FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) & ANR. versus THE STATE OF WEST BENGAL & ANR.
[2021] 5 S.C.R. 613, Supreme Court of India, 2021
Outcome: Case Allowed (Granted)
Segment: Ratio
59. While considering these submissions which have been
articulated by Mr Rakesh Dwivedi, learned Senior Counsel, it becomes
necessary to dwell on two lines of precedent of this Court. The first line
of precedent analyses provisions analogous to Section 88 of the RERA
and would shed light on what is the ambit of a provision which states
that the statute is in addition to and not in derogation of any other law for
the time being in force. The second line of precedent explores the meaning
of the expression ‘in any other law for the time being in force’. Does
this expression in Section 88 freeze the applicability of that provision to
laws which were in force when the RERA enacted or does it also apply
to laws which may be enacted subsequently?
H.3.1 Meaning of “is in addition to and not in derogation of
any other law”
60. The first line of precedent will facilitate judicial evaluation of
Section 88. In M D Frozen Foods Exports Private Limited vs Hero
Fincorp Limited30, a Bench of two judges of this Court analyzed three
30(2017) 16 SCC 741
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issues of which the first is of relevance to the present case. That issue
was:
“11.1. (i) Whether the arbitration proceedings initiated by the
respondent can be carried on along with the SARFAESI proceedings
simultaneously”
The appellant in that case had borrowed monies from the
respondent by creating a mortgage against deposit of title deeds. The
account became a non-performing asset resulting in the lender invoking
the arbitration clause of the agreement with the borrower. Prior to it, a
notification was issued under which the provisions of the Securitization
and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (“SARFAESI Act”) were applied to certain non-
banking financial institutions, including the respondent. The respondent
issued a notice under Section 13(2) of the SARFAESI Act. In the course
of the arbitration proceedings, an interim order was passed from which
proceedings were carried in appeal under Section 37 of the Arbitration
and Conciliation Act 1996, resulting in the dispute travelling to this Court.
Sections 35 and 37 of the SARFAESI Act are in the following terms:
“35. The provisions of this Act to override other laws.—
The provisions of this Act shall have effect, notwithstanding
anything inconsistent therewith contained in any other law for the
time being in force or any instrument having effect by virtue of
any such law.
***
37. Application of other laws not barred.—The provisions of
this Act or the
rules made thereunder shall be in addition to, and
not in derogation of, the Companies Act, 1956 (1 of 1956), the
Securities Contracts (Regulation) Act, 1956 (42 of 1956), the
Securities and Exchange Board of India Act, 1992 (15 of 1992),
the Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (51 of 1993) or any other law for the time being in
force.”
61. Justice Sanjay Kishan Kaul adverted to the above definition in
the course of the judgment. The Court noted the earlier decision in
Transcore vs Union of India31 holding that by virtue of Section 37, the
31 (2008) 1 SCC 125
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SARFAESI Act is in addition to and not in derogation of the provisions
of the Recovery of Debts Due to Banks and Financial Institutions Act
1993 (“RDDB Act”). The “only twist” was that instead of the recovery
process being under the RDDB Act, the Court was concerned with an
arbitration proceeding. In this context, the Court observed:
“30. The only twist in the present case is that, instead of the
recovery process under the RDDB Act, we are concerned with
an arbitration proceeding. It is trite to say that arbitration is an
alternative to the civil proceedings. In fact, when a question was
raised as to whether the matters which came within the scope
and jurisdiction of the Debt Recovery Tribunal under the RDDB
Act, could still be referred to arbitration when both parties have
incorporated such a clause, the answer was given in the
affirmative. [HDFC Bank Ltd. v. Satpal Singh Bakshi, 2012
SCC OnLine Del 4815: (2013) 134 DRJ 566] That being the
position, the appellants can hardly be permitted to contend that
the initiation of arbitration proceedings would, in any manner,
prejudice their rights to seek relief under the SARFAESI Act.”
There was, in other words, no question of an election of remedies
and the provisions of the SARFAESI Act provide a remedy in addition
to the provisions of the Arbitration Act. SARFAESI proceedings, the
Court held, are in the nature of enforcement proceedings, while arbitration
is an
“adjudicatory process”.
62. In KSL and Industries Limited vs Arihant Threads
Limited32 (“KSL and Industries”), a three judge Bench of this Court
considered a reference made by a two judge Bench following a
difference of opinion on the interpretation of Section 34 of the RDDB
Act. In that case, the High Court had set aside the order of the Debts
Recovery Appellate Tribunal, in view of the bar contained in Section 22
of the Sick Industrial Companies (Special Provisions) Act 1985
(“(SICA”). Section 32 of the SICA contained a provision giving overriding
force notwithstanding anything inconsistent contained in any other law
except the Foreign Exchange Regulation Act 1973 and the Urban Land
(Ceiling and Regulation) Act 1976, among other instruments. Section
32(1) was as follows:
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“32. Effect of the Act on other laws.—(1) The provisions of
this Act and of any rules or schemes made thereunder shall have
effect notwithstanding anything inconsistent therewith contained
in any other law except the provisions of the Foreign Exchange
Regulation Act, 1973 (46 of 1973) and the Urban Land (Ceiling
and Regulation) Act, 1976 (33 of 1976) for the time being in force
or in the memorandum or articles of association of an industrial
company or in any other instrument having effect by virtue of any
law other than this Act.”
The RDDB Act which was a later enactment of 1993 contained
Section 34 giving it overriding effect:
“34. Act to have overriding effect.—(1) Save as provided under
sub-section (2), the provisions of this Act shall have effect
notwithstanding anything inconsistent therewith contained in any
other law for the time being in force or in any instrument having
effect by virtue of any law other than this Act.
