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
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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) &
ANR.
v.
THE STATE OF WEST BENGAL & ANR.
(Writ Petition (C) No. 116 of 2019)
MAY 04, 2021
[DR. DHANANJAYA Y CHANDRACHUD AND
M R SHAH, JJ.]
West Bengal Housing Industry Regulation Act, 2017
(WB-HIRA):
Constitutional validity of – Challenged to, on the ground of
inconsistencies and overlapping with central law-Real Estate
(Regulation and Development) Act, 2016 (RERA) – Held: WB-HIRA
is repugnant to RERA and thus, held to be unconstitutional – WB-
HIRA purports to occupy the same subject as that which has been
provided in the Parliamentary legislation-RERA – State law fits,
virtually on all fours, with the footprints of the law enacted by
Parliament, which is constitutionally impermissible – Overlap
between the provisions of WB-HIRA and the RERA is so significant
–Provisions of the RERA have been lifted bodily, word for word
and enacted into the State enactment – WB-HIRA does not
complement the RERA by enacting provisions or fortifying the rights,
obligations and remedies created by the RERA – Subject of the
provisions of the State enactment is identical, the content is identical
– In essence and substance, WB-HIRA enacted a parallel mechanism
and parallel regime as that which has been entailed under the RERA
– Not only is the subject matter identical but 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 – Thus, the test of
repugnancy based on an identity of subject matter is clearly
established – Also WB-HIRA did not have presidential assent and
was repugnant to RERA u/Art. 254 – Furthermore, as a result thereof,
no revival of the provisions of the WB Act, 1993, since it would
stand impliedly repealed upon the enactment of the RERA – Real
Estate (Regulation and Development) Act, 2016 – West Bengal
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(Regulation of Promotion of Construction and Transfer by
Promoters) Act, 1993.
Plea that WB-HIRA intended to cover the field of ‘housing
industry’ under Entry 24 of List II – Held: WB-HIRA did not fall
under the ambit of the term industry within the meaning of Entry 24
of the State List.
Real Estate (Regulation and Development) Act, 2016:
ss. 88 and 89 – Interpretation and interplay of – Held: s.88
stipulates that the application of other laws is not barred, the
provisions of the legislation “shall be in addition to, and not in
derogation of, the provisions of any other law for the time being in
force” – s. 89 provides for overriding effect to the provisions of the
RERA when it stipulates that it “shall have effect, notwithstanding
anything inconsistent therewith contained in any other law for the
time being in force” – s. 88 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 or State enactments – s. 88 does not exclude recourse to
other remedies created by cognate legislation – Where the cognate
legislation has been enacted by a State legislature, s.88 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 – On facts, State legislature-WB-HIRA has not enacted
cognate or allied legislation but
legislation which is identical to
and bodily lifted from the Parliamentary law-RERA – This plainly
implicates the test of repugnancy by setting up a parallel regime
under the State law – 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 – Exercise conducted by the State legislature of doing so,
is plainly unconstitutional – West Bengal Housing Industry
Regulation Act, 2017.
Salient features of RERA Act – Explained.
Constitution of India:
Art. 254 – Repugnancy – Salient features of Art. 254 – Stated.
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Doctrine of repugnancy u/Art. 254(1) – Held: Operates within
the fold of the Concurrent List – Clause (1) of Art. 254 envisages
that the law enacted by Parliament will prevail and the law made by
the legislature of the State shall be void “to the extent of repugnancy”
– Clause (1) does not define what is meant by repugnancy – Clause
(1) indicate that the provision deals with a repugnancy between a
law enacted by the State legislature with a provision of a law made
by Parliament which it is competent to enact; or to any provision of
an existing law; and with respect to one of the matters enumerated
in the Concurrent List.
Art. 254 – Repugnancy – Concept of – Three types of
repugnancy – Held: First type envisages a situation of an absolute
or irreconcilable conflict or inconsistency between a State legislative
enactment with a Parliamentary law with reference to a matter in
the Concurrent List – Second situation involving a conflict between
State and Central legislations may arise when a Parliamentary
legislation is so complete and exhaustive as a Code as to preclude
the existence of any other legislation by the State – Third test of
repugnancy is where the law enacted by Parliament and by the State
legislature regulate the same subject – Allowing the exercise of power
over the same subject matter would trigger the application of the
concept of repugnancy – This may implicate the doctrine of implied
repeal – In such cases, harmonious construction can be
resorted
to, to ensure that the operation of both the statutes can co-exist –
Where, however, the competing statutes are not of the same
legislature, it then becomes necessary to apply the concept of
repugnancy, bearing in mind the intent of Parliament – Primary
effort in the exercise of judicial review must be to harmonise –
Repugnancy is not an option of first choice but something which
can be drawn where a clear case based on the application of one
of the three tests arises for determination.
Art. 254(2) – Presidential assent under, for WB-HRA – Lack
of – Held: 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 and this was not done – Thus, WB-
HIRA did not have presidential assent and was repugnant to RERA
under Article 254 – West Bengal Housing Industry Regulation Act,
2017 – Real Estate (Regulation and Development) Act, 2016.
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL
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Art. 142 – Jurisdiction under – Exercise of – WB-HIRA since
its enforcement, applied to building projects and implemented by
the authorities constituted under the law in the State of West Bengal
– WB-HIRA having declared unconstitutional, there is a need to
avoid uncertainty and disruption in respect of actions taken in the
past – Thus, in exercise of jurisdiction u/Art. 142, direction that
striking down of WB-HIRA would not affect the registrations,
sanctions and permissions previously granted under the legislation
– West Bengal Housing Industry Regulation Act, 2017 .
Words and phrases:
Expression “any other law for the time being in force” –
Meaning of, in the context of ss. 89, 2(zr) and 18(2) of the RERA
Act – Real Estate (Regulation and Development) Act, 2016.
Expression ‘ is in addition to and not in derogation of any
other law’ – Meaning of, in the context of s. 88 of the RERA Act –
Real Estate (Regulation and Development) Act, 2016.
Allowing the writ petition, the Court
HELD: 1. West Bengal Housing Industry Regulation Act,
2017-WB-HIRA is repugnant to the Real Estate (Regulation and
Development) Act, 2016-RERA, and is hence unconstitutional.
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. [Para 83][790-D-E]
2.1 In view of the
settled exposition of the ambit of Entry
24 of List II to the Seventh Schedule, there can be no manner of
doubt that the subject of WB-HIRA is not ‘industries’ within the
meaning of Entry 24. Both the central legislation-RERA and the
State legislation-WB-HIRA have substantially similar provisions.
These provisions seek to regulate the contractual relationship
between builders/promoters and their buyers in the real estate
sector. They recognize rights and obligations inter se promoters,
buyers and real estate agents. Both the State law and the Central
law provide for remedial measures to enforce compliance with
contractual rights and corresponding obligations. Hence, quite
correctly, the arguments before this Court have been addressed
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on the basis that the subject of both the central and the state
legislations-RERA and WB-HIRA falls under Entries 6 and 7 of
the Concurrent List to the Seventh Schedule. [Para 26][734-E-
G]
2.2 It is true that the edifice of the defense which was set
up before this Court in the Counter Affidavit is premised on the
State enactment being a law on the subject of ‘industries’ falling
within the ambit of Entry 24 of the State List. The genesis of this
defense traces its origin to the Statement of Objects and Reasons
accompanying the Bill when it was introduced in the State
legislature in West Bengal. Indeed, the long title also indicates
that the State legislation sought to establish a Housing Industry
Regulatory Authority. But these references in the Statement of
Objects and Reasons; the long title and the Counter Affidavit do
not preclude the State of West Bengal from asserting, that the
State legislation in pith and substance is not one which is on the
subject of industries within the meaning of Entry 24 of List II and
that it falls within the ambit of Entries 6 and 7 of List III. There is
a substantial overlap between the provisions of RERA and WB-
HIRA. Even the inconsistencies are on the same subject matter.
The provisions of RERA essentially seek to regulate the
contractual relationship between builders/promoters and
purchasers in the real estate sector. RERA, truly speaking, falls
within the ambit of Entries 6 and 7 of the Concurrent List. The
substantial overlap between the state and the central legislation
is evident on a comparative analysis of the two legislations. The
State of West Bengal is not precluded from seeking to sustain its
legislation on the basis that in pith and in substance it falls within
the ambit of Entries 6 and 7 of the Concurrent List. The analysis
of the constitutional challenge must therefore proceed on the
basis that both the central legislation-RERA, and the state
legislation-WB-HIRA, fall within the subjects embodied in
Entries 6 and 7 of List III of the Seventh Schedule. [Para 26][735-
A-F]
Tika Ramji v. State of UP [1956] SCR 393; Calcutta
Gas Co. (Proprietary) v. State of West Bengal AIR 1962
SC 1044 : [1962] Suppl. SCR 1; ITC Ltd. v. Agricultural
Produce Market Committee (2002) 9 SCC 232 : [2002]
1 SCR 441 – referred to.
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL
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3.1 Some of the salient features of Article 254 are:
(i) Firstly, Article 254(1) embodies the concept of
repugnancy on subjects within the Concurrent List on which
both the State legislatures and Parliament are entrusted
with the power to enact laws;
(ii) Secondly, a law made by the legislature of a State which
is repugnant to Parliamentary legislation on a matter
enumerated in the Concurrent List has to yield to a
Parliamentary law whether enacted before or after the law
made by the State legislature;
(iii) Thirdly, in the event of a repugnancy, the Parliamentary
legislation shall prevail and the State law shall “to the extent
of the repugnancy” be void;
(iv) Fourthly, the consequence of a repugnancy between
the State legislation with a law enacted by Parliament within
the ambit of List III can be cured if the State legislation
receives the assent of the President; and
(v) Fifthly, the grant of Presidential assent under clause (2)
of Article 254 will not preclude Parliament from enacting a
law on the subject matter, as stipulated in the proviso to
clause (2). [Para 30][739-A-E]
3.2 The precedent of this Court, commencing from
Zaverbhai’s case up until Innoventive Industries’s case indicates
a thread of thought dwelling on when, within the meaning of Article
254(1), a law made by the legislature of a State can be considered
to be repugnant to a provision of a law made by Parliament with
respect to one of the matters
in the Concurrent List which
Parliament is competent to enact. The doctrine of repugnancy
under Article 254(1) operates within the fold of the Concurrent
List. Clause (1) of Article 254 envisages that the law enacted by
Parliament will prevail and the law made by the legislature of the
State shall be void “to the extent of repugnancy”. Clause (1) does
not define what is meant by repugnancy. The initial words of Clause
(1) indicate that the provision deals with a repugnancy between a
law enacted by the State legislature with: (i) A provision of a law
made by Parliament which it is competent to enact; or (ii) To any
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provision of an existing law; and (iii) with respect to one of the
matters enumerated in the Concurrent List. [Para 40][753-F-H;
754-A]
3.3 The initial part of Clause (1) alludes to a law enacted by
a state legislature being “repugnant” to a law enacted by
Parliament or to an existing law. The concluding part of clause 1
provides for a consequence, namely that the State law would be
void “to the extent of the repugnancy” and the Parliamentary
enactment shall prevail. The concept of repugnancy emerges from
the decisions of this Court which have elaborated on the context
of clause (1) of Article 254. Clause (2) of Article 254 has also
employed the expression “repugnant” while providing that a law
enacted by the legislature of a State which is repugnant to a law
enacted by Parliament or an existing law on a matter within the
Concurrent List shall, if it has received the assent of the
President, prevail in the State. The decisions of this Court
essentially contemplate three types of repugnancy:
(i) The first envisages a situation of an absolute or
irreconcilable conflict or inconsistency between a provision
contained in a State legislative enactment with a
Parliamentary law with reference to a matter in the
Concurrent List. Such a conflict brings both the statutes
into a state of direct collision. This may arise, for instance,
where the two statutes adopt norms or standards of
behavior or provide consequences for breach which stand
opposed in direct and
immediate terms. The conflict arises
because it is impossible to comply with one of the two
statutes without disobeying the other;
(ii) The second situation involving a conflict between State
and Central legislations may arise in a situation where
Parliament has evinced an intent to occupy the whole field.
The notion of occupying a field emerges when a
Parliamentary legislation is so complete and exhaustive as
a Code as to preclude the existence of any other legislation
by the State. The State law in this context has to give way
to a Parliamentary enactment not because of an actual
conflict with the absolute terms of a Parliamentary law but
because the nature of the legislation enacted by Parliament
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WEST BENGAL
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is such as to constitute a complete and exhaustive Code
on the subject; and
(iii) The third test of repugnancy is where the law enacted
by Parliament and by the State legislature regulate the same
subject. In such a case the repugnancy does not arise
because of a conflict between the fields covered by the two
enactments but because the subject which is sought to be
covered by the State legislation is identical to and overlaps
with the Central legislation on the subject. [Para 41][754-
B-H; 755-A-B]
3.4 The distinction between the first test on the one hand
with the second and third tests on the other lies in the fact that
the first is grounded in an irreconcilable conflict between the
provisions of the two statutes each of which operates in the
Concurrent List. The conflict between the two statutes gives rise
to a repugnancy, the consequence of which is that the State
legislation will be void to the extent of the repugnancy. The
expression ‘to the extent of the repugnancy’ postulates that those
elements or portions of the state law which run into conflict with
the central legislation shall be excised on the ground that they
are void. The second and third tests, on the other hand, are not
grounded in a conflict borne out of a comparative evaluation of
the text of the two provisions. Where a law enacted by Parliament
is an exhaustive Code, the second test may come into being.
The intent of Parliament in enacting an
exhaustive Code on a
subject in the Concurrent List may well be to promote uniformity
and standardization of its legislative scheme as a matter of public
interest. Parliament in a given case may intend to secure the
protection of vital interests which require a uniformity of law and
a consistency of its application all over the country. A uniform
national legislation is considered necessary by Parliament in many
cases to prevent vulnerabilities of a segment of society being
exploited by an asymmetry of information and unequal power in a
societal context. The exhaustive nature of the Parliamentary code
is then an indicator of the exercise of the State’s power to legislate
being repugnant on the same subject. The third test of repugnancy
may arise where both the Parliament and the State legislation
cover the same subject matter. Allowing the exercise of power
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over the same subject matter would trigger the application of the
concept of repugnancy. This may implicate the doctrine of implied
repeal in that the State legislation cannot co-exist with a legislation
enacted by Parliament. But even here if the legislation by the
State covers distinct subject matters, no repugnancy would exist.
In deciding whether a case of repugnancy arises on the application
of the second and third tests, both the text and the context of the
Parliamentary legislation have to be borne in mind. The nature
of the subject matter which is legislated upon, the purpose of the
legislation, the rights which are sought to be protected, the
legislative history and the nature and ambit of the statutory
provisions are among the factors that provide guidance in the
exercise of judicial review. The text of the statute would indicate
whether Parliament contemplated the existence of State
legislation on the subject within the ambit of the Concurrent List.
Often times, a legislative draftsperson may utilize either of both
of two legislative techniques. The draftsperson may provide that
the Parliamentary law shall have overriding force and effect
notwithstanding anything to the contrary contained in any other
law for the time being in force. Such a provision is indicative of a
Parliamentary intent to override anything inconsistent or in
conflict with its provisions. The Parliamentary legislation may
also stipulate that its provisions are in addition to
and not in
derogation of other laws. Those other laws may be specifically
referred to by name, in which event this is an indication that the
operation of those specifically named laws is not to be affected.
Such a legislative device is often adopted by Parliament by saving
the operation of other Parliamentary legislation which is
specifically named. When such a provision is utilized, it is an
indicator of Parliament intending to allow the specific legislation
which is enlisted or enumerated to exist unaffected by a
subsequent law. Alternatively, Parliament may provide that its
legislation shall be in addition to and not in derogation of other
laws or of remedies, without specifically elucidating specifically
any other legislation. In such cases where the competent
legislation has been enacted by the same legislature, techniques
such as a harmonious construction can be resorted to in order to
ensure that the operation of both the statutes can co-exist. Where,
however, the competing statutes are not of the same legislature,
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL
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it then becomes necessary to apply the concept of repugnancy,
bearing in mind the intent of Parliament. The primary effort in
the exercise of judicial review must be an endeavour to
harmonise. Repugnancy in other words is not an option of first
choice but something which can be drawn where a clear case
based on the application of one of the three tests arises for
determination. [Para 42][755-B-H; 756-A-G]
Zaverbhai Amaldas v. State of Bombay (1955) 1 SCR
799; Tika Ramji v. State of UP [1956] SCR 393; O P
Stewart v. B K Roy AIR 1939 Cal 628; Deep Chand v.
State of UP [1959] 2 Suppl. SCR 8; State of Orissa v.
M/s M A Tulloch (1964) 4 SCR 461; M Karunanidhi v.
Union of India (1979) 3 SCC 431 : [1979] 3 SCR 254;
Hoechst Pharmaceuticals Ltd. v. State of Bihar (1983)
4 SCC 45 : [1983] 3 SCR 130; State of Kerala v. Mar
Appraem Kuri Company Ltd. (2012) 7 SCC 106 : [2012]
4 SCR 448; Innoventive Industries Ltd. v. ICICI Bank
(2018) 1 SCC 407 : [2017] 8 SCR 33 – referred to.
4.1 Two aspects of the RERA must be noticed at the fore-
front. Firstly, the RERA factors in the existence of municipal or
local authorities constituted under State legislation whose powers
and functions in regard to the development of land are regulated
by legislation enacted by the State legislatures. The RERA
recognizes that local bodies constituted under laws enacted by
the State legislatures regulate diverse aspects of construction
activity as an
incident of the development of land. Secondly, in
diverse provisions, the RERA has imposed the duty of complying
with its regulatory provisions upon the ‘appropriate government’.
