Supreme Court of India
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) & ANR.versusTHE STATE OF WEST BENGAL & ANR.
- Citation
- 2021 INSC 283
- Decided
- 4 May 2021
- Disposal
- Case Allowed
Holding
The West Bengal Housing Industry Regulation Act, 2017 is repugnant to the Real Estate (Regulation and Development) Act, 2016 and, having been enacted without presidential assent, is unconstitutional.
Summary
The petitioners challenged the West Bengal Housing Industry Regulation Act, 2017 (WB‑HIRA) on the ground that it largely reproduces the provisions of the central Real Estate (Regulation and Development) Act, 2016 (RERA) and therefore violates the doctrine of repugnancy under Article 254 of the Constitution. The Court examined whether WB‑HIRA falls within Entry 24 of the State List or the Concurrent List entries 6 and 7, and whether the extensive overlap and direct conflicts with RERA render it repugnant. It also considered the lack of presidential assent required for a state law that conflicts with a parliamentary enactment and the effect of Sections 88 and 89 of RERA. Applying the three tests of repugnancy, the Court found that WB‑HIRA is identical to RERA, creates a parallel regime, and was enacted without presidential assent, making it unconstitutional. Consequently, WB‑HIRA was struck down, the petition was allowed, and the Court ordered that past registrations and permissions under the Act remain unaffected under its jurisdiction under Article 142.
Issues considered
- The legislative competence of WB‑HIRA: whether it falls under Entry 24 of the State List or Entries 6 and 7 of the Concurrent List.
- Whether the substantial identity and overlap between WB‑HIRA and RERA makes WB‑HIRA repugnant to RERA under Article 254(1).
- Whether the absence of presidential assent under Article 254(2) invalidates WB‑HIRA.
- The interpretation of Sections 88 and 89 of RERA and whether they permit a state to enact a parallel law.
- The effect of striking down WB‑HIRA on the earlier West Bengal 1993 Act.
- The appropriate relief under Article 142 concerning actions taken under WB‑HIRA before its invalidation.
Legislation cited
- Consumer Protection Act, 2019
- Insolvency and Bankruptcy Code, 2016
- Real Estate (Regulation and Development) Act, 2016 (RERA)s. 2, s. 38(3), s. 41, s. 42, s. 6, s. 70, s. 71, s. 80(2), s. 88, s. 89
- West Bengal Housing Industry Regulation Act, 2017 (WB‑HIRA)s. 2, s. 20-39, s. 41-58, s. 71-78, s. 81-92, s. 83, s. 86, s. 92
- West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993s. 1-19, s. 3-17, s. 40, s. 59-70, s. 79-80
Subjects
repugnancyArticle 254Concurrent Listpresidential assentReal Estate (Regulation and Development) ActWest Bengal Housing Industry Regulation Actconstitutional validityArticle 142parallel legislationconsumer protectionhousing sector regulation
Judgment
[2021] 5 S.C.R. 613 613
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) & A
ANR.
v.
THE STATE OF WEST BENGAL & ANR.
(Writ Petition (C) No. 116 of 2019) B
MAY 04, 2021
[DR. DHANANJAYA Y CHANDRACHUD AND
M R SHAH, JJ.]
West Bengal Housing Industry Regulation Act, 2017
C
(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-
D
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 E
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
F
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 G
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
H
613
614 SUPREME COURT REPORTS [2021] 5 S.C.R.
A (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
B 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
C 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
D 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
E 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
F 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.
G
Salient features of RERA Act – Explained.
Constitution of India:
Art. 254 – Repugnancy – Salient features of Art. 254 – Stated.
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 615
WEST BENGAL
Doctrine of repugnancy u/Art. 254(1) – Held: Operates within A
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
B
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 C
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 D
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 E
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 – F
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 G
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. H
616 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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:
C 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 –
D 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.
E 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
F 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
G
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
H
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WEST BENGAL
on the basis that the subject of both the central and the state A
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 B
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 C
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 D
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 E
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 F
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] G
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. H
618 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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;
B (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;
C (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
D 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
E 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
F 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
G
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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 619
WEST BENGAL
provision of an existing law; and (iii) with respect to one of the A
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 B
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 C
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: D
(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 E
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; F
(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 G
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 H
620 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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]
C 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
D 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
E 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
F 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
G 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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 621
WEST BENGAL
over the same subject matter would trigger the application of the A
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
B
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 C
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
D
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 E
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
F
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 G
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,
H
622 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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.
C 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]
D 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
E 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
F 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
G 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
H needs to be developed and analyzed. [Para 44][757-D]
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 623
WEST BENGAL
4.3 Section 2(q), 2(zc), 2(zf), 2(zr) of RERA are indicative A
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
B
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 C
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 D
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 E
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 F
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 G
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
H
624 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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
D 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
E 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
F 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
G 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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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 625
WEST BENGAL
when the statutory provision was enacted. To the contrary, it widely A
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
B
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. C
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) D
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 E
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 F
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 G
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]
H
626 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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.
B
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
C 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
D
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.
E [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
F 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
G 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
H Parliament on the ground that the regulation of the subject matter
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 627
WEST BENGAL
by Parliament is so complete as a code, so as to leave no space A
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
B
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 C
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
D
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. E
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. F
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 G
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
H
628 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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.
D
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-
E 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
F 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
G 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:
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 629
WEST BENGAL
(i) Section 2(n) of the RERA contains a statutory definition A
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
B
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 C
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, D
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 E
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 F
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; G
(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,
H
630 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E 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;
F
(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
G 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
H to the Appellate Tribunal and thereafter to the High Court
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 631
WEST BENGAL
cannot gloss over the fact that the valuable safeguard of A
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 B
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 C
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 D
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 E
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 F
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). G
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 H
632 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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.
C 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
D 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
E 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
F 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
G 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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 633
WEST BENGAL
Marketing Ltd. v. Punjab National Bank (1990) 4 SCC A
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
B
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.
C
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 D
[2019] 10 SCR 381 referred to Para 17
[1956] SCR 393 referred to Para 18
[2002] 1 SCR 441 referred to Para 19
E
[1956] SCR 393 referred to Para 24
[1962] Suppl. SCR 1 referred to Para 25
[2002] 1 SCR 441 referred to Para 25
F
[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 G
[1979] 3 SCR 254 referred to Para 36
[1983] 3 SCR 130 referred to Para 37
[2012] 4 SCR 448 referred to Para 38
H
634 SUPREME COURT REPORTS [2021] 5 S.C.R.
A [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
B
[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
C
[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
D [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
E 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,
F 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,
G Sayandeep Pahari, Arya Tripathy, M/S. Plr Chambers & Co., Advs. for
the Respondents.
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 635
WEST BENGAL
The Judgment of the Court was delivered by A
DR JUSTICE DHANANJAYA Y CHANDRACHUD, J.
A The challenge
B Legislative history
B
C RERA - the legislative process
D Salient features – RERA
E Salient provisions of WB-HIRA
C
F RERA and WB-HIRA – provisions at variance
G Submissions
G.1 For the petitioners
G.2 For the Union of India D
G.3 For the State of West Bengal
H Analysis
H.1 Entry 24, List II – West Bengal’s ‘housing
industry’ defense E
H.2 The Constitutional Scheme of Article 254 and
repugnancy
H.3 Repugnancy – RERA and WB-HIRA
F
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
G
H.4 Lack of Presidential Assent for WB-HIRA
I Conclusion
H
636 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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:
B (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
C 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:
D
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
E 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
F
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
G 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:
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 637
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
(i) The Maharashtra Housing (Regulation and Development) A
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. B
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 C
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.
D
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 E
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. F
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
G
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) H
638 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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.
B 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
C 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
D 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
E 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
F 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
G 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.”
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 639
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
6. Upon being introduced in the Rajya Sabha, the RERA Bill 2013 A
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
B
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 C
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
D
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 E
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 F
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 G
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:-
H
640 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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.
D 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
E
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
F
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%.
G
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
H suggested in clause 16 is inappropriate. In such an eventuality,
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 641
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
the promoter be subjected to heavy penalty and compelled to A
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. B
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. C
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 D
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 E
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 F
(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 G
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 H
642 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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
D 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
E 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
F 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)
G
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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 643
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
source of exploitation of purchasers; thirdly, the legislative policy A
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
B
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 C
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.