(2) The provisions of this Act or the rules made thereunder
shall be in addition to, and not in derogation of, the Industrial Finance
Corporation Act, 1948 (15 of 1948), the State Financial
Corporations Act, 1951 (63 of 1951), the Unit Trust of India Act,
1963 (52 of 1963), the Industrial Reconstruction Bank of India
Act, 1984 (62 of 1984), the Sick Industrial Companies (Special
Provisions) Act, 1985 (1 of 1986) and the Small Industries
Development Bank of India Act, 1989 (39 of 1989).”
Now, sub-Section (1) of Section 34 gives
overriding effect to the
RDDB Act notwithstanding anything inconsistent contained in any other
law for the time being in force. On the other hand, sub-Section (2)
provides that the provisions of the Act and its rules would be in addition
to and not in derogation of certain other named statutes. Adverting to
the provisions of Section 34(2), Justice SA Bobde (as the learned Chief
Justice then was) observed;
“36 [Ed.: Para 36 corrected vide Official Corrigendum No.
F.3/Ed.B.J./61/2014 dated 25-11-2014.] . Sub-section (2) was
added to Section 34 of the RDDB Act w.e.f. 17-1-2000 by Act 1
of 2000. There is no doubt that when an Act provides, as here,
that its provisions shall be in addition to and not in derogation of
another law or laws, it means that the legislature intends that such
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an enactment shall coexist along with the other Acts. It is clearly
not the intention of the legislature, in such a case, to annul or
detract from the provisions of other laws. The term “in
derogation of” means “in abrogation or repeal of”. The Black’s
Law Dictionary sets forth the following meaning for “derogation”:
“derogation.—The partial repeal or abrogation of a law
by a later Act that limits its scope or impairs its utility and force.”
It is clear that sub-section (1) contains a non obstante clause,
which gives the overriding effect to the RDDB Act. Sub-section
(2) acts in the nature of an exception to such an overriding effect.
It states that this overriding effect is in relation to certain laws
and that the RDDB Act shall be in addition to and not in abrogation
of, such laws. SICA is undoubtedly one such law.”
The Court held that the effect of sub-Section (2) was to preserve
the powers of the authorities under the SICA and save the proceedings
from being overridden by the RDDB Act. The Court held that both
SICA and the RDDB Act were special laws within their own sphere:
“39. There is no doubt that both are special laws. SICA is a special
law, which deals with the reconstruction of sick companies and
matters incidental thereto, though it is general as regards other
matters such as recovery of debts. The RDDB Act is also a special
law, which deals with the recovery of money due to banks or
financial
institutions, through a special procedure, though it may
be general as regards other matters such as the reconstruction of
sick companies which it does not even specifically deal with. Thus
the purpose of the two laws is different.”
The Court noticed that Section 34(2) of the RDDB Act specifically
provides that its provisions would be in addition to and not in derogation
of the other laws mentioned in it, including SICA. The expression ‘not in
derogation’ was then construed in the following observations:
“49. The term “not in derogation” clearly expresses the intention
of Parliament not to detract from or abrogate the provisions of
SICA in any way. This, in effect must mean that Parliament
intended the proceedings under SICA for reconstruction of a sick
company to go on and for that purpose further intended that all
the other proceedings against the company and its properties should
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be stayed pending the process of reconstruction. While the term
“proceedings” under Section 22 of SICA did not originally include
the RDDB Act, which was not there in existence. Section 22
covers proceedings under the RDDB Act.”
Consequently, the Court answered the reference by holding that
the provisions of SICA, in particular Section 22, shall prevail over the
provisions for the recovery of debts in the RDDB Act.
63. To complete this trinity of judgments between 2015 and 2019,
there is a three judge Bench decision of this Court in Pioneer Urban
Land and Infrastructure Limited vs Union of India33. This Court
considered a challenge to the constitutional validity of the amendments
made in 2018 to the IBC 2016, pursuant to a report of the Insolvency
Law Committee. Under the amended provisions, allottees of real estate
projects were deemed to be financial creditors, triggering the applicability
of the Code to real estate developers. The three judge Bench considered,
in the course of its decision, the provisions of the RERA. The Court
adverted to the provisions of Sections 88 and 89 of the RERA on the one
hand and to Section 238 of the IBC which is in the following terms:
“238. Provisions of this Code to override other laws.—The
provisions of this Code shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time
being in force or any instrument having effect by virtue of any
such law.”
Justice RF Nariman speaking
for the three judge Bench noted
that
(i) There is no provision analogous to Section 88 of the RERA in
the IBC and the latter is meant to be a compete and exhaustive
statement of the law insofar as its subject matter is concerned;
(ii) While the non-obstante clause of RERA came into force on 1
May 2015, the non-obstante clause of IBC came into force
on 1 December 2016; and
(iii) The amendments to the IBC had come into force on 6 June
2018.
33 (2019) 8 SCC 416
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In this backdrop, the Court did not accept the submission that
RERA being a special enactment would have precedence over the IBC
which is a general enactment dealing with insolvency. In this backdrop,
the Court observed:
“25…From the introduction of the Explanation to Section 5(8)(f)
of the Code, it is clear that Parliament was aware of RERA, and
applied some of its definition provisions so that they could apply
when the Code is to be interpreted. The fact that RERA is in
addition to and not in derogation of the provisions of any
other law for the time being in force, also makes it clear
that the remedies under RERA to allottees were intended
to be additional and not exclusive remedies. Also, it is
important to remember that as the authorities under RERA were
to be set up within one year from 1-5-2016, remedies before those
authorities would come into effect only on and from 1-5-2017
making it clear that the provisions of the Code, which came into
force on 1-12-2016, would apply in addition to RERA.”