This expression encompasses, in respect of matters relating to
the State, the State government. In the case of Union Territories,
the definition of the expression ‘appropriate government’ in
Section 2(g) is bifurcated into three categories-Union Territory
without a legislature; Union Territory of Puducherry; and Union
Territory of Delhi. [Para 43][756-H; 757-A-C]
4.2 Parliament while enacting the RERA has imposed the
obligation to secure compliance with its provisions in diverse
aspects upon the State governments. Each of these two facets
needs to be developed and analyzed. [Para 44][757-D]
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4.3 Section 2(q), 2(zc), 2(zf), 2(zr) of RERA are indicative
of the fact that Parliament was conscious of the position that
diverse activities relating to construction projects are governed
by municipal and local legislation. There is an existence in the
States of various regimes of town and country planning governed
by State enactments and regulations have been framed under
them. Likewise, municipal and local laws govern diverse aspects
of construction activity in real estate projects including the
application for development, nature and extent of permissible
development on land, issuance of commencement certificates
allowing the promoter to begin development of an immoveable
property, completion certificates certifying the completion of the
construction project in accordance with the sanctioned plans and
the grant of occupation permission to occupy the constructed
areas. [Para 52][760-C-E]
4.4 All the definitions clearly postulate the existence of State
legislation which governs and regulates construction activity
through municipal and local bodies. The RERA naturally has not
attempted to supplant these State enactments which govern the
permissible use of land for development, the applicable norms
for construction activity, the nature and extent of development
permissible on land falling within municipal and local areas and
the process of carrying out construction from its initiation to
completion. In not intruding into this area, the RERA has followed
the distribution of legislative powers. Entry 5 of List II to the
Seventh Schedule, deals with local government, including the
constitution and powers of municipal corporations and other local
authorities for the purpose of local self-government or village
administration. The control over development activities under
municipal and local laws is governed by State legislation. [Para
53][760-E-H]
4.5 The second aspect of RERA which deserves emphasis
is that its diverse provisions are regulated and enforced by the
real estate regulatory authority, ss. 20, 21, 26, 28, 32, ss. 3 to 19,
s. 31, ss. 38 to 40 of the RERA. Besides these, the RERA has
provided for the establishment of a Real Estate Appellate Tribunal
by the appropriate government in Chapter VII. Consistent with
the provisions of Sections 43 to 57, the real estate regulatory
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authority has a vital role to play in regard to the imposition of
penalties under Chapter VIII prescribes penalties for
contravention of the provisions of the Act.Besides the
establishment of the real estate regulatory authority, the RERA
has, in Section 71, contemplated the appointment of adjudicating
officers for adjudging compensation under Sections 12, 14, 18
and 19. These adjudicating officers are to be appointed by the
authority in consultation with the appropriate government.
Furthermore, Chapter IX provides for finance, accounts, audits
and reports. [Paras 54-57][761-A-B; 762-B-D; 763-A]
4.6. Section 88 of the RERA stipulates that the application
of other laws is not barred: the provisions of the legislation “shall
be in addition to, and not in derogation of, the provisions of any
other law for the time being in force”. At the same time, Section
89 provides for overriding effect to the provisions of the RERA
when it stipulates that it “shall have effect, notwithstanding
anything inconsistent therewith contained in any other law for
the time being in force”. The interpretation of these provisions
and their interplay will have an important bearing on the outcome
of the instant controversy. This is because, the State of West
Bengal had originally supported its legislative authority over the
subject governed by WB-HIRA on the ground that the state
enactment falls within the ambit and purview of List II of the
Seventh Schedule. However, though this submission was
specifically pressed in the counter affidavit, it has been expressly
given up in the oral and written submissions tendered before
this Court by the State of West Bengal. The submission now of
the State of West Bengal accepts that in essence and in substance,
WB-HIRA contains a substantial overlap with the provisions of
the RERA and is a law which the State legislature enacted in
exercise of its legislative authority under Article 246(2) while
legislating on subjects in the Concurrent List. The State of West
Bengal submitted that WB-HIRA, like the RERA is enacted with
reference to the subjects incorporated in Entries 6 and 7 of List
III of the Seventh Schedule. [Para 58][763-E-H; 764-A-B]
5.1 The expression “any other law for the time being in
force” does not necessarily mean, such laws as were in existence
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when the statutory provision was enacted. To the contrary, it widely
considered to mean 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 colour from the context
in which it appears, and not devoid of it. [Para 70][776-G-H]
Sasanka Sekhar Maity v. Union of India (1980) 4 SCC
716 : [1980] 3 SCR 1209; Thyssen Stahlunion GMBH
v. Steel Authority of India (1999) 9 SCC 334 : [1999] 3
Suppl. SCR 461; Municipal Corporation of Delhi v.
Prem Chand Gupta (2000) 10 SCC 115 : [1999] 5 Suppl.
SCR 403; Yakub Abdul Razak Memon v. State of
Maharashtra (2013) 13 SCC 1 : [2013] 15 SCR 1;
Union Territory of Chandigarh v. Rajesh Kumar
Basandh (2003) 11 SCC 549 : [2003] 3 Suppl. SCR
452; Department of Customs v. Sharad Gandhi (2020)
13 SCC 521 : [2019] 4 SCR 273; National Insurance
Company Limited v. Sinitha (2012) 2 SCC 356 : [2011]
16 SCR 166 – relied on.
5.2 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), stipulates those 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 s. 2(zr) is not frozen in point of time as on
the date of the enactment of RERA. Likewise, s.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. [Para 72][778-B-E]
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6.1. From the 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 referrable to the
same entries in the Concurrent List-Entries 6 and 7 of List III-
and 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.
[Para 73][778-E-H; 779-A-B]
6.2. 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.
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
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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. This principle
constitutes the foundation of the rule of implied repeal. The instant
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 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. [Para 74][779-B-H; 780-A-B]
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC
407 : [2017] 8 SCR 33 – relied on.
6.3 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 or State
enactments. 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
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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 instant 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. [Para 75, 76][780-G-H; 781-
A, B-F]
6.4 The statutory
overlaps between WB-HIRA and the
RERA cannot be overlooked. 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 instant case, involves a 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:
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(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
s. 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
motu reference to the Competition Commission of India.
No such provision is made in the State enactment. Hence,
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a valuable safeguard to protect home buyers in the RERA
has been omitted.
(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). The functions of the Central
Advisory Council are provided in Section 42 of the RERA.
WB-HIRA on the other hand, provides for the constitution
of a State Advisory Council under Section 41. Section 42 of
WB-HIRA, which defines the functions of the State Advisory
Council. 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)
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
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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. [Para 77][781-F-H; 782-A-H; 783-
A-D; 784-A-B; 785-D-H; 786-A-C]
6.5 The 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 said 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, indicates that important
safeguards which have been enacted by Parliament in the public
interest have been omitted in the State enactment. There is 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. [Para 78][786-C-F]
7. 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 was given up before this Court, and it is
admitted that it comes under List III (the same as RERA).
Further, it has also been clarified by this Court, 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
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presidential assent and was repugnant to RERA under Article
254.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. However, since WB-HIRA is held
to be repugnant to RERA, this issue becomes moot. [Para
81][787-E-F; 788-G-H; 789-A]
Rajiv Sarin v. State of Uttarakhand (2011) 8 SCC 708
: [2011] 9 SCR 1012 – referred to.
8. 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 9.03.94. The provisions-Section 3 to 17 of the
WB 1993 Act 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 that
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. [Para 82][789-B; 790-B-D]
9. 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, this Court directs that the striking
down of WB-HIRA would not affect the registrations, sanctions
and permissions previously granted under the legislation prior
to the date of this judgment. [Para 84][790-E-F]
Accountant and Secretarial Services Pvt. Ltd. v. UOI
(1988) 4 SCC 324 : [1988] 1 Suppl. SCR 493; Ashoka
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Marketing Ltd. v. Punjab National Bank (1990) 4 SCC
406 : [1990] 3 SCR 649; Indu Bhushan Bose v. Rama
Sundari Debi. (1969) 2 SCC 289 : [1970] 1 SCR 443;
M D Frozen Foods Exports Private Limited v. Hero
Fincorp Limited (2017) 16 SCC 741: [2017] 13
SCR 800; Transcore v. Union of India (2008) 1 SCC
125 : [2006] 9 Suppl. SCR 785; KSL and Industries
Limited v. Arihant Threads Limited (2015) 1 SCC 166 :
[2014] 14 SCR 1097; Pioneer Urban Land and
Infrastructure Limited v. Union of India (2019) 8 SCC
416 : [2019] 10 SCR 381 – referred to.
Case Law Reference
[1988] 1 Suppl. SCR 493
referred to
Para 16
[1990] 3 SCR 649
referred to
Para 16
[1970] 1 SCR 443
referred to
Para 16
[2019] 10 SCR 381
referred to
Para 17
[1956] SCR 393
referred to
Para 18
[2002] 1 SCR 441
referred to
Para 19
[1956] SCR 393
referred to
Para 24
[1962] Suppl. SCR 1
referred to
Para 25
[2002] 1 SCR 441
referred to
Para 25
[1955] 1 SCR 799
referred to
Para 31
AIR 1939 Cal 628
referred to
Para 33
[1959] 2 Suppl. SCR 8
referred to
Para 34
[1964] 4 SCR 461
referred to
Para 35
[1979] 3 SCR 254
referred to
Para 36
[1983] 3 SCR 130
referred to
Para 37
[2012] 4 SCR 448
referred to
Para 38
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[2017] 8 SCR 33
relied on.
Para 74
[2017] 13 SCR 800
referred to
Para 60
[2006] 9 Suppl. SCR 785
referred to
Para 61
[2014] 14 SCR 1097
referred to
Para 62
[2019] 10 SCR 381
referred to
Para 63
[1980] 3 SCR 1209
relied on
Para 64
[1999] 3 Suppl. SCR 461
relied on
Para 65
[1999] 5 Suppl. SCR 403
relied on
Para 66
[2013] 15 SCR 1
relied on
Para 67
[2003] 3 Suppl. SCR 452
relied on
Para 68
[2019] 4 SCR 273
relied on
Para 69
[2011] 16 SCR 166
relied on
Para 71
[2011] 9 SCR 1012
referred to
Para 79, 81
CIVIL ORIGINAL JURISDICTION: Writ Petition (C) No. 116
of 2019.
Petition Under Article 32 of The Constitution of India
Devashish Bharuka, Mrs. Jaya Bharuka, Ravi Bharuka,
Ms. Sarvshree, Justine George, Ms. Shrishti Agarwal, Ankit Agarwal,
Ms. Taniya Bansal, Advs. for the Petitioners.
Ms. Aishwarya Bhati, ASG., Rakesh Dwivedi, Sr., Adv., Kanu
Agarwal, Ms. Ameyavikrama Thanvi, Rajat Nair, Mohd. Akhil, Navanjay
Mahapatra, Raj Bahadur Yadav, Mrs. Anil  Katiyar, Suhaan Mukerji,
Vishal Prasad, Nikhil Parikshit, Eklavya Dwivedi, Abhishek Manchanda,
Sayandeep Pahari, Arya Tripathy, M/S. Plr Chambers & Co., Advs. for
the Respondents.
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The Judgment of the Court was delivered by
DR JUSTICE DHANANJAYA Y CHANDRACHUD, J.
A The challenge
B Legislative history
C RERA - the legislative process
D Salient features – RERA
E Salient provisions of WB-HIRA
F RERA and WB-HIRA – provisions at variance
G Submissions
G.1 For the petitioners
G.2 For the Union of India
G.3 For the State of West Bengal
H Analysis
H.1
Entry 24, List II – West Bengal’s ‘housing
industry’ defense
H.2
The Constitutional Scheme of Article 254 and
repugnancy
H.3
Repugnancy – RERA and WB-HIRA
H.3.1 Meaning of “is in addition to and not in derogation
of any other law”
H.3.2 Meaning of “law for the time being in force”
H.3.3 Knitting it together
H.4
Lack of Presidential Assent for WB-HIRA
I Conclusion
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A The challenge
1. The constitutional validity of the West Bengal Housing Industry
Regulation Act, 2017 (“WB-HIRA”/the “State enactment”) is
challenged in a petition under Article 32. The basis of the challenge is
that:
(i)
Both WB-HIRA and a Parliamentary enactment – the Real
Estate (Regulation and Development) Act, 2016 (“RERA”/
the “Central enactment”) 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;
(ii)
WB-HIRA has neither been reserved for nor has it received
Presidential assent under Article 254(2);
(iii)
The State enactment contains certain provisions which are
either:
a. Directly inconsistent with the corresponding provisions
of the Central enactment; or
b. A virtual replica of the Central enactment; and
(iv)
Parliament having legislated on a field covered by the
Concurrent List, it is constitutionally impermissible for the
State Legislature to enact a law over the same subject
matter by setting up a parallel legislation.
Nuances apart, this, in substance, is the essence of the challenge.
B Legislative history
2. Before Parliament enacted the RERA in 2016, the state
legislatures had enacted several laws to regulate the relationship between
promoters and purchasers of real estate. Among them was the West
Bengal (Regulation of Promotion of Construction and Transfer by
Promoters)
Act, 1993 (the “WB 1993 Act”). This legislation of the
State of West Bengal was reserved for and received Presidential assent,
following which it was published in the Official Gazette on 9 March
1994. Many other States enacted laws on the subject, including among
them:
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(i)
The Maharashtra Housing (Regulation and Development)
Act, 2012 (the “Maharashtra Act”), which received
Presidential assent on 2February 2014; and
(ii)
The Kerala Real Estate (Regulation and Development) Act,
2015 (the “Kerala Act”), was enacted by the State
Legislative Assembly on 3 February 2016.
3. On 14 August 2013, the Bill for enactment of the RERA was
introduced in the Rajya Sabha. The Bill was passed by the Rajya Sabha
on 10 March 2016, and by the Lok Sabha on 15 March 2016. The law
received the assent of the President on 25 March 2016, and was published
in the Official Gazette on the next day. RERA was then partially enforced
on 1 May 20161, while the rest of its provisions were enforced on 19
April 20172.The Maharashtra Act was specifically repealed by RERA3,
while the Kerala Act was repealed by the State Legislative Assembly
through the Kerala Real Estate (Regulation and Development) Repeal
Act, 20174.
4. In the State of West Bengal, draft rules under the RERA were
framed on 18 August 2016 but no further progress was made in that
regard. On 16 August 2017, the motion for passing the WB-HIRA Bill
was adopted in the State Legislative Assembly. The State enactment
received the assent of the Governor of West Bengal on 17 October
2017. Inter alia, the WB-HIRA repealed the WB 1993Act5. The
remaining provisions of WB-HIRA were enforced by a notification6 dated
29 March 2018, issued by the Governor of the State of West Bengal in
exercise of the
power conferred by sub-section (3) of section 1 of WB-
HIRA. Thereafter on 8 June 2018, the State of West Bengal framed
rules under WB-HIRA.
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
1 Sections 2, 20 to 39, 41 to 58, 71 to 78 and 81 to 92.
2 Sections 3 to 19, 40, 59 to 70, 79 to 80.
3 “Section 92. Repeal: The Maharashtra Housing (Regulation and Development) Act,
2012 is hereby repealed.”
4 Its Statement of Objects and Reasons noted “… As per clause (1) of article 254 of the
Indian Constitution, if any provision of a law made by the legislature of a State is
repugnant to any law made by the Parliament, the law made by the legislature of a State
shall become void. Therefore the Government have decided to repeal the Kerala Real
Estate (Regulation and Development) Act, 2015.”
5 “86. Repeal and Savings. (1) The West Bengal (Regulation of Promotion of Construction
and Transfer by Promoters) Act, 1993 is hereby repealed.”
6 No. 18-HIV/3M-3/17 (PART-2)
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C RERA - the legislative process
5. The Standing Committee on Urban Development (2012-2013)
of the Fifteenth Lok Sabha submitted its Thirtieth Report on the Real
Estate (Regulation and Development) Bill, 2013 (the “RERA Bill 2013”)
pertaining to the Ministry of Housing and Urban Poverty alleviation.
While adopting the draft report on 12 February 2014, the Committee
emphasized the need for enacting a comprehensive legislation to regulate
the real estate sector. The backdrop is succinctly summarized in the
prefatory paragraphs of the report, which are set out below:
“Over the past few decades, the demand for housing has increased
manifold. In spite of Government’s efforts through various
schemes, it has not been able to cope up with the increasing
demands. Taking advantage of the situation, the private players
have taken over the real estate sector with no concern for the
consumers. Though availability of loans both through private and
public banks has become easier, the high rate of interest and the
higher EMI has posed additional financial burden on the people
with the largely unregulated Real Estate and Housing Sector.
Consequently the consumers are unable to procure complete
information or enforce accountability against builders and
developers in the absence of an effective mechanism in place. At
this juncture the need for the Real Estate (Regulation and
Development) Bill is felt badly for establishing an oversight
mechanism to enforce accountability of the Real Estate Sector
and providing adjudication machinery for speedy dispute redressal.
1.2. The real estate sector plays a catalytic role in fulfilling the
need and demand for housing and infrastructure in the country.
While this sector has grown significantly in recent years, it has
been largely unregulated. There is, thus, absence of
professionalism and standardization and lack of adequate consumer
protection. Though the Consumer Protection Act 1986 is available
as a forum to the buyers in the real estate market, the recourse is
only curative and is inadequate to address all the concerns of
buyers and promoters in that sector. The lack of standardization
has been a constraint to the healthy and orderly growth of industry.
Therefore, the need for regulating the sector has been emphasized
in various forums.”
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6. Upon being introduced in the Rajya Sabha, the RERA Bill 2013
was referred to a twenty-one member Select Committee, on a motion
adopted by the House on 6 May 2015. The Committee held seventeen
sittings –nine in Delhi and the remaining in different parts of the country.
As many as 445 persons appeared before the Select Committee drawn
from different categories and groups of stakeholders - representatives
of consumers; resident welfare associations; promoter – builders; banks
and financial institutions; Housing Ministries of all the States and Union
Territories; law firms and independent experts in the field of real estate.