D
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 E
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;
F
(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:
G
“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
H
644 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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.”
B 10. As such, the legislative background underlying the enactment
of the RERA demonstrates a clear emphasis on:
(i) Standardization;
(ii) Uniformity; and
C (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
D
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
E 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
F 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:
G
“(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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 645
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
thereof, in a building or on a plot of land, used or intended to be A
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. B
Broadly, the division is as follows:
Chapter I Preliminary
Chapter II Registration of Real Estate Projects and
Registration of Real Estate Agents
C
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
D
Chapter VI The Real Estate Appellate Tribunal
Chapter VII Offences, Penalties and Adjudication
Chapter IX Finance, Accounts, Audits and Reports
Chapter X Miscellaneous E
(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 F
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; G
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
H
646 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B project;
b. Adherence to approved plans and project specifications
as approved by competent authorities;
c. Obligations regarding veracity of advertisements or
prospectus;
C
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
D 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
E 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;
F
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;
G 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;
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 647
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
(vii) Establishment of a real estate authority by the appropriate A
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; B
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 C
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. D
(ix) It also establishes the Real-Estate Appellate Tribunal,
provides the following details about the institution:
a. Establishment;
b. Settlement of disputes and appeals; E
c. Composition;
d. Conditions of service;
e. Powers;
f. Appeals;
F
(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 G
(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
H
648 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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:
C “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
D 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,
E
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.”
F 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
G 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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 649
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
separately. However, at this stage, a sampling of some of the crucial A
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
B
Section number and title from RERA and WB-HIRA on both sides:
C
D
E
F
G
H
650 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 651
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
652 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 653
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
654 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 655
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
656 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 657
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
658 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 659
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
660 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 661
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
662 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 663
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
664 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 665
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
666 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 667
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
668 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 669
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
670 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 671
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
672 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 673
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
674 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 675
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
676 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 677
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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 679
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
680 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 681
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
682 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 683
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
684 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 685
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
686 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 687
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
688 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 689
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
690 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 691
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
692 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 693
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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 695
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
696 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 697
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
698 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 699
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
700 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 701
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
702 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 703
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
704 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 705
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
706 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 707
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
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G
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708 SUPREME COURT REPORTS [2021] 5 S.C.R.
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F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 709
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
It needs to be emphasized that the tabulated provisions of the G
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: H
710 SUPREME COURT REPORTS [2021] 5 S.C.R.
A “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,
B 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.
C
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
D 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:
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 711
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
E
F
G
H
712 SUPREME COURT REPORTS [2021] 5 S.C.R.
A
B
C
D
E
F
G
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 713
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
D
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 E
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 F
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 G
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,
H
714 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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
D
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-
E 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]
F • 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
G (1988) 4 SCC 324 [2-Judges]
• Ashoka Marketing Ltd. v Punjab National Bank,
(1990) 4 SCC 406 [5-Judges]
7
H Interchangeably referred to as ‘State List’
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 715
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
• Indu Bhushan Bose v Rama Sundari Debi, (1969) 2 A
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 B
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; C
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; D
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 E
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. F
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. G
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.
H
716 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E
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
F
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:
G
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
H 88 and 89 of RERA allows the States to by-pass the
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 717
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
requirement of Presidential assent under Article 254(2) A
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; B
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 12.12.1963 C
the promotion of Construction, Sale,
management and Transfer) Act, 1963
Karnataka Ownership Flat (Regulation of the 29.06.1973
promotion of Construction, Sale, Management
and Transfer) Act, 1972
Gujarat Ownership Flats Act, 1973 28.06.1973
Andhra Pradesh Apartments (Promotion of 15.05.1987
Construction and Ownership) Act, 1987 D
West Bengal (Regulation of Promotion of 09.03.1994
Construction and Transfer by Promoters) Act,
1993
Punjab Apartment and Property Regulation 02.08.1995
Act, 1995
The above state laws covered certain areas beyond what
E
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 F
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; G
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
H
718 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C
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
D 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
E 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”
F 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
G
are contained in several other central statutes on the
subjects in the Concurrent List some of which are
tabulated below:
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 719
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
A
B
C
If the interpretation of the State of West Bengal is accepted, the D
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 E
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;
F
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 G
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.
H
720 SUPREME COURT REPORTS [2021] 5 S.C.R.
A (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
B 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
C 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:
D (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
E 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
F exploitation;
2. The need to ensure uniformity and standardization of
business practices;
3. The key purpose of RERA is to ensure uniformity,
G 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.
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 721
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
d. Some of the salient features of RERA include A
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; B
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 C
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.
D
(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 E
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 F
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 G
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 H
722 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E 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
F 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
G 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;
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 723
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
4. Section 6 of the RERA specifically confines force majeure A
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 B
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 C
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 D
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 E
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 F
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
G
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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724 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E 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
F 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
G 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
H (2019) 8 SCC 416
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 725
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
3. The only exception would be where the State legislation A
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 B
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 C
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 D
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:
E
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, F
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 G
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
H
726 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E 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 UP 10 and ITC Ltd vs
Agricultural Produce Market Committee11 to exclude
those subjects which are specifically included in the other
F 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
G 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
H (2002) 9 SCC 232
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 727
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
(III) Article 254 and Repugnancy A
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 B
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 C
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 D
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 E
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.; F
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 G
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
H
728 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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.
B 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
C 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;
D 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
E 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
F 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
G 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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 729
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
‘Adjudicating Officer’. Under WB-HIRA, the Authority A
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 B
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 C
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
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 E
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 F
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 G
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
H
730 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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.
B
These submissions will now fall for analysis.
H Analysis
H.1 Entry 24, List II – West Bengal’s ‘housing industry’
defense
C
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:
D “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…”.
E
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:
F • Entry 5- Local Government
• Entry 18- Land
• Entry 24- Industries subject to the provisions of entries 7 and
52 of List I
G • 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
H not including fees taken in any court.
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 731
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
Even as among the above Entries, the Counter Affidavit A
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 7 12 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
B
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 C
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 D
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 E
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 F
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 G
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.” H
732 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E 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
F 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.
G 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
H 1956 SCR 393
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 733
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
a challenge to the validity of the UP Sugarcane (Regulation of Supply A
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.
B
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 C
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
D
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 E
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 F
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 G
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 H
734 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E 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
F 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
G 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
H
relating to agricultural land.”
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 735
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
Now it is true that the edifice of the defense which was set up A
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,
B
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 C
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
D
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 E
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
F
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 G
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
H
736 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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.
D (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
E 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
F (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
G (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
H enumerated in the State List.”
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 737
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
b. The State legislature also has the power to make laws A
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 B
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; C
(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 D
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
E
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 F
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.
G
(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.” H
738 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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
D
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
E 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
F 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
G 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
H the law so made by the Legislature of the State
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 739
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
30. Some of the salient features of Article 254 may be noticed at A
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; B
(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; C
(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 D
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 E
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 F
present case. In Zaverbhai Amaldas vs State of Bombay 2 0
(“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
G
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 H
740 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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
D 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
E 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-
F 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
G 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)
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 741
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
32. The judgement of the Constitution Bench in Tika Ramji A
(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:
B
“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). C
(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). D
(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).” E
(emphasis supplied)
Section 109 of the Australia Constitution Act of 1900 21 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 F
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 G
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.” H
742 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E 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]:
F “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
G “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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 743
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
with, and the method of dealing with it, and the nature and A
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
B
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… C
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 D
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 E
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”.” F
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 G
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 H
744 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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,
B
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
C 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
D 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
E 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
F 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
G 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
H (1959) Supp (2) SCR 8
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 745
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
“28… A
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 B
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) C
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 D
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
E
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
F
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 G
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 H
746 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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.
D 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
E 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)
F
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
G 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
H (1979) 3 SCC 431
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 747
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
Law (Amendment) Act, 1952. The State Act had the assent of the A
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… B
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 C
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. D
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 E
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 F
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 G
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 H
748 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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:
B “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:
C “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.”
