FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) & ANR. versus THE STATE OF WEST BENGAL & ANR. on 4 May 2021

[2021] 5 S.C.R. 613

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) &ANR.

v.

THE STATE OF WEST BENGAL & ANR.

(Writ Petition (C) No. 116 of 2019)

MAY 04, 2021

[DR. DHANANJAYA Y CHANDRACHUD ANDM R SHAH, JJ.]

West Bengal Housing Industry Regulation Act, 2017(WB-HIRA):

Constitutional validity of – Challenged to, on the ground ofinconsistencies and overlapping with central law-Real Estate(Regulation and Development) Act, 2016 (RERA) – Held: WB-HIRAis repugnant to RERA and thus, held to be unconstitutional – WB-HIRA purports to occupy the same subject as that which has beenprovided in the Parliamentary legislation-RERA – State law fits,virtually on all fours, with the footprints of the law enacted byParliament, which is constitutionally impermissible – Overlapbetween the provisions of WB-HIRA and the RERA is so significant–Provisions of the RERA have been lifted bodily, word for wordand enacted into the State enactment – WB-HIRA does notcomplement the RERA by enacting provisions or fortifying the rights,obligations and remedies created by the RERA – Subject of theprovisions of the State enactment is identical, the content is identical– In essence and substance, WB-HIRA enacted a parallel mechanismand parallel regime as that which has been entailed under the RERA– Not only is the subject matter identical but the statutory provisionsof WB-HIRA are on a majority of counts identical to those of theRERA – Both sets of statutes are referable to the same entries in theConcurrent List-Entries 6 and 7 of List III – Thus, the test ofrepugnancy based on an identity of subject matter is clearlyestablished – Also WB-HIRA did not have presidential assent andwas repugnant to RERA u/Art. 254 – Furthermore, as a result thereof,no revival of the provisions of the WB Act, 1993, since it wouldstand impliedly repealed upon the enactment of the RERA – RealEstate (Regulation and Development) Act, 2016 – West Bengal

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A(Regulation of Promotion of Construction and Transfer byPromoters) Act, 1993.

Plea that WB-HIRA intended to cover the field of ‘housingindustry’ under Entry 24 of List II – Held: WB-HIRA did not fallunder the ambit of the term industry within the meaning of Entry 24Bof the State List.

Real Estate (Regulation and Development) Act, 2016:

ss. 88 and 89 – Interpretation and interplay of – Held: s.88stipulates that the application of other laws is not barred, theprovisions of the legislation “shall be in addition to, and not inCderogation of, the provisions of any other law for the time being inforce” – s. 89 provides for overriding effect to the provisions of theRERA when it stipulates that it “shall have effect, notwithstandinganything inconsistent therewith contained in any other law for thetime being in force” – s. 88 is an indicator of the fact that ParliamentDhas not intended to occupy the whole field so as to precludealtogether the exercise of legislative authority whether under otherCentral or State enactments – s. 88 does not exclude recourse toother remedies created by cognate legislation – Where the cognatelegislation has been enacted by a State legislature, s.88 is anindicator that Parliament did not wish to oust the legislative powerEof the State legislature to enact legislation on cognate or alliedsubjects – On facts, State legislature-WB-HIRA has not enactedcognate or allied legislation but legislation which is identical toand bodily lifted from the Parliamentary law-RERA – This plainlyimplicates the test of repugnancy by setting up a parallel regimeFunder the State law – State legislature has encroached upon thelegislative authority of Parliament which has supremacy within theambit of the subjects falling within the Concurrent List of the SeventhSchedule – Exercise conducted by the State legislature of doing so,is plainly unconstitutional – West Bengal Housing IndustryRegulation Act, 2017.GSalient features of RERA Act – Explained.Constitution of India:

Art. 254 – Repugnancy – Salient features of Art. 254 – Stated.

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Art. 254 – Repugnancy – Salient features of Art. 254 – Stated.

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Doctrine of repugnancy u/Art. 254(1) – Held: Operates withinthe fold of the Concurrent List – Clause (1) of Art. 254 envisagesthat the law enacted by Parliament will prevail and the law made bythe 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 alaw enacted by the State legislature with a provision of a law madeby Parliament which it is competent to enact; or to any provision ofan existing law; and with respect to one of the matters enumeratedin the Concurrent List.

Art. 254 – Repugnancy – Concept of – Three types ofrepugnancy – Held: First type envisages a situation of an absoluteor irreconcilable conflict or inconsistency between a State legislativeenactment with a Parliamentary law with reference to a matter inthe Concurrent List – Second situation involving a conflict betweenState and Central legislations may arise when a Parliamentarylegislation is so complete and exhaustive as a Code as to precludethe existence of any other legislation by the State – Third test ofrepugnancy is where the law enacted by Parliament and by the Statelegislature regulate the same subject – Allowing the exercise of powerover the same subject matter would trigger the application of theconcept of repugnancy – This may implicate the doctrine of impliedrepeal – In such cases, harmonious construction can be resortedto, to ensure that the operation of both the statutes can co-exist –Where, however, the competing statutes are not of the samelegislature, it then becomes necessary to apply the concept ofrepugnancy, bearing in mind the intent of Parliament – Primaryeffort in the exercise of judicial review must be to harmonise –Repugnancy is not an option of first choice but something whichcan be drawn where a clear case based on the application of oneof the three tests arises for determination.

Art. 254(2) – Presidential assent under, for WB-HRA – Lackof – Held: State of West Bengal would have had to seek the assentof the President before enacting WB-HIRA, where its specificrepugnancy with respect to RERA and its reasons for enactmentwould have had to be specified and this was not done – Thus, WB-HIRA did not have presidential assent and was repugnant to RERAunder Article 254 – West Bengal Housing Industry Regulation Act,2017 – Real Estate (Regulation and Development) Act, 2016.

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AArt. 142 – Jurisdiction under – Exercise of – WB-HIRA sinceits enforcement, applied to building projects and implemented bythe authorities constituted under the law in the State of West Bengal– WB-HIRA having declared unconstitutional, there is a need toavoid uncertainty and disruption in respect of actions taken in thepast – Thus, in exercise of jurisdiction u/Art. 142, direction thatBstriking down of WB-HIRA would not affect the registrations,sanctions and permissions previously granted under the legislation– West Bengal Housing Industry Regulation Act, 2017 .

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CExpression “any other law for the time being in force” –Meaning of, in the context of ss. 89, 2(zr) and 18(2) of the RERAAct – Real Estate (Regulation and Development) Act, 2016.

Expression ‘ is in addition to and not in derogation of anyother law’ – Meaning of, in the context of s. 88 of the RERA Act –DReal 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 andDevelopment) Act, 2016-RERA, and is hence unconstitutional.EAs a consequence of the declaration by this Court of the invalidityof the provisions of WB-HIRA, there shall be no revival of theprovisions of the WB 1993 Act, since it would stand impliedlyrepealed upon the enactment of the RERA. [Para 83][790-D-E]

Conclusion

2.1 In view of the settled exposition of the ambit of EntryF24 of List II to the Seventh Schedule, there can be no manner ofdoubt that the subject of WB-HIRA is not ‘industries’ within themeaning of Entry 24. Both the central legislation-RERA and theState legislation-WB-HIRA have substantially similar provisions.These provisions seek to regulate the contractual relationshipbetween builders/promoters and their buyers in the real estateGsector. They recognize rights and obligations inter se promoters,buyers and real estate agents. Both the State law and the Centrallaw provide for remedial measures to enforce compliance withcontractual rights and corresponding obligations. Hence, quitecorrectly, the arguments before this Court have been addressedH

on the basis that the subject of both the central and the statelegislations-RERA and WB-HIRA falls under Entries 6 and 7 ofthe Concurrent List to the Seventh Schedule. [Para 26][734-E-G]

2.2 It is true that the edifice of the defense which was setup before this Court in the Counter Affidavit is premised on theState enactment being a law on the subject of ‘industries’ fallingwithin the ambit of Entry 24 of the State List. The genesis of thisdefense traces its origin to the Statement of Objects and Reasonsaccompanying the Bill when it was introduced in the Statelegislature in West Bengal. Indeed, the long title also indicatesthat the State legislation sought to establish a Housing IndustryRegulatory Authority. But these references in the Statement ofObjects and Reasons; the long title and the Counter Affidavit donot preclude the State of West Bengal from asserting, that theState legislation in pith and substance is not one which is on thesubject of industries within the meaning of Entry 24 of List II andthat it falls within the ambit of Entries 6 and 7 of List III. There isa 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 thecontractual relationship between builders/promoters andpurchasers in the real estate sector. RERA, truly speaking, fallswithin the ambit of Entries 6 and 7 of the Concurrent List. Thesubstantial overlap between the state and the central legislationis evident on a comparative analysis of the two legislations. TheState of West Bengal is not precluded from seeking to sustain itslegislation on the basis that in pith and in substance it falls withinthe ambit of Entries 6 and 7 of the Concurrent List. The analysisof the constitutional challenge must therefore proceed on thebasis that both the central legislation-RERA, and the statelegislation-WB-HIRA, fall within the subjects embodied inEntries 6 and 7 of List III of the Seventh Schedule. [Para 26][735-A-F]

Tika Ramji v. State of UP [1956] SCR 393; CalcuttaGas Co. (Proprietary) v. State of West Bengal AIR 1962SC 1044 : [1962] Suppl. SCR 1; ITC Ltd. v. AgriculturalProduce Market Committee (2002) 9 SCC 232 : [2002]1 SCR 441 – referred to.

