the State Legislature to enact a parallel law over the same subject matter. B. Legislative History Before RERA, various state laws regulated the real estate sector, including the West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993. RERA was enacted by Parliament to establish a uniform regulatory framework across India, receiving Presidential assent and being enforced in phases. C. RERA - The Legislative Process RERA was introduced to address the unregulated growth of the real estate sector, which led to consumer exploitation. It aimed to establish a comprehensive framework for real estate transactions, ensuring transparency, accountability, and a fast-track dispute resolution mechanism. D. Salient Features of RERA RERA mandates: - Registration of real estate projects and agents. - Disclosure of project details by promoters. - Adherence to approved plans and refund of monies in case of default. - Establishment of a Real Estate Regulatory Authority and Appellate Tribunal. - Imposition of penalties for non-compliance. E. Salient Provisions of WB-HIRA WB-HIRA mirrors RERA in most respects but has notable differences, such as: - Definition of "car parking area" and "garage." - Absence of the concept of "planning area." - Broader definition of "force majeure." - No provision for the establishment of a Central Advisory Council. - Lack of compounding of offenses and adjudicating officers for compensation. F. RERA and WB-HIRA - Provisions at Variance Key differences include: - Definitions of terms like "car parking area" and "garage." - Provisions for force majeure events and the powers of the regulatory authority. - Establishment of advisory councils and the adjudication of compensation. - Provisions for penalties and the jurisdiction of courts. G. Submissions G.1 For the Petitioners - RERA is an exhaustive code, and WB-HIRA is repugnant to it. - WB-HIRA was not reserved for Presidential assent. - WB-HIRA's provisions tilt in favor of promoters, lacking judicial safeguards. - Sections 88 and 89 of RERA do not permit the creation of parallel state regimes. G.2 For the Union of India - RERA was enacted after extensive consultations and is intended to be a uniform national law. - WB-HIRA creates a parallel regime, leading to repugnancy. - Several provisions of WB-HIRA conflict with RERA, affecting consumer protection. G.3 For the State of West Bengal - WB-HIRA is complementary to RERA and falls under Entries 6 and 7 of the Concurrent List. - Sections 88 and 89 of RERA allow for the coexistence of state laws. - The inconsistencies between WB-HIRA and RERA are minor and can be reconciled. H. Analysis H.1 Entry 24, List II - West Bengal’s ‘Housing Industry’ Defense - The State initially argued that WB-HIRA falls under Entry 24 of List II but later conceded that it falls under Entries 6 and 7 of List III. H.2 The Constitutional Scheme of Article 254 and Repugnancy - Article 254 addresses inconsistencies between state and central laws in the Concurrent List, with the central law prevailing in case of repugnancy. H.3 Repugnancy - RERA and WB-HIRA - WB-HIRA substantially overlaps with RERA, creating a parallel regime. - Several provisions of WB-HIRA conflict with RERA, failing to incorporate safeguards for home buyers. H.4 Lack of Presidential Assent for WB-HIRA - WB-HIRA did not receive Presidential assent, making it repugnant to RERA under Article 254. I. Conclusion - WB-HIRA is repugnant to RERA and is hence unconstitutional. - The provisions of the WB 1993 Act are also impliedly repealed due to their repugnancy to RERA. - The striking down of WB-HIRA will not affect registrations, sanctions, and permissions previously granted under the legislation prior to this judgment. The writ petition is allowed, and pending applications are disposed of.
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