D 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,
E 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,
F 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
G 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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 749
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
be read in isolation, but has to be interpreted in conjunction with A
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
B
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 C
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
D
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.” E
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 F
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, G
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
H
750 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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
D 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
E 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)
F 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
G 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
H (1983) 4 SCC 45
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 751
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
three judge Bench, rejected the arguments of the appellant that there A
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
B
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 C
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
D
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”. E
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 F
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 G
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
27
(2012) 7 SCC 106 H
752 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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
D 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:
E
“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
F 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
G 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
28
H (2018) 1 SCC 407
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 753
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
the same subject-matter as the Parliamentary law to any extent, A
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
B
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 C
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- D
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 E
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 F
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 G
(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
H
754 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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
C 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:
D (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
E 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;
F
(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
G 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
H subject; and
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 755
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
(iii) The third test of repugnancy is where the law enacted by A
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
B
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 C
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 D
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 E
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 F
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 G
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 H
756 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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
D
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
E 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
F
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
G 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
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 757
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
constituted under State legislation whose powers and functions in regard A
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
B
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; C
(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 D
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 E
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 F
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 G
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:
H
758 SUPREME COURT REPORTS [2021] 5 S.C.R.
A “(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;”
B 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.
C 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
D 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:
E “(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
F 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’
G
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.
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 759
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
48. In a similar manner, the definition of the expression ‘completion A
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 B
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;”
C
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 D
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 E
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 F
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 G
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:
H
760 SUPREME COURT REPORTS [2021] 5 S.C.R.
A “(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”
B 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”.
C 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
D 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
E 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
F 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
G 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
H State legislation.
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 761
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
54. The second aspect of RERA which deserves emphasis is that A
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
B
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 C
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
D
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 E
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-
F
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, G
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
H
762 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B 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,
C 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.
D 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
E 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.
F (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
G
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
H provisions of any of those sections.”
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 763
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
57. Chapter IX provides for finance, accounts, audits and reports. A
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
B
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 C
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
D
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 E
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 F
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, G
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 H
764 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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
B
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
C 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
D
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.
59. While considering these submissions which have been
E articulated by Mr Rakesh Dwivedi, learned Senior Counsel, it becomes
necessary to dwell on two lines of precedent of this Court. The first line
of precedent analyses provisions analogous to Section 88 of the RERA
and would shed light on what is the ambit of a provision which states
that the statute is in addition to and not in derogation of any other law for
F the time being in force. The second line of precedent explores the meaning
of the expression ‘in any other law for the time being in force’. Does
this expression in Section 88 freeze the applicability of that provision to
laws which were in force when the RERA enacted or does it also apply
to laws which may be enacted subsequently?
G H.3.1 Meaning of “is in addition to and not in derogation of
any other law”
60. The first line of precedent will facilitate judicial evaluation of
Section 88. In M D Frozen Foods Exports Private Limited vs Hero
Fincorp Limited30, a Bench of two judges of this Court analyzed three
30
H (2017) 16 SCC 741
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 765
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
issues of which the first is of relevance to the present case. That issue A
was:
“11.1. (i) Whether the arbitration proceedings initiated by the
respondent can be carried on along with the SARFAESI proceedings
simultaneously”
The appellant in that case had borrowed monies from the B
respondent by creating a mortgage against deposit of title deeds. The
account became a non-performing asset resulting in the lender invoking
the arbitration clause of the agreement with the borrower. Prior to it, a
notification was issued under which the provisions of the Securitization
and Reconstruction of Financial Assets and Enforcement of Security C
Interest Act, 2002 (“SARFAESI Act”) were applied to certain non-
banking financial institutions, including the respondent. The respondent
issued a notice under Section 13(2) of the SARFAESI Act. In the course
of the arbitration proceedings, an interim order was passed from which
proceedings were carried in appeal under Section 37 of the Arbitration
and Conciliation Act 1996, resulting in the dispute travelling to this Court. D
Sections 35 and 37 of the SARFAESI Act are in the following terms:
“35. The provisions of this Act to override other laws.—
The provisions of this Act shall have effect, notwithstanding
anything inconsistent therewith contained in any other law for the
time being in force or any instrument having effect by virtue of E
any such law.
***
37. Application of other laws not barred.—The provisions of
this Act or the rules made thereunder shall be in addition to, and F
not in derogation of, the Companies Act, 1956 (1 of 1956), the
Securities Contracts (Regulation) Act, 1956 (42 of 1956), the
Securities and Exchange Board of India Act, 1992 (15 of 1992),
the Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (51 of 1993) or any other law for the time being in
force.” G
61. Justice Sanjay Kishan Kaul adverted to the above definition in
the course of the judgment. The Court noted the earlier decision in
Transcore vs Union of India31 holding that by virtue of Section 37, the
31
(2008) 1 SCC 125 H
766 SUPREME COURT REPORTS [2021] 5 S.C.R.
A SARFAESI Act is in addition to and not in derogation of the provisions
of the Recovery of Debts Due to Banks and Financial Institutions Act
1993 (“RDDB Act”). The “only twist” was that instead of the recovery
process being under the RDDB Act, the Court was concerned with an
arbitration proceeding. In this context, the Court observed:
B “30. The only twist in the present case is that, instead of the
recovery process under the RDDB Act, we are concerned with
an arbitration proceeding. It is trite to say that arbitration is an
alternative to the civil proceedings. In fact, when a question was
raised as to whether the matters which came within the scope
and jurisdiction of the Debt Recovery Tribunal under the RDDB
C Act, could still be referred to arbitration when both parties have
incorporated such a clause, the answer was given in the
affirmative. [HDFC Bank Ltd. v. Satpal Singh Bakshi, 2012
SCC OnLine Del 4815: (2013) 134 DRJ 566] That being the
position, the appellants can hardly be permitted to contend that
D the initiation of arbitration proceedings would, in any manner,
prejudice their rights to seek relief under the SARFAESI Act.”
There was, in other words, no question of an election of remedies
and the provisions of the SARFAESI Act provide a remedy in addition
to the provisions of the Arbitration Act. SARFAESI proceedings, the
E Court held, are in the nature of enforcement proceedings, while arbitration
is an “adjudicatory process”.
62. In KSL and Industries Limited vs Arihant Threads
Limited32 (“KSL and Industries”), a three judge Bench of this Court
considered a reference made by a two judge Bench following a
F difference of opinion on the interpretation of Section 34 of the RDDB
Act. In that case, the High Court had set aside the order of the Debts
Recovery Appellate Tribunal, in view of the bar contained in Section 22
of the Sick Industrial Companies (Special Provisions) Act 1985
(“(SICA”). Section 32 of the SICA contained a provision giving overriding
force notwithstanding anything inconsistent contained in any other law
G except the Foreign Exchange Regulation Act 1973 and the Urban Land
(Ceiling and Regulation) Act 1976, among other instruments. Section
32(1) was as follows:
32
H (2015) 1 SCC 166
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 767
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
“32. Effect of the Act on other laws.—(1) The provisions of A
this Act and of any rules or schemes made thereunder shall have
effect notwithstanding anything inconsistent therewith contained
in any other law except the provisions of the Foreign Exchange
Regulation Act, 1973 (46 of 1973) and the Urban Land (Ceiling
and Regulation) Act, 1976 (33 of 1976) for the time being in force
B
or in the memorandum or articles of association of an industrial
company or in any other instrument having effect by virtue of any
law other than this Act.”
The RDDB Act which was a later enactment of 1993 contained
Section 34 giving it overriding effect:
C
“34. Act to have overriding effect.—(1) Save as provided under
sub-section (2), the provisions of this Act shall have effect
notwithstanding anything inconsistent therewith contained in any
other law for the time being in force or in any instrument having
effect by virtue of any law other than this Act.
D
(2) The provisions of this Act or the rules made thereunder
shall be in addition to, and not in derogation of, the Industrial Finance
Corporation Act, 1948 (15 of 1948), the State Financial
Corporations Act, 1951 (63 of 1951), the Unit Trust of India Act,
1963 (52 of 1963), the Industrial Reconstruction Bank of India
Act, 1984 (62 of 1984), the Sick Industrial Companies (Special E
Provisions) Act, 1985 (1 of 1986) and the Small Industries
Development Bank of India Act, 1989 (39 of 1989).”