Following a press communique, the Select Committee invited suggestions
and views from the members of the public, receiving a total of 273
suggestions. It further visited Kolkata, Bengaluru, Mumbai and Shimla
to interact with stakeholders in various parts of the country. While
discussing diverse issues which were presented before it by stakeholders,
the Select Committee noted the grievances of consumers, many of whom
were duped by unscrupulous promoters and were made to run from
pillar to post to secure possession of the apartments which were agreed
to be sold or a refund of their moneys. The plight of the consumers is
highlighted in the following passage in the report of the Select Committee,
which was presented before the Rajya Sabha on 30 July 2015:
“(i) Consumers and Resident Welfare Association
The Committee came across many
instances of standalone projects
where the consumers were fleeced by the unscrupulous
promoters. These consumer invested their hard earned money
for their dream houses which turned out to be a nightmare for
them while they run from pillar to post either to get the possession
of their apartment or refund of their money back and fighting
cases in the courts. The consumers were unanimous in their
submission that they have no means to know about the real status
of the project for example whether all the approvals have been
obtained, who is holding the title of the land, what is the financing
pattern of the project and what has been the past record of the
builder, etc As a result, they invested their money without having
any information about the project. In many cases, they were not
given what was promised to them and in almost all the cases the
project was delayed. Submitting their views on the Bill, they
highlighted the following points:-
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a)
There should not be any deemed provision for the registration
of project by promoter. The projects should be registered only
after thorough scrutiny.
b)
Any housing project should commence only after obtaining al
the approvals by the promoter and they should have access
to all the documents before entering into agreement of sale.
c)
The advance cost of apartment, plot or building before entering
into written agreement should not be more than one lakh or
5 % of the cost of apartment whichever is less (Clause 13(1).
d)
There should be model “agreement for sale” which should
be appended to the Bill.
e)
In case of default by a promoter, they should be given refund
of money at the market rate prevailing at that time with
interest.
f)
There should be one criterion for selling a flat i.e. the carpet
area which should be clearly defined and should not be linked
to National Building Code which can be damaged any time
independent of the Bill.
g)
The definition of the term ‘advertisement’ should be made
more exhaustive and the definition of the term ‘allottee’ should
also include the association of allottees or group of allottees
so that they can in case of need take up the cause collectively.
h)
Information relating to various clearances, credentials of
promoter i.e., cases pending against, defaults in payments in
the past, projects left in between in the past, etc. water
harvesting environmental impact, net worth of
promoters and
financing pattern etc. should be given.
i)
Regarding the provision to keep 50% of the amount realized
for the project from allottees in a separate account, it was
demanded that this amount should not be less than 70%.
j)
On structural defect after handing over the possession, it was
demanded that the liability of promoter should be increased
from 2 years to 5 years.
k)
In case any project is abandoned by a promoter the way out
suggested in clause 16 is inappropriate. In such an eventuality,
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the promoter be subjected to heavy penalty and compelled to
carry the project through rather than considering the suggested
options which were not practicable.
l)
In case of default, allottees are charged penalty at much
higher rate of interest compared to default on the part of the
promoter.
m) There should not be any exemption to any project from the
provisions of this Bill in respect of area and number of flats.
n)
Timely formation of the association of allottees and handing
over of the common areas to the association for management
at the earliest.
o)
Parking areas accommodation for domestic help to be dealt
as per the Supreme Court Judgment.”
7. In bringing about a balance between the need to protect
consumers with the necessity of encouraging investment in the real estate
sector, the Committee observed that while it shared the concerns of
consumers, many of whom have to suffer because of ‘fly by night
operators’, it was cognizant of the position that the real estate sector
was largely being developed through private promoters, all of whom
could not be tarred with the same brush. The Select Committee observed
that there was a need to ensure that a renewed impetus is provided for
the growth of the real estate sector to fulfill the government’s objective
of ensuring housing for all, while at the same time protecting the interest
of consumers. The Committee struck a legislative balance between these
objects, seeking to “stand by the good consumer and
the good promoter”.
8. Following the report of the Select Committee, the Real Estate
(Regulation and Development) Bill, 2016 (the “RERA Bill 2016”) was
introduced. The Statement of Objects and Reasons accompanying the
RERA Bill 2016 emphasizes the basic rationale for the enactment of the
legislation:
“STATEMENT OF OBJECTS AND REASONS
The real estate sector plays a catalytic role in fulfilling the need
and demand for housing and infrastructure in the country. While
this sector has grown significantly in recent years, it has been
largely unregulated, with absence of professionalism and
standardization and lack of adequate consumer protection. Though
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the Consumer Protection Act, 1986 is available as a forum to the
buyers in the real estate market, the recourse is only curative and
is not adequate to address all the concerns of buyers and promoters
in that sector. The lack of standardization has been a
constraint to the healthy and orderly growth of industry.
Therefore, the need for regulating the sector has been
emphasized in various forums.
2. In view of the above, it becomes necessary to have a Central
legislation, namely the Real Estate (Regulation and
Development) Bill, 2013 in the interests of effective
consumer protection, uniformity and standardization of
business practices and transactions in the real estate sector.
The proposed Bill provides for the establishment of the Real Estate
Regulatory Authority (the Authority) for regulation and promotion
of real estate sector and to ensure sale of plot, apartment or
building, as the case may be, in an efficient and transparent manner
and to protect the interest of consumers in real estate sector and
establish the Real Estate Appellate Tribunal to hear appeals from
the decisions, directions or orders of the Authority.
3. The proposed Bill will ensure greater accountability
towards consumers and significantly reduce frauds and
delays as also the current high transactions costs. It
attempts to balance the interests of consumers and
promoters by imposing certain responsibilities on both. It
seeks to establish
symmetry of information between the
promoter and purchaser, transparency of contractual
conditions set minimum standards of accountability and a
fast-track dispute resolution mechanism. The proposed Bill
will induct professionalism and standardization in the sector,
thus paving the way for accelerated growth and investments
in the long run.”
(emphasis supplied)
9. The legislative background antecedent to and ultimately
culminating in the enactment of the RERA indicates: firstly, the
circumstances which gave rise to the need for comprehensive
Parliamentary legislation on the subject; secondly, the specific
inadequacies in the development of the real estate sector which were a
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source of exploitation of purchasers; thirdly, the legislative policy
underlying the enactment of the law; and fourthly, the context in which
specific statutory provisions have been adopted as the instrument for
bringing about orderly development and growth of the real estate sector.
The legislative background demonstrates the concern of the policy makers
that the unregulated growth of the real estate sector, accompanied by a
lack of professionalism and standardization, had resulted in serious
hardship to consumers. The real estate sector is of crucial significance
to meet the demand for housing in the country. While remedies were
provided to consumers by the Consumer Protection Act, 1986, this
recourse was “curative” and did not assuage all the concerns of buyers
on the one hand and promoters on the other hand in the sector. There
existed an asymmetry of information between promoters and buyers of
real estate. Buyers lacked adequate information about the title to the
land, the nature of the development, pricing of projects and the progress
of construction. A lack of standardization and uniformity was a key factor
restraining the balanced growth and development of the real estate sector.
The Central enactment sought to remedy the drawbacks of the existing
regulatory framework in the country by establishing a real estate regulatory
authority to ensure that transactions between promoters and buyers are
governed by the twin norms of efficiency and
transparency. It sought to
bring about accountability towards consumers and to significantly reduce
frauds, delays and high transaction costs. While imposing duties and
responsibilities on promoters and purchasers, RERA sought to achieve
its objectives by ensuring:
(i) Symmetry of information between promoters and purchasers;
(ii) Transparency of contractual conditions;
(iii) Threshold standards of standardization of accountability; and
(iv) A fast-track dispute resolution mechanism.
Besides the Statement of Objects and Reasons, the long title to
the legislation dwells on the purpose of the law in the following terms:
“An Act to establish the Real Estate Regulatory Authority for
regulation and promotion of the real estate sector and to ensure
sale of plot, apartment or building, as the case may be, or sale of
real estate project, in an efficient and transparent manner and to
protect the interest of consumers in the real estate sector and to
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establish an adjudicating mechanism for speedy dispute redressal
and also to establish the Appellate Tribunal to hear appeals from
the decisions, directions or orders of the Real Estate Regulatory
Authority and the adjudicating officer and for matters connected
therewith or incidental thereto.”
10. As such, the legislative background underlying the enactment
of the RERA demonstrates a clear emphasis on:
(i) Standardization;
(ii) Uniformity; and
(iii) Symmetry of information.
These elements provide the justification for enacting a
comprehensive legislation which is uniformly applicable to all parts of
the country.
D Salient features – RERA
11. Before we proceed further, some of the salient features of the
RERA need to be noticed:
(i) The expression ‘real estate project’ is defined in Section 2(zn):
“(zn) “real estate project” means the development of a building
or a building consisting of apartments, or converting an existing
building or a part thereof into apartments, or the development
of land into plots or apartments, as the case may be, for the
purpose of selling all or some of the said apartments or plots or
building, as the case may be, and includes the common areas,
the development works, all improvements and structures
thereon, and all easement, rights and appurtenances belonging
thereto;”
(ii) The expression ‘apartment’, which is adverted to in the definition
of real estate project under Section 2(zn), is
defined in Section 2(e) as
follows:
“(e) “apartment” whether called block, chamber, dwelling unit,
flat, office, showroom, shop, godown, premises, suit, tenement,
unit or by any other name, means a separate and self-contained
part of any immovable property, including one or more rooms
or enclosed spaces, located on one or more floors or any part
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645
thereof, in a building or on a plot of land, used or intended to be
used for any residential or commercial use such as residence,
office, shop, showroom or godown or for carrying on any
business, occupation, profession or trade, or for any other type
of use ancillary to the purpose specified;”
(iii) The provisions of the RERA are comprised in ten Chapters.
Broadly, the division is as follows:
Chapter I
Preliminary
Chapter II
Registration of Real Estate Projects and
Registration of Real Estate Agents
Chapter III
Functions and Duties of Promoters
Chapter IV
Rights and Duties of allottees
Chapter V
The Real Estate Regulatory Authority
Chapter VI
Central Advisory Council
Chapter VI
The Real Estate Appellate Tribunal
Chapter VII
Offences, Penalties and Adjudication
Chapter IX
Finance, Accounts, Audits and Reports
Chapter X
Miscellaneous
(iv) RERA mandates the registration of real estate projects and
real estate agents. The salient features of this process are:
a.
Mandatory registration of real estate projects with the
real estate regulatory authority is required before the
promoter can advertise, market, book, sell or offer for
sale or invite persons to purchase a plot, apartment or
building in a real estate project;
b.
Mandatory registration of real estate agents before
facilitating the sale or purchase of plots, apartments or
buildings in real estate projects;
c.
Mandatory public disclosure of all project details by
promoters;
d.
Promoters are required to
make a mandatory public
disclosure of all registered projects on the web-site of
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the authority including lay out plans, land titles, statutory
approvals, agreements;
(v) RERA also provides the functions and duties of promoters, in
the following terms:
a.
Disclosure of all relevant information relating to the
project;
b.
Adherence to approved plans and project specifications
as approved by competent authorities;
c.
Obligations regarding veracity of advertisements or
prospectus;
d.
Transfer of title by a registered deed of conveyance;
e.
Refund of monies in case of default;
f.
Prohibition on accepting more than ten per cent of the
cost as advance without entering into a written agreement
for sale;
g.
Rectification of structural defects for a specified period
from the date of possession;
h.
Formation of an association, society or cooperative society
of allottees and the execution of a registered deed of
conveyance;
(vi)
It also provides the rights and obligations of allotees, which
are:
a.
Obtaining information about sanctioned plans, lay outs
and specifications approved by the competent authority;
b.
The date wise time schedule for completion of the project
including provisions for essential amenities;
c.
Claiming possession, including possession of the common
areas by the association;
d.
Refund in the event for default;
e.
Duty to make payments of consideration for the sale of
the apartment, plot or building together with interest as
prescribed;
f.
Duty to take possession;
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(vii) Establishment of a real estate authority by the appropriate
government (the State government in a State with
corresponding provisions for Union territories), with the
following details provided:
a.
Composition of the authority;
b.
Qualifications for appointment to the authority;
c.
Removal of members and conditions of service;
d.
Functions of the authority include the growth and
promotion of the real-estate sector;
(viii) RERA also provides for the establishment of a Central
Advisory Council to advise and make recommendations to
the Central government on all matters concerning the
implementation of RERA, on major questions on policy,
towards protection of consumer interest, to foster the growth
and development of real-estate sector and on any other matter
as assigned by the Central government.
(ix)
It also establishes the Real-Estate Appellate Tribunal,
provides the following details about the institution:
a.
Establishment;
b.
Settlement of disputes and appeals;
c.
Composition;
d.
Conditions of service;
e.
Powers;
f.
Appeals;
(x)
RERA notes the offences, penalties and adjudication, along
with:
a.
Delegated legislation;
b.
Power of the appropriate government to make rules;
c.
Framing of regulations by the authority; and
(xi)
Finally, Sections 88 and 89 of the RERA provide as follows:
“88. Application of other laws not barred.—The
provisions of this Act shall be in addition to, and not in
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derogation of, the provisions of any other law for the time
being in force.
89. Act to have overriding effect.—The provisions of
this Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the
time being in force.”
E Salient provisions of WB-HIRA
12. The long title to the State enactment describes the purpose
and content of the legislation as:
“An Act to establish the Housing Industry Regulatory Authority
for regulation and promotion of the housing sector and to ensure
sale of plot, apartment or building, as the case may be, or sale
of real estate project, in an efficient and transparent manner
and to protect the interest of consumers in the real estate sector
and to establish a mechanism for speedy dispute redressal and
for matters connected therewith or incidental thereto.”
Its preamble is in the following terms:
“Whereas it is expedient to establish the Housing Industry
Regulatory Authority for regulation and promotion of the
housing sector and to ensure sale of plot, apartment or building,
as the case may be, or sale of real estate project, in an efficient
and transparent manner and to protect the interest of consumers
in the real estate sector and to establish a mechanism for speedy
dispute redressal and for matters connected therewith or
incidental thereto.”
The above excerpts indicate that the State enactment purports to
set up a regulatory authority for the
housing industry. Save and except
for this emphasis on the housing industry, the broad purpose of the State
enactment coincides with RERA. Before we set out a comparative table
of the corresponding provisions of WB-HIRA and RERA, it is necessary
to note at the outset that there is, in most of the substantive provisions, a
complete overlap of the provisions contained in the two statutes. Evidently,
the Bill for the introduction of WB-HIRA in the State legislature was
prepared on the basis of the RERA as a drafting model. Hence, during
the course of this judgment, the provisions of the State enactment which
are at variance to those in the Central enactment will be delineated

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separately. However, at this stage, a sampling of some of the crucial
provisions would indicate that theyare identical in their entirety, in the
State of West Bengal’s WB-HIRA and RERA which has been enacted
by Parliament. This identical nature is evident from the tabulated
statement set out below, in which the identical provision is placed in the
middle (as extracted from the RERA), while it is flanked with its relevant
Section number and title from RERA and WB-HIRA on both sides:

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SUPREME COURT REPORTS
[2021] 5 S.C.R.

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651
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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C
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SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
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653
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
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654
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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655
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
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656
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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657
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
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658
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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659
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
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660
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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661
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
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662
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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663
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
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664
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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665
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
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666
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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667
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
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D
E
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668
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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669
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
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670
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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671
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
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672
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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673
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
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674
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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675
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
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676
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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677
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
H
678
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
G
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679
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
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680
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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681
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
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682
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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683
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
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684
SUPREME COURT REPORTS
[2021] 5 S.C.R.

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B
C
D
E
F
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685
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
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686
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
G
H
687
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
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688
SUPREME COURT REPORTS
[2021] 5 S.C.R.

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B
C
D
E
F
G
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689
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

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C
D
E
F
G
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690
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
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691
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
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692
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
G
H
693
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
H
694
SUPREME COURT REPORTS
[2021] 5 S.C.R.

A
B
C
D
E
F
G
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695
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A
B
C
D
E
F
G
H
696
SUPREME COURT REPORTS
[2021] 5 S.C.R.

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B
C
D
E
F
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697
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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709
It needs to be emphasized that the tabulated provisions of the
State enactment are verbatim a reproduction of the Central enactment
in most instances, with minor differences between the provisions (due to
RERA being a Central enactment, and WB-HIRA being a State
enactment) but those are not relevant for our present discussion. It is
also important to note that Section 83 of WB-HIRA provides as follows:
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“83. Application of other laws not barred.- The provisions
of this Act shall be in addition to, and not in derogation of,
the provisions of any other law for the time being in force.”
13. Section 83 corresponds to Section 88 of the RERA. However,
there is no provision in WB-HIRA corresponding to Section 89 of RERA,
according to which overriding effect has been given to the RERA,
notwithstanding anything inconsistent therewith contained in any other
law for the time being in force. Further, the repealing provisions of the
two enactments are distinct. Section 92 of the RERA has repealed the
Maharashtra Act, while Section 86(1) of WB-HIRA repeals the WB
1993Act.
FRERA and WB-HIRA – provisions at variance
14. In the previous section, this judgment has dwelt on the
substantial overlap between the provisions of RERA and the subsequently
enacted WB-HIRA. However, in this segment of the judgment, it would
be necessary to visit the inconsistencies and deviations made in WB-
HIRA from the provisions of the RERA. These divergences are indicated
in the following tabulation, which has been put on record by the Union of
India during its submissions:

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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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15. Now, it is in this backdrop that it becomes necessary to consider
the submission made by the parents.
G Submissions
G.1 For the petitioners
16. Mr Devashish Bharuka, learned Counsel appearing on behalf
of the petitioner surged the following submissions:
(I) Nature of RERA and WB-HIRA
a. The subject of both the central and the state enactments is
covered by Entries 6 and 7 of the Concurrent List to the
Seventh Schedule to the Constitution;
b. RERA is a complete and exhaustive code which regulates
the contractual relationship between a builder/promoter and
a buyer/consumer in the real estate sector and provides
remedial measures. Parliament has indicated an intent to
occupy the whole field;
c. RERA regulates the rights and obligations between
promoters and buyers of real estate in addition to the
provisions of the Indian Contract Act, 1872. The enactment,
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in ensuring the actual transfer of property to the buyer
furthers the objects of the Transfer of Property Act, 1882.