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A3.1 Some of the salient features of Article 254 are:

(i) Firstly, Article 254(1) embodies the concept ofrepugnancy on subjects within the Concurrent List on whichboth the State legislatures and Parliament are entrustedwith the power to enact laws; B(ii) Secondly, a law made by the legislature of a State whichis repugnant to Parliamentary legislation on a matterenumerated in the Concurrent List has to yield to aParliamentary law whether enacted before or after the lawmade by the State legislature;

C(iii) Thirdly, in the event of a repugnancy, the Parliamentarylegislation shall prevail and the State law shall “to the extentof the repugnancy” be void;

(iv) Fourthly, the consequence of a repugnancy betweenthe State legislation with a law enacted by Parliament withinDthe ambit of List III can be cured if the State legislationreceives 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 alaw on the subject matter, as stipulated in the proviso toEclause (2). [Para 30][739-A-E]

3.2 The precedent of this Court, commencing fromZaverbhai’s case up until Innoventive Industries’s case indicatesa thread of thought dwelling on when, within the meaning of Article254(1), a law made by the legislature of a State can be consideredFto be repugnant to a provision of a law made by Parliament withrespect to one of the matters in the Concurrent List whichParliament is competent to enact. The doctrine of repugnancyunder Article 254(1) operates within the fold of the ConcurrentList. Clause (1) of Article 254 envisages that the law enacted byParliament will prevail and the law made by the legislature of theGState shall be void “to the extent of repugnancy”. Clause (1) doesnot define what is meant by repugnancy. The initial words of Clause(1) indicate that the provision deals with a repugnancy between alaw enacted by the State legislature with: (i) A provision of a lawmade by Parliament which it is competent to enact; or (ii) To anyH

provision of an existing law; and (iii) with respect to one of thematters 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 bya state legislature being “repugnant” to a law enacted byParliament or to an existing law. The concluding part of clause 1provides for a consequence, namely that the State law would bevoid “to the extent of the repugnancy” and the Parliamentaryenactment shall prevail. The concept of repugnancy emerges fromthe decisions of this Court which have elaborated on the contextof clause (1) of Article 254. Clause (2) of Article 254 has alsoemployed the expression “repugnant” while providing that a lawenacted by the legislature of a State which is repugnant to a lawenacted by Parliament or an existing law on a matter within theConcurrent List shall, if it has received the assent of thePresident, prevail in the State. The decisions of this Courtessentially contemplate three types of repugnancy:

(i) The first envisages a situation of an absolute orirreconcilable conflict or inconsistency between a provisioncontained in a State legislative enactment with aParliamentary law with reference to a matter in theConcurrent List. Such a conflict brings both the statutesinto a state of direct collision. This may arise, for instance,where the two statutes adopt norms or standards ofbehavior or provide consequences for breach which standopposed in direct and immediate terms. The conflict arisesbecause it is impossible to comply with one of the twostatutes without disobeying the other;

(ii) The second situation involving a conflict between Stateand Central legislations may arise in a situation whereParliament has evinced an intent to occupy the whole field.The notion of occupying a field emerges when aParliamentary legislation is so complete and exhaustive asa Code as to preclude the existence of any other legislationby the State. The State law in this context has to give wayto a Parliamentary enactment not because of an actualconflict with the absolute terms of a Parliamentary law butbecause the nature of the legislation enacted by Parliament AB

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Ais such as to constitute a complete and exhaustive Codeon the subject; and

(iii) The third test of repugnancy is where the law enactedby Parliament and by the State legislature regulate the samesubject. In such a case the repugnancy does not ariseBbecause of a conflict between the fields covered by the twoenactments but because the subject which is sought to becovered by the State legislation is identical to and overlapswith the Central legislation on the subject. [Para 41][754-B-H; 755-A-B]

C3.4 The distinction between the first test on the one handwith the second and third tests on the other lies in the fact thatthe first is grounded in an irreconcilable conflict between theprovisions of the two statutes each of which operates in theConcurrent List. The conflict between the two statutes gives riseto a repugnancy, the consequence of which is that the StateDlegislation will be void to the extent of the repugnancy. Theexpression ‘to the extent of the repugnancy’ postulates that thoseelements or portions of the state law which run into conflict withthe central legislation shall be excised on the ground that theyare void. The second and third tests, on the other hand, are notEgrounded in a conflict borne out of a comparative evaluation ofthe text of the two provisions. Where a law enacted by Parliamentis an exhaustive Code, the second test may come into being.The intent of Parliament in enacting an exhaustive Code on asubject in the Concurrent List may well be to promote uniformityand standardization of its legislative scheme as a matter of publicFinterest. Parliament in a given case may intend to secure theprotection of vital interests which require a uniformity of law anda consistency of its application all over the country. A uniformnational legislation is considered necessary by Parliament in manycases to prevent vulnerabilities of a segment of society beingGexploited by an asymmetry of information and unequal power in asocietal context. The exhaustive nature of the Parliamentary codeis then an indicator of the exercise of the State’s power to legislatebeing repugnant on the same subject. The third test of repugnancymay arise where both the Parliament and the State legislationcover the same subject matter. Allowing the exercise of powerH

over the same subject matter would trigger the application of theconcept of repugnancy. This may implicate the doctrine of impliedrepeal in that the State legislation cannot co-exist with a legislationenacted by Parliament. But even here if the legislation by theState covers distinct subject matters, no repugnancy would exist.In deciding whether a case of repugnancy arises on the applicationof the second and third tests, both the text and the context of theParliamentary legislation have to be borne in mind. The natureof the subject matter which is legislated upon, the purpose of thelegislation, the rights which are sought to be protected, thelegislative history and the nature and ambit of the statutoryprovisions are among the factors that provide guidance in theexercise of judicial review. The text of the statute would indicatewhether Parliament contemplated the existence of Statelegislation on the subject within the ambit of the Concurrent List.Often times, a legislative draftsperson may utilize either of bothof two legislative techniques. The draftsperson may provide thatthe Parliamentary law shall have overriding force and effectnotwithstanding anything to the contrary contained in any otherlaw for the time being in force. Such a provision is indicative of aParliamentary intent to override anything inconsistent or inconflict with its provisions. The Parliamentary legislation mayalso stipulate that its provisions are in addition to and not inderogation of other laws. Those other laws may be specificallyreferred to by name, in which event this is an indication that theoperation of those specifically named laws is not to be affected.Such a legislative device is often adopted by Parliament by savingthe operation of other Parliamentary legislation which isspecifically named. When such a provision is utilized, it is anindicator of Parliament intending to allow the specific legislationwhich is enlisted or enumerated to exist unaffected by asubsequent law. Alternatively, Parliament may provide that itslegislation shall be in addition to and not in derogation of otherlaws or of remedies, without specifically elucidating specificallyany other legislation. In such cases where the competentlegislation has been enacted by the same legislature, techniquessuch as a harmonious construction can be resorted to in order toensure that the operation of both the statutes can co-exist. Where,however, the competing statutes are not of the same legislature, AB

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Ait then becomes necessary to apply the concept of repugnancy,bearing in mind the intent of Parliament. The primary effort inthe exercise of judicial review must be an endeavour toharmonise. Repugnancy in other words is not an option of firstchoice but something which can be drawn where a clear casebased on the application of one of the three tests arises forBdetermination. [Para 42][755-B-H; 756-A-G]

Zaverbhai Amaldas v. State of Bombay (1955) 1 SCR799; Tika Ramji v. State of UP [1956] SCR 393; O PStewart v. B K Roy AIR 1939 Cal 628; Deep Chand v.State of UP [1959] 2 Suppl. SCR 8; State of Orissa v.CM/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. MarAppraem Kuri Company Ltd. (2012) 7 SCC 106 : [2012]D4 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 orlocal authorities constituted under State legislation whose powersEand functions in regard to the development of land are regulatedby legislation enacted by the State legislatures. The RERArecognizes that local bodies constituted under laws enacted bythe State legislatures regulate diverse aspects of constructionactivity as an incident of the development of land. Secondly, indiverse provisions, the RERA has imposed the duty of complyingFwith its regulatory provisions upon the ‘appropriate government’.This expression encompasses, in respect of matters relating tothe State, the State government. In the case of Union Territories,the definition of the expression ‘appropriate government’ inSection 2(g) is bifurcated into three categories-Union TerritoryGwithout a legislature; Union Territory of Puducherry; and UnionTerritory of Delhi. [Para 43][756-H; 757-A-C]

4.2 Parliament while enacting the RERA has imposed theobligation to secure compliance with its provisions in diverseaspects upon the State governments. Each of these two facetsHneeds to be developed and analyzed. [Para 44][757-D]

4.3 Section 2(q), 2(zc), 2(zf), 2(zr) of RERA are indicativeof the fact that Parliament was conscious of the position thatdiverse activities relating to construction projects are governedby municipal and local legislation. There is an existence in theStates of various regimes of town and country planning governedby State enactments and regulations have been framed underthem. Likewise, municipal and local laws govern diverse aspectsof construction activity in real estate projects including theapplication for development, nature and extent of permissibledevelopment on land, issuance of commencement certificatesallowing the promoter to begin development of an immoveableproperty, completion certificates certifying the completion of theconstruction project in accordance with the sanctioned plans andthe grant of occupation permission to occupy the constructedareas. [Para 52][760-C-E]

4.4 All the definitions clearly postulate the existence of Statelegislation which governs and regulates construction activitythrough municipal and local bodies. The RERA naturally has notattempted to supplant these State enactments which govern thepermissible use of land for development, the applicable normsfor construction activity, the nature and extent of developmentpermissible on land falling within municipal and local areas andthe process of carrying out construction from its initiation tocompletion. In not intruding into this area, the RERA has followedthe distribution of legislative powers. Entry 5 of List II to theSeventh Schedule, deals with local government, including theconstitution and powers of municipal corporations and other localauthorities for the purpose of local self-government or villageadministration. The control over development activities undermunicipal and local laws is governed by State legislation. [Para53][760-E-H]

4.5 The second aspect of RERA which deserves emphasisis that its diverse provisions are regulated and enforced by thereal 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 hasprovided for the establishment of a Real Estate Appellate Tribunalby the appropriate government in Chapter VII. Consistent withthe provisions of Sections 43 to 57, the real estate regulatory A