Now, sub-Section (1) of Section 34 gives overriding effect to the
RDDB Act notwithstanding anything inconsistent contained in any other
law for the time being in force. On the other hand, sub-Section (2) F
provides that the provisions of the Act and its rules would be in addition
to and not in derogation of certain other named statutes. Adverting to
the provisions of Section 34(2), Justice SA Bobde (as the learned Chief
Justice then was) observed;
“36 [Ed.: Para 36 corrected vide Official Corrigendum No. G
F.3/Ed.B.J./61/2014 dated 25-11-2014.] . Sub-section (2) was
added to Section 34 of the RDDB Act w.e.f. 17-1-2000 by Act 1
of 2000. There is no doubt that when an Act provides, as here,
that its provisions shall be in addition to and not in derogation of
another law or laws, it means that the legislature intends that such
H
768 SUPREME COURT REPORTS [2021] 5 S.C.R.
A an enactment shall coexist along with the other Acts. It is clearly
not the intention of the legislature, in such a case, to annul or
detract from the provisions of other laws. The term “in
derogation of” means “in abrogation or repeal of”. The Black’s
Law Dictionary sets forth the following meaning for “derogation”:
B “derogation.—The partial repeal or abrogation of a law
by a later Act that limits its scope or impairs its utility and force.”
It is clear that sub-section (1) contains a non obstante clause,
which gives the overriding effect to the RDDB Act. Sub-section
(2) acts in the nature of an exception to such an overriding effect.
C It states that this overriding effect is in relation to certain laws
and that the RDDB Act shall be in addition to and not in abrogation
of, such laws. SICA is undoubtedly one such law.”
The Court held that the effect of sub-Section (2) was to preserve
the powers of the authorities under the SICA and save the proceedings
D from being overridden by the RDDB Act. The Court held that both
SICA and the RDDB Act were special laws within their own sphere:
“39. There is no doubt that both are special laws. SICA is a special
law, which deals with the reconstruction of sick companies and
matters incidental thereto, though it is general as regards other
E matters such as recovery of debts. The RDDB Act is also a special
law, which deals with the recovery of money due to banks or
financial institutions, through a special procedure, though it may
be general as regards other matters such as the reconstruction of
sick companies which it does not even specifically deal with. Thus
the purpose of the two laws is different.”
F
The Court noticed that Section 34(2) of the RDDB Act specifically
provides that its provisions would be in addition to and not in derogation
of the other laws mentioned in it, including SICA. The expression ‘not in
derogation’ was then construed in the following observations:
“49. The term “not in derogation” clearly expresses the intention
G
of Parliament not to detract from or abrogate the provisions of
SICA in any way. This, in effect must mean that Parliament
intended the proceedings under SICA for reconstruction of a sick
company to go on and for that purpose further intended that all
the other proceedings against the company and its properties should
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 769
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
be stayed pending the process of reconstruction. While the term A
“proceedings” under Section 22 of SICA did not originally include
the RDDB Act, which was not there in existence. Section 22
covers proceedings under the RDDB Act.”
Consequently, the Court answered the reference by holding that
the provisions of SICA, in particular Section 22, shall prevail over the B
provisions for the recovery of debts in the RDDB Act.
63. To complete this trinity of judgments between 2015 and 2019,
there is a three judge Bench decision of this Court in Pioneer Urban
Land and Infrastructure Limited vs Union of India33. This Court
considered a challenge to the constitutional validity of the amendments C
made in 2018 to the IBC 2016, pursuant to a report of the Insolvency
Law Committee. Under the amended provisions, allottees of real estate
projects were deemed to be financial creditors, triggering the applicability
of the Code to real estate developers. The three judge Bench considered,
in the course of its decision, the provisions of the RERA. The Court
adverted to the provisions of Sections 88 and 89 of the RERA on the one D
hand and to Section 238 of the IBC which is in the following terms:
“238. Provisions of this Code to override other laws.—The
provisions of this Code shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time
being in force or any instrument having effect by virtue of any E
such law.”
Justice RF Nariman speaking for the three judge Bench noted
that
(i) There is no provision analogous to Section 88 of the RERA in F
the IBC and the latter is meant to be a compete and exhaustive
statement of the law insofar as its subject matter is concerned;
(ii) While the non-obstante clause of RERA came into force on 1
May 2015, the non-obstante clause of IBC came into force
on 1 December 2016; and
G
(iii) The amendments to the IBC had come into force on 6 June
2018.
33
(2019) 8 SCC 416 H
770 SUPREME COURT REPORTS [2021] 5 S.C.R.
A In this backdrop, the Court did not accept the submission that
RERA being a special enactment would have precedence over the IBC
which is a general enactment dealing with insolvency. In this backdrop,
the Court observed:
“25…From the introduction of the Explanation to Section 5(8)(f)
B of the Code, it is clear that Parliament was aware of RERA, and
applied some of its definition provisions so that they could apply
when the Code is to be interpreted. The fact that RERA is in
addition to and not in derogation of the provisions of any
other law for the time being in force, also makes it clear
that the remedies under RERA to allottees were intended
C to be additional and not exclusive remedies. Also, it is
important to remember that as the authorities under RERA were
to be set up within one year from 1-5-2016, remedies before those
authorities would come into effect only on and from 1-5-2017
making it clear that the provisions of the Code, which came into
D force on 1-12-2016, would apply in addition to RERA.”
(emphasis supplied)
The Court noted the decision in KSL & Industries (supra) in
which it was held that notwithstanding the non-obstante clause contained
in the RDDB Act which was later in time than the non-obstante clause
E in the SICA and the principle that the later Act would prevail over the
earlier, this principle was departed from only because of the of the
presence of a provision, like Section 88 of the RERA, which was
contained in the RDDB Act which made it clear that the Act was meant
to be in addition and not in derogation of other statutes. Distinguishing
F the decision, the Court observed:
“27. In view of Section 34(2) of the Recovery Act, this Court
held that despite the fact that the non obstante clause contained in
the Recovery Act is later in time than the non obstante clause
contained in the Sick Act, in the event of a conflict, the Recovery
G Act i.e. the later Act must give way to the Sick Act i.e. the earlier
Act. Several judgments were referred to in which ordinarily a
later Act containing a non obstante clause must be held to have
primacy over an earlier Act containing a non obstante clause, as
Parliament must be deemed to be aware of the fact that the later
Act is intended to override all earlier statutes including those which
H contained non obstante clauses. This statement of the law was
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 771
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
departed from in KSL & Industries [KSL & Industries A
Ltd. v. Arihant Threads Ltd., (2015) 1 SCC 166 : (2015) 1 SCC
(Civ) 462] only because of the presence of a section like Section
88 of RERA contained in the Recovery Act, which makes it clear
that the Act is meant to be in addition to and not in derogation of
other statutes. In the present case, it is clear that both tests are
B
satisfied, namely, that the Code as amended, is both later in point
of time than RERA, and must be given precedence over RERA,
given Section 88 of RERA.”
Therefore, the Court held that RERA and the IBC must be held
to co-exist and in the event of a clash, RERA must give way to the IBC.
C
H.3.2 Meaning of “law for the time being in force”
64. The second line of precedent has been relied upon by Mr
Rakesh Dwivedi on behalf of the State of West Bengal, as an aid to the
construction of the expression “law for the time being in force”. In the
decision of the Constitution Bench in Sasanka Sekhar Maity vs Union D
of India34, Justice AP Sen construed the provisions of the second proviso
to Article 31-A(1) of the Constitution and the expression “any law for
the time being in force”. The argument was that this expression must
mean the West Bengal Estate Acquisition Act, 1953 only. Rejecting the
submission, the Constitution Bench held:
E
“27. Such a construction, if we may say so, would create a serious
impediment to any kind of agrarian reform. The ceiling on
agricultural holdings, once fixed cannot be static, unalterable for
all times. The expression “any law for the time being in force”
obviously refers to the law imposing a ceiling. Here it is
the West Bengal Land Reforms (Amendment) Act, 1971 F
(President’s Act 3 of 1971) and now the West Bengal Land
Reforms (Amendment) Act, 1971 (W.B. Act 12 of 1972)
which introduced Chapter II-B imposing a new ceiling on
agricultural holdings of raiyats. That is the law for the time
being in force, and no land is being acquired by the State G
under Section 14-L within the ceiling limits prescribed
therein.