It provides for the enforcement of contracts through
remedial measures which are in addition to the remedies
provided in the Consumer Protection Act, 1986 and its
successor legislation of 2019. RERA, in other words, is a
special statute governing the real estate sector
encompassing rights and obligations found in different
central enactments; and
d. WB-HIRA covers the identical field of regulating the
contractual behavior of promoters and buyers in real-estate
projects. The state law is a ‘copy-and paste’ replica of the
central legislation (except for certain provisions which are
inconsistent with RERA) and covers the field which is
occupied by the central enactment.
(II) WB-HIRA is repugnant to RERA
a. The subjects of both sets of legislations are contained in
Entries 6 and 7 of the Concurrent List;
b. The state law does not fall either under the subject of land
(Entry 18, List II7) or industry (Entry 24, List II). That WB-
HIRA does not fall under Entry 24, List II is evident from
the meaning of the expression ‘industry’ as explained in the
following decisions:
•
Tika Ram Ji v State of UP, (1956) SCR 393 at pg. 412,
420 [5-Judges]
•
Calcutta Gas Co. Ltd. v State of West Bengal, (1962)
Supp. 3 SCR 1 [5-Judges]
•
ITC Ltd. v Agricultural Produce Market Committee
& Ors., (2002) 9 SCC 232 [5-Judges]
•
Accountant and Secretarial Services Pvt. Ltd. v UOI
(1988) 4 SCC 324 [2-Judges]
•
Ashoka Marketing Ltd. v Punjab National Bank,
(1990) 4 SCC 406 [5-Judges]
7 Interchangeably referred to as ‘State List’
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•
Indu Bhushan Bose v Rama Sundari Debi, (1969) 2
SCC 289 [5-Judges]
c. The tests of repugnancy as enunciated in the judgments of
this Court are three-fold: First, there may be a direct
inconsistency or conflict between the actual terms of the
competing statutes; Second, even if there is no direct
conflict, where Parliament has intended to occupy the entire
field by enacting an exhaustive or complete code, the state
law in the same field would be repugnant and inoperative;
and Third, a conflict may arise where the State Legislature
has sought to exercise its powers over the same subject
matter as the legislation by Parliament;
d. RERA being an exhaustive code regulating the contractual
relationships between promoters and buyers in the real-
estate sector, WB-HIRA entrenches on an occupied field
and is hence repugnant and void under Article 254(2) of
the Constitution;
e. WB-HIRA was not reserved for the assent of the President
and is hence not protected by Article 254(2) nor would the
state enactment be protected by Article 255 which applies
only to a situation where a ‘recommendation’ or ‘previous
sanction’ is required to be given by the Governor or the
President; and
f. Without prejudice to the earlier submissions on the doctrine
of occupied field, there are inconsistencies between RERA
and WB-HIRA. The state legislature has made several
changes which tilt the law in favour of the promoter – builder.
For example:
1. Though, the adjudication of
compensation under the RERA
is entrusted to an adjudicatory officer who is a judicial officer,
this provision for an adjudicating officer does not find place
in the state enactment.
2. Changes have been made in the definition of the
expression’s ‘garage’ and ‘force majeure’.
3. Removal of the concept of planning area in the state
legislation.
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4. Change in the jurisdictional court which takes cognizance
of offences;
(III) Complete change of stance by the State government.
a. At the time when WB-HIRA was enacted by the state
legislature, it was intended to govern the field of housing
industry under Entry 24 of List II in the State of West
Bengal and not the field of ‘contracts’ and ‘transfer of
property’ under Entries 6 and 7 of List III. This is evident
from the following circumstances:
1.
The Statement of Objects and Reasons of the Bill
from when it was introduced in the state legislature,
specifically notes that housing comes under the
ambit of industry which is why the state decided to
enact its own legislation;
2.
The long title of the state enactment seeks to
establish a housing industry regulatory authority for
regulation and promotion of the housing sector;
3.
The Governor of West Bengal was not informed of
RERA when assent was sought;
4.
Even in the counter affidavit filed in this Court, the
State government has pleaded that “as per WB-
HIRA, housing comes under the meaning of
‘industry’”; and
5.
Once it is conceded during the course of oral
submissions that the legislation does not fall under
Entry 24 of List II but Entries 6 and 7 of List III,
the entire edifice of the legislation being referable
to the State List is negatived and the state enactment
is void under Article 254(1).
(IV) Effect of Sections 88 and 89 of RERA:
a. It is common ground
that both the central and state laws
fall under the subjects of legislation contained in the
Concurrent List;
b. The State of West Bengal has submitted that Sections
88 and 89 of RERA allows the States to by-pass the
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requirement of Presidential assent under Article 254(2)
to enact a statute which is substantially identical to RERA
for creating parallel regimes across the country;
c. Accepting this submission and allowing the State to
provide a “duplicate regime would result in complete
chaos in the real-estate sector;
d. At the time when RERA was enacted several state laws
were in existence including
State Act 
Date of 
Presidential 
assent 
Maharashtra Ownership Flats (Regulation of 
the promotion of Construction, Sale, 
management and Transfer) Act, 1963
12.12.1963 
Karnataka Ownership Flat (Regulation of the 
promotion of Construction, Sale, Management 
and Transfer) Act, 1972
29.06.1973 
Gujarat Ownership Flats Act, 1973
28.06.1973
Andhra Pradesh Apartments (Promotion of 
Construction and Ownership) Act, 1987
15.05.1987
West Bengal (Regulation of Promotion of 
Construction and Transfer by Promoters) Act, 
1993
09.03.1994
Punjab Apartment and Property Regulation 
Act, 1995
02.08.1995
The above state laws covered certain areas beyond what
is covered by RERA. Hence, Section 89 read with the
proviso to Article 254(2) impliedly repeals such provisions
to the extent to which they overlap with the RERA.
Significantly, the state legislations covering the same
subject matter were enacted in Maharashtra in 2012 and
in Kerala in 2015. By Section 92 of RERA, Parliament
repealed the Maharashtra legislation while Kerala
repealed its own law in 2017;
e. The legislative history
of RERA would indicate that there
was a clarion call for a uniform national law in the real-
estate sector for some time;
f. Section 88 of RERA stipulates that the provisions of the
Act are in addition to and not in derogation of any other
law for the time being in force while Section 89 gives
overriding force and effect to RERA notwithstanding
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anything inconsistent contained in any other law for the
time being in force;
g. The expression “for the time being in force” may,
according to context and intent refer to either
1. a specific period of time or
2. to all periods of time.
Since RERA is remedial and regulatory, it is to operate
together with existing laws including the Consumer
Protection Act for the purpose of providing wholesome
statutory protections- both to promoters and consumers.
Section 89 gives overriding effect to RERA over
inconsistent existing laws;
h. Sections 88 and 89 do not prohibit the enactment of laws
by Parliament or the state legislatures in future. However,
in the case of a future state law covering the same field,
its validity has to be tested only on the touchstone of
Article 254 without reference to Sections 88 or 89. In
the event of a future Parliamentary law, its effect and
impact would be tested on the general principles of
interpretation of statutes such as general and special laws,
an earlier and later law and the rule of harmonious
construction. The State cannot enact a law on the subject
matter without seeking Presidential assent;
i.
The expression “in addition to and not in derogation of”
was intended to indicate that the remedies in RERA are
addition to those provided by other statutes including the
Consumer Protection Act and the Insolvency and
Bankruptcy Code, 2016 (“IBC”).
j.
Provisions analogous to Sections 88 and 89
of the RERA
are contained in several other central statutes on the
subjects in the Concurrent List some of which are
tabulated below:

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If the interpretation of the State of West Bengal is accepted, the
States would have an open hand to legislate by enacting a parallel
regime as in the case of WB-HIRA without obtaining Presidential
assent. This would destroy the federal legislative scheme of the
primacy of Parliament under Article 254.
(V) Applicability of Article 256
a.
The interpretation placed by the State of West Bengal on
Sections 88 and 89 is contrary to the request of the Union
of India to the State to repeal WB-HIRA and to notify the
rules under RERA;
b.
The State was under a constitutional mandate to act under
Article 256 rather than enacting its own law without
Presidential assent under Article 254(2); and
c.
The enactment of a parallel regime for implementing
provisions analogous to RERA in the State of West Bengal
will create serious inconvenience and absurdity and render
the entire scheme of RERA as a uniform national regulation,
unworkable. Under RERA, the State government acts as
a delegate of Parliament whereas with WB-HIRA, the
State has shifted its role to that of a delegator.
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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(VI) Upon the declaration of WB-HIRA as unconstitutional,
the 1993 legislation in West Bengal may also be
declared as repealed in view of the following:
a.
Section 89 of the RERA impliedly repeals all earlier state
acts with Presidential assent under the proviso to Article
254(2); and
b.
In the alternative, Section 86 of WB-HIRA which repeals
WB 1993 Act may be severed by applying the doctrine of
severability.
On the above grounds, it has been submitted that WB-HIRA is
void for want of legislative competence.
G.2 For the Union of India
17. Ms Aishwarya Bhati, learned Additional Solicitor General
appearing on behalf of the Union of India urged the following submissions:
(I) Background and Statement of objects of RERA
a.
The legislative background before the enactment of the
RERA in 2016 indicates that a comprehensive exercise
was carried out by the Select Committee of the Rajya
Sabha which heard the views of stakeholders from across
the country;
b.
Parliament has enacted RERA, as the Statement of Objects
and Reasons indicates, having due regard to
1. The necessity of a central legislation to provide effective
protection to real estate buyers and protect them from
exploitation;
2. The need to ensure uniformity and standardization of
business practices;
3. The key purpose of RERA is to ensure uniformity,
transparency, efficiency, symmetry, standardization and
efficacious dispute resolution;
c.
While enacting the RERA,
Parliament by its definition of
“appropriate government” in Section 2(g) entrusted wide
powers to the State governments including the power to
frame rules and regulations.
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d.
Some of the salient features of RERA include
1. Registration of real estate projects;
2. Registration of real estate agents;
3. Mandatory disclosers of project details on the web-
site of the authority;
4. Fast track dispute settlement mechanism;
5. Establishment of a Central Advisory Council to
recommend policy measures for protecting consumer
interest and ensure faster growth and development of
the real estate sector; and
6. Establishment of a real estate regulatory authority and
appellate tribunal for oversight of real estate
transactions and to settle disputes by imposing interest
and compensation.
(II) Constitutional validity
a.
The validity of RERA has been upheld by the Bombay
High Court8 (except for Section 46(1)(b));
b.
As many as 29 States and Union Territories have notified
rules under RERA as of the date of the filing of the counter
affidavit;
c.
As on date, 34 States and Union Territories have notified
the rules (with the sole exceptions of Nagaland where the
process is going on and West Bengal which has enacted
its separate legislation). The provisions of WB-HIRA bear
an uncanny resemblance to RERA and large portions of
the State legislation have been copied verbatim from the
central legislation;
d.
The Statement of Objects and Reasons of WB-HIRA also
indicates that the purpose was to regulate and promote
the housing sector in an efficient and transparent manner
in the interests of consumers. The objects of the state
legislation are
synonymous with RERA and the State
statute deals with the same subject matter in an identical
8 WP 2737 of 2017, decided on 6 December 2017
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manner. The State of West Bengal in effect has set up a
parallel mechanism and parallel regime which is similar to
the RERA on a majority of counts; and
e.
Though in the counter affidavit, the State of West Bengal
sought to justify the state law primarily under Entry 24 of
List II of the Seventh Schedule, this stand has been
specifically given up at the time of the oral submissions.
(III) Article 254 of the Constitution and repugnancy
Repugnancy of a statute enacted by the state legislature with a
central statute on a subject in the concurrent list may arise in any one or
more of the following modes: First, there may be an inconsistency or
conflict in the actual terms of competing statutes; second, though there
is no direct conflict between a State and Central statute, the latter may
be intended to be an exhaustive code in which event it occupies the
whole field, excluding the operation of the state law on the subject in the
concurrent list; and third, even in the absence of an actual conflict,
repugnancy may arise when both the State and Central statutes seek to
exercise power over the same subject matter;
a. First test of repugnancy: direct conflict
There is a direct inconsistency between several provisions of the
RERA and WB-HIRA:
1.
Under the RERA open car parking areas are covered by the
definition of ‘common areas’ in Section 2(n), indicating
therefore that they cannot be sold; on the other hand in the
State
enactment, Section 2(i) allows the car parking area to
be prescribed by rules made by the state government;
2.
The definition of ‘garage’ in Section 2(y) of RERA does not
include unenclosed or uncovered parking spaces such as open
parking areas, whereas Section 2(x) of WB-HIRA defines
the expression ‘garage’ to mean parking spaces as sanctioned
by the competent authority;
3.
RERA applies only to those real estate projects situated in a
planning area while there is no concept of a planning area in
the state legislation;
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4.
Section 6 of the RERA specifically confines force majeure
events to specific eventualities whereas the corresponding
provision of state enactment is much wider leaving it to be
prescribed by the rules;
5.
Under Section 38(3) of RERA, the Authority has been
entrusted with the power to make a reference to the
Competition Commission of India in the event of a monopoly
situation while there is no such provision in the state
enactment;
6.
While Section 41 of the RERA provides for a Central Advisory
Council to advise and recommend the Central government
on specific matters, the corresponding provision of WB-HIRA
provides for the establishment of a State Advisory Council
chaired by the State Minister of Housing;
7.
Unlike Section 70 of RERA which has a provision of
compounding of offences, there is no corresponding provision
in WB-HIRA;
8.
Section 71(1) provides for the appointment of an adjudicating
officer of the rank of a district judge by the regulatory
authority for adjudging compensation. Section 40 of WB-HIRA
entrusts the adjudicatory function to the administrative
regulatory authority without providing for a judicial officer;
and
9.
Section 80(2) of the RERA provides that no court inferior to
that of a Metropolitan Magistrate or Judicial Magistrate First
Class shall try an offence under the RERA, while there is no
such provision in WB-HIRA.
The Central government has established a fund of Rs 25,000 crores
(known as the SWAMIH) to provide for last mile
funding for projects
which are net-worth positive and registered under RERA, including those
projects declared as NPAs or those which are the subject matter of
proceedings before the NCLT under the IBC. If the state law is allowed
to hold the field, buyers of real estate projects in the State of West
Bengal which are not registered under the RERA will lose the benefit of
the above provision.
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b. Second test of repugnancy: Occupied field
1.
The entire subject of WB-HIRA is the same as RERA as a
result of which the state law is repugnant to the central
legislation;
2.
The enforcement of the RERA would be completely
obstructed in the State of West Bengal if WB-HIRA is given
effect to;
3.
Sections 88 and 89 of RERA cannot be construed in isolation.
While Section 88 permits the existence of other laws in addition
to RERA, this would not apply to other legislation which would
completely derail, obstruct and assault the very existence of
RERA;
4.
In the decision in Pioneer Urban Land & Infrastructure
Ltd vs Union of India9, the provisions of three central
enactments were construed harmoniously namely RERA, the
Consumer Protection Act, 1986 and the IBC. Construing these
enactments harmoniously, the Court held that the IBC and
Consumer Protection Act as well as RERA provide concurrent
remedies to allottees of flats which can be exercised at their
option; and
5.
Even assuming that Sections 88 and 89 of RERA are
construed as an intent of the Parliament to not occupy the
field exhaustively, they cannot be implied to allow the operation
of State laws which completely eclipse and encroach upon
RERA so much so that the existence of RERA is impossible
as long as WB-HIRA is given effect to by the State.
c. Third test of repugnancy: implied repeal
1.
The subject matter of both the enactments is the regulation
of the real
estate sector;
2.
WB-HIRA stands in the State of West Bengal in place of
RERA. Both cannot stand together. As a matter of fact, while
WB-HIRA is fully operational in the State of West Bengal,
RERA is non-operational;
9 (2019) 8 SCC 416
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3.
The only exception would be where the State legislation
contains distinct matters which are of a cognate and allied
nature. However, in the present case, WB-HIRA deals on all
fours with the subject matter of RERA and not with any
distinct matter which is cognate or allied; and
4.
The state enactment has created an identical but parallel and
mutually exclusive regime in the State of West Bengal, which
cannot co-exist with the regime which is enacted under
RERA.
On the above grounds, it has been submitted that the state
enactment fails all the three tests of repugnancy. While the failure of the
first test would only require WB-HIRA to yield to RERA to the extent
of the repugnancy, since the State enactment in the present case
completely obstructs and hinders the Parliamentary law, the repugnancy
is, according to the submission, absolute and complete.
G.3 For the State of West Bengal
18. Mr Rakesh Dwivedi, learned Senior Counsel appearing on
behalf of the State of West Bengal has urged the following submissions:
(I) RERA does not cover the whole field and is not
exhaustive:
a.
An analysis of RERA would indicate that its objective is
to regulate and promote the real estate sector and to ensure
the sale of plots, apartments, buildings and real estate
projects in an efficient and transparent manner. The other
object is to protect consumer interest and establish an
adjudicating mechanism for speedy resolution of disputes,
including appeals;
b.
A survey of the
provisions of RERA would indicate that it
is based on plans sanctioned and approved by competent
authorities under state enactments. The sanctioned plan
provides a specific period for construction and local bodies
are responsible for the sanctioning of plans under local
laws. Similarly, local authorities provide for completion
certificates. The diverse provisions of RERA contemplate
the jurisdiction of local authorities governed by state laws
in the matter of sanctioning of plans and completion of
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construction projects. This is supported by references to
the planning area (Section 2(zh)) and appropriate
government (Section 2(g) of RERA); and
c.