(emphasis supplied)
The Court noted the decision in KSL & Industries (supra) in
which it was held that notwithstanding the non-obstante clause contained
in the RDDB Act which was later in time than the non-obstante clause
in the SICA and the principle that the later Act would prevail over the
earlier, this principle was departed from only because of the of the
presence of  a provision, like Section 88 of the RERA, which
was
contained in the RDDB Act which made it clear that the Act was meant
to be in addition and not in derogation of other statutes. Distinguishing
the decision, the Court observed:
“27. In view of Section 34(2) of the Recovery Act, this Court
held that despite the fact that the non obstante clause contained in
the Recovery Act is later in time than the non obstante clause
contained in the Sick Act, in the event of a conflict, the Recovery
Act i.e. the later Act must give way to the Sick Act i.e. the earlier
Act. Several judgments were referred to in which ordinarily a
later Act containing a non obstante clause must be held to have
primacy over an earlier Act containing a non obstante clause, as
Parliament must be deemed to be aware of the fact that the later
Act is intended to override all earlier statutes including those which
contained non obstante clauses. This statement of the law was
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departed from in KSL & Industries [KSL & Industries
Ltd. v. Arihant Threads Ltd., (2015) 1 SCC 166 : (2015) 1 SCC
(Civ) 462] only because of the presence of a section like Section
88 of RERA contained in the Recovery Act, which makes it clear
that the Act is meant to be in addition to and not in derogation of
other statutes. In the present case, it is clear that both tests are
satisfied, namely, that the Code as amended, is both later in point
of time than RERA, and must be given precedence over RERA,
given Section 88 of RERA.”
Therefore, the Court held that RERA and the IBC must be held
to co-exist and in the event of a clash, RERA must give way to the IBC.
H.3.2 Meaning of “law for the time being in force”
64. The second line of precedent has been relied upon by Mr
Rakesh Dwivedi on behalf of the State of West Bengal, as an aid to the
construction of the expression “law for the time being in force”. In the
decision of the Constitution Bench in Sasanka Sekhar Maity vs Union
of India34, Justice AP Sen construed the provisions of the second proviso
to Article 31-A(1)  of the Constitution and the expression “any law for
the time being in force”. The argument was that this expression must
mean the West Bengal Estate Acquisition Act, 1953 only. Rejecting the
submission, the Constitution Bench held:
“27. Such a construction, if we may say so, would create a serious
impediment to any kind of agrarian reform. The ceiling on
agricultural holdings, once fixed
cannot be static, unalterable for
all times. The expression “any law for the time being in force”
obviously refers to the law imposing a ceiling. Here it is
the West Bengal Land Reforms (Amendment) Act, 1971
(President’s Act 3 of 1971) and now the West Bengal Land
Reforms (Amendment) Act, 1971 (W.B. Act 12 of 1972)
which introduced Chapter II-B imposing a new ceiling on
agricultural holdings of raiyats. That is the law for the time
being in force, and no land is being acquired by the State
under Section 14-L within the ceiling limits prescribed
therein.
28. It will be noticed that the second proviso to Article 31-A(1)
refers to the “ceiling limit applicable to him”, which evidently refers
34 (1980) 4 SCC 716
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to the law in question and not earlier law, that is Section 6(1) of
the West Bengal Estates Acquisition Act, 1953. It will be noticed
that both Section 4(3) and Section 6(2) of the West Bengal Land
Reforms Act, 1955 stood deleted by the West Bengal Land
Reforms (Amendment) Act, 1971 (President’s Act 3 of 1971)
and thereafter by the West Bengal Land Reforms (Amendment)
Act, 1972 with retrospective effect from February 12, 1971.”
(emphasis supplied)
65. In Thyssen Stahlunion GMBH vs Steel Authority of
India35, a two judge Bench of this Court considered the expression “for
the time being in force” in the context of an arbitration agreement and
agreed with the view of the High Courts of Bombay and Madhya Pradesh,
which had held that the expression not only refers to the law in force at
the time when the arbitration was entered into but also to any law that
may be in force in the conduct of the arbitration proceeding. Speaking
for the bench, Justice DP Wadhwa held:
“35. Parties can agree to the applicability of the new Act even
before the new Act comes into force and when the old Act is still
holding the field. There is nothing in the language of Section
85(2)(a) which bars the parties from so agreeing. There is, however,
a bar that they cannot agree to the applicability of the old Act
after the new Act has come into force when arbitral proceedings
under the old Act have not commenced though the arbitral
agreement was
under the old Act. Arbitration clause in the
contract in the case of Rani Constructions (Civil Appeal
No. 61 of 1999) uses the expression “for the time being in
force” meaning thereby that provision of that Act would
apply to the arbitration proceedings which will be in force
at the relevant time when arbitration proceedings are held.
We have been referred to two decisions — one of the
Bombay High Court and the other of the Madhya Pradesh
High Court on the interpretation of the expression “for
the time being in force” and we agree with them that the
expression aforementioned not only refers to the law in
force at the time the arbitration agreement was entered
into but also to any law that may be in force for the conduct
of arbitration proceedings, which would also include the
35 (1999) 9 SCC 334
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enforcement of the award as well. The expression “unless
otherwise agreed” as appearing in Section 85(2)(a) of the new
Act would clearly apply in the case of Rani Constructions in Civil
Appeal No. 61 of 1999. Parties were clear in their minds that it
would be the old Act or any statutory modification or re-enactment
of that Act which would govern the arbitration. We accept the
submission of the appellant Rani Constructions that parties could
anticipate that the new enactment may come into operation at the
time the disputes arise. We have seen Section 28 of the Contract
Act. It is difficult for us to comprehend that arbitration agreement
could be said to be in restraint of legal proceedings. There is no
substance in the submission of the respondent that parties could
not have agreed to the application of the new Act till they knew
the provisions thereof and that would mean that any such
agreement as mentioned in the arbitration clause could be entered
into only after the new Act had come into force. When the
agreement uses the expressions “unless otherwise agreed” and
“law in force” it does give an option to the parties to agree that
the new Act would apply to the pending arbitration proceedings.