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Aauthority has a vital role to play in regard to the imposition ofpenalties under Chapter VIII prescribes penalties forcontravention of the provisions of the Act.Besides theestablishment of the real estate regulatory authority, the RERAhas, in Section 71, contemplated the appointment of adjudicatingofficers for adjudging compensation under Sections 12, 14, 18Band 19. These adjudicating officers are to be appointed by theauthority in consultation with the appropriate government.Furthermore, Chapter IX provides for finance, accounts, auditsand reports. [Paras 54-57][761-A-B; 762-B-D; 763-A]

4.6. Section 88 of the RERA stipulates that the applicationCof other laws is not barred: the provisions of the legislation “shallbe in addition to, and not in derogation of, the provisions of anyother law for the time being in force”. At the same time, Section89 provides for overriding effect to the provisions of the RERAwhen it stipulates that it “shall have effect, notwithstandingDanything inconsistent therewith contained in any other law forthe time being in force”. The interpretation of these provisionsand their interplay will have an important bearing on the outcomeof the instant controversy. This is because, the State of WestBengal had originally supported its legislative authority over thesubject governed by WB-HIRA on the ground that the stateEenactment falls within the ambit and purview of List II of theSeventh Schedule. However, though this submission wasspecifically pressed in the counter affidavit, it has been expresslygiven up in the oral and written submissions tendered beforethis Court by the State of West Bengal. The submission now ofFthe State of West Bengal accepts that in essence and in substance,WB-HIRA contains a substantial overlap with the provisions ofthe RERA and is a law which the State legislature enacted inexercise of its legislative authority under Article 246(2) whilelegislating on subjects in the Concurrent List. The State of WestBengal submitted that WB-HIRA, like the RERA is enacted withGreference to the subjects incorporated in Entries 6 and 7 of ListIII of the Seventh Schedule. [Para 58][763-E-H; 764-A-B]

5.1 The expression “any other law for the time being inforce” does not necessarily mean, such laws as were in existence H

when the statutory provision was enacted. To the contrary, it widelyconsidered to mean not just the laws which were in existencewhen the statutory provision was enacted but also such laws whichmay come into existence at a later stage. On the other hand,another line of judicial precedent also suggests the meaning tobe ascribed to the expression must bear colour from the contextin which it appears, and not devoid of it. [Para 70][776-G-H]

Sasanka Sekhar Maity v. Union of India (1980) 4 SCC716 : [1980] 3 SCR 1209; Thyssen Stahlunion GMBHv. Steel Authority of India (1999) 9 SCC 334 : [1999] 3Suppl. SCR 461; Municipal Corporation of Delhi v.Prem Chand Gupta (2000) 10 SCC 115 : [1999] 5 Suppl.SCR 403; Yakub Abdul Razak Memon v. State ofMaharashtra (2013) 13 SCC 1 : [2013] 15 SCR 1;Union Territory of Chandigarh v. Rajesh KumarBasandh (2003) 11 SCC 549 : [2003] 3 Suppl. SCR452; Department of Customs v. Sharad Gandhi (2020)13 SCC 521 : [2019] 4 SCR 273; National InsuranceCompany 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 thetime being in force” is used in Section 89 as well as in Section2(zr) and Section 18(2). Section 2(zr), stipulates those words andexpression used in the Act, but not defined in it and defined inany law for the time being in force or in municipal laws or otherrelevant laws of the appropriate government, shall have themeaning assigned to them in those laws. Evidently, a law for thetime being in force in s. 2(zr) is not frozen in point of time as onthe date of the enactment of RERA. Likewise, s.18(2) of the RERAimposes an obligation to the promoter to compensate allotteesfor the loss caused due to a defective title to the land and theprovision stipulates that the claim for compensation shall not bebarred by limitation provided “under any law for the time beingin 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]

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A6.1. From the analysis of the provisions of RERA on theone hand and of WB-HIRA on the other, two fundamental featuresemerge from a comparison of the statutes. First, a significant andeven overwhelmingly large part of WB-HIRA overlaps with theprovisions of RERA. These provisions of the RERA have beenlifted bodily, word for word and enacted into the State enactment.BSecond, in doing so, WB-HIRA does not complement the RERAby enacting provisions which may be regarded as in addition toor fortifying the rights, obligations and remedies created by theCentral enactment. The subject of the provisions of the Stateenactment is identical, the content is identical. In essence andCsubstance, WB-HIRA has enacted a parallel mechanism andparallel regime as that which has been entailed under the RERA.The State legislature has, in other words, enacted legislation onthe same subject matter as the Central enactment. Not only isthe subject matter identical but in addition, the statutoryprovisions of WB-HIRA are on a majority of counts identical toDthose of the RERA. Both sets of statutes are referrable to thesame entries in the Concurrent List-Entries 6 and 7 of List III-and the initial effort of the State of West Bengal to sustain itslegislation as a law regulating ‘Industry” within the meaning ofEntry 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 statutoryprovisions of WB-HIRA and the RERA makes the formerrepugnant to the latter within the meaning of that expression inclause (1) of Article 254, it becomes necessary to apply the severalFtests 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 inconflict with a law enacted by Parliament, so that compliance withone is impossible along with obedience to the other. The secondtest of repugnancy is where Parliament through the legislativeGprovisions contained in the statute has enacted an exhaustivecode. The second test of repugnancy is based on an intent ofParliament to occupy the whole field covered by the subject of itslegislation. In terms of the second test of repugnancy, a stateenactment on the subject has to give way to the law enacted byHParliament on the ground that the regulation of the subject matter

by Parliament is so complete as a code, so as to leave no spacefor legislation by the State. The third test of repugnancy postulatesthat the subject matter of the legislation by the State is identicalto the legislation which has been enacted by Parliament, whetherprior or later in point of time. Repugnancy in the constitutionalsense is implicated not because there is a conflict between theprovisions enacted by the State legislature with those of the lawenacted by Parliament but because once Parliament has enacteda law, it is not open to the State legislature to legislate on thesame subject matter and, as in this case, by enacting provisionswhich are bodily lifted from and verbatim the same as the statutoryprovisions enacted by Parliament. The overlap between theprovisions of WB-HIRA and the RERA is so significant as toleave no manner of doubt that the test of repugnancy based on anidentity of subject matter is clearly established. This principleconstitutes the foundation of the rule of implied repeal. The instantcase is not one where WB-HIRA deals not with matters whichform the subject matter of the Parliamentary legislation but withother and distinct matters of a cognate and allied nature. WB-HIRA, on the contrary, purports to occupy the same subject asthat which has been provided in the Parliamentary legislation.The state law fits, virtually on all fours, with the footprints of thelaw enacted by Parliament. This is constitutionally impermissible.What the legislature of the State of West Bengal has attemptedto achieve is to set up its parallel legislation involving a parallelregime. [Para 74][779-B-H; 780-A-B]

Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC

407 : [2017] 8 SCR 33 – relied on.

6.3 Parliament envisaged in Section 88 of the RERA thatits provisions would be in addition to and not in derogation ofother laws for the time being in force. True enough, this provisionis an indicator of the fact that Parliament has not intended tooccupy the whole field so as to preclude altogether the exerciseof legislative authority whether under other Central or Stateenactments. The effect of Section 88 is to ensure that remedieswhich are available under consumer legislation, includingConsumer Protection Act, 2019, are not ousted as a consequenceof the operation of the RERA. Of course, it is also material to ABC

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Anote that both sets of statutes, namely the Consumer ProtectionAct(s) and the RERA, have been enacted by the Parliament andboth sets of statutes have to be therefore harmoniouslyconstrued. Section 88 of the RERA does not exclude recourse toother remedies created by cognate legislation. Where the cognatelegislation has been enacted by a State legislature, Section 88 ofBthe RERA is an indicator that Parliament did not wish to oust thelegislative power of the State legislature to enact legislation oncognate or allied subjects. In other words, spaces which are leftin the RERA can be legislated upon by the State legislature byenacting a legislation, so long as it is allied to, incidental or cognateCto the exercise of Parliament’s legislative authority. What theState legislature in the instant case has done is not to enactcognate or allied legislation but legislation which, insofar as thestatutory overlaps is concerned is identical to and bodily liftedfrom the Parliamentary law. This plainly implicates the test ofrepugnancy by setting up a parallel regime under the State law.DThe State legislature has encroached upon the legislativeauthority of Parliament which has supremacy within the ambit ofthe subjects falling within the Concurrent List of the SeventhSchedule. The exercise conducted by the State legislature ofdoing so, is plainly unconstitutional. [Para 75, 76][780-G-H; 781-EA, B-F]

6.4 The statutory overlaps between WB-HIRA and theRERA cannot be overlooked. But quite apart from that, there isan additional reason why the test of repugnancy engrafted in clause(1) of Article 254 is attracted. This is because several provisionsFof the WB-HIRA are directly in conflict and dissonance with theRERA. Where a State enactment in the Concurrent List hasenacted or made a statutory provision which is in conflict withthose which have been enacted by Parliament, it may in a givencase be possible to excise the provision of the State statute so asto bring it into conformity with the Parliamentary enactment. ButGthe instant case, involves a situation where valuable safeguardswhich are introduced by Parliament in the public interest andcertain remedies which have been created by Parliament arefound to be absent in WB-HIRA. This is indicated from thefollowing provisions:

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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL

(i) Section 2(n) of the RERA contains a statutory definitionof the meaning of ‘common areas’. Parliament has definedthe expression to mean what is set out in sub-clause 1(i) to(iii) which includes open parking areas. The WB-HIRAcontains a definition of the expression ‘common areas’ ins. 2(m). While this definition is pari materia, WB-HIRA hasenacted the definition of the expression ‘car parking area’in Section 1 to mean such area as may be prescribed inexercise of the rule making power. The rules framed bythe State government define the expression to mean anarea either enclosed or uncovered or open excluding opencar parking areas reserved as common areas and to excludeall types of car parking areas sanctioned by the competentauthority;

(ii) Section 2(y) of the RERA defines the expression‘garage’ so as not to include an unenclosed or uncoveredparking space such as open parking area. On the other hand,Section 2(x) of WB-HIRA defines the expression ‘garage’to mean garage and property space as sanctioned by thecompetent authority;

(iii) Section 6 of the RERA provides for an extension of aregistration under Section 5 on an application by thepromoter due to force majeure. The explanationexhaustively defines force majeure to mean a case of war,flood, drought, fire, cyclone, earthquake or any othercalamity caused by nature affecting the development of thereal estate project. The provisions of Section 6 of the WB-HIRA, in contrast, while defining force majeure alsoincorporate “any other circumstances prescribed”, therebygiving a wider discretion to the regulatory authority or theState to give extensions of registration to real estate projectsin a manner which may prejudicially affect the interest ofhome buyers;

(iv) Section 38(3) of the RERA empowers the real estateregulatory authority in a monopoly situation to make a suomotu reference to the Competition Commission of India.No such provision is made in the State enactment. Hence, A

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Aa valuable safeguard to protect home buyers in the RERAhas been omitted.

