SC strikes down West Bengal law regulating real estate, says it encroaches upon Centre's RERA Act

A Bench of Justices DY Chandrachud and MR Shah also said that West Bengal's law has failed to include valuable safeguards for homebuyers

Press Trust of India May 04, 2021 14:23:11 IST
SC strikes down West Bengal law regulating real estate, says it encroaches upon Centre's RERA Act

Representational image. Reuters

New Delhi: The Supreme Court Tuesday struck down West Bengal’s law on regulating real estate sector saying it was 'unconstitutional' as the state's statute encroached upon the Centre's Real Estate (Regulation and Development) Act (RERA).

The top court also said that West Bengal's HIRA Act has failed to include valuable safeguards for the homebuyers.

A bench of justices DY Chandrachud and MR Shah said the West Bengal Housing Industry Regulation Act (HIRA), 2017 is more or less identical to the Centre's RERA and hence repugnant to Parliament's law.

”The state law has encroached upon the domain of the Parliament and hence is unconstitutional,” the verdict said.

It said however that homebuyers who have purchased properties under state law before its verdict, will not have to worry as their registration and other acts would remain valid.

The judgement came on a plea of ‘Forum For People's Collective Efforts’ , an umbrella homebuyers association, challenging the constitutional validity of West Bengal Housing Industry Regulation Act, 2017, which is more or less identical to the Centre's RERA.

Pronouncing the verdict through video conferencing, Justice Chandrachud said that fundamental features of WB HIRA overlap and are word-to-word copies of Centre's RERA.

The bench, which passed a lengthy verdict on the issue, said that WB HIRA touches upon entry 6 and 7 of the concurrent list which was occupied by the law passed by Parliament and set up a parallel regime in the state.

“The state doing so is plainly unconstitutional,” the bench said, adding that provisions in the legislation shows that there is repugnancy in WB HIRA and RERA.

“WB HIRA is directly in conflict with RERA, without any valuable safeguards for the home buyers”, the bench said, adding that it is invoking powers under Article 142 to hold that registrations of properties done under the state law before its verdict, will be valid.

The top court had during the hearing of the petition wondered whether a state, in the name of cooperative federalism, enact a legislation under the concurrent list to occupy the same subjects in which Parliament has enacted a law.

It had observed that both Centre's RERA and WB HIRA dealt with issues of providing reliefs to home buyers and to promote real estate sectors but some of the provisions of State''s legislation were in direct conflict with the law passed by Parliament.

The top court had said that a state can have legislation but to supplant the Centre''s law and not to be direct conflict or to override it and say that “now we will not follow your law but our law”

It had wondered why a state would have a similar law enacted when there is already a law passed by Parliament and said many provisions in WB HIRA are repugnant to Centre's RERA.

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