The provisions of Sections 88 and 89 of RERA indicate
that the central legislation is not a complete or exhaustive
code on the subject matter legislated upon by Parliament.
(II) Constitutional validity
a. While enacting RERA in exercise of its legislative powers
under Articles 245 and 246 of the Constitution, Parliament
has enacted the legislation on the subjects assigned to it
under Entries 6 and 7 of List III of the Seventh Schedule
which pertain to transfer of property and contracts not
relating to agricultural land. Since the enactment in the
State of West Bengal follows the provisions of RERA
“broadly and substantially”, the state enactment would also
be covered by Entries 6 and 7 of List III of the Seventh
Schedule;
b. In the Counter Affidavit filed by the State of West Bengal
it was contended that the State enactment falls under Entry
24 of List II, as it deals with the housing industry. This
contention is not correct and is not being pressed. This is
for the reason that the ambit of Entry 24 of List II has
been explained in the decisions of the Constitution Bench
in Tika Ramji vs State of UP10 and ITC Ltd vs
Agricultural Produce Market Committee11 to exclude
those subjects which are specifically included in the other
Entries of List III in the Seventh Schedule;
and
c. In view of the above position, Entry 24 of List II will not
cover the field which is covered by Entries 6 and 7 of List
III. Hence, the present case has to be adjudicated upon
by considering both RERA and WB-HIRA as being
referable to subjects in Concurrent List. Consequently, the
Court will have to determine as to whether Article 254
has a nullifying effect on the state enactment.
10 (1956) SCR 393
11 (2002) 9 SCC 232
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(III) Article 254 and Repugnancy
a. In view of the language of Article 254, the state law would
be void only if it is in consistent with and repugnant to a
law made by Parliament in the Concurrent List and, in
such an event, only to the extent of the repugnancy;
b. Repugnancy would arise if there is a conflict between a
state enactment and central enactment which cannot be
reconciled or if the central enactment occupies the whole
field completely and exhaustively. Applying the above tests,
there is no repugnancy or inconsistency between WB-
HIRA and RERA. Irrespective of Sections 88 and 89 of
RERA, Article 254 is not attracted;
c. The submission of the petitioner is based on the substantial
identity between WB-HIRA and RERA. This substantial
identity is indicative of consonance, conformity and
symmetry. Identity of subject matter does not constitute
inconsistency or repugnancy, particularly when the central
enactment is not a complete and exhaustive code; and
d. In the present case, the state law is complementary to the
central law.
(IV) Sections 88 and 89 of RERA
a. Sections 88 and 89 indicate that RERA was not intended
by Parliament to be a complete and exhaustive code nor is
it intended to be exclusive in operation. Sections 88 and 89
allow other laws to operate and wherever there is an
inconsistency with RERA, the central act would prevail.;
b. Sections 88 and 89 indicate a Parliamentary intent that
RERA should co-exist with other legislations;
c.
Section 88 refers to “any other law for the time being in
force”. Such an expression has been construed by this
Court to cover laws which were operating when RERA
was enacted as well as laws made after the enforcement
of RERA;
d. The expression ‘laws for the time being in force’ has been
deployed in Section 2(zr) and Section 18(2) of RERA as
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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well as in Section 89. This supports the contention of the
State of West Bengal;
e. Parliament has chosen to repeal only the Maharashtra Act
by way of Section 92 of RERA. Prior to WB-HIRA, in
the State of West Bengal, the WB 1993 Act was operating.
Parliament did not repeal this Act. The WB 1993 Act was
repealed only by Section 86 of WB-HIRA to align the State
Act with the RERA. The fact that Parliament repealed
only the Maharashtra Act indicates that RERA does not
evince any intention to shut out other state enactments.
On the contrary the Parliamentary intent is to make RERA
permissive and accommodative of state legislation;
f. The fact that other states had not enacted a law like WB-
HIRA does not take away the plenary legislative powers
of the State of West Bengal;
g. In exercise of the rule making power under Section 80(1)
of the WB-HIRA, the State of West Bengal has framed
rules on 5 June 2018. A dedicated web-site has been made
operational. The regulatory authority has been established
on 23 July 2018 while its Chairperson and Members were
appointed on 25 June 2020 and 30 June 2020. The
Appellate Tribunal has been established on 29 July 2019
and both the Authority and the Appellate Tribunal are
adjudicating all complaints; and
h. One of the reasons for enacting WB-HIRA was to enable
the State to have its own State Advisory Council for
advising and recommending to the State government on
the implementation of
the law on major questions of policy,
protection of consumer interest and development of the
real estate sector.
(V) The few inconsistencies between WB-HIRA and RERA
are of a minor nature:
a. There is no real conflict with the provisions of RERA under
which an adjudicating officer decides disputes as to
compensation under Section 71. Under Section 31, a
complaint can be filed both before the ‘Authority’ and the
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‘Adjudicating Officer’. Under WB-HIRA, the Authority
decides and there is an appeal provided to the Tribunal
and then to the High Court. Consequently, there is no
conflict;
b. While under WB-HIRA, the Chairperson of the Tribunal
can be removed in consultation with the Chief Justice of
the High Court, as in the case of RERA, both Acts
contemplate an enquiry by a Judge of the High Court. This
secures the independence of the Chairperson;
c. As regards the definition of ‘garage,’ ‘planning area,’ and
‘force majeure’, there is no significant difference. RERA
adopts a declaration of planning area in the law relating to
Town and Country Planning of the State and hence a
separate provision in the State Act is not required. Similarly,
the definitions of ‘garage’ and force majeure are not
variant;
d. The State Advisory Council is to act in compliance with
the rules framed by the Central government. Where the
rules have not been framed by the Central government or
there is an issue which is not governed by the Central Act,
the State can prescribe a rule or policy on the
recommendation of the State Advisory Council. Sections
83 and 84 of RERA contemplate a role for the State in this
regard;
e. Under RERA grants are made by the Central government
whereas under WB-HIRA grants are given by the State
government. This does not result in a conflict. The State
cannot provide for grants by the Central government.
Moreover, there is nothing to prevent the Central
government
from making a grant under Article 282 of the
Constitution;
f. Even if the Central Act provides certain additional features
which are absent in the State Act, the State Act would be
bound to treat those as being superimposed on the State
law in view of Section 89 of RERA. Moreover, a Removal
of Difficulties Order can be issued under Section 85 of
WB-HIRA; and
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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g. Article 256 of the Constitution does not enable the Union
Executive to give directions to the State legislature.
Federalism is a basic feature of the Constitution. WB-
HIRA follows the principle of cooperative federalism. The
Union government has no authority to direct the State
legislature to repeal its law.
These submissions will now fall for analysis.
H Analysis
H.1 Entry 24, List II – West Bengal’s ‘housing industry’
defense
19. The interesting feature of the case with which we commence
the discussion is that when it was enacted, WB-HIRA was intended to
cover the field of ‘housing industry’ under Entry 24 of List II. The
Statement of Objects and Reasons to the WB-HIRA Bill notes that:
“2. Since the ‘housing’ comes under the periphery of ‘industry’,
it is contemplated that the State Government should go for its
own State Legislation… …”
20. The long title to the state enactment explains that WB-HIRA
is “an act to establish Housing Industry Regulatory Authority (“HIRA”)
for regulation and promotion of housing sector…”.
21. In the Counter Affidavit which has been filed on behalf of the
State of West Bengal before this Court the subject of the legislation is
asserted to fall within the purview of the following Entries in the State
List of the Seventh Schedule to the Constitution:
•
Entry 5- Local Government
•
Entry 18- Land
•
Entry 24- Industries subject to the provisions of entries 7 and
52 of List I
•
Entry 35-
Works, lands and buildings vested in or in the
possession of the State
•
Entry 64-Offences against laws with respect to any of the
matters in this List
•
Entry 66- Fees in respect of any of the matters in this List, but
not including fees taken in any court.
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Even as among the above Entries, the Counter Affidavit
substantively dwells on Entry 24 of the State List. The defense in the
Counter is that (i) housing as an industry falls in Entry 24 of the State
List; (ii) Entry 24 is subject to the provisions of Entries 712 and 5213 of
List I; (iii) there is no declaration by Parliament within the meaning of
Entries 7 or 52; (iv) WB-HIRA falls within the ambit of ‘industry’ in
Entry 24 of the State List. That indeed is the basis of the Counter
Affidavit. Paragraphs 15, 16 and 17 of the Counter are extracted below:
“15. It is most respectfully submitted that, as per WBHIRA
“housing” comes under the meaning of “Industry”.
Therefore, the State Government ought to go for curated
legislations, specific to the need of the State. Furthermore, State
law can also be amended by the State itself without approaching
the central government as and when the occasion arises to meet
the necessity of the people of the state. That, even the Real Estate
Activities being an industry’ vests in the State Legislature
competence to enact a legislation on the subject matters
by virtue of Entry 24 of the State List in the Seventh
Schedule to the Col since the matter falls within the purview
of the State list unless brought under the Control of the
Union by the relevant Legislation.
16. That it is imperative to note that Entry 24 of State List in its
widest amplitude takes in all Industries. In other words, the
legislative power of the State
under Entry 24 of State List
is eroded only to the extent to which control was assumed
by the Union pursuant to a declaration made by parliament
under Entry 52 of Union List. In the absence thereof, under
Entry 52 of Union List, the State Legislature will have power
to legislate under Entry 24 of State List. That under Entry 52
of the Union List, it is required that an express declaration be
made by the Parliament, an abstract declaration is not
contemplated. In the event the Parliament passes a law containing
a declaration specifying the industry and indicating the nature and
extent of the Union control over the concerned industry, then to
that limited extent the State’s legislative power is curtailed. It is
12 “7. Industries declared by Parliament by law to be necessary for the purpose of
defence or for the prosecution of war.”
13 “52. Industries, the control of which by the Union is declared by Parliament by law
to be expedient in the public interest.”
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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reiterated that even in the case of a declaration under Entry
52 by the Central Government, “industry” as a whole is
not taken out of Entry 24 of the State List.
17. That, in furtherance of the above, it is further submitted that a
perusal of RERA exhibits that there is no declaration even in the
abstract that the Union intends to assume control over the real
estate sector.”
(emphasis supplied)
22. As a matter of fact, it has also been urged that Entries 6 and
7 of the Concurrent List would not cover the subject of the housing
industry since the field covered by these Entries “merely enables the
manner and mode in which property is to be transferred and contracts
are to be executed”. This submission is sought to be buttressed by stating
that WB-HIRA is merely an extension of RERA with a wider purview
of the housing industry as opposed to RERA which deals with a limited
extent only with real estate. In other words, since the legislation falls
under Entry 24 of the State List, there was – in the submission - no
necessity of reserving the law for the assent of the President.
23. Faced with the judgments of this Court defining the ambit of
the expression “industry” in the Union and the State Lists, the basis of
asserting the legislative competence of the State legislature (‘industry’
in Entry 24 of List II) over the subject of the State enactment as set out
in the Counter Affidavit has been specifically given up in the
course of
the oral submissions in this Court. As a matter of fact, the written
submissions which have been placed on the record during the course of
the hearing specifically state that the claim of WB-HIRA being referable
to Entry 24 of the State List “as it deals with housing industry” is “not
accurate and is not being pressed”. The reason which has been adduced
is that the ambit of Entry 24 of List II has been explained to exclude
from within its fold subject matters which are specifically included in the
other Entries of the three Lists of the Seventh Schedule.
24. Before proceeding with the discussion any further, it would be
necessary for this Court to dwell on the concession which has been
made on behalf of the State of West Bengal. The concession is based on
a correct assessment of the ambit of the expression ‘industry’ in the
three lists. In Tika Ramji vs State of UP14 (“Tika Ramji”), there was
14 1956 SCR 393
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a challenge to the validity of the UP Sugarcane (Regulation of Supply
and Purchase) Act 1953 under which the UP Sugarcane Supply and
Purchase Order 1954 was made. The vires of the Act was challenged
on the ground that the Act was respect to the subject of industries, the
control of which by the Union is declared by Parliament by law to be
expedient in the public interest, within the meaning of Entry 52 of List I.
Parliament enacted the Industries (Development and Regulation) Act
1951 declaring that it was expedient in the public interest that the Union
should take in its control the industries specified in the First Schedule
which included the industry engaged in the manufacture or production
of sugar. In Tika Ramji (supra), the argument was that the expression
‘industries’ should be construed as not only including the process of
manufacture or production but also activities antecedent, such as
acquisition of raw-material and subsequent, such as the disposal of
finished products. A Constitution Bench of this Court held that the
expression ‘industry’ in its wide sense would be capable of comprising
three different aspects: first, raw materials which are an integral part of
the industrial process; second, the process of manufacture and production;
and third, distribution of the products of the industries. The Court held
that the process of manufacture or production would be comprised in
Entry 24 of List II except where the industry is a controlled industry
when it would fall under Entry 52 of List I. The Constitution Bench
rejected the contention that the expression “industries” in Entry 52 of
List I was wide enough to encompass the power to legislate in respect
of raw material said to be an integral part of the industrial process or the
distribution of the products of the industry.
25. The decision in Tika Ramji (supra) was followed by a
Constitution Bench in Calcutta Gas Co. (Proprietary) vs State of
West Bengal15 which held that the expression ‘industry’ in all the three
Lists must be given the same meaning and since ordinarily, industry is in
the field of State legislation, the word must be construed in such a manner
that no entry in List II is deprived of its entire content. A Constitution
Bench of this Court in ITC Ltd. vs Agricultural Produce Market
Committee16 reiterated the principles which have been enunciated in
Tika Ramji (supra). Justice YK Sabharwal, (as the learned Chief Justice
then was), speaking for himself and Justice Brijesh Kumar, reiterated
the principles which were adopted by the Constitution Bench in Tika
15 AIR 1962 SC 1044
16 (2002) 9 SCC 232
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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Ramji (supra). After considering the precedents of this Court, the
judgment reiterated the principles enunciated in Tika Ramji’s (supra)
case. In a concurring judgment, Justice Ruma Pal noted:
“126. To sum up: the word “industry” for the purposes of
Entry 52 of List I has been firmly confined by Tika
Ramji [1985 Supp SCC 476: 1985 Supp (1) SCR 145]to the
process of manufacture or production only. Subsequent
decisions including those of other Constitution Benches have
reaffirmed that Tika Ramji case [AIR 1956 SC 676 : 1956 SCR
393] authoritatively defined the word “industry” — to mean the
process of manufacture or production and that it does not include
the raw materials used in the industry or the distribution of the
products of the industry. Given the constitutional framework, and
the weight of judicial authority it is not possible to accept an
argument canvassing a wider meaning of the word “industry”.
Whatever the word may mean in any other context, it must be
understood in the constitutional context as meaning “manufacture
or production”.”
(emphasis supplied)
26. In view of the settled exposition of the ambit of Entry 24 of
List II to the Seventh Schedule, there can be no manner of doubt that
the subject of WB-HIRA is not ‘industries’ within the meaning of Entry
24. Both the central legislation – RERA and the State legislation – WB-
HIRA have substantially similar provisions. These provisions seek to
regulate the
contractual relationship between builders/promoters and their
buyers in the real estate sector. They recognize rights and obligations
inter se promoters, buyers and real estate agents. Both the State law
and the Central law provide for remedial measures to enforce compliance
with contractual rights and corresponding obligations. Hence, quite
correctly, the arguments before this Court have been addressed on the
basis that the subject of both the central and the state legislations –
RERA and WB-HIRA falls under Entries 6 and 7 of the Concurrent List
to the Seventh Schedule. Entries 6 and 7 are extracted below:
“6. Transfer of property other than agricultural land; registration
of deeds and documents.
7. Contracts, including partnership, agency, contracts of carriage,
and other special forms of contracts, but not including contracts
relating to agricultural land.”
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Now it is true that the edifice of the defense which was set up
before this Court in the Counter Affidavit is premised on the State
enactment being a law on the subject of ‘industries’ falling within the
ambit of Entry 24 of the State List. The genesis of this defense traces its
origin to the Statement of Objects and Reasons accompanying the Bill
when it was introduced in the State legislature in West Bengal. Indeed,
the long title also indicates that the State legislation sought to establish a
Housing Industry Regulatory Authority (“HIRA”). But these
references in the Statement of Objects and Reasons; the long title andthe
Counter Affidavit do not preclude the State of West Bengal from asserting,
in the course of the submissions, that the State legislation in pith and
substance is not one which is on the subject of industries within the
meaning of Entry 24 of List II and that it falls within the ambit of Entries
6 and 7 of List III. Indeed, as we have noticed in the earlier part of this
judgment, there is a substantial overlap between the provisions of RERA
and WB-HIRA. Even the inconsistencies which have been noticed earlier
are on the same subject matter. The provisions of RERA essentially
seek to regulate the contractual relationship between builders/promoters
and purchasers in the real estate sector. RERA, truly speaking, falls
within the ambit of Entries 6 and 7 of the Concurrent List. The substantial
overlap between the state and the central
legislation is evident on a
comparative analysis of the two legislations which has been alluded to in
the earlier part of this judgment. The State of West Bengal is not precluded
from seeking to sustain its legislation on the basis that in pith and in
substance it falls within the ambit of Entries 6 and 7 of the Concurrent
List. The analysis of the constitutional challenge in the present case
must therefore proceed on the basis that both the central legislation –
RERA, and the state legislation –WB-HIRA, fall within the subjects
embodied in Entries 6 and 7 of List III of the Seventh Schedule. That
indeed is the foundation on which submissions have been urged and the
further analysis is based. In a matter involving the constitutional validity
of its law the State of West Bengal has not been precluded by this court
from urging the full line of its defense.
H.2 The Constitutional Scheme of Article 254 and
repugnancy
27. The distribution of legislative powers in Part XI of the
Constitution envisages that Parliamentary legislation extends to the entire
territory of India or its part while state legislation extends law to the
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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whole or any part of a state. Under Article 24617, the legislative power
to make laws “with respect to” any of the matters enumerated in List I
of the Seventh Schedule – the Union List – is entrusted to Parliament.