(v) Section 41 of the RERA is a pivotal provision underwhich the Central government is to establish a CentralAdvisory Council. The Minister of the Central governmentBdealing with Housing is to be the ex officio Chairperson.The membership of the Central Advisory Council isstipulated in Section 41(3). The functions of the CentralAdvisory Council are provided in Section 42 of the RERA.WB-HIRA on the other hand, provides for the constitutionof a State Advisory Council under Section 41. Section 42 ofCWB-HIRA, which defines the functions of the State AdvisoryCouncil. The State legislature while enacting WB-HIRA hasreplaced the Central Advisory Council, which has a majorpolicy making role, with the State Advisory Council. Thoughthe functions of the State Advisory Council are similar, itsDpower is to advise and recommend to the State governmentin distinct in contrast to the functions of the CentralAdvisory Council, which is to make policy recommendationsto the Central government on the subjects contemplatedin clauses (a) to (e) of Section 42. As a consequence, theadvisory role of the Central government, based on theErecommendations of the Central Advisory Council, has beencompletely eroded in the provisions of WB-HIRA;

(vi) While Section 70 of the RERA contains a provision forcompounding of offences, but WB-HIRA does not containany such provision; F

(vii) Section 71(1) of the RERA provides that the regulatoryauthority shall appoint adjudicating officers for the purposeof adjudging compensation under Sections 12, 14, 18 and19. The adjudicating officer is required to be a person whois or has been a District Judge. WB-HIRA does not containGany provision for appointment of adjudicating officers forthe purpose of adjudging compensation. Under Section 40(3)of WB-HIRA, this power is entrusted to the regulatoryauthority and not to a judicial person or body. The fact thatan appeal against the orders of the regulatory authority lieHto the Appellate Tribunal and thereafter to the High Court cannot gloss over the fact that the valuable safeguard ofappointing judicial officers as adjudicating officers fordetermining compensation under the RERA has not beenenacted in WB-HIRA; and

(viii) Section 80(2) of the RERA provides that no Courtinferior to a Metropolitan Magistrate or JMFC shall try anoffence punishable under the Act. No such provision iscontained 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 thereis a repugnancy between WB-HIRA and RERA-the aboveprovisions of the State enactment are directly in conflict with theCentral enactment. Undoubtedly, as Article 254(1) postulates,the legislation enacted by the State legislature is void “to theextent of the repugnancy”. But the said analysis clearlydemonstrates that in material respects, WB-HIRA has failed toincorporate valuable institutional safeguards and provisionsintended to protect the interest of home-buyers. The silence ofthe State legislature in critical areas, indicates that importantsafeguards which have been enacted by Parliament in the publicinterest have been omitted in the State enactment. There is notonly a direct conflict of certain provisions between the RERAand WB-HIRA but there is also a failure of the State legislatureto incorporate statutory safeguards in WB-HIRA, which have beenintroduced in the RERA for protecting the interest of thepurchasers of real estate. In failing to do so, the State legislaturehas transgressed the limitations on its power and has enacted alaw which is repugnant to Parliamentary legislation on the samesubject matter. [Para 78][786-C-F]

7. The State of West Bengal initially argued that WB-HIRAdid not require presidential since it had been enacted under ListII, but that argument was given up before this Court, and it isadmitted that it comes under List III (the same as RERA).Further, it has also been clarified by this Court, rejecting theirargument, that Sections 88 and 89 of the RERA did not implicitlypermit the States to create their own legislation creating a parallelregime alongside the RERA which would have not requiredpresidential assent. Hence, it is clear that WB-HIRA did not have

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Apresidential assent and was repugnant to RERA under Article254.It is abundantly clear that the State of West Bengal wouldhave had to seek the assent of the President before enactingWB-HIRA, where its specific repugnancy with respect to RERAand its reasons for enactment would have had to be specified.Evidently, this was not done. However, since WB-HIRA is heldBto be repugnant to RERA, this issue becomes moot. [Para81][787-E-F; 788-G-H; 789-A]

Rajiv Sarin v. State of Uttarakhand (2011) 8 SCC 708: [2011] 9 SCR 1012 – referred to.

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8. Before the WB-HIRA, the State legislature had alsoenacted the WB 1993 Act. Upon receiving the assent of thePresident, the Act was published in the Calcutta Gazette,Extraordinary on 9.03.94. The provisions-Section 3 to 17 of theWB 1993 Act are repugnant to the corresponding provisionsDwhich are contained in the RERA. These provisions of the WB1993 Act impliedly stand repealed upon the enactment of theRERA in 2016, in accordance with Sections 88 and 89 read withArticle 254(1) of the Constitution. Hence, it is clarified thatstriking down of the provisions of WB-HIRA in the presentjudgment will not, in any manner, revive the WB 1993 Act, whichEwas repealed upon the enactment of WB-HIRA since the WB1993 Act is itself repugnant to the RERA, and would standimpliedly repealed. [Para 82][789-B; 790-B-D]

9. Since its enforcement in the State of West Bengal, theWB-HIRA would have been applied to building projects andFimplemented by the authorities constituted under the law in thestate. In order to avoid uncertainty and disruption in respect ofactions taken in the past, recourse to the jurisdiction of this Courtunder Article 142 is necessary. Hence, in exercise of thejurisdiction under Article 142, this Court directs that the strikingGdown of WB-HIRA would not affect the registrations, sanctionsand permissions previously granted under the legislation priorto 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 OFWEST BENGAL

Marketing Ltd. v. Punjab National Bank (1990) 4 SCC406 : [1990] 3 SCR 649; Indu Bhushan Bose v. RamaSundari Debi. (1969) 2 SCC 289 : [1970] 1 SCR 443;M D Frozen Foods Exports Private Limited v. HeroFincorp Limited (2017) 16 SCC 741: [2017] 13SCR 800; Transcore v. Union of India (2008) 1 SCC125 : [2006] 9 Suppl. SCR 785; KSL and IndustriesLimited v. Arihant Threads Limited (2015) 1 SCC 166 :[2014] 14 SCR 1097; Pioneer Urban Land andInfrastructure Limited v. Union of India (2019) 8 SCC416 : [2019] 10 SCR 381 – referred to.

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CIVIL ORIGINAL JURISDICTION: Writ Petition (C) No. 116Eof 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, FMs. Taniya Bansal, Advs. for the Petitioners.

Ms. Aishwarya Bhati, ASG., Rakesh Dwivedi, Sr., Adv., KanuAgarwal, Ms. Ameyavikrama Thanvi, Rajat Nair, Mohd. Akhil, NavanjayMahapatra, Raj Bahadur Yadav, Mrs. Anil Katiyar, Suhaan Mukerji,Vishal Prasad, Nikhil Parikshit, Eklavya Dwivedi, Abhishek Manchanda,GSayandeep Pahari, Arya Tripathy, M/S. Plr Chambers & Co., Advs. forthe Respondents.

The Judgment of the Court was delivered by DR JUSTICE DHANANJAYA Y CHANDRACHUD, J.

A The challenge

B Legislative historyC RERA - the legislative processD Salient features – RERAE Salient provisions of WB-HIRA

F RERA and WB-HIRA – provisions at variance G Submissions G.1 For the petitioners G.2 For the Union of India G.3 For the State of West Bengal A

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H Analysis

H.1Entry 24, List II – West Bengal’s ‘housingEindustry’ defense H.2The Constitutional Scheme of Article 254 andrepugnancy H.3Repugnancy – RERA and WB-HIRA

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H.3.1 Meaning of “is in addition to and not in derogationof any other law”

H.3.2 Meaning of “law for the time being in force”

H.3.3 Knitting it together

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H.4Lack of Presidential Assent for WB-HIRA

I Conclusion

636SUPREME COURT REPORTS

AA The challenge

1. The constitutional validity of the West Bengal Housing IndustryRegulation Act, 2017 (“WB-HIRA”/the “State enactment”) ischallenged in a petition under Article 32. The basis of the challenge isthat:

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(i) Both WB-HIRA and a Parliamentary enactment – the RealEstate (Regulation and Development) Act, 2016 (“RERA”/the “Central enactment”) are relatable to the legislativesubjects contained in Entries 6 and 7 of the Concurrent List(interchangeably referred to as ‘List III’) of the SeventhCSchedule to the Constitution;

(ii) WB-HIRA has neither been reserved for nor has it receivedPresidential assent under Article 254(2);

(iii) The State enactment contains certain provisions which areeither:

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a. Directly inconsistent with the corresponding provisionsof the Central enactment; or

b. A virtual replica of the Central enactment; and

(iv) Parliament having legislated on a field covered by theEConcurrent List, it is constitutionally impermissible for theState Legislature to enact a law over the same subjectmatter by setting up a parallel legislation.