That agreement can be entered into even before the new Act
comes into force and it cannot be said that agreement has to be
entered into only after the coming into force of the new Act.”
(emphasis supplied)
66. The decision of a two judge Bench in Municipal
Corporation
of Delhi vs Prem Chand Gupta36, considered Regulation 4(1) of the
Services Regulations of 1959 which commenced with the expression
“Unless otherwise provided in the Act or these regulations, the rules for
the time being in force and applicable to government servants in the
service of the Central Government shall, as far as may be, regulate the
conditions of service of municipal officers and other municipal employees”.
The Court rejected the submission that the rules for the time being in
force would be those which were in existence when the Services
Regulations of 1959 were promulgated and not any later rules. Justice
SB Majmudar held that whenever the question of the regulation of
conditions of service of municipal officers comes up for consideration,
the relevant rules in force at that time have to be looked into. As such,
the scope and ambit could not be frozen as of 1959. Hence, the
36 (2000) 10 SCC 115
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phraseology “rules for the time being in force” would necessarily mean
rules in force from time to time and not the rules in force only at a fixed
point of time in 1959.
67. Another two judge Bench of this Court in Yakub Abdul Razak
Memon vs State of Maharashtra37, while construing the provisions of
the Juvenile Justice (Care and Protection of Children) Act, 2000 and its
interplay with Terrorist and Disruptive Activities (Prevention) Act, 1987,
speaking through Justice P Sathasivam (as the learned Chief Justice
was then), held:
“1554. Section 1(4) of the JJ Act was added by amendment with
effect from 22-8-2006. In fact, this provision gives the overriding
effect to this Act over other statutes. However, it reads that the
Act would override “anything contained in any other law for the
time being in force”. The question does arise as to whether the
statutory provisions of the JJ Act would have an overriding effect
over the provisions of TADA which left long back and was
admittedly not in force on 22-8-2006. Thus, the question does
arise as what is the meaning of the law for the time being in
force. This Court has interpreted this phrase to include
the law in existence on the date of commencement of the
Act having overriding effect and the law which may be
enacted in future during the life of the Act having overriding
effect. (Vide Thyssen Stahlunion GmbH v. SAIL [(1999) 9 SCC
334 : AIR 1999 SC 3923] and MCD v. Prem
Chand Gupta [(2000)
10 SCC 115 : 2000 SCC (L&S) 404] .)”
(emphasis supplied)
68. In Union Territory of Chandigarh vs Rajesh Kumar
Basandhi38, Justice Brijesh Kumar considered the expression “for the
time being in force” in the law lexicon and held that it must be interpreted
keeping in mind the context in which it is used:
“10. A perusal of the meaning of the expression “for the time
being” by different authors, based on decided cases makes it clear
that it cannot be said that it must in every case indicate a single
period of time. It may be for an indefinite period of time depending
upon the context in which the phrase is used. It is also evident
37 (2013) 13 SCC 1
38 (2003) 11 SCC 549
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that generally it denotes an indefinite period of time, meaning
thereby, the position as existing at the time of application of the
rules, maybe, amended or unamended. Therefore, to come to a
conclusion as to whether it is for one time or for indefinite period
of time, the context, purpose and the intention of the use of the
phrase will have to be seen and examined.”
69. Similarly, in Department of Customs vs Sharad Gandhi39,
a two judge Bench of this Court considered a case where the respondent
had been discharged of offences under Sections 132 and 175 of the
Customs Act, 1962. The Additional Chief Metropolitan Magistrate
allowed an application for discharge holding that there was a complete
bar with regard to prosecution under the Customs Act, 1962, and that
the Collector of Customs only had the power to confiscate the goods
and impose a penalty for a breach of Section 3 of the Antiquities and Art
Treasurers Act, 1972. Amongst other issues, the Bench had to interpret
the meaning of Section 30 of the Antiquities and Art Treasurers Act,
1972, which reads as follows:
“30. Application of other laws not barred.—The provisions of
this Act shall be in addition to, and not in derogation of, the
provisions of the Ancient Monuments Preservation Act, 1904
(7 of 1904) or the Ancient Monuments and Archaeological Sites
and Remains Act, 1958 (24 of 1958), or any other law for the
time being in force.”
Justice KM Joseph, speaking for the two judge Bench, observed:
“39.
We would think that though the words “any other
law for the time being in force” have been used, the
context for the use of the provision is not to be
overlooked. We have referred to the relevant provisions
of the two specific enactments which show that the said
legislation also deals with antiquities as it deals with
cognate subjects, namely, ancient monuments and
archaeological sites. The common genus is manifest. The
legislative intention was to declare that the Antiquities
Act should not result in the provision contained in allied
or cognate laws being overridden upon passing of the
Antiquities Act. Full play was intended for the provisions
39 (2020) 13 SCC 521
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contained in relation to antiquities contained in the two
enactments. Despite the passage of the Antiquities Act,
a prosecution for instance would be maintainable if a case
is otherwise made out under the two enactments in
relation to antiquity. The Antiquities Act in other words
is not to be in derogation of those provisions. They were
to supplement the existing laws. It is therefore in the
same context that we should understand the words “any
other law for the time being in force”. For instance, there
may be laws made by the State Legislatures which relate to
antiquity. There may be any other law which deal with a subject
with a common genus of which the specific law would be an
integral part. It is all such laws which legislature intended to
comprehend within the expression “any other law for the time
being in force”. Take for example, a case where there is a
theft of an antiquity. Can it be said that the prosecution under
Section 379 would not be maintainable. The answer will be an
emphatic No. Certainly, the prosecution will lie. The Sale of
Goods Act, 1930 which relates to movable items generally will
be applicable, to the extent that it is not covered by any provision
in the Acts in question. The Contract Act, 1872 may continue
to be applicable. But it is not the question of applying general
laws that engage the attention of the legislature. The intention
behind Section 30 was as noted is to provide for any
other
law which deal with antiquity to continue to have force
and declare its enforceability even after passing of the
Antiquities Act. In that view of the matter we are of the
view that the words “any other law for the time being in
force” must be construed as ejusdem generis.”