28. It will be noticed that the second proviso to Article 31-A(1)
refers to the “ceiling limit applicable to him”, which evidently refers
34
(1980) 4 SCC 716 H
772 SUPREME COURT REPORTS [2021] 5 S.C.R.
A to the law in question and not earlier law, that is Section 6(1) of
the West Bengal Estates Acquisition Act, 1953. It will be noticed
that both Section 4(3) and Section 6(2) of the West Bengal Land
Reforms Act, 1955 stood deleted by the West Bengal Land
Reforms (Amendment) Act, 1971 (President’s Act 3 of 1971)
and thereafter by the West Bengal Land Reforms (Amendment)
B
Act, 1972 with retrospective effect from February 12, 1971.”
(emphasis supplied)
65. In Thyssen Stahlunion GMBH vs Steel Authority of
India35, a two judge Bench of this Court considered the expression “for
C the time being in force” in the context of an arbitration agreement and
agreed with the view of the High Courts of Bombay and Madhya Pradesh,
which had held that the expression not only refers to the law in force at
the time when the arbitration was entered into but also to any law that
may be in force in the conduct of the arbitration proceeding. Speaking
for the bench, Justice DP Wadhwa held:
D
“35. Parties can agree to the applicability of the new Act even
before the new Act comes into force and when the old Act is still
holding the field. There is nothing in the language of Section
85(2)(a) which bars the parties from so agreeing. There is, however,
a bar that they cannot agree to the applicability of the old Act
E after the new Act has come into force when arbitral proceedings
under the old Act have not commenced though the arbitral
agreement was under the old Act. Arbitration clause in the
contract in the case of Rani Constructions (Civil Appeal
No. 61 of 1999) uses the expression “for the time being in
F force” meaning thereby that provision of that Act would
apply to the arbitration proceedings which will be in force
at the relevant time when arbitration proceedings are held.
We have been referred to two decisions — one of the
Bombay High Court and the other of the Madhya Pradesh
High Court on the interpretation of the expression “for
G the time being in force” and we agree with them that the
expression aforementioned not only refers to the law in
force at the time the arbitration agreement was entered
into but also to any law that may be in force for the conduct
of arbitration proceedings, which would also include the
H 35
(1999) 9 SCC 334
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 773
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
enforcement of the award as well. The expression “unless A
otherwise agreed” as appearing in Section 85(2)(a) of the new
Act would clearly apply in the case of Rani Constructions in Civil
Appeal No. 61 of 1999. Parties were clear in their minds that it
would be the old Act or any statutory modification or re-enactment
of that Act which would govern the arbitration. We accept the
B
submission of the appellant Rani Constructions that parties could
anticipate that the new enactment may come into operation at the
time the disputes arise. We have seen Section 28 of the Contract
Act. It is difficult for us to comprehend that arbitration agreement
could be said to be in restraint of legal proceedings. There is no
substance in the submission of the respondent that parties could C
not have agreed to the application of the new Act till they knew
the provisions thereof and that would mean that any such
agreement as mentioned in the arbitration clause could be entered
into only after the new Act had come into force. When the
agreement uses the expressions “unless otherwise agreed” and
D
“law in force” it does give an option to the parties to agree that
the new Act would apply to the pending arbitration proceedings.
That agreement can be entered into even before the new Act
comes into force and it cannot be said that agreement has to be
entered into only after the coming into force of the new Act.”
(emphasis supplied) E
66. The decision of a two judge Bench in Municipal Corporation
of Delhi vs Prem Chand Gupta36, considered Regulation 4(1) of the
Services Regulations of 1959 which commenced with the expression
“Unless otherwise provided in the Act or these regulations, the rules for
the time being in force and applicable to government servants in the F
service of the Central Government shall, as far as may be, regulate the
conditions of service of municipal officers and other municipal employees”.
The Court rejected the submission that the rules for the time being in
force would be those which were in existence when the Services
Regulations of 1959 were promulgated and not any later rules. Justice G
SB Majmudar held that whenever the question of the regulation of
conditions of service of municipal officers comes up for consideration,
the relevant rules in force at that time have to be looked into. As such,
the scope and ambit could not be frozen as of 1959. Hence, the
36
(2000) 10 SCC 115 H
774 SUPREME COURT REPORTS [2021] 5 S.C.R.
A phraseology “rules for the time being in force” would necessarily mean
rules in force from time to time and not the rules in force only at a fixed
point of time in 1959.
67. Another two judge Bench of this Court in Yakub Abdul Razak
Memon vs State of Maharashtra37, while construing the provisions of
B the Juvenile Justice (Care and Protection of Children) Act, 2000 and its
interplay with Terrorist and Disruptive Activities (Prevention) Act, 1987,
speaking through Justice P Sathasivam (as the learned Chief Justice
was then), held:
“1554. Section 1(4) of the JJ Act was added by amendment with
C effect from 22-8-2006. In fact, this provision gives the overriding
effect to this Act over other statutes. However, it reads that the
Act would override “anything contained in any other law for the
time being in force”. The question does arise as to whether the
statutory provisions of the JJ Act would have an overriding effect
over the provisions of TADA which left long back and was
D admittedly not in force on 22-8-2006. Thus, the question does
arise as what is the meaning of the law for the time being in
force. This Court has interpreted this phrase to include
the law in existence on the date of commencement of the
Act having overriding effect and the law which may be
E enacted in future during the life of the Act having overriding
effect. (Vide Thyssen Stahlunion GmbH v. SAIL [(1999) 9 SCC
334 : AIR 1999 SC 3923] and MCD v. Prem Chand Gupta [(2000)
10 SCC 115 : 2000 SCC (L&S) 404] .)”
(emphasis supplied)
F 68. In Union Territory of Chandigarh vs Rajesh Kumar
Basandhi38, Justice Brijesh Kumar considered the expression “for the
time being in force” in the law lexicon and held that it must be interpreted
keeping in mind the context in which it is used:
“10. A perusal of the meaning of the expression “for the time
G being” by different authors, based on decided cases makes it clear
that it cannot be said that it must in every case indicate a single
period of time. It may be for an indefinite period of time depending
upon the context in which the phrase is used. It is also evident
37
(2013) 13 SCC 1
H 38
(2003) 11 SCC 549
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 775
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
that generally it denotes an indefinite period of time, meaning A
thereby, the position as existing at the time of application of the
rules, maybe, amended or unamended. Therefore, to come to a
conclusion as to whether it is for one time or for indefinite period
of time, the context, purpose and the intention of the use of the
phrase will have to be seen and examined.”
B
69. Similarly, in Department of Customs vs Sharad Gandhi39,
a two judge Bench of this Court considered a case where the respondent
had been discharged of offences under Sections 132 and 175 of the
Customs Act, 1962. The Additional Chief Metropolitan Magistrate
allowed an application for discharge holding that there was a complete
bar with regard to prosecution under the Customs Act, 1962, and that C
the Collector of Customs only had the power to confiscate the goods
and impose a penalty for a breach of Section 3 of the Antiquities and Art
Treasurers Act, 1972. Amongst other issues, the Bench had to interpret
the meaning of Section 30 of the Antiquities and Art Treasurers Act,
1972, which reads as follows: D
“30. Application of other laws not barred.—The provisions of
this Act shall be in addition to, and not in derogation of, the
provisions of the Ancient Monuments Preservation Act, 1904
(7 of 1904) or the Ancient Monuments and Archaeological Sites
and Remains Act, 1958 (24 of 1958), or any other law for the E
time being in force.”