Nuances apart, this, in substance, is the essence of the challenge.

B Legislative history

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2. Before Parliament enacted the RERA in 2016, the statelegislatures had enacted several laws to regulate the relationship betweenpromoters and purchasers of real estate. Among them was the WestBengal (Regulation of Promotion of Construction and Transfer byPromoters) Act, 1993 (the “WB 1993 Act”). This legislation of theGState of West Bengal was reserved for and received Presidential assent,following which it was published in the Official Gazette on 9 March1994. Many other States enacted laws on the subject, including amongthem:

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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

(i) The Maharashtra Housing (Regulation and Development)AAct, 2012 (the “Maharashtra Act”), which receivedPresidential assent on 2February 2014; and

(ii) The Kerala Real Estate (Regulation and Development) Act,2015 (the “Kerala Act”), was enacted by the StateLegislative Assembly on 3 February 2016.

B

3. On 14 August 2013, the Bill for enactment of the RERA wasintroduced in the Rajya Sabha. The Bill was passed by the Rajya Sabhaon 10 March 2016, and by the Lok Sabha on 15 March 2016. The lawreceived the assent of the President on 25 March 2016, and was publishedin the Official Gazette on the next day. RERA was then partially enforcedon 1 May 2016[1], while the rest of its provisions were enforced on 19April 2017[2].The Maharashtra Act was specifically repealed by RERA[3],while the Kerala Act was repealed by the State Legislative Assemblythrough the Kerala Real Estate (Regulation and Development) RepealAct, 2017[4].

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4. In the State of West Bengal, draft rules under the RERA wereframed on 18 August 2016 but no further progress was made in thatregard. On 16 August 2017, the motion for passing the WB-HIRA Billwas adopted in the State Legislative Assembly. The State enactmentreceived the assent of the Governor of West Bengal on 17 October2017. Inter alia, the WB-HIRA repealed the WB 1993Act[5]. Theremaining provisions of WB-HIRA were enforced by a notification[6] dated29 March 2018, issued by the Governor of the State of West Bengal inexercise of the power conferred by sub-section (3) of section 1 of WB-HIRA. Thereafter on 8 June 2018, the State of West Bengal framedrules under WB-HIRA.

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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 theIndian Constitution, if any provision of a law made by the legislature of a State isrepugnant to any law made by the Parliament, the law made by the legislature of a Stateshall become void. Therefore the Government have decided to repeal the Kerala RealEstate (Regulation and Development) Act, 2015.”

5 “86. Repeal and Savings. (1) The West Bengal (Regulation of Promotion of Constructionand Transfer by Promoters) Act, 1993 is hereby repealed.”

6 No. 18-HIV/3M-3/17 (PART-2)

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AC RERA - the legislative process

5. The Standing Committee on Urban Development (2012-2013)of the Fifteenth Lok Sabha submitted its Thirtieth Report on the RealEstate (Regulation and Development) Bill, 2013 (the “RERA Bill 2013”)pertaining to the Ministry of Housing and Urban Poverty alleviation.BWhile adopting the draft report on 12 February 2014, the Committeeemphasized the need for enacting a comprehensive legislation to regulatethe real estate sector. The backdrop is succinctly summarized in theprefatory paragraphs of the report, which are set out below:

“Over the past few decades, the demand for housing has increasedmanifold. In spite of Government’s efforts through variousschemes, it has not been able to cope up with the increasingdemands. Taking advantage of the situation, the private playershave taken over the real estate sector with no concern for theconsumers. Though availability of loans both through private andpublic banks has become easier, the high rate of interest and thehigher EMI has posed additional financial burden on the peoplewith the largely unregulated Real Estate and Housing Sector.Consequently the consumers are unable to procure completeinformation or enforce accountability against builders anddevelopers in the absence of an effective mechanism in place. Atthis juncture the need for the Real Estate (Regulation andDevelopment) Bill is felt badly for establishing an oversightmechanism to enforce accountability of the Real Estate Sectorand providing adjudication machinery for speedy dispute redressal.

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1.2. The real estate sector plays a catalytic role in fulfilling theneed and demand for housing and infrastructure in the country.While this sector has grown significantly in recent years, it hasbeen largely unregulated. There is, thus, absence ofprofessionalism and standardization and lack of adequate consumerprotection. Though the Consumer Protection Act 1986 is availableas a forum to the buyers in the real estate market, the recourse isonly curative and is inadequate to address all the concerns ofbuyers and promoters in that sector. The lack of standardizationhas been a constraint to the healthy and orderly growth of industry.Therefore, the need for regulating the sector has been emphasizedin various forums.”

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6. Upon being introduced in the Rajya Sabha, the RERA Bill 2013was referred to a twenty-one member Select Committee, on a motionadopted by the House on 6 May 2015. The Committee held seventeensittings –nine in Delhi and the remaining in different parts of the country.As many as 445 persons appeared before the Select Committee drawnfrom different categories and groups of stakeholders - representativesof consumers; resident welfare associations; promoter – builders; banksand financial institutions; Housing Ministries of all the States and UnionTerritories; law firms and independent experts in the field of real estate.Following a press communique, the Select Committee invited suggestionsand views from the members of the public, receiving a total of 273suggestions. It further visited Kolkata, Bengaluru, Mumbai and Shimlato interact with stakeholders in various parts of the country. Whilediscussing diverse issues which were presented before it by stakeholders,the Select Committee noted the grievances of consumers, many of whomwere duped by unscrupulous promoters and were made to run frompillar to post to secure possession of the apartments which were agreedto be sold or a refund of their moneys. The plight of the consumers ishighlighted 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 projectswhere the consumers were fleeced by the unscrupulouspromoters. These consumer invested their hard earned moneyfor their dream houses which turned out to be a nightmare forthem while they run from pillar to post either to get the possessionof their apartment or refund of their money back and fightingcases in the courts. The consumers were unanimous in theirsubmission that they have no means to know about the real statusof the project for example whether all the approvals have beenobtained, who is holding the title of the land, what is the financingpattern of the project and what has been the past record of thebuilder, etc As a result, they invested their money without havingany information about the project. In many cases, they were notgiven what was promised to them and in almost all the cases theproject was delayed. Submitting their views on the Bill, theyhighlighted the following points:- A

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Aa)There should not be any deemed provision for the registrationof project by promoter. The projects should be registered onlyafter thorough scrutiny.

b)Any housing project should commence only after obtaining althe approvals by the promoter and they should have accessBto all the documents before entering into agreement of sale.

c)The advance cost of apartment, plot or building before enteringinto written agreement should not be more than one lakh or5 % of the cost of apartment whichever is less (Clause 13(1).

d)There should be model “agreement for sale” which shouldCbe appended to the Bill.

e)In case of default by a promoter, they should be given refundof money at the market rate prevailing at that time withinterest.

Df)There should be one criterion for selling a flat i.e. the carpetarea which should be clearly defined and should not be linkedto National Building Code which can be damaged any timeindependent of the Bill.

g)The definition of the term ‘advertisement’ should be mademore exhaustive and the definition of the term ‘allottee’ shouldEalso include the association of allottees or group of allotteesso that they can in case of need take up the cause collectively.

h)Information relating to various clearances, credentials ofpromoter i.e., cases pending against, defaults in payments inthe past, projects left in between in the past, etc. waterFharvesting environmental impact, net worth of promoters andfinancing pattern etc. should be given.

i)Regarding the provision to keep 50% of the amount realizedfor the project from allottees in a separate account, it wasdemanded that this amount should not be less than 70%.G

j)On structural defect after handing over the possession, it wasdemanded that the liability of promoter should be increasedfrom 2 years to 5 years.

k)In case any project is abandoned by a promoter the way outHsuggested in clause 16 is inappropriate. In such an eventuality, FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

the promoter be subjected to heavy penalty and compelled tocarry the project through rather than considering the suggestedoptions which were not practicable.

l)In case of default, allottees are charged penalty at muchhigher rate of interest compared to default on the part of thepromoter.

m) There should not be any exemption to any project from theprovisions of this Bill in respect of area and number of flats.

n)Timely formation of the association of allottees and handingover of the common areas to the association for managementat the earliest.

o)Parking areas accommodation for domestic help to be dealtas per the Supreme Court Judgment.”

7. In bringing about a balance between the need to protectconsumers with the necessity of encouraging investment in the real estatesector, the Committee observed that while it shared the concerns ofconsumers, many of whom have to suffer because of ‘fly by nightoperators’, it was cognizant of the position that the real estate sectorwas largely being developed through private promoters, all of whomcould not be tarred with the same brush. The Select Committee observedthat there was a need to ensure that a renewed impetus is provided forthe growth of the real estate sector to fulfill the government’s objectiveof ensuring housing for all, while at the same time protecting the interestof consumers. The Committee struck a legislative balance between theseobjects, seeking to “stand by the good consumer and the good promoter”.

8. Following the report of the Select Committee, the Real Estate(Regulation and Development) Bill, 2016 (the “RERA Bill 2016”) wasintroduced. The Statement of Objects and Reasons accompanying theRERA Bill 2016 emphasizes the basic rationale for the enactment of thelegislation:

“STATEMENT OF OBJECTS AND REASONS

The real estate sector plays a catalytic role in fulfilling the needand demand for housing and infrastructure in the country. Whilethis sector has grown significantly in recent years, it has beenlargely unregulated, with absence of professionalism andstandardization and lack of adequate consumer protection. Though A

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the Consumer Protection Act, 1986 is available as a forum to thebuyers in the real estate market, the recourse is only curative andis not adequate to address all the concerns of buyers and promotersin that sector. The lack of standardization has been aconstraint to the healthy and orderly growth of industry.Therefore, the need for regulating the sector has beenemphasized in various forums.