(emphasis supplied)
70. These decisions indicate that the expression “any other law
for the time being in force” does not necessarily mean, such laws as
were in existence when the statutory provision was enacted. To the
contrary, it widely considered to means not just the laws which were in
existence when the statutory provision was enacted but also such laws
which may come into existence at a later stage. On the other hand,
another line of judicial precedent also suggests the meaning to be ascribed
to the expression must bear color from the context in which it appears,
and not devoid of it.
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71. For instance, in National Insurance Company Limited vs
Sinitha40, in the context of a policy of insurance, the expression “for the
time being in force” was held to mean provisions then existing. The
decision related to Sections 144 and 163A of the Motor Vehicles Act,
1988, in which Section 163A was subsequently inserted. In the context
of adjustment of compensation, a two judge Bench of this Court held
that Section 144 would not override Section 163A because of the use of
the expression “laws for the time being in force” would encompass only
existing provisions of the Motor Vehicles Act, 1988, and not those inserted
in the Act later. Speaking for the Bench, Justice JS Khehar (as the
learned Chief Justice was then) observed:
“16. Section 144, it may be pointed out, is a part of Chapter X of
the Motor Vehicles Act, 1988, which includes Section 140. Section
144 of the Act is being extracted herein:
“144.Overriding effect.—The provisions of this Chapter shall have
effect notwithstanding anything contained in any other provision
of this Act or of any other law for the time being in force.”
Even though Section 144 of the Act mandates that the provisions
of Chapter X (which includes Section 140) have effect
notwithstanding anything to the contrary contained in any other
provision of the Act or in any other law for the time being in force,
Section 144 of the Act would not override the mandate contained
in Section 163-A for the simple reason that Section 144
provided
for such effect over provisions “for the time being in force” i.e.
the provisions then existing, but Section 163-A was not on the
statute book at the time when Section 144 was incorporated
therein. Therefore the provisions contained in Chapter X would
not have overriding effect over Section 163-A of the Act.
17. As against the aforesaid, at the time of incorporation of Section
163-A of the Act, Sections 140 and 144 of the Act were already
subsisting, as such, the provisions of Section 163-A which also
provided by way of a non obstante clause, that it would have by a
legal fiction overriding effect over all existing provisions under
the Act as also any other law or instrument having the force of
law “for the time being in force”, would have overriding effect,
even over the then existing provisions in Chapter X of the Act
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because the same was already in existence when Section 163-A
was introduced into the Act.”
This again indicates that it is the statutory context and scheme
which will determine the nature and ambit of the expression “any other
law for the time being in force”.
72. In the case of the RERA, the expression “law for the time
being in force” is used in Section 89 as well as in Section 2(zr) and
Section 18(2). Section 2(zr), as noticed earlier, stipulates that words and
expression used in the Act, but not defined in it and defined in any law
for the time being in force or in municipal laws or other relevant laws of
the appropriate government, shall have the meaning assigned to them in
those laws. Evidently, a law for the time being in force in Section 2(zr) is
not frozen in point of time as on the date of the enactment of RERA.
Likewise, Section 18(2) of the RERA imposes an obligation to the
promoter to compensate allottees for the loss caused due to a defective
title to the land and the provision stipulates that the claim for compensation
shall not be barred by limitation provided “under any law for the time
being in force”. However, in Section 89, “law for the time being in force”
is used in general sense of all the provisions of the Act, vis-à-vis,
provisions of other Acts.
H.3.3 Knitting it together
73. From our analysis of the provisions of RERA on the one hand
and of WB-HIRA on the other, two fundamental features
emerge from
a comparison of the statutes. First, a significant and even overwhelmingly
large part of WB-HIRA overlaps with the provisions of RERA. These
provisions of the RERA have been lifted bodily, word for word and
enacted into the State enactment. Second, in doing so, WB-HIRA 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 subject of the provisions of the State
enactment is identical, the content is identical. In essence and substance,
WB-HIRA has enacted a parallel mechanism and parallel regime as
that which has been entailed under the RERA. The State legislature
has, in other words, enacted legislation on the same subject matter as
the Central enactment. Not only is the subject matter identical but in
addition, the statutory provisions of WB-HIRA are on a majority of counts
identical to those of the RERA. Both sets of statutes are referable to the
same entries in the Concurrent List – Entries 6 and 7 of List III – and
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the initial effort of the State of West Bengal to sustain its legislation as a
law regulating ‘Industry” within the meaning of Entry 24 of List II has
been expressly given up before this Court (as we have explained, for
valid reasons bearing on the precedents of this Court).
74. In assessing whether this overlap between the statutory
provisions of WB-HIRA and the RERA makes the former repugnant to
the latter within the meaning of that expression in clause (1) of Article
254, it becomes necessary to apply the several tests which are a part of
our constitutional jurisprudence over the last seven decades. Repugnancy
can be looked at from three distinct perspectives. The first is 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. The second test of repugnancy is 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. In terms of the second test of repugnancy, a State
enactment on the subject has to give way to the law enacted by Parliament
on the ground that the regulation of the subject matter by Parliament is
so complete as a code, so as to leave no space for legislation by the
State. The third test of repugnancy 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. Repugnancy
in the constitutional sense is implicated not because there is a conflict
between the provisions enacted by the State legislature with those of the
law enacted by Parliament but because once Parliament has enacted a
law, it is not open to the State legislature to legislate on the same subject
matter and, as in this case, by enacting provisions which are bodily lifted
from and verbatim the same as the statutory provisions enacted by
Parliament. The overlap between the provisions of WB-HIRA and the
RERA is so significant as to leave no manner of doubt that the test of
repugnancy based on an identity of subject matter is clearly established.