Clause (1) of Article 246 which embodies this principle is prefaced with
a non-obstante provision which gives it precedence over clauses (2) and
(3). Article 246 (2) enunciates the principles governing the exercise of
legislative power “to make laws with respect to any of the matters
enumerated in List III of the Seventh Schedule, the Concurrent List.
Clause (2) begins with a non-obstante provision which gives it precedence
over Clause (3). Clause (2) embodies the principle that Parliament and
(subject to clause (1)) the legislature of any State have the power to
make laws with respect to any of the matters in List III. Clause 3
stipulates that the legislature of any State has the exclusive power to
make laws for the State or any part of it “with respect to any of the
matters enumerated in List II”, the State List. Some of the salient features
of Article 246 need to be noticed.
(i)
An exclusive power has been entrusted to Parliament to
legislate on matters enumerated in List I;
(ii) The plenary power entrusted to Parliament to legislate with
respect to a matter enumerated in List I is reaffirmed by the
non-obstante provision which operates notwithstanding
anything in Clauses (2) and (3);
(iii) On matters
which have been enumerated in List III:
a. Parliament has the power to make laws notwithstanding
clause (3); and
17 “246. Subject matter of laws made by Parliament and by the Legislatures of States
(1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to
make laws with respect to any of the matters enumerated in List I in the Seventh
Schedule (in this Constitution referred to as the Union List)
(2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the
Legislature of any State also, have power to make laws with respect to any of the
matters enumerated in List III in the Seventh Schedule (in this Constitution referred to
as the Concurrent List
(3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to
make laws for such State or any part thereof with respect to any of the matters
enumerated in List II of the Seventh Schedule (in this Constitution referred to as the
State List)
(4) Parliament has power to make laws with respect to any matter for any part of the
territory of India not included (in a State) notwithstanding that such matter is a matter
enumerated in the State List.”
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b. The State legislature also has the power to make laws
subject to clause (1).
(iv) The State legislatures have the exclusive powers to make
laws for the State or any part of it with respect to matters in
List II, this power being subject to clauses (1) and (2);
(v) Clauses (1) and (2) of Article 246 employ non-obstante
provisions in respect of
a. The exclusive power entrusted to Parliament over List I
matters;
b. The power entrusted to Parliament over List III matters;
(vi) Though, the legislature of a State has exclusive power to
make laws with respect to matters on the State List, this is
subject to clauses (1) and (2).
28. Parliament, under Article 248, has been entrusted with the
residuary powers of legislation (subject to Article 246A) to make any
law with respect to any matter which is not enumerated in the Concurrent
or State Lists. The 101st Amendment to the Constitution, which came
into force from 16 September 2016, inserted Article 246A18 to make a
special provision with respect to the goods and services tax. Article
246A begins with a non-obstante provision, giving it overriding force
over Articles 246 and 254. Under clause (1), Parliament and, subject to
clause (2), the legislature of a State has the power to make laws with
respect to goods and services tax imposed by the Union or by the State.
Under clause (2), Parliament has been entrusted with the exclusive
power to make laws with respect to goods and services tax wherethe
supply of
goods, services or both takes place in the course of inter-state
trade and commerce.
18 “(1) Notwithstanding anything contained in articles 246 and 254, Parliament, and,
subject to clause (2), the Legislature of every State, have power to make laws with
respect to goods and services tax imposed by the Union or by such State.
(2) Parliament has exclusive power to make laws with respect to goods and services tax
where the supply of goods, or of services, or both takes place in the course of inter-
State trade or commerce.
Explanation. - The provisions of this article, shall, in respect of goods and services tax
referred to in clause (5) of article 279A, take effect from the date recommended by the
Goods and Services Tax Council.”
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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29. Article 25419 contains provisions for inconsistencies between
laws made by Parliament and by the legislatures of the States. Clause
(1) of Article 254 stipulates that where a State law “is repugnant” to a
Parliamentary law which Parliament is competent to enact or to a
provision of an existing law “with respect to one of the matters
enumerated in the Concurrent List”, then the law made by Parliament is
to prevail and the law made by the legislature of a State shall “to the
extent of the repugnancy” be void. The provisions of clause (1) are
subject to clause (2). Clause (1) also provides that in the event of a
repugnancy between a law enacted by the State legislature with a
provision of a law made by Parliament which it is competent to enact or
to a provision of an existing law with respect to a matter enumerated in
the Concurrent List, the law enacted by Parliament is to prevail whether
it was enacted before or after the State law or, as the case may be, the
existing law. Clause (1) of Article 254 is however made subject to clause
(2) which envisages that if a State law on a matter enumerated in the
Concurrent List contains a provision which is repugnant to an earlier
law of Parliament or an existing law with respect to the subject matter,
the law made by the legislature of the State will prevail in the State if it
is has been reserved for the consideration of the President and has
received such assent. Despite
the grant of Presidential assent, the
Parliament is not precluded from enacting any law with respect to the
same matter in future including a law adding to, amending, varying or
repealing the law made by the legislature of the State.
19 254. Inconsistency between laws made by Parliament and laws made by the Legislatures
of States
(1) If any provision of a law made by the Legislature of a State is repugnant to any
provision of a law made by Parliament which Parliament is competent to enact, or to
any provision of an existing law with respect to one of the matters enumerated in the
Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament,
whether passed before or after the law made by the Legislature of such State, or, as the
case may be, the existing law, shall prevail and the law made by the Legislature of the
State shall, to the extent of the repugnancy, be void
(2) Where a law made by the Legislature of a State with respect to one of the matters
enumerated in the concurrent List contains any provision repugnant to the provisions
of an earlier law made by Parliament or an existing law with respect to that matter, then,
the law so made by the Legislature of such State shall, if it has been reserved for the
consideration of the President and has received his assent, prevail in that State: Provided
that nothing in this clause shall prevent Parliament from enacting at any time any law
with respect to the same matter including a law adding to,
amending, varying or repealing
the law so made by the Legislature of the State
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30. Some of the salient features of Article 254 may be noticed at
this stage:
(i)
Firstly, Article 254(1) embodies the concept of repugnancy
on subjects within the Concurrent List on which both the
State legislatures and Parliament are entrusted with the
power to enact laws;
(ii)
Secondly, a law made by the legislature of a State which is
repugnant to Parliamentary legislation on a matter
enumerated in the Concurrent List has to yield to a
Parliamentary law whether enacted before or after the law
made by the State legislature;
(iii)
Thirdly, in the event of a repugnancy, the Parliamentary
legislation shall prevail and the State law shall “to the extent
of the repugnancy” be void;
(iv)
Fourthly, the consequence of a repugnancy between the
State legislation with a law enacted by Parliament within
the ambit of List III can be cured if the State legislation
receives the assent of the President; and
(v)
Fifthly, the grant of Presidential assent under clause (2) of
Article 254 will not preclude Parliament from enacting a
law on the subject matter, as stipulated in the proviso to
clause (2).
31. A long line of precedent of this Court has developed on the
content of the concept of repugnancy as envisaged in Article 254. It
becomes necessary to visit some of those precedents in order to prepare
a jurisprudential foundation for addressing the central challenge in the
present case. In Zaverbhai Amaldas vs State of Bombay20
(“Zaverbhai”), the contention of the State
was that as a result ofthe
Essential Supplies (Temporary Powers) Act (Act 24 of 1946) which
was followed by amendments in 1948-1949 and 1950, Section 2 of
Bombay Act 36 of 1947 had become inoperative. The amendments of
1948 and 1949 were made when Section 107(2) of the Government of
India Act was in force. At the time when the Amending Act of 1950 was
enacted, the Constitution had come into operation. Justice TL
Venkatarama Aiyar speaking for the Constitution Bench, held that there
20 (1955) 1 SCR 799
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was no express repeal of the Bombay Act by Central Act 52 of 1950 in
terms of the proviso to Article 254(2). Hence, the question to be decided
was whether the amendments made to the Essential Supplies (Temporary
Powers) Act by the Central legislature in 1948, 1949 and 1950 were
“further legislation” under Section 107(2) of the Government of India
Act, 1947 or a “law with respect to the same matter” falling within
Article 254(2). In this context, the Court held:
“8…The important thing to consider with reference to this
provision is whether the legislation is “in respect of the same
matter”. If the later legislation deals not with the matters
which formed the subject of the earlier legislation but with
other and distinct matters though of a cognate and allied
character, then Article 254(2) will have no application. The
principle embodied in Section 107(2) and Article 254(2) is
that when there is legislation covering the same ground
both by the Centre and by the Province, both of them being
competent to enact the same, the law of the Centre should
prevail over that of the State.”
(emphasis supplied)
Dealing with the issue, the Court held that a State legislation whose
subject matter is identical to a law enacted by the Parliament would be
repugnant under Article 254(1):
“11. It is true, as already pointed out, that on a question under
Article 254(1) whether an Act of Parliament prevails against a
law of the State, no
question of repeal arises; but the principle on
which the rule of implied repeal rests, namely, that if the subject-
matter of the later legislation is identical with that of the
earlier, so that they cannot both stand together, then the
earlier is repealed by the later enactment, will be equally
applicable to a question under Article 254(2) whether the
further legislation by Parliament is in respect of the same
matter as that of the State law. We must accordingly hold that
Section 2 of Bombay Act 36 of 1947 cannot prevail as against
Section 7 of the Essential Supplies (Temporary Powers) Act 24
of 1946 as amended by Act 52 of 1950.”
(emphasis supplied)
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32. The judgement of the Constitution Bench in Tika Ramji
(supra) explained the concept of repugnancy arising by reason of both
Parliament and the State legislature having operated in the same field in
respect of a matter enumerated in the Concurrent List. Justice NH
Bhagwati adopted the three tests of repugnancy on inconsistency spelt
out by Nicholas’ text on the Australian Constitution and observed:
“27. Nicholas in his Australian Constitution, 2nd Ed., p. 303, refers
to three tests of inconsistency or repugnancy:—
(1) There may be inconsistency in the actual terms of the
competing statutes (R. v. Brisbane Licensing Court, [1920] 28
CLR 23).
(2) Though there may be no direct conflict, a State law
may be inoperative because the Commonwealth law, or the award
of the Commonwealth Court, is intended to be a complete
exhaustive code (Clyde Engineering Co. Ltd. v. Cowburn,
[1926] 37 CLR 466).
(3) Even in the absence of intention, a conflict may
arise when both State and Commonwealth seek to exercise
their 
powers 
over 
the 
same 
subject-matter
(Victoria v. Commonwealth, [1937] 58 CLR 618; Wenn v.
Attorney-General (Vict.), [1948] 77 CLR 84).”
(emphasis supplied)
Section 109 of the Australia Constitution Act of 190021 envisages
a style of federalism and repugnance in similar terms to the Indian
Constitution. Therefore, Australian jurisprudence would also be instructive
in interpreting repugnance between provisions of the State law against
Parliamentary
enactments. The Constitution Bench in Zaverbhai (supra)
thereafter moved on to cite other judgments of the High Court of Australia,
observing:
“28. Isaacs, 
J. 
in Clyde 
Engineering 
Company,
Limited v. Cowburn [(1926) 37 CLR 466, 489] laid down one
test of inconsistency as conclusive: “If, however, a competent
legislature expressly or implicitly evinces its intention to cover the
21 “109. Inconsistency of laws.—When a law of a State is inconsistent with a law of the
Commonwealth, the latter shall prevail, and the former shall, to the extent of the
inconsistency, be invalid.”
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whole field, that is a conclusive test of inconsistency where another
Legislature assumes to enter to any extent upon the same field”.
Dixon, J. elaborated this theme in Ex parte McLean [(1930) 43
CLR 472, 483]:
“When the Parliament of the Commonwealth and the
Parliament of a State each legislate upon the same subject
and prescribe what the rule of conduct shall be, they make
laws which are inconsistent, notwithstanding that the rule
of conduct is identical which each prescribes, and Section
109 applies. That this is so is settled, at least when the sanctions
they impose are diverse. But the reason is that, by prescribing the
rule to be observed, the Federal statute shows an intention to
cover the subject-matter and provide what the law upon it shall
be. If it appeared that the Federal law was intended to be
supplementary to or cumulative upon State law, then no
inconsistency would be exhibited in imposing the same duties or
in inflicting different penalties. The inconsistency does not lie in
the mere co-existence of two laws which are susceptible of
simultaneous obedience. It depends upon the intention of the
paramount Legislature to express by its enactment, completely,
exhaustively, or exclusively, what shall be the law governing the
particular conduct or matter to which its attention is directed. When
a Federal statute discloses such an intention, it is inconsistent with
it for the law of a State to govern the
same conduct or matter”.
To the same effect are the observations of Evatt, J. in Stock
Motor Plough Ltd. v. Forsyth [(1932) 48 CLR 128, 147]:
“It is now established, therefore, that State and Federal
laws may be inconsistent, although obedience to both laws is
possible. There may even be inconsistency although each
law imposes the very same duty of obedience. These
conclusions have, in the main, been reached, by ascribing
“inconsistency” to a State law, not because the Federal law
directly invalidates or conflicts with it, but because the
Federal law is said to “cover the field”. This is a very
ambiguous phrase, because subject-matters of legislation bear little
resemblance to geographical areas. It is no more than a cliche for
expressing the fact that, by reason of the subject-matter dealt
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with, and the method of dealing with it, and the nature and
multiplicity of the regulations prescribed, the Federal authority has
adopted a plan or scheme which will be hindered and obstructed
if any additional regulations whatever are prescribed upon the
subject by any other authority; if, in other words, the subject is
either touched or trenched upon by State authority” (emphasis
supplied)
33. The decision has also adverted to a judgment of Justice BN
Rau, speaking for the Calcutta High Court in O P Stewart vs B K
Roy22, where it was observed:
“29…
at p.632 “It is sometimes said that two laws cannot be said to be
properly repugnant unless there is a direct conflict between them,
as when one says “do” and the other “don’t”, there is no true
repugnancy, according to this view, if it is possible to obey both
the laws. For reasons which we shall set forth presently, we think
that this is too narrow a test: there may well be cases of repugnancy
where both laws say “don’t” but in different ways. For example,
one law may say, “No person shall sell liquor by retail, that is, in
quantities of less than five gallons at a time” and another law may
say, “No person shall sell liquor by retail, that is, in quantities of
less than ten gallons at a time”. Here, it is obviously possible to
obey both laws, by obeying the more stringent of the two, namely
the second one; yet it is equally obvious that the two laws are
repugnant, for to the extent to which a citizen is
compelled to
obey one of them, the other, though not actually disobeyed, is
nullified”.”
Significantly, after comparing the gamut of impugned provisions
before it, in holding that no provision of the impugned Act and the Rules
made by the UP legislature and its delegate stood invalidated by any
provision contained in Act 65 of 1951 as amended in 1953 or 1955 and
the Sugarcane Control Order 1955 issued under it, the Constitution Bench
held:
“31. In the instant case, there is no question of any inconsistency
in the actual terms of the Acts enacted by Parliament and the
impugned Act. The only questions that arise are whether
22 AIR 1939  Cal 628
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Parliament and the State Legislature sought to exercise their
powers over the same subject-matter or whether the laws enacted
by Parliament were intended to be a complete exhaustive code
or, in other words, expressly or impliedly evinced an intention to
cover the whole field. It would be necessary, therefore, to compare
the provisions of Act 65 of 1951 as amended by Act 26 of 1953,
Act 10 of 1955 and the Sugar Control Order, 1955 issued thereunder
with those of the impugned Act and U.P. Sugarcane Regulation
of Supply and Purchase Order, 1954 passed thereunder.
34…Suffice it to say that none of these provisions do
overlap, the Centre being silent with regard to some of the
provisions which have been enacted by the State and the
State being silent with regard to some of the provisions
which have been enacted by the Centre. There is no
repugnancy whatever between these provisions and the impugned
Act and the Rules framed thereunder as also the U.P. Sugarcane
Regulation of Supply and Purchase Order, 1954 do not trench
upon the field covered by Act 10 of 1955. There being no
repugnancy at all, therefore, no question arises of the operation of
Article 254(2) of the Constitution and no provision of the impugned
Act and the Rules made thereunder is invalidated by any provision
contained in Act 65 of 1951 as amended by Act 26 of 1953 or Act
10 of 1955 and the Sugarcane Control Order, 1955 issued
thereunder.”(emphasis supplied)
34. To complete this trinity of cases we may next advert to the
decision in Deep Chand vs State of UP23. The Constitution Bench
dealt inter alia with the issue as to whether the provisions of the Uttar
Pradesh Transport Service (Development) Act, 1955 where repugnant
to the provisions of a subsequent Parliamentary enactment– the Motor
Vehicles (Amendment) Act 1956. As in the case of Tika Ramji (supra),
the Court cited the three pronged test of repugnancy formulated by
Nicholas in his text on the Australian Constitution. The Constitution Bench
recorded that the decision in Tika Ramji (supra) had accepted the three
rules with the decision in Zaverbhai (supra) having laid down a similar
test. Reformulating the principle, Justice K Subba Rao in his separate
opinion observed:
23 (1959) Supp (2) SCR  8
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“28…
Repugnancy between two statutes may thus be ascertained on
the basis of the following three principles:
(1) Whether there is direct conflict between the two provisions;
(2) Whether Parliament intended to lay down an exhaustive code
in respect of the subject-matter replacing the Act of the State
Legislature and
(3) Whether the law made by Parliament and the law made
by the State Legislature occupy the same field…”
(emphasis supplied)
The judgment noted that a comparison of the provisions of the UP
Act and the Amending Act indicated that both the legislations were
intended to operate “in respect of the same subject matter in the same
field”. Justice K Subba Rao noted that the unamended Motor Vehicles
Act 1939 did not make any provision for the nationalization of transport
services but the States introduced amendments to implement the scheme
of nationalization of road transport. With a view to introduce a Union
law throughout the country, Parliament enacted the Amendment Act by
inserting Chapter IVA in the Motor Vehicles Act, 1939. This object, the
Court ruled, would be frustrated if the argument that both the UP Act
and the Amending Act should co-exist in respect of schemes to be framed
after the Amendment Act, were accepted. Additionally, the learned judge
also observed that the provisions of the scheme, the principles of
compensation and the manner of its payment differed in the two Acts.