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2. In view of the above, it becomes necessary to have a Centrallegislation, namely the Real Estate (Regulation andDevelopment) Bill, 2013 in the interests of effectiveconsumer protection, uniformity and standardization ofbusiness practices and transactions in the real estate sector.The proposed Bill provides for the establishment of the Real EstateRegulatory Authority (the Authority) for regulation and promotionof real estate sector and to ensure sale of plot, apartment orbuilding, as the case may be, in an efficient and transparent mannerand to protect the interest of consumers in real estate sector andestablish the Real Estate Appellate Tribunal to hear appeals fromthe decisions, directions or orders of the Authority.

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3. The proposed Bill will ensure greater accountabilitytowards consumers and significantly reduce frauds andEdelays as also the current high transactions costs. Itattempts to balance the interests of consumers andpromoters by imposing certain responsibilities on both. Itseeks to establish symmetry of information between thepromoter and purchaser, transparency of contractualconditions set minimum standards of accountability and aFfast-track dispute resolution mechanism. The proposed Billwill induct professionalism and standardization in the sector,thus paving the way for accelerated growth and investmentsin the long run.”

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9. The legislative background antecedent to and ultimatelyculminating in the enactment of the RERA indicates: firstly, thecircumstances which gave rise to the need for comprehensiveParliamentary legislation on the subject; secondly, the specificinadequacies in the development of the real estate sector which were a H

source of exploitation of purchasers; thirdly, the legislative policyunderlying the enactment of the law; and fourthly, the context in whichspecific statutory provisions have been adopted as the instrument forbringing about orderly development and growth of the real estate sector.The legislative background demonstrates the concern of the policy makersthat the unregulated growth of the real estate sector, accompanied by alack of professionalism and standardization, had resulted in serioushardship to consumers. The real estate sector is of crucial significanceto meet the demand for housing in the country. While remedies wereprovided to consumers by the Consumer Protection Act, 1986, thisrecourse was “curative” and did not assuage all the concerns of buyerson the one hand and promoters on the other hand in the sector. Thereexisted an asymmetry of information between promoters and buyers ofreal estate. Buyers lacked adequate information about the title to theland, the nature of the development, pricing of projects and the progressof construction. A lack of standardization and uniformity was a key factorrestraining the balanced growth and development of the real estate sector.The Central enactment sought to remedy the drawbacks of the existingregulatory framework in the country by establishing a real estate regulatoryauthority to ensure that transactions between promoters and buyers aregoverned by the twin norms of efficiency and transparency. It sought tobring about accountability towards consumers and to significantly reducefrauds, delays and high transaction costs. While imposing duties andresponsibilities on promoters and purchasers, RERA sought to achieveits objectives by ensuring:

(i) Symmetry of information between promoters and purchasers;

(ii) Transparency of contractual conditions;

(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 tothe legislation dwells on the purpose of the law in the following terms:

“An Act to establish the Real Estate Regulatory Authority forregulation and promotion of the real estate sector and to ensuresale of plot, apartment or building, as the case may be, or sale ofreal estate project, in an efficient and transparent manner and toprotect the interest of consumers in the real estate sector and to A

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Aestablish an adjudicating mechanism for speedy dispute redressaland also to establish the Appellate Tribunal to hear appeals fromthe decisions, directions or orders of the Real Estate RegulatoryAuthority and the adjudicating officer and for matters connectedtherewith or incidental thereto.”

B10. As such, the legislative background underlying the enactmentof the RERA demonstrates a clear emphasis on:

(i) Standardization;

(ii) Uniformity; and

C(iii) Symmetry of information.

These elements provide the justification for enacting acomprehensive legislation which is uniformly applicable to all parts ofthe country.

D Salient features – RERAD

11. Before we proceed further, some of the salient features of theRERA 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 buildingEor a building consisting of apartments, or converting an existingbuilding or a part thereof into apartments, or the developmentof land into plots or apartments, as the case may be, for thepurpose of selling all or some of the said apartments or plots orbuilding, as the case may be, and includes the common areas,the development works, all improvements and structuresFthereon, and all easement, rights and appurtenances belongingthereto;”

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(ii) The expression ‘apartment’, which is adverted to in the definitionof real estate project under Section 2(zn), is defined in Section 2(e) asfollows:

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“(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-containedpart of any immovable property, including one or more roomsor enclosed spaces, located on one or more floors or any part H

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

thereof, in a building or on a plot of land, used or intended to beused for any residential or commercial use such as residence,office, shop, showroom or godown or for carrying on anybusiness, occupation, profession or trade, or for any other typeof use ancillary to the purpose specified;”

(iii) The provisions of the RERA are comprised in ten Chapters.Broadly, the division is as follows:

Chapter IPreliminary

Chapter IIRegistration of Real Estate Projects andRegistration of Real Estate Agents Chapter IIIFunctions and Duties of Promoters Chapter IVRights and Duties of allottees Chapter VThe Real Estate Regulatory Authority Chapter VICentral Advisory Council Chapter VIThe Real Estate Appellate TribunalChapter VIIOffences, Penalties and AdjudicationChapter IXFinance, Accounts, Audits and ReportsChapter XMiscellaneous

(iv) RERA mandates the registration of real estate projects andreal estate agents. The salient features of this process are:

a.Mandatory registration of real estate projects with thereal estate regulatory authority is required before thepromoter can advertise, market, book, sell or offer forsale or invite persons to purchase a plot, apartment orbuilding in a real estate project; b.Mandatory registration of real estate agents beforefacilitating the sale or purchase of plots, apartments orbuildings in real estate projects;

c.Mandatory public disclosure of all project details bypromoters;

d.Promoters are required to make a mandatory publicdisclosure of all registered projects on the web-site of

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[2021] 5 S.C.R.

Athe authority including lay out plans, land titles, statutoryapprovals, agreements;

(v) RERA also provides the functions and duties of promoters, inthe following terms:

a.Disclosure of all relevant information relating to theBproject; b.Adherence to approved plans and project specificationsas approved by competent authorities;

c.Obligations regarding veracity of advertisements orprospectus; 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 thecost as advance without entering into a written agreementfor sale; D

g.Rectification of structural defects for a specified periodfrom the date of possession; h.Formation of an association, society or cooperative societyof allottees and the execution of a registered deed ofEconveyance;

(vi) It also provides the rights and obligations of allotees, whichare:

a.Obtaining information about sanctioned plans, lay outsand specifications approved by the competent authority; F

b.The date wise time schedule for completion of the projectincluding provisions for essential amenities;

c.Claiming possession, including possession of the commonareas by the association; d.Refund in the event for default; G

e.Duty to make payments of consideration for the sale ofthe apartment, plot or building together with interest asprescribed; f.Duty to take possession; H

(vii) Establishment of a real estate authority by the appropriategovernment (the State government in a State withcorresponding provisions for Union territories), with thefollowing details provided:

a.Composition of the authority;

b.Qualifications for appointment to the authority;

c.Removal of members and conditions of service; d.Functions of the authority include the growth andpromotion of the real-estate sector;

(viii) RERA also provides for the establishment of a CentralAdvisory Council to advise and make recommendations tothe Central government on all matters concerning theimplementation of RERA, on major questions on policy,towards protection of consumer interest, to foster the growthand development of real-estate sector and on any other matteras assigned by the Central government.

(ix) It also establishes the Real-Estate Appellate Tribunal,provides the following details about the institution:

a.Establishment;

b.Settlement of disputes and appeals;

c.Composition;

d.Conditions of service;

e.Powers;

f.Appeals;

(x) RERA notes the offences, penalties and adjudication, alongwith:

a.Delegated legislation;

b.Power of the appropriate government to make rules;

c.Framing of regulations by the authority; and

(xi) Finally, Sections 88 and 89 of the RERA provide as follows:

“88. Application of other laws not barred.—Theprovisions of this Act shall be in addition to, and not in A

B

C

D

E

F

G

derogation of, the provisions of any other law for the timebeing in force.

A

89. Act to have overriding effect.—The provisions ofthis Act shall have effect, notwithstanding anythinginconsistent therewith contained in any other law for thetime being in force.”

B

E Salient provisions of WB-HIRA

12. The long title to the State enactment describes the purposeand content of the legislation as:

C“An Act to establish the Housing Industry Regulatory Authorityfor regulation and promotion of the housing sector and to ensuresale of plot, apartment or building, as the case may be, or saleof real estate project, in an efficient and transparent mannerand to protect the interest of consumers in the real estate sectorand to establish a mechanism for speedy dispute redressal andDfor matters connected therewith or incidental thereto.”

Its preamble is in the following terms:

“Whereas it is expedient to establish the Housing IndustryRegulatory Authority for regulation and promotion of thehousing sector and to ensure sale of plot, apartment or building,Eas the case may be, or sale of real estate project, in an efficientand transparent manner and to protect the interest of consumersin the real estate sector and to establish a mechanism for speedydispute redressal and for matters connected therewith orincidental thereto.”