As the decision in Innoventive Industries (supra) emphasizes, laws
under this head are repugnant even if the rule of conduct prescribed by
both the laws is identical. This principle constitutes the foundation of the
rule of implied repeal. The present case is not one where WB-HIRA
deals not with matters which form the subject matter of the Parliamentary
legislation but with other and distinct matters of a cognate and allied
nature. WB-HIRA, on the contrary, purports to occupy the same subject
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as that which has been provided in the Parliamentary legislation. The
state law fits, virtually on all fours, with the footprints of the law enacted
by Parliament. 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.
75. 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. For the purpose of the
present discussion, we may accept the hypothesis of the State of West
Bengal that the expression “any other law for the time being in force”
does not, in the context of Section 88, imply the applicability of the
provision only to laws which had been enacted before the RERA.
Conceivably, as the judgments of this Court construing similar expressions
indicate, the trend has been to broadly configure the meaning of the
expression by extending it to laws which were in existence and those
which may be enacted thereafter. In other contexts, such an interpretation
has not been accepted but, for the purpose of the discussion, we will
proceed on the hypothesis
which has been put forth by the State of West
Bengal that ‘law for the time being in force’ within the meaning of Section
88 would also include subsequent legislation. The submission is that since
Section 88 allows for the existence of other laws by adopting the ‘in
addition to and not in derogation of’ formula, Parliament did not intend to
exclude State legislation even though it is identical to that which has
been enacted by Parliament. This submission is also sought to be
buttressed by adverting to Section 92 of the RERA, under which only
the Maharashtra Actwas repealed.
76. Now, in assessing the correctness of the submission, it is
necessary to construe Section 88 in its proper perspective. Unless this is
done, the Court would be doing violence to the intent of Parliament and
to the constitutional principles which are embodied in Article 254.
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. True enough, this provision is an indicator of the fact that
Parliament has not intended to occupy the whole field so as to preclude
altogether the exercise of legislative authority whether under other Central
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or State enactments. For instance, Section 71 of the RERA specifically
contemplates (in the proviso to sub-Section (1)) that a complaint in respect
of matters covered by Sections 12, 14, 18 and 19 is pending in the
adjudicating fora constituted by the Consumer Protection Act, 1986.
The person who has moved the consumer forum may withdraw the
complaint and file an application before the adjudicating officer constituted
under the RERA. The effect of Section 88 is to ensure that remedies
which are available under consumer legislation, including Consumer
Protection Act, 2019, are not ousted as a consequence of the operation
of the RERA. Of course, it is also material to note that both sets of
statutes, namely the Consumer Protection Act(s) and the RERA, have
been enacted by the Parliament and both sets of statutes have to be
therefore harmoniously construed. Section 88 of the RERA does not
exclude recourse to other remedies created by cognate legislation. Where
the cognate legislation has been enacted by a State legislature, Section
88 of the RERA 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. What the State legislature in the
present
case has done is not to enact cognate or allied legislation but legislation
which, insofar as the statutory overlaps is concerned is identical to and
bodily lifted from the Parliamentary law. This plainly implicates the test
of repugnancy by setting up a parallel regime under the State law. The
State legislature has encroached upon the legislative authority of
Parliament which has supremacy within the ambit of the subjects falling
within the Concurrent List of the Seventh Schedule. The exercise
conducted by the State legislature of doing so, is plainly unconstitutional.
77. The statutory overlaps between WB-HIRA and the RERA
cannot be overlooked, as noted above. But quite apart from that, there is
an additional reason why the test of repugnancy engrafted in clause (1)
of Article 254 is attracted. This is because several provisions of the
WB-HIRA are directly in conflict and dissonance with the RERA. Where
a State enactment in the Concurrent List has enacted or made a statutory
provision which is in conflict with those which have been enacted by
Parliament, it may in a given case be possible to excise the provision of
the State statute so as to bring it into conformity with the Parliamentary
enactment. But the present case, as we shall demonstrate, involves a
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situation where valuable safeguards which are introduced by Parliament
in the public interest and certain remedies which have been created by
Parliament are found to be absent in WB-HIRA. This is indicated from
the following provisions:
(i)
Section 2(n) of the RERA contains a statutory definition of
the meaning of ‘common areas’. Parliament has defined
the expression to mean what is set out in sub-clause 1(i) to
(iii) which includes open parking areas. The WB-HIRA
contains a definition of the expression ‘common areas’ in
Section 2(m). While this definition is pari materia, WB-
HIRA has enacted the definition of the expression ‘car
parking area’ in Section 1 to mean such area as may be
prescribed in exercise of the rule making power. The rules
framed by the State government define the expression to
mean an area either enclosed or uncovered or open
excluding open car parking areas reserved as common areas
and to exclude all types of car parking areas sanctioned by
the competent authority;
(ii)
Section 2(y) of the RERA defines the expression ‘garage’
so as not to include an unenclosed or uncovered parking
space such as open parking area. On the other hand, Section
2(x) of WB-HIRA defines the expression ‘garage’ to mean
garage and property space as sanctioned by the competent
authority;
(iii)
Section 6 of the RERA provides for an extension of a
registration under Section 5 on an application by the promoter
due to force
majeure. The explanation exhaustively defines
force majeure to mean a case of war, flood, drought, fire,
cyclone, earthquake or any other calamity caused by nature
affecting the development of the real estate project. The
provisions of Section 6 of the WB-HIRA, in contrast, while
defining force majeure also incorporate “any other
circumstances prescribed”, thereby giving a wider discretion
to the regulatory authority or the State to give extensions of
registration to real estate projects in a manner which may
prejudicially affect the interest of home buyers;
(iv)
Section 38(3) of the RERA empowers the real estate
regulatory authority in a monopoly situation to make a suo
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motu reference to the Competition Commission of India.