35. In State of Orissa vs M/s M A Tulloch24, the legislation
in
issue was the Orissa Mining Areas Development Fund Act, 1952 under
which certain areas were constituted as mining areas and the State
government was empowered to levy a fee at a percentage of the value
of the mined ore at the pit’s mouth. Entry 23 of the State List covers
“regulation of mines and mineral development subject to the provisions
of List I with respect to regulation and development under the control of
the Union”. Entry 54 of the Union List deals with “regulation of mines
and mineral development to the extent to which such regulation and
development under the control of the Union is declared by Parliament
by law to be expedient in the public interest”. The Parliament
24 (1964) 4 SCR 461
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subsequently enacted the Mines and Minerals (Development and
Regulation) Act, 1957 which contains the declaration envisaged by the
latter part of Entry 54 of the Union List. The High Court had held that on
the coming into force of the Central Act, the Orissa Act ceased to be
operative by reason of the withdrawal of legislative competence since
the entry in the State List is subject to a Parliamentary declaration and a
law enacted by Parliament. Justice N Rajagopala Ayyangar, speaking
for the Constitution Bench, dealt with the issue of repugnancy in the
following observations:
“14…Repugnancy arises when two enactments both within the
competence of the two Legislatures collide and when the
Constitution expressly or by necessary implication provides that
the enactment of one legislature has superiority over the other
then to the extent of the repugnancy the one supersedes the other.
But two enactments may be repugnant to each other even though
obedience to each of them is possible without disobeying the other.
The test of two legislations containing contradictory
provisions is not, however, the only criterion of repugnancy,
for if a competent legislature with a superior efficacy
expressly or impliedly evinces by its legislation an intention
to cover the whole field, the enactments of the other
legislature whether passed before or after would be
overborne on the ground of repugnance. Where such is the
position, the
inconsistency is demonstrated not by a detailed
comparison of provisions of the two statutes but by the mere
existence of the two pieces of legislation.”
(emphasis supplied)
The Court held that the intent of the subsequent Parliamentary
enactment was to cover the entire field and there was an implied repeal
of the Orissa Act.
36. In 1979, a Constitution Bench in M Karunanidhi vs Union
of India25 (“M Karunanidhi”) revisited the issue of repugnancy in the
context of the Tamil Nadu Public Men (Criminal Misconduct) Act, 1973.
Though the State legislation was subsequently repealed, it was urged
that during the time that it was in force, it was repugnant to the provisions
of the India Penal Code, the Prevention of Corruption Act and the Criminal
25 (1979) 3 SCC 431
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Law (Amendment) Act, 1952. The State Act had the assent of the
President. Hence by virtue of Article 254(2), it was urged that the
aforementioned Central Acts stood repealed and could not revive even
after the State Act was repealed. Justice S Murtaza Fazal Ali formulated
the principles governing repugnancy in the following observations:
“8…
1. Where the provisions of a Central Act and a State Act in
the Concurrent List are fully inconsistent and are absolutely
irreconcilable, the Central Act will prevail and the State Act will
become void in view of the repugnancy.
2. Where however a law passed by the State comes into
collision with a law passed by Parliament on an Entry in the
Concurrent List, the State Act shall prevail to the extent of the
repugnancy and the provisions of the Central Act would become
void provided the State Act has been passed in accordance with
clause (2) of Article 254.
3. Where a law passed by the State Legislature while being
substantially within the scope of the entries in the State List
entrenches upon any of the Entries in the Central List the
constitutionality of the law may be upheld by invoking the doctrine
of pith and substance if on an analysis of the provisions of the Act
it appears that by and large the law falls within the four corners of
the State List and entrenchment, if any, is purely incidental or
inconsequential.
4. Where, however, a law made by the State Legislature
on a subject covered by the Concurrent List is
inconsistent with
and repugnant to a previous law made by Parliament, then such a
law can be protected by obtaining the assent of the President
under Article 254(2) of the Constitution. The result of obtaining
the assent of the President would be that so far as the State Act
is concerned, it will prevail in the State and overrule the provisions
of the Central Act in their applicability to the State only. Such a
state of affairs will exist only until Parliament may at any time
make a law adding to, or amending, varying or repealing the law
made by the State Legislature under the proviso to Article 254.”
The Constitution Bench held that although the ingredients of
criminal misconduct as defined in Section 5(1)(d) of the Prevention of
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Corruption Act were substantially the same in the State Act as in the
Central Acts, the prescribed punishment varied. The Court held that the
State Act did not contain a provision repugnant to the Central Acts but it
was “a sort of complementary Act which runs pari passu the Central
Acts”. The Court held:
“37. Last but not the least there is a very important circumstance
which completely and conclusively clinches the issue and takes
the force out of the argument of Mr Venugopal on the question of
repugnancy. It would be seen that in the original State Act, Section
29 ran thus:
“Act to override other laws, etc.—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 custom, usage or contract or decree or order of a court or
other authority.”
This section underwent an amendment which was brought
about by Tamil Nadu Act 16 of 1974 which substituted a new
Section 29 for the old one. The new section which was substituted
may be extracted thus:
“Saving—The provisions of this Act shall be in addition to,
and not in derogation of, any other law for the time being in force,
and nothing contained herein shall exempt any public man from
any proceeding by way of investigation or otherwise which might,
apart from this Act, be instituted against him.”
This amendment received the assent of the President on April 10,
1974 and was
published in the Tamil Nadu Government Gazette
Extraordinary dated April 16, 1974. We have already shown that
although the State Act was passed as far back as December 30,
1973 it received the assent of the President on April 10, 1974, that
is to say, on the same [ Ed. : But see paras 4 and 7 of this judgment
and 1974 MLJ (Stat.) Mad. Acts p. 2 wherein it is stated that Act
II of 1974 was assented to by the President on Dec. 30, 1973 and
published in T. N. Govt. Gaz. Extra., Pt. IV, S. 2 at p. 5, dated
Jan. 2, 1974] date as Act 16 of 1974. The Act was however
brought into force on May 8, 1974 when the new Section 29 which
had already replaced the old section and had become a part of the
statute. Therefore, for all intents and purposes the State Act cannot
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be read in isolation, but has to be interpreted in conjunction with
the express language contained in Section 29 of the State Act.
This section has in unequivocable terms expressed the intention
that the State Act which was undoubtedly the dominant legislation
would only be “in addition to and not in derogation of any other
law for the time being in force” which manifestly includes the
Central Acts, namely, the Penal Code, 1860, the Corruption Act
and the Criminal Law (Amendment) Act. Thus, the Legislature
about a month before the main Act came into force clearly declared
its intention that there would be no question of the State Act colliding
with the Central Acts referred to above. The second part of Section
29 also provides that nothing contained in the State Act shall
exempt any public man from being proceeded with by way of
investigation or otherwise under a proceeding instituted against
him under the Central Acts. It is, therefore, clear that in view of
this clear intention of the legislature there can be no room for any
argument that the State Act was in any way repugnant to the
Central Acts. We have already pointed out from the decisions of
the Federal Court and this Court that one of the important tests to
find out as to whether or not there is repugnancy is to ascertain
the intention of the legislature regarding the fact that the dominant
legislature allowed the subordinate legislature to operate in the
same field pari passu the State Act.”
Since the State Act created distinct and separate offences with
different ingredients and different punishments, it was held not to collide
with the Central Acts. Another feature of the State Act in M Karunanidhi
(supra) was that as originally enacted, the legislation contained a provision
(Section 29) giving overriding effect to its provisions, notwithstanding
anything inconsistent contained in any other law for the time being in
force”. Subsequently, by Tamil Nadu Act 16 of 1959, a new Section 29
was substituted. The substituted Section 29 provided that the provisions
of the Act were in addition to and not in derogation of any other law for
the time being in force and nothing in the Act would exempt a “public
man” from any proceeding by way of an investigation or otherwise,
which might apart from the Act be instituted against them. The
amendment received the assent of the President on 10 April 1974 and
was published in the Gazette on 16 April 1974. The State Act though
enacted in December 1973 received the assent of the President
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subsequently. Interpreting the provisions of the substituted Section 29,
the Constitution Bench held:
“37…
This section has in unequivocable terms expressed the intention
that the State Act which was undoubtedly the dominant legislation
would only be “in addition to and not in derogation of any other
law for the time being in force” which manifestly includes the
Central Acts, namely, the Penal Code, 1860, the Corruption Act
and the Criminal Law (Amendment) Act. Thus, the Legislature
about a month before the main Act came into force clearly declared
its intention that there would be no question of the State Act colliding
with the Central Acts referred to above. The second part of Section
29 also provides that nothing contained in the State Act shall
exempt any public man from being proceeded with by way of
investigation or otherwise under a proceeding instituted against
him under the Central Acts. It is, therefore, clear that in view of
this clear intention of the legislature there can be no room for any
argument that the State Act was in any way repugnant to the
Central Acts. We have already pointed out from the decisions
of the Federal Court and this Court that one of the important
tests to find out as to whether or not there is repugnancy is
to ascertain the intention of the legislature regarding the
fact that the dominant legislature allowed the subordinate
legislature to operate in the same field pari passu the
State
Act.”
(emphasis supplied)
37. A three judge Bench of this Court in Hoechst
Pharmaceuticals Ltd. vs State of Bihar26, considered the constitutional
validity of Section 5(1) of the Bihar Finance Act, 1981 which provided
for the levy of a surcharge on every dealer, whose gross turnover during
a year exceeded Rs 5 lacs, in addition to the tax payable by him. The
Act received the assent of the President. The challenge was on the
ground that the price fixation of essential commodities in general and
drugs and formulations in particular was an occupied field by various
Control orders issued by the Union government under Section 3(1) of
the Essential Commodities Act 1955, Justice AP Sen, speaking for the
26 (1983) 4 SCC 45
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three judge Bench, rejected the arguments of the appellant that there
was a repugnancy between sub-Section (3) of Section 5 which was
relatable to Entry 54 of List II and the Control order issued by the Central
government under Section 3(1) of the Essential Commodities Act relatable
to Entry 33 of List III. The Court held that the question of repugnancy
under Article 254(1) between a law made by Parliament and the law
made by the State legislature arises only in case both the legislations
occupy the same field with respect to one of the matters enumerated
the Concurrent List and there is a direct conflict between the two laws.
Article 254(1), it held, has no application to cases of repugnancy due to
overlapping found between List II on the one hand and Lists I and III on
the other. In such a case, the State law will fail not because of the
repugnancy to the Union law but due to want of legislative competence.
The Court rejected the argument that sub-Section (3) of Section 5 being
a State law must be struck down as ultra vires on the ground that the
fixation of the price of essential commodities was an occupied field
covered by central legislation. The power of the State legislature to make
a law with respect to the levy and imposition of a tax on the sale or
purchase of goods (relatable to Entry 54 of List II) and to make ancillary
provisions is plenary and was not subject to the power of Parliament to
make a law under Entry 33 of List III. There was
therefore no question
of a clash between the two laws and the question of repugnancy, the
Court held, “does not come into play”.
38. In State of Kerala vs Mar Appraem Kuri Company Ltd.27,
a Constitution Bench dealt with the question as to whether the Kerala
Chitties Act, 1975 became repugnant to the Chit Funds Act, 1982 enacted
by Parliament on the date when the Parliamentary legislation received
the assent of the President or subsequently, when a notification was
issued under Section 1(3) bringing the Central Act into force in the State
of Kerala. On comparing the Central and State statutes in the course of
the judgment, Chief Justice SH Kapadia, noticed various provisions of
the State Act in conflict with the Central legislation. The High Court had
also noticed several inconsistencies. The Court held that the Act of 1982
was enacted as a Central legislation to ensure uniformity in the provisions
applicable to Chit Fund institutions throughout the country. There was
thus an intent to occupy the entire field falling under Entry 7 of List III.
A significant aspect of the Central legislation was Section 3 which gave
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overriding effect to the law enacted by Parliament. Moreover, Section
90 provided for the repeal of State legislations, manifesting, in the view
of the Court, an intent of Parliament to occupy the field hitherto occupied
by the State legislations. The Court observed that every aspect relating
to the conduct of chits as was covered by the State Act had been touched
upon by the Central Act in a more comprehensive manner. The Court
held that on the enactment of the Central legislation on 19 August 1982,
intending to occupy the entire subject of chits under Entry 7 of List II,
the State Legislature was denuded of its power to enact a law on the
subject.
39. A two judge Bench of this Court in Innoventive Industries
Ltd. vs ICICI Bank28 (“Innoventive Industries”), dealt with the
provisions of the Maharashtra Relief Undertakings (Special Provisions)
Act 1958 vis-à-vis the provisions of the IBC. Speaking through Justice
RF Nariman the court held that the IBC is an exhaustive code on the
subject matter of insolvency in relation to corporate entities, referable to
Entry 9 of List III of the Seventh Schedule which deals with “bankruptcy
and insolvency”. On the other hand, the subject covered by the
Maharashtra legislation fell within Entry 23 of List III which deals with
“social security and social insurance; employment and unemployment”.
IBC was held to prevail after adverting to the earlier line of precedent,
the Court
formulated the three tests of repugnancy in the following terms:
“51.6. Repugnancy may be direct in the sense that there is
inconsistency in the actual terms of the competing statutes and
there is, therefore, a direct conflict between two or more provisions
of the competing statutes. In this sense, the inconsistency must
be clear and direct and be of such a nature as to bring the two
Acts or parts thereof into direct collision with each other, reaching
a situation where it is impossible to obey the one without disobeying
the other. This happens when two enactments produce different
legal results when applied to the same facts.
51.7. Though there may be no direct conflict, a State law may be
inoperative because the Parliamentary law is intended to be a
complete, exhaustive or exclusive code. In such a case, the State
law is inconsistent and repugnant, even though obedience to both
laws is possible, because so long as the State law is referable to
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the same subject-matter as the Parliamentary law to any extent,
it must give way. One test of seeing whether the subject-matter
of the Parliamentary law is encroached upon is to find out whether
the Parliamentary statute has adopted a plan or scheme which
will be hindered and/or obstructed by giving effect to the State
law. It can then be said that the State law trenches upon the
Parliamentary statute. Negatively put, where Parliamentary
legislation does not purport to be exhaustive or unqualified, but
itself permits or recognises other laws restricting or qualifying the
general provisions made in it, there can be said to be no repugnancy.
51.8. A conflict may arise when Parliamentary law and State law
seek to exercise their powers over the same subject-matter. This
need not be in the form of a direct conflict, where one says “do”
and the other says “don’t”. Laws under this head are repugnant
even if the rule of conduct prescribed by both laws is identical.
The test that has been applied in such cases is based on the principle
on which the rule of implied repeal rests, namely, that if the subject-
matter of the State legislation or part thereof is identical with that
of the Parliamentary legislation, so that they cannot both stand
together, then the State legislation will be said to be repugnant to
the Parliamentary legislation. However, if the State legislation or
part thereof deals not with the matters which formed the subject-
matter of Parliamentary
legislation but with other and distinct
matters though of a cognate and allied nature, there is no
repugnancy.”
40. Our journey of tracing the precedents of this Court,
commencing from Zaverbhai (supra) up until Innoventive Industries
(supra) indicates a thread of thought dwelling on when, within the
meaning of Article 254(1), a law made by the legislature of a State can
be considered to be repugnant to a provision of a law made by Parliament
with respect to one of the matters in the Concurrent List which
Parliament is competent to enact. The doctrine of repugnancy under
Article 254(1) operates within the fold of the Concurrent List. Clause
(1) of Article 254 envisages that the law enacted by Parliament will
prevail and the law made by the legislature of the State shall be void “to
the extent of repugnancy”. Clause (1) does not define what is meant by
repugnancy. The initial words of Clause (1) indicate that the provision
deals with a repugnancy between a law enacted by the State legislature
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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with: (i) A provision of a law made by Parliament which it is competent
to enact; or (ii) To any provision of an existing law; and (iii) with respect
to one of the matters enumerated in the Concurrent List.
41. The initial part of Clause (1) alludes to a law enacted by a
state legislature being “repugnant” to a law enacted by Parliament or to
an existing law. The concluding part of clause 1 provides for a
consequence, namely that the State law would be void “to the extent of
the repugnancy” and the Parliamentary enactment shall prevail. The
concept of repugnancy emerges from the decisions of this Court which
have elaborated on the context of clause (1) of Article 254. Clause (2)
of Article 254 has also employed the expression “repugnant” while
providing that a law enacted by the legislature of a State which is
repugnant to a law enacted by Parliament or an existing law on a matter
within the Concurrent List shall, if it has received the assent of the
President, prevail in the State. The decisions of this Court essentially
contemplate three types of repugnancy:
(i)
The first envisages a situation of an absolute or
irreconcilable conflict or inconsistency between a provision
contained in a State legislative enactment with a
Parliamentary law with reference to a matter in the
Concurrent List. Such a conflict brings both the statutes
into a state of direct collision. This may arise, for instance,
where the two statutes
adopt norms or standards of behavior
or provide consequences for breach which stand opposed
in direct and immediate terms. The conflict arises because
it is impossible to comply with one of the two statutes without
disobeying the other;
(ii)
The second situation involving a conflict between State and
Central legislations may arise in a situation where Parliament
has evinced an intent to occupy the whole field.  The notion
of occupying a field emerges when a Parliamentary
legislation is so complete and exhaustive as a Code as to
preclude the existence of any other legislation by the State.
The State law in this context has to give way to a
Parliamentary enactment not because of an actual conflict
with the absolute terms of a Parliamentary law but because
the nature of the legislation enacted by Parliament is such
as to constitute a complete and exhaustive Code on the
subject; and
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(iii)
The third test of repugnancy is where the law enacted by
Parliament and by the State legislature regulate the same
subject. In such a case the repugnancy does not arise
because of a conflict between the fields covered by the
two enactments but because the subject which is sought to
be covered by the State legislation is identical to and overlaps
with the Central legislation on the subject.