F

The above excerpts indicate that the State enactment purports toset up a regulatory authority for the housing industry. Save and exceptfor this emphasis on the housing industry, the broad purpose of the Stateenactment coincides with RERA. Before we set out a comparative tableof the corresponding provisions of WB-HIRA and RERA, it is necessaryGto note at the outset that there is, in most of the substantive provisions, acomplete overlap of the provisions contained in the two statutes. Evidently,the Bill for the introduction of WB-HIRA in the State legislature wasprepared on the basis of the RERA as a drafting model. Hence, duringthe course of this judgment, the provisions of the State enactment whichare at variance to those in the Central enactment will be delineated H

A

separately. However, at this stage, a sampling of some of the crucialAprovisions would indicate that theyare identical in their entirety, in theState of West Bengal’s WB-HIRA and RERA which has been enactedby Parliament. This identical nature is evident from the tabulatedstatement set out below, in which the identical provision is placed in themiddle (as extracted from the RERA), while it is flanked with its relevantBSection number and title from RERA and WB-HIRA on both sides:

CDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF653WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

656SUPREME COURT REPORTS

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

AB

C

DEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF659WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

660SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

661ABCDEFGH

662SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

AB

C

DEFGH

664SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF665WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

ABCDEFGH

SUPREME COURT REPORTS

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

670SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A

BC

DEFGH

672SUPREME COURT REPORTS

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABC

DEFGH

674SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

676SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

AB

CDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A

B

C

D

E

F

G

H

680SUPREME COURT REPORTS

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

681ABCDEFGH

682SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A

B

C

D

EFGH

684SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

AB

C

DEFGH

686SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF687WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

688SUPREME COURT REPORTS

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

AB

C

DEFGH

690SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A

B

C

D

E

FGH

694SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A

B

C

DEF

G

H

ABCDEFGH

SUPREME COURT REPORTS

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OF699WEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

700SUPREME COURT REPORTS[2021] 5 S.C.R.ABCDEFGH

A

BCDEFGH

702SUPREME COURT REPORTS

[2021] 5 S.C.R.

ABCDEFGH

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A

B

C

D

E

FG

H

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

ABCDEFGH

ABCDEFGH

[2021] 5 S.C.R.

It needs to be emphasized that the tabulated provisions of theState enactment are verbatim a reproduction of the Central enactmentin most instances, with minor differences between the provisions (due toRERA being a Central enactment, and WB-HIRA being a Stateenactment) but those are not relevant for our present discussion. It isalso important to note that Section 83 of WB-HIRA provides as follows:

AB

C

DEF

G

H

710SUPREME COURT REPORTS

A“83. Application of other laws not barred.- The provisionsof 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,Baccording to which overriding effect has been given to the RERA,notwithstanding anything inconsistent therewith contained in any otherlaw for the time being in force. Further, the repealing provisions of thetwo enactments are distinct. Section 92 of the RERA has repealed theMaharashtra Act, while Section 86(1) of WB-HIRA repeals the WB1993Act.C

FRERA and WB-HIRA – provisions at variance

14. In the previous section, this judgment has dwelt on thesubstantial overlap between the provisions of RERA and the subsequentlyenacted WB-HIRA. However, in this segment of the judgment, it wouldDbe necessary to visit the inconsistencies and deviations made in WB-HIRA from the provisions of the RERA. These divergences are indicatedin the following tabulation, which has been put on record by the Union ofIndia during its submissions:

E

F

G

H

AB

CDEFGH

ABCDEFGH

[2021] 5 S.C.R.

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A

B

C

D

15. Now, it is in this backdrop that it becomes necessary to considerthe submission made by the parents.

G Submissions

E

G.1 For the petitioners

16. Mr Devashish Bharuka, learned Counsel appearing on behalfof the petitioner surged the following submissions:

(I) Nature of RERA and WB-HIRA

a. The subject of both the central and the state enactments iscovered by Entries 6 and 7 of the Concurrent List to theSeventh Schedule to the Constitution; F

b. RERA is a complete and exhaustive code which regulatesthe contractual relationship between a builder/promoter anda buyer/consumer in the real estate sector and providesGremedial measures. Parliament has indicated an intent tooccupy the whole field;

c. RERA regulates the rights and obligations betweenpromoters and buyers of real estate in addition to theprovisions of the Indian Contract Act, 1872. The enactment, H

Ain ensuring the actual transfer of property to the buyerfurthers the objects of the Transfer of Property Act, 1882.It provides for the enforcement of contracts throughremedial measures which are in addition to the remediesprovided in the Consumer Protection Act, 1986 and itssuccessor legislation of 2019. RERA, in other words, is aBspecial statute governing the real estate sectorencompassing rights and obligations found in differentcentral enactments; and

d. WB-HIRA covers the identical field of regulating thecontractual behavior of promoters and buyers in real-estateCprojects. The state law is a ‘copy-and paste’ replica of thecentral legislation (except for certain provisions which areinconsistent with RERA) and covers the field which isoccupied by the central enactment.

(II) WB-HIRA is repugnant to RERAD

a. The subjects of both sets of legislations are contained inEntries 6 and 7 of the Concurrent List;

b. The state law does not fall either under the subject of land(Entry 18, List II[7]) or industry (Entry 24, List II). That WB-EHIRA does not fall under Entry 24, List II is evident fromthe meaning of the expression ‘industry’ as explained in thefollowing 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 UOIG(1988) 4 SCC 324 [2-Judges]

•Ashoka Marketing Ltd. v Punjab National Bank,(1990) 4 SCC 406 [5-Judges]

H7 Interchangeably referred to as ‘State List’

•Indu Bhushan Bose v Rama Sundari Debi, (1969) 2SCC 289 [5-Judges]

c. The tests of repugnancy as enunciated in the judgments ofthis Court are three-fold: First, there may be a directinconsistency or conflict between the actual terms of thecompeting statutes; Second, even if there is no directconflict, where Parliament has intended to occupy the entirefield by enacting an exhaustive or complete code, the statelaw in the same field would be repugnant and inoperative;and Third, a conflict may arise where the State Legislaturehas sought to exercise its powers over the same subjectmatter as the legislation by Parliament;

d. RERA being an exhaustive code regulating the contractualrelationships between promoters and buyers in the real-estate sector, WB-HIRA entrenches on an occupied fieldand is hence repugnant and void under Article 254(2) ofthe Constitution;

e. WB-HIRA was not reserved for the assent of the Presidentand is hence not protected by Article 254(2) nor would thestate enactment be protected by Article 255 which appliesonly to a situation where a ‘recommendation’ or ‘previoussanction’ is required to be given by the Governor or thePresident; and

f. Without prejudice to the earlier submissions on the doctrineof occupied field, there are inconsistencies between RERAand WB-HIRA. The state legislature has made severalchanges which tilt the law in favour of the promoter – builder.For example:

1. Though, the adjudication of compensation under the RERAis entrusted to an adjudicatory officer who is a judicial officer,this provision for an adjudicating officer does not find placein the state enactment.

2. Changes have been made in the definition of theexpression’s ‘garage’ and ‘force majeure’.

3. Removal of the concept of planning area in the statelegislation.

A

B

C

D

E

F

G

H

716SUPREME COURT REPORTS

[2021] 5 S.C.R.

A4. Change in the jurisdictional court which takes cognizanceof offences;

(III) Complete change of stance by the State government.

a. At the time when WB-HIRA was enacted by the statelegislature, it was intended to govern the field of housingBindustry under Entry 24 of List II in the State of WestBengal and not the field of ‘contracts’ and ‘transfer ofproperty’ under Entries 6 and 7 of List III. This is evidentfrom the following circumstances:

1. The Statement of Objects and Reasons of the Billfrom when it was introduced in the state legislature,specifically notes that housing comes under theambit of industry which is why the state decided toenact its own legislation; C

2. The long title of the state enactment seeks toDestablish a housing industry regulatory authority forregulation and promotion of the housing sector;

3. The Governor of West Bengal was not informed ofRERA when assent was sought;

4. Even in the counter affidavit filed in this Court, theEState 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 oralsubmissions that the legislation does not fall underEntry 24 of List II but Entries 6 and 7 of List III,the entire edifice of the legislation being referableto the State List is negatived and the state enactmentis void under Article 254(1).

F

(IV) Effect of Sections 88 and 89 of RERA:G

a. It is common ground that both the central and state lawsfall under the subjects of legislation contained in theConcurrent List;

b. The State of West Bengal has submitted that SectionsH88 and 89 of RERA allows the States to by-pass the FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

requirement of Presidential assent under Article 254(2)to enact a statute which is substantially identical to RERAfor creating parallel regimes across the country;

c. Accepting this submission and allowing the State toprovide a “duplicate regime would result in completechaos in the real-estate sector;

d. At the time when RERA was enacted several state lawswere in existence including The above state laws covered certain areas beyond whatis covered by RERA. Hence, Section 89 read with theproviso to Article 254(2) impliedly repeals such provisionsto the extent to which they overlap with the RERA.Significantly, the state legislations covering the samesubject matter were enacted in Maharashtra in 2012 andin Kerala in 2015. By Section 92 of RERA, Parliamentrepealed the Maharashtra legislation while Keralarepealed its own law in 2017;

e. The legislative history of RERA would indicate that therewas a clarion call for a uniform national law in the real-estate sector for some time;

f. Section 88 of RERA stipulates that the provisions of theAct are in addition to and not in derogation of any otherlaw for the time being in force while Section 89 givesoverriding force and effect to RERA notwithstanding

A

B

C

D

E

F

G

H

anything inconsistent contained in any other law for thetime being in force; A

g. The expression “for the time being in force” may,according to context and intent refer to either B1. a specific period of time or

2. to all periods of time.

Since RERA is remedial and regulatory, it is to operatetogether with existing laws including the ConsumerProtection Act for the purpose of providing wholesomestatutory protections- both to promoters and consumers.Section 89 gives overriding effect to RERA overinconsistent existing laws; C

h. Sections 88 and 89 do not prohibit the enactment of lawsby 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 ofArticle 254 without reference to Sections 88 or 89. Inthe event of a future Parliamentary law, its effect andimpact would be tested on the general principles ofinterpretation of statutes such as general and special laws,an earlier and later law and the rule of harmoniousconstruction. The State cannot enact a law on the subjectmatter without seeking Presidential assent; D

E

i.The expression “in addition to and not in derogation of”Fwas intended to indicate that the remedies in RERA areaddition to those provided by other statutes including theConsumer Protection Act and the Insolvency andBankruptcy Code, 2016 (“IBC”).

j.Provisions analogous to Sections 88 and 89 of the RERAGare contained in several other central statutes on thesubjects in the Concurrent List some of which aretabulated below:

H

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

A

B

C

D

If the interpretation of the State of West Bengal is accepted, theStates would have an open hand to legislate by enacting a parallelregime as in the case of WB-HIRA without obtaining Presidentialassent. This would destroy the federal legislative scheme of theprimacy of Parliament under Article 254.