No such provision is made in the State enactment. Hence,
a valuable safeguard to protect home buyers in the RERA
has been omitted. Section 38(3) of the RERA is in the
following terms:
“(3) Where an issue is raised relating to agreement, action,
omission, practice or procedure that— (a) has an appreciable
prevention, restriction or distortion of competition in
connection with the development of a real estate project;
or (b) has effect of market power or monopoly situation
being abused for affecting interest of allottees adversely,
then the Authority, may suo motu, make reference in respect
of such issue to the Competition Commission of India.”
(v)
Section 41 of the RERA is a pivotal provision under which
the Central government is to establish a Central Advisory
Council. The Minister of the Central government dealing
with Housing is to be the ex officio Chairperson. The
membership of the Central Advisory Council is stipulated
in Section 41(3). Section 41 provides as follows:
“41. (1) The Central Government may, by notification,
establish with effect from such date as it may specify in
such notification, a Council to be known as the Central
Advisory Council. (2) The Minister to the Government of
India in charge of the Ministry of the Central Government
dealing with Housing shall be the ex officio Chairperson of
the Central Advisory Council. (3) The Central Advisory
Council shall consist of
representatives of the Ministry of
Finance, Ministry of Industry and Commerce, Ministry of
Urban Development, Ministry of Consumer Affairs, Ministry
of Corporate Affairs, Ministry of Law and Justice, Niti
Aayog, National Housing Bank, Housing and Urban
Development Corporation, five representatives of State
Governments to be selected by rotation, five representatives
of the Real Estate Regulatory Authorities to be selected by
rotation, and any other Central Government department as
notified. (4) The Central Advisory Council shall also consist
of not more than ten members to represent the interests of
real estate industry, consumers, real estate agents,
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construction labourers, non-governmental organisations and
academic and research bodies in the real estate sector.”
The functions of the Central Advisory Council are provided in
Section 42 of the RERA, which reads as follows:
“42. Functions of Central Advisory Council.
(1) The functions of the Central Advisory Council shall be to advise
and recommend the Central Government,— (a) on all matters
concerning the implementation of this Act; (b) on major questions
of policy; (c) towards protection of consumer interest; (d) to foster
the growth and development of the real estate sector; (e) on any
other matter as may be assigned to it by the Central Government.
(2) The Central Government may specify the rules to give effect
to the recommendations of the Central Advisory Council on
matters as provided under sub-section (1).”
WB-HIRA on the other hand, provides for the constitution of a
State Advisory Council under Section 41,which is in the following terms:
“41. Establishment of State Advisory Council.-(1) The State
Government may, by notification, establish with effect from such
date as it may specify in such notification, a Council to be known
as the State Advisory Council.
(2) The Minister to the Government of the State of West Bengal
in charge of the Department dealing ·with Housing shall be the ex
officer Chairperson of the State Advisory Council.
(3) The State Advisory Council shall consist of representatives of
the
Finance Department, Department of Industry, Commerce &
Enterprises, Department of Urban Development and Municipal
Affairs, Department of Consumer Affairs, Law Department, five
representatives of the Real Estate Regulatory Authorities to be
selected by rotations, and any other State Government department
as notified.
(4) The State Advisory Council shall also consist of not more than
ten members to represent the interests of real estate industry,
consumers, real estate agents, construction labourers, non-
governmental organisations and academic and research bodies in
the real estate sector.”
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Section 42 of WB-HIRA, which defines the functions of the State
Advisory Council, is as follows:
“42. Functions of State Advisory Council.-(1) The functions of
the State Advisory Council shall be to advise and recommend the
State Government,-
(a) on all matters concerning the implementation of this Act;
(b) on major questions of policy;
(c) towards protection of consumer interest;
(d) to foster the growth and development of the real estate sector;
(e) on any other matter as may be assigned to it by the State
Government.
(2) The State Government may specify the rules to give effect to
the recommendations of the State Advisory Council on matters
as provided under sub-section (1 ).”
The State legislature while enacting WB-HIRA has replaced the
Central Advisory Council, which has a major policy making role, with
the State Advisory Council. Though the functions of the State Advisory
Council are similar, its power is to advise and recommend to the State
government in distinct in contrast to the functions of the Central Advisory
Council, which is to make policy recommendations to the Central
government on the subjects contemplated in clauses (a) to (e) of Section
42. As a consequence, the advisory role of the Central government,
based on the recommendations of the Central Advisory Council, has
been completely eroded in the provisions of WB-HIRA;
(vi)
While Section 70 of the RERA contains a provision for
compounding of offences, but WB-HIRA does not contain
any
such provision;
(vii)
Section 71(1) of the RERA provides that the regulatory
authority shall appoint adjudicating officers for the purpose
of adjudging compensation under Sections 12, 14, 18 and
19. The adjudicating officer is required to be a person who
is or has been a District Judge. WB-HIRA does not contain
any provision for appointment of adjudicating officers for
the purpose of adjudging compensation. Under Section 40(3)
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of WB-HIRA, this power is entrusted to the regulatory
authority and not to a judicial person or body. The fact that
an appeal against the orders of the regulatory authority lie
to the Appellate Tribunal and thereafter to the High Court
cannot gloss over the fact that the valuable safeguard of
appointing judicial officers as adjudicating officers for
determining compensation under the RERA has not been
enacted in WB-HIRA; and
(viii) Section 80(2) of the RERA provides that no Court inferior
to a Metropolitan Magistrate or JMFC shall try an offence
punishable under the Act. No such provision is contained in
WB-HIRA.
