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Supreme Court bench of Justice DY Chandrachud and Justice MR Shah, continued hearing the plea challenging constitutional validity of the WB Housing Industry Regulatory Authority Act, 2017 on the grounds of repugnancy with the Real Estate (Regulation and Development) Act, 2016.

While hearing the matter today, Justice Chandrachud, indicating some apprehensions behind enactment of the State Act said, “One thing that still baffles me is, why will a State make an Act exactly similar to the Central Law. No State does that.”

On Tuesday submissions were made by Senior Advocate Rakesh Dwivedi, for the State of West Bengal.

Learned ASG Ms. Aishwarya Bhati completed her submissions for the Union today.

Reliance was placed on Tika ramji case, State of Orissa v. MA Tulloch, Hingir Rampur Coal v. State of Orissa, 1961, Innoventive Industries v. icici (2018) 1 SCC 407, Select Committee Report on Real Estate Development Bill, 2013 and the difference in scheme of the two Acts.

ASG Bhati: (referring relevant para of the Innoventive judgment) I rely heavily on 'hindered' and 'obstructed'; 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 obstructed by giving effect to the State law.

The Threefold Test laid down in the Innoventive Industries case to test Repugnancy:

1. Direct Repugnancy: Repugnancy may be direct in the sense that there is inconsistency in the actual terms of the competing statutes and there is, therefore, a direct conflict between two or more provisions of the competing statutes. In this sense, the inconsistency must be clear and direct and be of such a nature as to bring the two Acts or parts thereof into direct collision with each other, reaching a situation where it is impossible to obey the one without disobeying the other.
2. Intentional/Occupational Repugnancy: Though there may be no direct conflict, a State law may be inoperative because the Parliamentary law is intended to be a complete, exhaustive or exclusive code. In such a case, the State law is inconsistent and repugnant, even though obedience to both laws is possible, because so long as the State law is referable to the same subject-matter as the Parliamentary law to any extent, it must give way. One test of seeing whether the subject-matter of the Parliamentary law is encroached upon is to find out whether the Parliamentary statute has adopted a plan or scheme which will be hindered and/or obstructed by giving effect to the State law. It can then be said that the State law trenches upon the Parliamentary statute.
3. Subject-matter Repugnancy: A conflict may arise when Parliamentary law and State law seek to exercise their powers over the same subject-matter. This need not be in the form of a direct conflict, where one says “do” and the other says “don’t”. Laws under this head are repugnant even if the rule of conduct prescribed by both laws is identical. The test that has been applied in such cases is based on the principle on which the rule of implied repeal rests, namely, that if the subject-matter of the State legislation or part thereof is identical with that of the Parliamentary legislation, so that they cannot both stand together, then the State legislation will be said to be repugnant to the Parliamentary legislation.

Justice Chandrachud: You may show us how implementation of scheme under the State Act will effect implementation of scheme under the Central Act.

ASG Bhati: This Bill was first introduced as Real Estate and Development Bill in 2013, referred to Select Committee of 21 members. Refers relevant excerpts of the Select Committee Report;

“It seeks to establish symmetry of information between the promoter and purchaser, transparency of contractual conditions, set minimum standards of accountability and a fast track dispute resolution mechanism.”

“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.”

“Uniformity of Agreements on the lines of Model Agreement to be devised by the RERA.”

Effectively, RERA was brought to ensure standardization, symmetry of information, uniformity in the Real Estate sector, however, by enacting a parallel mechanism under WB HIRA, State of West Bengal has defied the objectives of the Central Act. It was also informed by the Learned ASG Ms. Bhati that WB is the only State which has not made the appropriate rules under RERA.

Reference is further made to the inconsistencies between the Central Act and the State Act.

Attention is drawn to the provision for ‘car parking’ submitting that while RERA takes it to be a part of the dwelling unit, HIRA considers it separately, also planning areas and force majeure clause.

Another difference noted by Justice Chandrachud was the mechanism to award Compensation between the State and the Central Act. While a Judicial Officer makes it under the RERA, it is the regulatory authority itself which does that under WB HIRA.

With respect to Section 88 and 89 of the RERA Act, learned ASG submitted, “Section 88 & 89 cannot be construed in a manner to allow the state to legislate on the subject, completely encroaching the laws made by the Centre.”

Learned ASG Ms. Bhati also relies on para 75 & 76 of Animal Welfare Board, 2014 judgement before closing her submissions.

Advocate Devashish Baruka continues, making submission on the interpretation of ‘for the time being in force’.

The matter remains part heard, listed for tomorrow.

Also Read: “Parliament Can Enact Law on Same Subject If Presidential Assent Received On State Law”: Justice DY Chandrachud

Case Title: Forum For Peoples Collective Efforts (FPCE) v. State Of West Bengal & Ors. | WP(C) No. 116 of 2019