Supreme Court declares West Bengal law on real estate regulation unconstitutional

Forum for Peoples Collective Efforts (FPCE), an NGO, had challenged the validity of the state law, saying this had caused irreparable loss to home buyers

The Supreme Court on Tuesday declared as unconstitutional a West Bengal law enacted in 2017, a year after the Centre passed the Real Estate (Regulation and Development) Act, 2016, saying if Parliament has passed a legislation, it was not open for states to enact similar statute.

A bench of Justices D Y Chandrachud and M R Shah termed the West Bengal Housing Industry Regulation Act, (WB-HIRA) 2017, as void, for the state legislature has transgressed the limitations on its power.

The central law was passed in 2016 to avoid exploitation of home buyers and to ensure orderly growth of the housing sector.

The top court noted the WB law was in direct conflict with the central legislation, by lacking necessary safeguards to protect the consumers.

The state law created a parallel regime, besides it did not have presidential assent under Article 254 of the Constitution, necessary as Parliamentary statute already occupied the field, it pointed out.

In its 190-page judgement, the top court struck down the state law.

It also noted a significant and even overwhelmingly large part of WB-HIRA overlapped with the provisions of RERA but it does not complement the central law by fortifying the rights, obligations and remedies.

The court pointed out how RERA included open car parking in definition of common area which was not there in WB-HIRA. The definition of 'force majeure' under the RERA for delay in registration of housing project covered war, flood, drought, fire, cyclone, earthquake or any other calamity while the state law gave wide discretion to the authorities to incorporate “any other circumstances prescribed” for it.

NGO, Forum for Peoples Collective Efforts (FPCE) challenged the validity of the state law, saying this had caused irreparable loss to home buyers.

After the striking down the WB law, the top court used its power under Article 142 of the Constitution to direct that prior permission and sanctions granted to housing projects would not be affected with its judgement in order to avoid "uncertainty and disruption".