Justice KM Joseph, speaking for the two judge Bench, observed:
“39. We would think that though the words “any other
law for the time being in force” have been used, the
context for the use of the provision is not to be F
overlooked. We have referred to the relevant provisions
of the two specific enactments which show that the said
legislation also deals with antiquities as it deals with
cognate subjects, namely, ancient monuments and
archaeological sites. The common genus is manifest. The G
legislative intention was to declare that the Antiquities
Act should not result in the provision contained in allied
or cognate laws being overridden upon passing of the
Antiquities Act. Full play was intended for the provisions
39
(2020) 13 SCC 521 H
776 SUPREME COURT REPORTS [2021] 5 S.C.R.
A contained in relation to antiquities contained in the two
enactments. Despite the passage of the Antiquities Act,
a prosecution for instance would be maintainable if a case
is otherwise made out under the two enactments in
relation to antiquity. The Antiquities Act in other words
is not to be in derogation of those provisions. They were
B
to supplement the existing laws. It is therefore in the
same context that we should understand the words “any
other law for the time being in force”. For instance, there
may be laws made by the State Legislatures which relate to
antiquity. There may be any other law which deal with a subject
C with a common genus of which the specific law would be an
integral part. It is all such laws which legislature intended to
comprehend within the expression “any other law for the time
being in force”. Take for example, a case where there is a
theft of an antiquity. Can it be said that the prosecution under
Section 379 would not be maintainable. The answer will be an
D
emphatic No. Certainly, the prosecution will lie. The Sale of
Goods Act, 1930 which relates to movable items generally will
be applicable, to the extent that it is not covered by any provision
in the Acts in question. The Contract Act, 1872 may continue
to be applicable. But it is not the question of applying general
E laws that engage the attention of the legislature. The intention
behind Section 30 was as noted is to provide for any other
law which deal with antiquity to continue to have force
and declare its enforceability even after passing of the
Antiquities Act. In that view of the matter we are of the
view that the words “any other law for the time being in
F
force” must be construed as ejusdem generis.”
(emphasis supplied)
70. These decisions indicate that the expression “any other law
for the time being in force” does not necessarily mean, such laws as
G were in existence when the statutory provision was enacted. To the
contrary, it widely considered to means not just the laws which were in
existence when the statutory provision was enacted but also such laws
which may come into existence at a later stage. On the other hand,
another line of judicial precedent also suggests the meaning to be ascribed
to the expression must bear color from the context in which it appears,
H and not devoid of it.
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 777
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
71. For instance, in National Insurance Company Limited vs A
Sinitha40, in the context of a policy of insurance, the expression “for the
time being in force” was held to mean provisions then existing. The
decision related to Sections 144 and 163A of the Motor Vehicles Act,
1988, in which Section 163A was subsequently inserted. In the context
of adjustment of compensation, a two judge Bench of this Court held
B
that Section 144 would not override Section 163A because of the use of
the expression “laws for the time being in force” would encompass only
existing provisions of the Motor Vehicles Act, 1988, and not those inserted
in the Act later. Speaking for the Bench, Justice JS Khehar (as the
learned Chief Justice was then) observed:
“16. Section 144, it may be pointed out, is a part of Chapter X of C
the Motor Vehicles Act, 1988, which includes Section 140. Section
144 of the Act is being extracted herein:
“144.Overriding effect.—The provisions of this Chapter shall have
effect notwithstanding anything contained in any other provision
of this Act or of any other law for the time being in force.” D
Even though Section 144 of the Act mandates that the provisions
of Chapter X (which includes Section 140) have effect
notwithstanding anything to the contrary contained in any other
provision of the Act or in any other law for the time being in force,
Section 144 of the Act would not override the mandate contained E
in Section 163-A for the simple reason that Section 144 provided
for such effect over provisions “for the time being in force” i.e.
the provisions then existing, but Section 163-A was not on the
statute book at the time when Section 144 was incorporated
therein. Therefore the provisions contained in Chapter X would F
not have overriding effect over Section 163-A of the Act.
17. As against the aforesaid, at the time of incorporation of Section
163-A of the Act, Sections 140 and 144 of the Act were already
subsisting, as such, the provisions of Section 163-A which also
provided by way of a non obstante clause, that it would have by a G
legal fiction overriding effect over all existing provisions under
the Act as also any other law or instrument having the force of
law “for the time being in force”, would have overriding effect,
even over the then existing provisions in Chapter X of the Act
40
(2012) 2 SCC 356 H
778 SUPREME COURT REPORTS [2021] 5 S.C.R.
A because the same was already in existence when Section 163-A
was introduced into the Act.”
This again indicates that it is the statutory context and scheme
which will determine the nature and ambit of the expression “any other
law for the time being in force”.
B 72. In the case of the RERA, the expression “law for the time
being in force” is used in Section 89 as well as in Section 2(zr) and
Section 18(2). Section 2(zr), as noticed earlier, stipulates that words and
expression used in the Act, but not defined in it and defined in any law
for the time being in force or in municipal laws or other relevant laws of
C the appropriate government, shall have the meaning assigned to them in
those laws. Evidently, a law for the time being in force in Section 2(zr) is
not frozen in point of time as on the date of the enactment of RERA.
Likewise, Section 18(2) of the RERA imposes an obligation to the
promoter to compensate allottees for the loss caused due to a defective
title to the land and the provision stipulates that the claim for compensation
D shall not be barred by limitation provided “under any law for the time
being in force”. However, in Section 89, “law for the time being in force”
is used in general sense of all the provisions of the Act, vis-à-vis,
provisions of other Acts.
H.3.3 Knitting it together
E
73. From our analysis of the provisions of RERA on the one hand
and of WB-HIRA on the other, two fundamental features emerge from
a comparison of the statutes. First, a significant and even overwhelmingly
large part of WB-HIRA overlaps with the provisions of RERA. These
provisions of the RERA have been lifted bodily, word for word and
F 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,
G WB-HIRA has enacted a parallel mechanism and parallel regime as
that which has been entailed under the RERA. The State legislature
has, in other words, enacted legislation on the same subject matter as
the Central enactment. Not only is the subject matter identical but in
addition, the statutory provisions of WB-HIRA are on a majority of counts
identical to those of the RERA. Both sets of statutes are referable to the
H same entries in the Concurrent List – Entries 6 and 7 of List III – and
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 779
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
the initial effort of the State of West Bengal to sustain its legislation as a A
law regulating ‘Industry” within the meaning of Entry 24 of List II has
been expressly given up before this Court (as we have explained, for
valid reasons bearing on the precedents of this Court).
74. In assessing whether this overlap between the statutory
provisions of WB-HIRA and the RERA makes the former repugnant to B
the latter within the meaning of that expression in clause (1) of Article
254, it becomes necessary to apply the several tests which are a part of
our constitutional jurisprudence over the last seven decades. Repugnancy
can be looked at from three distinct perspectives. The first is where the
provision of a State enactment is directly in conflict with a law enacted
by Parliament, so that compliance with one is impossible along with C
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 D
enactment on the subject has to give way to the law enacted by Parliament
on the ground that the regulation of the subject matter by Parliament is
so complete as a code, so as to leave no space for legislation by the
State. The third test of repugnancy postulates that the subject matter of
the legislation by the State is identical to the legislation which has been
enacted by Parliament, whether prior or later in point of time. Repugnancy E
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 F
from and verbatim the same as the statutory provisions enacted by
Parliament. The overlap between the provisions of WB-HIRA and the
RERA is so significant as to leave no manner of doubt that the test of
repugnancy based on an identity of subject matter is clearly established.
As the decision in Innoventive Industries (supra) emphasizes, laws
under this head are repugnant even if the rule of conduct prescribed by G
both the laws is identical. This principle constitutes the foundation of the
rule of implied repeal. The present case is not one where WB-HIRA
deals not with matters which form the subject matter of the Parliamentary
legislation but with other and distinct matters of a cognate and allied
nature. WB-HIRA, on the contrary, purports to occupy the same subject H
780 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 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.
B 75. But the submission which has been articulately presented
before the Court on behalf of the State of West Bengal is that Section 88
of the RERA itself allows for the existence of State statutes by enacting
Sections 88 and 89, which stipulate that its provisions shall be in addition
to and not in derogation of the provisions of any other law for time being
in force and override only inconsistent provisions. For the purpose of the
C present discussion, we may accept the hypothesis of the State of West
Bengal that the expression “any other law for the time being in force”
does not, in the context of Section 88, imply the applicability of the
provision only to laws which had been enacted before the RERA.