78. The above analysis indicates an additional reason why there
is a repugnancy between WB-HIRA and RERA- the above provisions
of the State enactment are directly in conflict with the Central enactment.
Undoubtedly, as Article 254(1) postulates, the legislation enacted by the
State legislature is void “to the extent of the repugnancy”. But the above
analysis clearly demonstrates that in material respects, WB-HIRA has
failed to incorporate valuable institutional safeguards and provisions
intended to protect the interest of home-buyers. The silence of the State
legislature in critical areas, as noted above, indicates that important
safeguards which have been enacted by Parliament in the public interest
have been omitted in the State enactment. There is, in other words, not
only a direct conflict of certain
provisions between the RERA and WB-
HIRA but there is also a failure of the State legislature to incorporate
statutory safeguards in WB-HIRA, which have been introduced in the
RERA for protecting the interest of the purchasers of real estate. In
failing to do so, the State legislature has transgressed the limitations on
its power and has enacted a law which is repugnant to Parliamentary
legislation on the same subject matter.
H.4 Lack of Presidential Assent for WB-HIRA
79. Finally, another argument raised before us by the petitioner’s
was that WB-HIRA had not received the President’s assent under Article
254(2) of the Constitution, which was necessary since it was going the
occupy the same field as the RERA, a law which had been enacted by
the Parliament. This becomes important since a Constitution Bench of
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this Court in Rajiv Sarin v. State of Uttarakhand41 (“Rajiv Sarin”),
speaking through Justice Mukundakam Sharma, has held the two
requirements for repugnancy under Article 254 to be as follows:
“45. For repugnancy under Article 254 of the Constitution,
there is a twin requirement, which is to be fulfilled: firstly,
there has to be a “repugnancy” between a Central and State
Act; and secondly, the Presidential assent has to be held
as being non-existent. The test for determining such repugnancy
is indeed to find out the dominant intention of both the legislations
and whether such dominant intentions of both the legislations are
alike or different. To put it simply, a provision in one legislation in
order to give effect to its dominant purpose may incidentally be
on the same subject as covered by the provision of the other
legislation, but such partial or incidental coverage of the same
area in a different context and to achieve a different purpose
does not attract the doctrine of repugnancy. In a nutshell, in order
to attract the doctrine of repugnancy, both the legislations must be
substantially on the same subject.”
(emphasis supplied)
80. Since we have already answered with the first requirement,
the second remains. However, the State of West Bengal initially argued
that WB-HIRA did not require presidential since it had been enacted
under List II, but that argument has now been given up before this Court,
as already noted above, and it is admitted that
it comes under List III
(the same as RERA). Further, it has also been clarified by us, rejecting
their argument, that Sections 88 and 89 of the RERA did not implicitly
permit the States to create their own legislation creating a parallel regime
alongside the RERA which would have not required presidential assent.
Hence, it is clear that WB-HIRA did not have presidential assent and
was repugnant to RERA under Article 254.
81. Therefore, this issue of whether presidential assent was needed
remains merely academic. Having said so, we note that issues related to
Presidential assent under Article 254(2) have been settled by a Constitution
Bench of this Court in Rajiv Sarin (supra), wherein it was held:
“Presidential assent and Article 254(2) of the Constitution
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63. It is in this context, that the finding of this Court in
Kaiser-I-Hind (P) Ltd. [(2002) 8 SCC 182] at para 65
becomes important to the effect that “pointed attention”
of the President is required to be drawn to the repugnancy
and the reasons for having such a law, despite the enactment
by Parliament, has to be understood. It summarises the
point as follows at pp. 215-16 as follows:
“65. The result of the foregoing discussion is:
1. It cannot be held that the summary speedier procedure
prescribed under the PP Eviction Act for evicting the tenants,
sub-tenants or unauthorised occupants, if it is reasonable and in
conformity with the principles of natural justice, would abridge
the rights conferred under the Constitution.
2. (a) Article 254(2) contemplates ‘reservation for
consideration of the President’ and also ‘assent’.
Reservation for consideration is not an empty formality.
Pointed attention of the President is required to be drawn
to the repugnancy between the earlier law made by
Parliament and the contemplated State legislation and the
reasons for having such law despite the enactment by
Parliament.
(b) The word ‘assent’ used in clause (2) of Article 254 would in
context mean express agreement of mind to what is proposed by
the State.
(c) In case where it is not indicated that ‘assent’ is qua a particular
law made by Parliament, then it is open to the Court to call for the
proposals made by the State for the
consideration of the President
before obtaining assent.
3. Extending the duration of a temporary enactment does not
amount to enactment of a new law. However such extension may
require the assent of the President in case of repugnancy.””
(emphasis supplied)
As such, it is abundantly clear that the State of West Bengal would
have had to seek the assent of the President before enacting WB-HIRA,
where its specific repugnancy with respect to RERA and its reasons for
enactment would have had to be specified.Evidently, this was not done.
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However, since we have already held WB-HIRA to be repugnant to
RERA, this issue becomes moot.
I Conclusion
82. Before the WB-HIRA, the State legislature had also enacted
the WB 1993Act. 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;
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(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, we clarify with abundant caution that our 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.
83. For the above reasons, we have come to the conclusion that
WB-HIRA is repugnant to the RERA, and is hence unconstitutional.
We also hold and declare 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.
84. 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, we direct 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
85. The writ petition is accordingly stand allowed in the above
terms.
86. Pending application(s), if any, stand disposed of.
Nidhi Jain
Writ petition allowed.