SC declares WB law on real estate unconstitutional

In an important judgement, the Supreme Court on Tuesday struck down a West Bengal real estate law, saying it was in direct conflict with the central legislation enacted by Parliament on the subject.

The top court declared the West Bengal Housing Industry Regulation Act, (WB-HIRA) 2017, unconstitutional as it came in conflict with the Real Estate (Regulation and Development) Act (RERA), 2016, enacted to prevent exploitation of home buyers and to ensure orderly growth of the housing sector.

"If Parliament has enacted a law on a subject, it is not open to state legislature to enact a similar law," a bench of Justices D Y Chandrachud and M R Shah said in its 190-page judgement.

The bench said the state law created a parallel regime and lacked the necessary safeguards of the central law. By enacting it, the state legislature had transgressed the limitations on its power, the court said, pointing out that it did not have presidential assent under Article 254 of the Constitution, necessary as parliamentary statute already occupied the field.

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

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

Forum for People's Collective Efforts (FPCE), an NGO, had challenged the validity of the state law, saying it 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".