Conceivably, as the judgments of this Court construing similar expressions
D indicate, the trend has been to broadly configure the meaning of the
expression by extending it to laws which were in existence and those
which may be enacted thereafter. In other contexts, such an interpretation
has not been accepted but, for the purpose of the discussion, we will
proceed on the hypothesis which has been put forth by the State of West
Bengal that ‘law for the time being in force’ within the meaning of Section
E 88 would also include subsequent legislation. The submission is that since
Section 88 allows for the existence of other laws by adopting the ‘in
addition to and not in derogation of’ formula, Parliament did not intend to
exclude State legislation even though it is identical to that which has
been enacted by Parliament. This submission is also sought to be
F buttressed by adverting to Section 92 of the RERA, under which only
the Maharashtra Actwas repealed.
76. Now, in assessing the correctness of the submission, it is
necessary to construe Section 88 in its proper perspective. Unless this is
done, the Court would be doing violence to the intent of Parliament and
G to the constitutional principles which are embodied in Article 254.
Parliament envisaged in Section 88 of the RERA that its provisions would
be in addition to and not in derogation of other laws for the time being in
force. True enough, this provision is an indicator of the fact that
Parliament has not intended to occupy the whole field so as to preclude
altogether the exercise of legislative authority whether under other Central
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 781
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
or State enactments. For instance, Section 71 of the RERA specifically A
contemplates (in the proviso to sub-Section (1)) that a complaint in respect
of matters covered by Sections 12, 14, 18 and 19 is pending in the
adjudicating fora constituted by the Consumer Protection Act, 1986.
The person who has moved the consumer forum may withdraw the
complaint and file an application before the adjudicating officer constituted
B
under the RERA. The effect of Section 88 is to ensure that remedies
which are available under consumer legislation, including Consumer
Protection Act, 2019, are not ousted as a consequence of the operation
of the RERA. Of course, it is also material to note that both sets of
statutes, namely the Consumer Protection Act(s) and the RERA, have
been enacted by the Parliament and both sets of statutes have to be C
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
D
or allied subjects. In other words, spaces which are left in the RERA
can be legislated upon by the State legislature by enacting a legislation,
so long as it is allied to, incidental or cognate to the exercise of
Parliament’s legislative authority. What the State legislature in the present
case has done is not to enact cognate or allied legislation but legislation
which, insofar as the statutory overlaps is concerned is identical to and E
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
F
conducted by the State legislature of doing so, is plainly unconstitutional.
77. The statutory overlaps between WB-HIRA and the RERA
cannot be overlooked, as noted above. But quite apart from that, there is
an additional reason why the test of repugnancy engrafted in clause (1)
of Article 254 is attracted. This is because several provisions of the
WB-HIRA are directly in conflict and dissonance with the RERA. Where G
a State enactment in the Concurrent List has enacted or made a statutory
provision which is in conflict with those which have been enacted by
Parliament, it may in a given case be possible to excise the provision of
the State statute so as to bring it into conformity with the Parliamentary
enactment. But the present case, as we shall demonstrate, involves a H
782 SUPREME COURT REPORTS [2021] 5 S.C.R.
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:
(i) Section 2(n) of the RERA contains a statutory definition of
B the meaning of ‘common areas’. Parliament has defined
the expression to mean what is set out in sub-clause 1(i) to
(iii) which includes open parking areas. The WB-HIRA
contains a definition of the expression ‘common areas’ in
Section 2(m). While this definition is pari materia, WB-
HIRA has enacted the definition of the expression ‘car
C 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
D 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
E 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
F 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
G 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
H regulatory authority in a monopoly situation to make a suo
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 783
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
motu reference to the Competition Commission of India. A
No such provision is made in the State enactment. Hence,
a valuable safeguard to protect home buyers in the RERA
has been omitted. Section 38(3) of the RERA is in the
following terms:
“(3) Where an issue is raised relating to agreement, action, B
omission, practice or procedure that— (a) has an appreciable
prevention, restriction or distortion of competition in
connection with the development of a real estate project;
or (b) has effect of market power or monopoly situation
being abused for affecting interest of allottees adversely,
then the Authority, may suo motu, make reference in respect C
of such issue to the Competition Commission of India.”
(v) Section 41 of the RERA is a pivotal provision under which
the Central government is to establish a Central Advisory
Council. The Minister of the Central government dealing
with Housing is to be the ex officio Chairperson. The D
membership of the Central Advisory Council is stipulated
in Section 41(3). Section 41 provides as follows:
“41. (1) The Central Government may, by notification,
establish with effect from such date as it may specify in
such notification, a Council to be known as the Central E
Advisory Council. (2) The Minister to the Government of
India in charge of the Ministry of the Central Government
dealing with Housing shall be the ex officio Chairperson of
the Central Advisory Council. (3) The Central Advisory
Council shall consist of representatives of the Ministry of F
Finance, Ministry of Industry and Commerce, Ministry of
Urban Development, Ministry of Consumer Affairs, Ministry
of Corporate Affairs, Ministry of Law and Justice, Niti
Aayog, National Housing Bank, Housing and Urban
Development Corporation, five representatives of State
Governments to be selected by rotation, five representatives G
of the Real Estate Regulatory Authorities to be selected by
rotation, and any other Central Government department as
notified. (4) The Central Advisory Council shall also consist
of not more than ten members to represent the interests of
real estate industry, consumers, real estate agents, H
784 SUPREME COURT REPORTS [2021] 5 S.C.R.
A construction labourers, non-governmental organisations and
academic and research bodies in the real estate sector.”
The functions of the Central Advisory Council are provided in
Section 42 of the RERA, which reads as follows:
“42. Functions of Central Advisory Council.
B
(1) The functions of the Central Advisory Council shall be to advise
and recommend the Central Government,— (a) on all matters
concerning the implementation of this Act; (b) on major questions
of policy; (c) towards protection of consumer interest; (d) to foster
the growth and development of the real estate sector; (e) on any
C other matter as may be assigned to it by the Central Government.
(2) The Central Government may specify the rules to give effect
to the recommendations of the Central Advisory Council on
matters as provided under sub-section (1).”
WB-HIRA on the other hand, provides for the constitution of a
D State Advisory Council under Section 41,which is in the following terms:
“41. Establishment of State Advisory Council.-(1) The State
Government may, by notification, establish with effect from such
date as it may specify in such notification, a Council to be known
as the State Advisory Council.
E
(2) The Minister to the Government of the State of West Bengal
in charge of the Department dealing ·with Housing shall be the ex
officer Chairperson of the State Advisory Council.
(3) The State Advisory Council shall consist of representatives of
the Finance Department, Department of Industry, Commerce &
F
Enterprises, Department of Urban Development and Municipal
Affairs, Department of Consumer Affairs, Law Department, five
representatives of the Real Estate Regulatory Authorities to be
selected by rotations, and any other State Government department
as notified.
G (4) The State Advisory Council shall also consist of not more than
ten members to represent the interests of real estate industry,
consumers, real estate agents, construction labourers, non-
governmental organisations and academic and research bodies in
the real estate sector.”
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 785
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
Section 42 of WB-HIRA, which defines the functions of the State A
Advisory Council, is as follows:
“42. Functions of State Advisory Council.-(1) The functions of
the State Advisory Council shall be to advise and recommend the
State Government,-
(a) on all matters concerning the implementation of this Act; B
(b) on major questions of policy;
(c) towards protection of consumer interest;
(d) to foster the growth and development of the real estate sector;
C
(e) on any other matter as may be assigned to it by the State
Government.
(2) The State Government may specify the rules to give effect to
the recommendations of the State Advisory Council on matters
as provided under sub-section (1 ).” D
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 E
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;
F
(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 G
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)
H
786 SUPREME COURT REPORTS [2021] 5 S.C.R.
A of WB-HIRA, this power is entrusted to the regulatory
authority and not to a judicial person or body. The fact that
an appeal against the orders of the regulatory authority lie
to the Appellate Tribunal and thereafter to the High Court
cannot gloss over the fact that the valuable safeguard of
appointing judicial officers as adjudicating officers for
B
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
C WB-HIRA.
78. The above analysis indicates an additional reason why there
is a repugnancy between WB-HIRA and RERA- the above provisions
of the State enactment are directly in conflict with the Central enactment.
