Forum for Peoples Collective Efforts v. State of West Bengal & Others : The PIL Allowed By The Supreme Court Challenged The Constitutional Validity Of West Bengal Housing Industry Regulation Act, 2017

DATE OF JUDGEMENT: 21st April 2021

JUDGES
Justice A.K Sikri, Justice Abdul Naseer [Initial Hearing]
Justice D.Y Chandrachud, Justice M.R Shah [Final Hearing]

PARTIES:

• Forum for People’s Collective Efforts (FPCE) ........... (Petitioner)
• State of West Bengal & Others. ........... (Respondent)

COUNSEL: Advocate Devashish Bharuka and Justine George (For Petitioners)
Senior Advocate Rakesh Dwivedi (For State of West Bengal)

SUBJECT: The Petitioner, in this case, had challenged the constitutional validity of a State Act called the West Bengal Housing Industry Regulation Act, 2017 (WBHIRA) which ultra vires the Central Act called Real Estate(Regulation & Development) Act, 2016 [RERA]

AN OVERVIEW

1. In the present case, a civil writ petition was filed by the petitioner in February 2019 before the 2 judge bench of the Supreme Court of India challenging the constitutional validity of the WBHIRA, 2017 which ultra vires the legislation enacted by the Central Government called (RERA) Real Estate (Regulation and Development) Act, 2016.
2. The court admitted the PIL and issued a notice to the West Bengal Government to file a reply on this matter within 2 weeks. The Supreme Court thought that it was quite an interesting case that came up before the court for consideration that how can a State make and enact a law that is quite similar.
3. The question of reference which came up before the apex court was that when there is already central legislation on the subject of real estate which is comprehensive and exhaustive then there is no need for state act to be in the picture and thus only the central act should prevail.
4. The apex court in its judgement said that once a central law was enacted then the State cannot say that enact the law but we won’t make any rules for its enforcement and it also makes no sense of creating a similar law that was already in force.

IMPORTANT PROVISIONS

Constitution of India

• Article 162 [Proviso] – The executive power of the State shall be restricted by and subject to the executive powers of the Parliament and authorities under it as conferred by the Constitution of India in any matters where the State legislature and the Parliament has the power to make laws.
• Article 245(2) – No law shall be held invalid that is made by the parliament on the ground that it would have an extra-territorial operation.
• Article 254(2) – When a state legislature makes law with regards to one of the matters listed in the concurrent list and contains any provision repugnant to an earlier or the existing law made by the parliament concerning that matter it shall prevail in the state if it was reserved for consideration and received the assent of the President.
• It is to be noted that nothing in this clause shall deter the Parliament to make any laws at any time concerning the same matter including adding, amending or repealing the law made by the state legislature.
• Article 256 – The executive power of the State is to be exercised in a way which complies with the laws made by the Parliament and the executive powers of the Parliament shall extend to give directions as the government of India finds it necessary to such states wherein any existing laws apply.

ISSUES

The major issue framed by the Supreme Court of India -

• Can the State in the name of cooperative federalism, enact legislation under the concurrent list to occupy the same field that the Parliament has occupied?

ANALYSIS OF THE JUDGEMENT

1. The counsel appearing for the petitioner contended that if WB HIRA is allowed to operate in the State of West Bengal it will give way to not only the West Bengal government but also encourage other State Legislatures to enter into the matters listed in the concurrent list and make laws that are already enacted by the central government and in force. Not just this state legislatures might enact laws in favour of builders thereby diminishing the purpose of RERA and rendering this act unnecessary.
2. The petitioner pleaded that the Supreme Court should pass order by way of issuing a writ of mandamus or any other writ or appropriate direction or order by declaring WB HIRA ultra vires the provisions of the Indian Constitution and to also direct the West Bengal Government to not implement the provisions of WB HIRA in the State of West Bengal when there is already a central act on the same matter which was in force way before the WB HIRA was enacted. The petitioner also mentioned in its petition that 98% of the WB HIRA is copy-paste of RERA.
3. Further, the petitioner said that only the Central legislation should exist in the State of West Bengal as the constitutional procedure requires the State legislation to give way to the Central Act. As even in the State of Maharashtra the State law was abolished despite the assent of the President and the State of Kerala also did not execute its act. The petitioners also brought to the notice of the apex court that there is a direct conflict between the Central Act I.e. RERA and the State Act I.e. WB HIRA. The petitioner explained their statement by pointing out such instances which creates chaos and confusion about whether that particular subject should be followed under the RERA or WB HIRA. For example, the regulatory authority, real estate agents, registering real estate projects, etc. But the real estate agents and developers/builders to stay in business have no other option but to register under the WB HIRA.
4. The petitioners also brought to the court's notice that all over the country in different states the RERA act is being implemented by notifying the rules except in the State of West Bengal that not only disregards the Central Act but also indirectly questions the supremacy of the parliament by not implementing the (RERA) Central Act. Furthermore, they produced a letter which showed that the Union Housing secretary had communicated with the State Secretary for repealing the State Act. Moreover, they showed that as per the RTI reply it stated that the governor was neither properly informed nor advised regarding the same.
5. While answering the primary issue Justice Chandrachud was quite astonished and remarked this was the 1st time that something like this has happened. He was baffled and asked ‘why would a state make a law exactly similar to Central law?’ He explained how inconsistency can occur between state and central act and said repugnancy can be due to direct conflict or occupied field or by enacting a state law that does not supplement with the existing central law but in reality, it is doing the same thing which the parliament is doing by way of creating its law.
6. He further questioned that can a State say ‘You passed an act, now we will pass a similar act and enforce the same and not yours, is that even acceptable?’ The court observed that under Article 162 the executive power of the union of India extends under Article 256 which allows the centre to instruct the state and it is bound to comply. The court scrutinizing further said that a central act cannot be reduced to a dead letter by the state government and asked ‘What was the intent of the State Government?- no one(State) does that.’ The Central Government exercising its executive powers can direct the state to enforce the central law and then it cannot say – ‘enact the law, we won’t make any rules for its enforcement.’
7. The Hon’ble court said there is an exception that the government of India has no authority if the State enacts a pari materia law under the concurrent list because the moment the central law ceases the central government discharges its right.

CONCLUSION

It is clear by the court's decision which points out the fact that even though the West Bengal Housing Industry Regulation Act, 2017 (WB HIRA) was enacted under the state list and the Real Estate (Regulation & Development) Act, 2017 was made under concurrent list still the state act could never pass the test of constitutionality. Such state laws which makes a similar rule like that of the central act which is already in force only brings absurdity and confusion for the people.