42. The distinction between the first test on the one hand with the
second and third tests on the other lies in the fact that the first is grounded
in an irreconcilable conflict between the provisions of the two statutes
each of which operates in the Concurrent List. The conflict between the
two statutes gives rise to a repugnancy, the consequence of which is
that the State legislation will be void to the extent of the repugnancy.
The expression ‘to the extent of the repugnancy’ postulates that those
elements or portions of the state law which run into conflict with the
central legislation shall be excised on the ground that they are void. The
second and third tests, on the other hand, are not grounded in a conflict
borne out of a comparative evaluation of the text of the two provisions.
Where a law enacted by Parliament is an exhaustive Code, the second
test may come into being. The intent of Parliament in enacting an
exhaustive Code on a subject in the Concurrent List may well be to
promote uniformity and standardization of its legislative scheme as a
matter of
public interest. Parliament in a given case may intend to secure
the protection of vital interests which require a uniformity of law and a
consistency of its application all over the country. A uniform national
legislation is considered necessary by Parliament in many cases to prevent
vulnerabilities of a segment of society being exploited by an asymmetry
of information and unequal power in a societal context. The exhaustive
nature of the Parliamentary code is then an indicator of the exercise of
the State’s power to legislate being repugnant on the same subject. The
third test of repugnancy may arise where both the Parliament and the
State legislation cover the same subject matter. Allowing the exercise of
power over the same subject matter would trigger the application of the
concept of repugnancy. This may implicate the doctrine of implied repeal
in that the State legislation cannot co-exist with a legislation enacted by
Parliament. But even here if the legislation by the State covers distinct
subject matters, no repugnancy would exist. In deciding whether a case
of repugnancy arises on the application of the second and third tests,
both the text and the context of the Parliamentary legislation have to be
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borne in mind. The nature of the subject matter which is legislated upon,
the purpose of the legislation, the rights which are sought to be protected,
the legislative history and the nature and ambit of the statutory provisions
are among the factors that provide guidance in the exercise of judicial
review. The text of the statute would indicate whether Parliament
contemplated the existence of State legislation on the subject within the
ambit of the Concurrent List. Often times, a legislative draftsperson
may utilize either of both of two legislative techniques. The draftsperson
may provide that the Parliamentary law shall have overriding force and
effect notwithstanding anything to the contrary contained in any other
law for the time being in force. Such a provision is indicative of a
Parliamentary intent to override anything inconsistent or in conflict with
its provisions. The Parliamentary legislation may also stipulate that its
provisions are in addition to and not in derogation of other laws. Those
other laws may be specifically referred to by name, in which event this
is an indication that the operation of those specifically named laws is not
to be affected. Such a legislative device is often adopted by Parliament
by saving the operation of other Parliamentary legislation which is
specifically named. When such a provision is utilized, it is an indicator of
Parliament intending to allow the specific legislation
which is enlisted or
enumerated to exist unaffected by a subsequent law. Alternatively,
Parliament may provide that its legislation shall be in addition to and not
in derogation of other laws or of remedies, without specifically elucidating
specifically any other legislation. In such cases where the competent
legislation has been enacted by the same legislature, techniques such as
a harmonious construction can be resorted to in order to ensure that the
operation of both the statutes can co-exist. Where, however, the
competing statutes are not of the same legislature, it then becomes
necessary to apply the concept of repugnancy, bearing in mind the intent
of Parliament. The primary effort in the exercise of judicial review must
be an endeavour to harmonise.  Repugnancy in other words is not an
option of first choice but something which can be drawn where a clear
case based on the application of one of the three tests arises for
determination.
H.3 Repugnancy – RERA and WB-HIRA
43. While proceeding with the analysis on the basis of the above
foundation, two aspects of the RERA must be noticed at the fore-front.
Firstly, the RERA factors in the existence of municipal or local authorities
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constituted under State legislation whose powers and functions in regard
to the development of land are regulated by legislation enacted by the
State legislatures. The RERA recognizes that local bodies constituted
under laws enacted by the State legislatures regulate diverse aspects of
construction activity as an incident of the development of land. Secondly,
in diverse provisions, the RERA has imposed the duty of complying with
its regulatory provisions upon the ‘appropriate government’. This
expression encompasses, in respect of matters relating to the State, the
State government. In the case of Union Territories, the definition of the
expression ‘appropriate government’ in Section 2(g) is bifurcated into
three categories:
(i) A Union Territory without a legislature;
(ii) The Union Territory of Puducherry; and
(iii) The Union Territory of Delhi.
44. Parliament while enacting the RERA has imposed the obligation
to secure compliance with its provisions in diverse aspects upon the
State governments. Each of these two facets needs to be developed and
analyzed for the purpose of the discussion.
45. The statutory dictionary which is adopted in the provisions of
Section 2 contains various definitions which expressly recognize the
existence of State enactments regulating construction activities. The
definition of the expression ‘commencement certificate’ in Section 2(m)
is as follows:
“(m) “commencement certificate” means the commencement
certificate or the
building permit or the construction permit, by
whatever name called issued by the competent authority to allow
or permit the promoter to begin development works on an
immovable property, as per the sanctioned plan;”
The definition of the expression “commencement certificate”
adverts to a building or construction permit issued by “the competent
authority” to allow or permit the promoter to begin the development
work on an immoveable property in accordance with the sanctioned
plan. This definition incorporates the notion of a “competent authority”
(which is defined in Section 2(p)), and of a sanctioned plan (which is
defined in Section 2(zq)). The expression ‘competent authority’ is defined
as follows:
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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“(p) “competent authority” means the local authority or any
authority created or established under any law for the time being
in force by the appropriate Government which exercises authority
over land under its jurisdiction, and has powers to give permission
for development of such immovable property;”
The above definition refers to a local authority or an authority
created or established under any law for the time being in force by the
appropriate government, exercising authority over land within its
jurisdiction, with powers to permit the development of immoveable
property.
46. The expression ‘sanctioned plan’ is defined in Section 2(zq) in
the following terms:
“(zq) “sanctioned plan” means the site plan, building plan, service
plan, parking and circulation plan, landscape plan, layout plan, zoning
plan and such other plan and includes structural designs, if
applicable, permissions such as environment permission and such
other permissions, which are approved by the competent authority
prior to start of a real estate project;”
47. The expression ‘planning area’ is defined in Section 2(zh) in
the following terms:
“(zh) “planning area” means a planning area or a development
area or a local planning area or a regional development plan area,
by whatever name called, or any other area specified as such by
the appropriate Government or any competent authority and
includes any area designated by the appropriate Government
or
the competent authority to be a planning area for future planned
development, under the law relating to Town and Country Planning
for the time being in force and as revised from time to time;”
The above definition of a planning area clearly incorporates a
reference to its designation by an appropriate government or a competent
authority including an area designated for ‘future plannned development’
under the law relating to town and country plaining for the time being in
force, and as revised from time to time. The definition implicitly recognizes
the existence of town and country planning legislation in the State
governing planned development and the existence of development plans
authorized and sanctioned under the terms of such legislation.
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48. In a similar manner, the definition of the expression ‘completion
certificate’ in Section 2(q) recognizes that the real estate project has
been developed according to the plan, layout plan and specifications
duly approved by the competent authority as provided for in local laws.
Section 2(q) is in the following terms:
“(q) “completion certificate” means the completion certificate, or
such other certificate, by whatever name called, issued by the
competent authority certifying that the real estate project has been
developed according to the sanctioned plan, layout plan and
specifications, as approved by the competent authority under the
local laws;”
49. The expression ‘local authority’ is defined in Section 2(zc) as
follows:
“(zc) “local authority” means the Municipal Corporation or
Municipality or Panchayats or any other Local Body constituted
under any law for the time being in force for providing municipal
services or basic services, as the case may be, in respect of areas
under its jurisdiction;”
The above definition recognizes the existence of municipal
corporations, municipalities or Panchayats and local bodies constituted
under any law for the time being in force for providing municipal services
or basic services in respect of the areas under its jurisdiction.
50. The definition of “occupancy certificate” in Section 2(zf) is as
follows:
“(zf) “occupancy certificate” means the occupancy certificate,
or such other certificate by whatever name
called, issued by the
competent authority permitting occupation of any building, as
provided under local laws, which has provision for civic
infrastructure such as water, sanitation and electricity;”
The above definition recognizes that occupancy certificates are
issued by a competent authority permitting the occupation of the building
under local laws upon being satisfied that the building has provision for
civic infrastructure such as water, sanitation or electricity.
51. Among the definitions provided in Section 2, clause (zr)
stipulates that:
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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“(zr) words and expressions used herein but not defined in this
Act and defined in any law for the time being in force or in the
municipal laws or such other relevant laws of the appropriate
Government shall have the same meanings respectively assigned
to them in those laws”
In other words, those expressions and words which are used in
the RERA but for which there is no definition in Section 2 are to have a
meaning ascribed to them “in any law for the time being in force or in
the municipal laws or such other relevant laws of the appropriate
government”.
52. The above provisions of RERA are indicative of the fact that
Parliament was conscious of the position that diverse activities relating
to construction projects are governed by municipal and local legislation.
There is an existence in the States of various regimes of town and country
planning governed by State enactments and regulations have been framed
under them. Likewise, municipal and local laws govern diverse aspects
of construction activity in real estate projects including the application
for development, nature and extent of permissible development on land,
issuance of commencement certificates allowing the promoter to begin
development of an immoveable property, completion certificates certifying
the completion of the construction project in accordance with the
sanctioned plans and the grant of occupation permission to occupy the
constructed areas.
53. All
the definitions which we have adverted to clearly postulate
the existence of State legislation which governs and regulates construction
activity through municipal and local bodies. The RERA naturally has not
attempted to supplant these State enactments which govern the
permissible use of land for development, the applicable norms for
construction activity, the nature and extent of development permissible
on land falling within municipal and local areas and the process of
carrying out construction from its initiation to completion. In not intruding
into this area, the RERA has followed the distribution of legislative
powers. Entry 5 of List II to the Seventh Schedule, as we have seen
earlier, deals with local government, including the constitution and powers
of municipal corporations and other local authorities for the purpose of
local self-government or village administration. The control over
development activities under municipal and local laws is governed by
State legislation.
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54. The second aspect of RERA which deserves emphasis is that
its diverse provisions are regulated and enforced by the real estate
regulatory authority which is constituted under Section 20 by the
appropriate government. The appropriate government as noticed in
Section 2(g) means the State government in respect of matters relating
to the State. The appointment of the real estate regulatory authority is
envisaged to be made by the appropriate government under Section 21.
The power of removal is entrusted to the appropriate government under
Section 26. The appointment of officers and employees of the authority
is entrusted to the appropriate government under Section 28. Section 32
requires the authority to make recommendations to the appropriate
government or the competent authority, as the case may be, to facilitate
the growth and promotion of a healthy, transparent, efficient and
competitive real estate sector. The authority is entrusted with regulatory
functions to ensure compliance with the substantive norms envisaged
from Sections 3 to 19. Section 3 requires the promoter to first register a
real estate project with the real estate regulatory authority before
advertising, marketing, booking, selling or offering for sale or inviting
persons to purchase a plot, apartment or building in a real estate project.
The authority receives applications for registration under Section 4 and
it has a statutory role under Section 5 in regard to the grant of
registration,
in Section 6 for the extension of registration and in Section 7 for the
revocation of registration. Upon the lapsing or revocation of the
registration, the authority is entrusted with certain powers under Section
8. Likewise, in the sphere of regulating real estate agents, the authority
is entrusted with the power of registration under Section 9. Chapter III
of the RERA specifies the functions and duties of promoters. Section 11
requires the promoter upon the grant of registration to create a web-
page on the website of the authority. Sections 12 and 13 impose positive
obligations on the promoter. Section 14 requires the promoter to adhere
to sanctioned plans, layouts and specifications as approved by the
competent authority. Section 18 provides for the return of the amount
received by the promoter and payment of compensation if the promoter
has failed to complete and is unable to give possession of an apartment,
flat or building. The rights and duties of allottees are specified in Section
19. Significantly, Section 31 envisages the filling of complaints with the
authority or an adjudicating officer in the event that there has been a
violation or contravention of the provisions of the Act or its rules and
regulations by a promoter, allottee or real estate agent. The authority
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
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has wide ranging powers under Sections 38 and 40 to impose a penalty
or interest for a contravention of the obligations cast upon promoters,
allottees and real estate agents.
55. Besides the above provisions, the RERA has provided for the
establishment of a Real Estate Appellate Tribunal by the appropriate
government in Chapter VII. Consistent with the provisions of Sections
43 to 57, the real estate regulatory authority has a vital role to play in
regard to the imposition of penalties under Chapter VIII prescribes
penalties for contravention of the provisions of the Act.
56. Besides the establishment of the real estate regulatory authority,
the RERA has, in Section 7129, contemplated the appointment of
adjudicating officers for adjudging compensation under Sections 12, 14,
18 and 19. These adjudicating officers are to be appointed by the authority
in consultation with the appropriate government.
29 “71. Power to adjudicate.
(1) For the purpose of adjudging compensation under sections 12, 14, 18 and section
19, the Authority shall appoint in consultation with the appropriate Government one
or more judicial officer as deemed necessary, who is or has been a District Judge to be
an adjudicating officer for holding an inquiry in the prescribed manner, after giving any
person concerned a reasonable opportunity of being heard: Provided that any person
whose complaint in respect of matters covered under sections 12, 14, 18
and section 19
is pending before the Consumer Disputes Redressal Forum or the Consumer Disputes
Redressal Commission or the National Consumer Redressal Commission, established
under section 9 of the Consumer Protection Act, 1986, on or before the commencement
of this Act, he may, with the permission of such Forum or Commission, as the case may
be, withdraw the complaint pending before it and file an application before the
adjudicating officer under this Act.
(2) The application for adjudging compensation under sub-section (1), shall be dealt
with by the adjudicating officer as expeditiously as possible and dispose of the same
within a period of sixty days from the date of receipt of the application: Provided that
where any such application could not be disposed of within the said period of sixty
days, the adjudicating officer shall record his reasons in writing for not disposing of the
application within that period.
(3) While holding an inquiry the adjudicating officer shall have power to summon and
enforce the attendance of any person acquainted with the facts and circumstances of
the case to give evidence or to produce any document which in the opinion of the
adjudicating officer, may be useful for or relevant to the subject matter of the inquiry
and if, on such inquiry, he is satisfied that the person has failed to comply with the
provisions of any of the sections specified in sub-section (1), he may direct to pay such
compensation or interest, as the case any be, as he
thinks fit in accordance with the
provisions of any of those sections.”
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57. Chapter IX provides for finance, accounts, audits and reports.
Under Section 73, the Central government is empowered to make grants
and loans to the authority upon due appropriation by Parliament. A similar
power is entrusted to the State government under Section 74. Section 75
contemplates the constitution of a fund called the Real Estate Regulatory
Fund by the appropriate government. Section 77 requires the preparation
of a budget and maintenance of accounts and other records as well as
preparation of an annual statement of accounts by the authority in such
form as is prescribed by the appropriate government in consultation with
the Comptroller and Auditor General of India. The annual report of the
authority is under Section 78(2) required to be placed before each House
of Parliament, or as the case may be, before the State legislature or
Union Territory legislature. Section 82 entrusts to the appropriate
government the statutory powers to supersede the authority. Section 83
empowers the appropriate government to issue directions to the authority.
Section 84 entrusts a rule making power to the appropriate government.
This review of the provisions of the RERA emphasizes the second facet
of the law which is that the statutory duty to ensure the implementation
of the legislation is entrusted to the appropriate government which in the
case of the states means the state government.
58. Now, it is in this background that it becomes necessary to
analyze
the provisions of Sections 88 and 89 of the RERA. Section 88
stipulates that the application of other laws is not barred: the provisions
of the legislation “shall be in addition to, and not in derogation of, the
provisions of any other law for the time being in force”. At the same
time, Section 89 provides for overriding effect to the provisions of the
RERA when it stipulates that it “shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time being in
force”. The interpretation of these provisions and their interplay will
have an important bearing on the outcome of the present controversy.
This is because, as we noticed earlier in this judgment, the State of West
Bengal had originally supported its legislative authority over the subject
governed by WB-HIRA on the ground that the state enactment falls
within the ambit and purview of List II of the Seventh Schedule. However,
though this submission was specifically pressed in the counter affidavit,
it has been expressly given up in the oral and written submissions tendered
before this Court by the State of West Bengal. The submission now of
the State of West Bengal accepts that in essence and in substance, WB-
HIRA contains a substantial overlap with the provisions of the RERA
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
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and is a law which the State legislature enacted in exercise of its legislative
authority under Article 246(2) while legislating on subjects in the
Concurrent List. The State of West Bengal submitted that WB-HIRA,
like the RERA is enacted with reference to the subjects incorporated in
Entries 6 and 7 of List III of the Seventh Schedule. Simply put, the
submission of the State of West Bengal is four-fold: firstly, though there
is a substantial overlap between the State and the Central enactments
and both of them govern the same subject matter and field, there is no
constitutional prohibition on the State legislature enacting legislation on a
subject in the Concurrent List which is virtually identical to central
legislation in the same list; secondly, Section 88 of the RERA contains
an expression that its provisions shall be in addition to, and not in derogation
of any other law for the time in force; this being an indicator that
Parliament contemplated that the RERA can co-exist with analogous
State legislation; thirdly, the inconsistencies between WB-HIRA and
RERA are of a minor nature and wherever the State enactment contains
provisions at variance with the Central law, the former will have to yield
to the latter, and fourthly, the provisions of Section 92 of the RERA
demonstrate that where Parliament intended to repeal a specific State
legislation – Maharashtra Act No II of 2014 - only that legislation was
repealed.