Undoubtedly, as Article 254(1) postulates, the legislation enacted by the
D State legislature is void “to the extent of the repugnancy”. But the above
analysis clearly demonstrates that in material respects, WB-HIRA has
failed to incorporate valuable institutional safeguards and provisions
intended to protect the interest of home-buyers. The silence of the State
legislature in critical areas, as noted above, indicates that important
E safeguards which have been enacted by Parliament in the public interest
have been omitted in the State enactment. There is, in other words, not
only a direct conflict of certain provisions between the RERA and WB-
HIRA but there is also a failure of the State legislature to incorporate
statutory safeguards in WB-HIRA, which have been introduced in the
RERA for protecting the interest of the purchasers of real estate. In
F failing to do so, the State legislature has transgressed the limitations on
its power and has enacted a law which is repugnant to Parliamentary
legislation on the same subject matter.
H.4 Lack of Presidential Assent for WB-HIRA
G 79. Finally, another argument raised before us by the petitioner’s
was that WB-HIRA had not received the President’s assent under Article
254(2) of the Constitution, which was necessary since it was going the
occupy the same field as the RERA, a law which had been enacted by
the Parliament. This becomes important since a Constitution Bench of
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 787
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
this Court in Rajiv Sarin v. State of Uttarakhand41 (“Rajiv Sarin”), A
speaking through Justice Mukundakam Sharma, has held the two
requirements for repugnancy under Article 254 to be as follows:
“45. For repugnancy under Article 254 of the Constitution,
there is a twin requirement, which is to be fulfilled: firstly,
there has to be a “repugnancy” between a Central and State B
Act; and secondly, the Presidential assent has to be held
as being non-existent. The test for determining such repugnancy
is indeed to find out the dominant intention of both the legislations
and whether such dominant intentions of both the legislations are
alike or different. To put it simply, a provision in one legislation in
order to give effect to its dominant purpose may incidentally be C
on the same subject as covered by the provision of the other
legislation, but such partial or incidental coverage of the same
area in a different context and to achieve a different purpose
does not attract the doctrine of repugnancy. In a nutshell, in order
to attract the doctrine of repugnancy, both the legislations must be D
substantially on the same subject.”
(emphasis supplied)
80. Since we have already answered with the first requirement,
the second remains. However, the State of West Bengal initially argued
that WB-HIRA did not require presidential since it had been enacted E
under List II, but that argument has now been given up before this Court,
as already noted above, and it is admitted that it comes under List III
(the same as RERA). Further, it has also been clarified by us, rejecting
their argument, that Sections 88 and 89 of the RERA did not implicitly
permit the States to create their own legislation creating a parallel regime F
alongside the RERA which would have not required presidential assent.
Hence, it is clear that WB-HIRA did not have presidential assent and
was repugnant to RERA under Article 254.
81. Therefore, this issue of whether presidential assent was needed
remains merely academic. Having said so, we note that issues related to G
Presidential assent under Article 254(2) have been settled by a Constitution
Bench of this Court in Rajiv Sarin (supra), wherein it was held:
“Presidential assent and Article 254(2) of the Constitution
41
(2011) 8 SCC 708 H
788 SUPREME COURT REPORTS [2021] 5 S.C.R.
A 63. It is in this context, that the finding of this Court in
Kaiser-I-Hind (P) Ltd. [(2002) 8 SCC 182] at para 65
becomes important to the effect that “pointed attention”
of the President is required to be drawn to the repugnancy
and the reasons for having such a law, despite the enactment
by Parliament, has to be understood. It summarises the
B
point as follows at pp. 215-16 as follows:
“65. The result of the foregoing discussion is:
1. It cannot be held that the summary speedier procedure
prescribed under the PP Eviction Act for evicting the tenants,
C sub-tenants or unauthorised occupants, if it is reasonable and in
conformity with the principles of natural justice, would abridge
the rights conferred under the Constitution.
2. (a) Article 254(2) contemplates ‘reservation for
consideration of the President’ and also ‘assent’.
D Reservation for consideration is not an empty formality.
Pointed attention of the President is required to be drawn
to the repugnancy between the earlier law made by
Parliament and the contemplated State legislation and the
reasons for having such law despite the enactment by
Parliament.
E
(b) The word ‘assent’ used in clause (2) of Article 254 would in
context mean express agreement of mind to what is proposed by
the State.
(c) In case where it is not indicated that ‘assent’ is qua a particular
F law made by Parliament, then it is open to the Court to call for the
proposals made by the State for the consideration of the President
before obtaining assent.
3. Extending the duration of a temporary enactment does not
amount to enactment of a new law. However such extension may
require the assent of the President in case of repugnancy.””
G
(emphasis supplied)
As such, it is abundantly clear that the State of West Bengal would
have had to seek the assent of the President before enacting WB-HIRA,
where its specific repugnancy with respect to RERA and its reasons for
enactment would have had to be specified.Evidently, this was not done.
H
FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF 789
WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]
However, since we have already held WB-HIRA to be repugnant to A
RERA, this issue becomes moot.
I Conclusion
82. Before the WB-HIRA, the State legislature had also enacted
the WB 1993Act. Upon receiving the assent of the President, the Act
was published in the Calcutta Gazette, Extraordinary on 9 March 1994. B
Some of the salient provisions of the Act are detailed below:
(i) Section 3 provides for registration of promoters who
construct or intend to construct a building and for obtaining
permission for construction;
C
(ii) Section 4 provides for the validity of the certificate of
registration and for cancellation;
(iii) Section 5 provides for appeals;
(iv) Section 6 provides for adjudication of disputes by an officer
appointed by the State government for adjudication; D
(v) Section 7 provides that the promoter shall before taking
any advance payment for deposit, which shall not be more
than 40 per cent of the sale price, enter into a written
agreement for sale which shall be registered;
(vi) Section 8 restrains additions or alterations without the E
consent of the transferee and for rectification of defects;
(vii) Section 9 contains a prohibition on a promoter creating a
mortgage or charge without the consent of the purchaser
after entering into an agreement;
F
(viii) Section 10 requires the formation of a co-operative society;
(ix) Section 11 provides for the promoter to covey title to the
co-operative society;
(x) Section 12 provides for insurance against loss or death;
G
(xi) Section 13 provides for penalties;
(xii) Section 14 provides for offences by companies;
(xiii) Section 15 provides for rule making powers;
H
790 SUPREME COURT REPORTS [2021] 5 S.C.R.
A (xiv) Section 16 provides for exemption to constructions by the
State Government Housing Board and by the Housing and
Urban Development Corporation; and
(xv) Section 17 provides for repeals and the earlier legislation of
1972 is repealed.
B The above provisions are repugnant to the corresponding provisions
which are contained in the RERA. These provisions of the WB 1993
Act impliedly stand repealed upon the enactment of the RERA in 2016,
in accordance with Sections 88 and 89 read with Article 254(1) of the
Constitution. Hence, we clarify with abundant caution that our striking
C down of the provisions of WB-HIRA in the present judgment will not, in
any manner, revive the WB 1993 Act, which was repealed upon the
enactment of WB-HIRA since the WB 1993 Act is itself repugnant to
the RERA, and would stand impliedly repealed.
83. For the above reasons, we have come to the conclusion that
D WB-HIRA is repugnant to the RERA, and is hence unconstitutional.
We also hold and declare that as a consequence of the declaration by
this Court of the invalidity of the provisions of WB-HIRA, there shall be
no revival of the provisions of the WB 1993 Act, since it would stand
impliedly repealed upon the enactment of the RERA.
E 84. Since its enforcement in the State of West Bengal, the WB-
HIRA would have been applied to building projects and implemented by
the authorities constituted under the law in the state. In order to avoid
uncertainty and disruption in respect of actions taken in the past, recourse
to the jurisdiction of this Court under Article 142 is necessary. Hence, in
exercise of the jurisdiction under Article 142, we direct that the striking
F down of WB-HIRA will not affect the registrations, sanctions and
permissions previously granted under the legislation prior to the date of
this judgment
85. The writ petition is accordingly stand allowed in the above
terms.
G
86. Pending application(s), if any, stand disposed of.
Nidhi Jain Writ petition allowed.
H
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