Supreme Court hears plea challenging West Bengal Housing Industry Act

The Supreme Court on Thursday heard a plea of the Forum for Peoples Collective Efforts (FPCE) challenging the constitutional validity of the West Bengal Housing Industry Regulation Act 2017.(Forum for Peoples Collective Efforts (FPCE) & Anr. vs The State of West Bengal & Anr.)

The petitioner contended that the West Bengal Government refused to implement RERA and enacted its own law, the West Bengal Housing Industry Regulation Act 2017, which has caused irreparable loss to home buyers.

A two-judge bench of Dr Justice D.Y. Chandrachud and Justice M.R. Shah has observed that it doesn’t matter whether there’s an overlap or no overlap because if Parliament intends to occupy a field, then you cannot legislate at the state level at all. The Court was hearing the submissions made by parties involved in the matter.

The Counsel for the petitioner submitted that the requirement of Article 254(2) to obtain the assent of the President of India has not been fulfilled while enacting the impugned state act.

Justice Chandrachud said, under Article 254, even if the state law has received the presidential assent it will to the extent of repugnancy prevail over the Central government and does not prevent Parliament from subsequently enacting a law, by granting presidential assent Parliament is not deprived of its power to legislate again and overwrite the state act.

The counsel for petitioner mentioned that the petitioners originally were part of a small group who had actually been fighting for this real estate law since 2013; they had formed a group, an unregistered group and named Fight for RERA.

He said that Parliament and the legislature, they have been constantly making laws with respect to regulating contractual behavior of parties of more persons in variety and different circumstances, and earliest of the act was the Indian Contract Act 1872.

The counsel added, “Then there was specific Transfer of Property Act 1882 with respect to transfer of property under the particular act, again regulating the contractual behavior and relationships. Then Sale of Goods Act 1930 other on very specific legislation partnership act 1932, limited liability partnership act from time to time depending on the situation and need of the society, the Parliament had been stepping in and making laws so as to control and regulate the contractual behavior of the parties. In 1986, the Consumer Protection Act was brought into the statute with a purpose that the consumers are defined under the act would be given speedy redressal mechanism with respect to certain contractual behavior against within the provisions of the act when the Parliament finds out in spite of the consumer protection and all this contractual laws.”

The counsel said, “So far as the real estate sector is concerned, it was felt that these laws are not adequate for the purposes of protecting the interest of the consumers and also the interest of the builders. Actually both sides though there were factual relationships between them, governed by the terms and conditions neither was any clarity or infirmity with respect to those terms and conditions nor the redressal mechanism was found to be adequate, so far as the real estate system is concerned.”

The counsel further mentioned that Maharashtra Housing Regulation and Development Act 2012, these were substantially similar but that was repealed by RERA under Section 92. So far as Kerala is concerned, it also has Kerala Real Estate Regulation and Development Act 2015, which was repealed by Kerala itself in 2017. Jammu and Kashmir Real Estate Regulation and Development Act that also stood repealed by Jammu and Kashmir Reorganisation Act 2019.

He emphasized that so far as the West Bengal Act of 1993 is concerned, the scope of that Act was a bit different than what RERA covered, because when they have repealed it by this impugned legislation that also covered the certain area in respect to construction of the building.

He further added that though the legislation talks about housing industry and housing for all, but ultimately the legislation gives only with the third aspect; the sale of the product of the industry not the actual industry.

Justice Shah said, “Even in 1993 Act, if we consider as a whole, then there is no provision for industry except registration of the product, nothing is there with respect to industry.”

The counsel for petitioners submitted that even if we take best scenarios for the state the permission to construct might come under industries, but that is nowhere in the present legislation. He took the court through both the acts compared, pointing out the similarities between the acts in question.

The Court pointed out that ultimately the counsel for the respondent cannot deny the overlap between the acts.

The Court further said that it doesn’t matter whether there’s an overlap or no overlap because if Parliament intends to occupy a field, then you cannot legislate at the state level at all.

The counsel for respondent submitted that “that the Parliament was clear with respect to the background.”

The counsel for the petitioner emphasized that during the debates and also in the reports West Bengal has actually supported this entire bill (central bill),and West Bengal MPs were part of the select committee.

The Court observed that this impugned act doesn’t really regulate the housing industry per se but regulate the contracts formed between promoters and purchasers.

The petition filed before the Supreme Court has challenged the constitutional validity of a State Act, i.e. The West Bengal Housing Industry Regulation Act, 2017 (WBHIRA). Both the statutes are relatable to entries 6, 7 and 46 of the list III (concurrent list) of Seventh Schedule of the Constitution of India and therefore, occupy the same field.

The plea stated that there is a “direct conflict” between the Central Act i.e. Real Estate Act, 2016 made by Parliament and the impugned state legislation and thus later is repugnant to the former.

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The petitioners prior to moving the present writ petition under Article 32 of the Constitution had moved different authorities both at the Central and state level requiring them to ensure that the impugned state legislation is repealed and the provisions of the RERA 2016 are implemented in West Bengal in its true letter and spirit.

The Court will hear the matter next on April 13.