Supreme Court strikes down West Bengal's copycat legislation

Supreme Court strikes down West Bengal's copycat legislation

Apex Court says West Bengal Housing Industry Regulation Act, 2017 is in conflict with Central law, RERA

The Supreme Court has struck down a West Bengal legislation terming the West Bengal Housing Industry Regulation Act, 2017 (WBHIRA) as unconstitutional and infringement into the domain of Parliament.

Moreover, the SC observed the WBHIRS conflicts with a Central legislation already occupying the field, i.e. the Real Estate (Regulation and Development) Act, 2016 (RERA) since both WBHIRA and RERA dealt 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 Top Court bench of Justices DY Chandrachud and MR Shah said.

The Court was clear in its assertion that the State had enacted a parallel mechanism and regime entailed under RERA and held that a State legislature cannot enact a similar law once Parliament has enacted a law on the same subject.

"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 Apex Court came down heavily on the State of West Bengal saying, "these provisions of the RERA have been lifted bodily, word for word and enacted into the State enactment. Second, in doing so, WBHIRA does not complement the RERA by enacting provisions which may be regarded as in addition to or fortifying the rights, obligations and remedies created by the Central enactment."

The judgment was delivered in a plea filed by NGO Forum for People's Collective Efforts, which contended that the WBHIRA should be struck down since it conflicts with RERA.

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

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, however, the same was not obtained.

RERA was enacted by the Central Government in 2016. In August 2016 the same year, West Bengal notified the draft Real Estate (Regulation and Development) Rules, 2016 under the RERA. A meeting of the stakeholder was convened in 2017 to finalise these rules. However, no further action was taken thereafter and the WBHIRA, 2017 was notified in March 2018 and rules under the WBHIRA was also published in June 2018.

The Apex Court held that the state law was repugnant to the Parliament enacted law and elaborated on the tests of repugnancy:

1. Where the provision of a State enactment is directly in conflict with a law enacted by Parliament, so that compliance with one is impossible along with obedience to the other.

2. Where Parliament through the legislative provisions contained in the statute has enacted an exhaustive code. The second test of repugnancy is based on an intent of Parliament to occupy the whole field covered by the subject of its legislation.

3. Third postulates that the subject matter of the legislation by the State is identical to the legislation which has been enacted by Parliament, whether prior or later in point of time.

"WBHIRA, on the contrary, purports to occupy the same subject as that which has been provided in the Parliamentary legislation… This is constitutionally impermissible. What the legislature of the State of West Bengal has attempted to achieve is to set up its parallel legislation involving a parallel regime," the SC ruled.