E

(V) Applicability of Article 256

a.The interpretation placed by the State of West Bengal onSections 88 and 89 is contrary to the request of the Unionof India to the State to repeal WB-HIRA and to notify therules under RERA; F

b.The State was under a constitutional mandate to act underArticle 256 rather than enacting its own law withoutPresidential assent under Article 254(2); and

c.The enactment of a parallel regime for implementingprovisions analogous to RERA in the State of West BengalGwill create serious inconvenience and absurdity and renderthe entire scheme of RERA as a uniform national regulation,unworkable. Under RERA, the State government acts asa delegate of Parliament whereas with WB-HIRA, theState has shifted its role to that of a delegator.

H

A(VI) Upon the declaration of WB-HIRA as unconstitutional,the 1993 legislation in West Bengal may also bedeclared as repealed in view of the following:

a.Section 89 of the RERA impliedly repeals all earlier stateacts with Presidential assent under the proviso to ArticleB254(2); and b.In the alternative, Section 86 of WB-HIRA which repealsWB 1993 Act may be severed by applying the doctrine ofseverability.

On the above grounds, it has been submitted that WB-HIRA isCvoid for want of legislative competence.

G.2 For the Union of India

17. Ms Aishwarya Bhati, learned Additional Solicitor Generalappearing 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 theRERA in 2016 indicates that a comprehensive exercisewas carried out by the Select Committee of the RajyaSabha which heard the views of stakeholders from acrossEthe country; b.Parliament has enacted RERA, as the Statement of Objectsand Reasons indicates, having due regard to

1. The necessity of a central legislation to provide effectiveprotection to real estate buyers and protect them fromFexploitation;

2. The need to ensure uniformity and standardization ofbusiness practices;

3. The key purpose of RERA is to ensure uniformity,Gtransparency, efficiency, symmetry, standardization andefficacious dispute resolution;

c.While enacting the RERA, Parliament by its definition of“appropriate government” in Section 2(g) entrusted widepowers to the State governments including the power toframe rules and regulations.

H

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 torecommend policy measures for protecting consumerinterest and ensure faster growth and development ofthe real estate sector; andC

6. Establishment of a real estate regulatory authority andappellate tribunal for oversight of real estatetransactions and to settle disputes by imposing interestand compensation.

D

(II) Constitutional validity

a.The validity of RERA has been upheld by the BombayHigh Court[8] (except for Section 46(1)(b)); b.As many as 29 States and Union Territories have notifiedrules under RERA as of the date of the filing of the counteraffidavit; E

c.As on date, 34 States and Union Territories have notifiedthe rules (with the sole exceptions of Nagaland where theprocess is going on and West Bengal which has enactedits separate legislation). The provisions of WB-HIRA bearan uncanny resemblance to RERA and large portions ofthe State legislation have been copied verbatim from thecentral legislation; F

d.The Statement of Objects and Reasons of WB-HIRA alsoindicates that the purpose was to regulate and promotethe housing sector in an efficient and transparent mannerin the interests of consumers. The objects of the statelegislation are synonymous with RERA and the Statestatute deals with the same subject matter in an identical G

8 WP 2737 of 2017, decided on 6 December 2017

H

722SUPREME COURT REPORTS

Amanner. The State of West Bengal in effect has set up aparallel mechanism and parallel regime which is similar tothe RERA on a majority of counts; and e.Though in the counter affidavit, the State of West Bengalsought to justify the state law primarily under Entry 24 ofBList II of the Seventh Schedule, this stand has beenspecifically 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 acentral statute on a subject in the concurrent list may arise in any one orCmore of the following modes: First, there may be an inconsistency orconflict in the actual terms of competing statutes; second, though thereis no direct conflict between a State and Central statute, the latter maybe intended to be an exhaustive code in which event it occupies thewhole field, excluding the operation of the state law on the subject in theDconcurrent list; and third, even in the absence of an actual conflict,repugnancy may arise when both the State and Central statutes seek toexercise power over the same subject matter;

a. First test of repugnancy: direct conflict There is a direct inconsistency between several provisions of theERERA and WB-HIRA:

1. Under the RERA open car parking areas are covered by thedefinition of ‘common areas’ in Section 2(n), indicatingtherefore that they cannot be sold; on the other hand in theState enactment, Section 2(i) allows the car parking area toFbe prescribed by rules made by the state government;

2. The definition of ‘garage’ in Section 2(y) of RERA does notinclude unenclosed or uncovered parking spaces such as openparking areas, whereas Section 2(x) of WB-HIRA definesthe expression ‘garage’ to mean parking spaces as sanctionedGby the competent authority;

3. RERA applies only to those real estate projects situated in aplanning area while there is no concept of a planning area inthe state legislation; H

4. Section 6 of the RERA specifically confines force majeureevents to specific eventualities whereas the correspondingprovision of state enactment is much wider leaving it to beprescribed by the rules; A

5. Under Section 38(3) of RERA, the Authority has beenentrusted with the power to make a reference to theBCompetition Commission of India in the event of a monopolysituation while there is no such provision in the stateenactment;

6. While Section 41 of the RERA provides for a Central AdvisoryCouncil to advise and recommend the Central governmenton specific matters, the corresponding provision of WB-HIRAprovides for the establishment of a State Advisory Councilchaired by the State Minister of Housing; C

7. Unlike Section 70 of RERA which has a provision ofcompounding of offences, there is no corresponding provisionin WB-HIRA; D

8. Section 71(1) provides for the appointment of an adjudicatingofficer of the rank of a district judge by the regulatoryauthority for adjudging compensation. Section 40 of WB-HIRAentrusts the adjudicatory function to the administrativeregulatory authority without providing for a judicial officer;and E

9. Section 80(2) of the RERA provides that no court inferior tothat of a Metropolitan Magistrate or Judicial Magistrate FirstClass shall try an offence under the RERA, while there is nosuch provision in WB-HIRA.

F

The Central government has established a fund of Rs 25,000 crores(known as the SWAMIH) to provide for last mile funding for projectswhich are net-worth positive and registered under RERA, including thoseprojects declared as NPAs or those which are the subject matter ofproceedings before the NCLT under the IBC. If the state law is allowedto hold the field, buyers of real estate projects in the State of WestBengal which are not registered under the RERA will lose the benefit ofthe above provision.

H

[2021] 5 S.C.R.

Ab. Second test of repugnancy: Occupied field

1. The entire subject of WB-HIRA is the same as RERA as aresult of which the state law is repugnant to the centrallegislation;

2. The enforcement of the RERA would be completelyBobstructed in the State of West Bengal if WB-HIRA is giveneffect to;

3. Sections 88 and 89 of RERA cannot be construed in isolation.While Section 88 permits the existence of other laws in additionto RERA, this would not apply to other legislation which wouldCcompletely derail, obstruct and assault the very existence ofRERA;

4. In the decision in Pioneer Urban Land & InfrastructureLtd vs Union of India[9], the provisions of three centralenactments were construed harmoniously namely RERA, theDConsumer Protection Act, 1986 and the IBC. Construing theseenactments harmoniously, the Court held that the IBC andConsumer Protection Act as well as RERA provide concurrentremedies to allottees of flats which can be exercised at theiroption; and E5.Even assuming that Sections 88 and 89 of RERA areconstrued as an intent of the Parliament to not occupy thefield exhaustively, they cannot be implied to allow the operationof State laws which completely eclipse and encroach uponRERA so much so that the existence of RERA is impossibleFas 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 regulationof the real estate sector;

2. WB-HIRA stands in the State of West Bengal in place ofGRERA. Both cannot stand together. As a matter of fact, whileWB-HIRA is fully operational in the State of West Bengal,RERA is non-operational;

3. The only exception would be where the State legislationcontains distinct matters which are of a cognate and alliednature. However, in the present case, WB-HIRA deals on allfours with the subject matter of RERA and not with anydistinct matter which is cognate or allied; and

4. The state enactment has created an identical but parallel andmutually exclusive regime in the State of West Bengal, whichcannot co-exist with the regime which is enacted underRERA.

On the above grounds, it has been submitted that the stateenactment fails all the three tests of repugnancy. While the failure of thefirst test would only require WB-HIRA to yield to RERA to the extentof the repugnancy, since the State enactment in the present casecompletely obstructs and hinders the Parliamentary law, the repugnancyis, according to the submission, absolute and complete.

G.3 For the State of West Bengal

18. Mr Rakesh Dwivedi, learned Senior Counsel appearing onbehalf of the State of West Bengal has urged the following submissions:

(I) RERA does not cover the whole field and is notexhaustive:

a.An analysis of RERA would indicate that its objective isto regulate and promote the real estate sector and to ensurethe sale of plots, apartments, buildings and real estateprojects in an efficient and transparent manner. The otherobject is to protect consumer interest and establish anadjudicating mechanism for speedy resolution of disputes,including appeals; b.A survey of the provisions of RERA would indicate that itis based on plans sanctioned and approved by competentauthorities under state enactments. The sanctioned planprovides a specific period for construction and local bodiesare responsible for the sanctioning of plans under locallaws. Similarly, local authorities provide for completioncertificates. The diverse provisions of RERA contemplatethe jurisdiction of local authorities governed by state lawsin the matter of sanctioning of plans and completion of A

B

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construction projects. This is supported by references tothe planning area (Section 2(zh)) and appropriategovernment (Section 2(g) of RERA); and A

c.The provisions of Sections 88 and 89 of RERA indicatethat the central legislation is not a complete or exhaustivecode on the subject matter legislated upon by Parliament.

B

(II) Constitutional validity

a. While enacting RERA in exercise of its legislative powersunder Articles 245 and 246 of the Constitution, Parliamenthas enacted the legislation on the subjects assigned to itunder Entries 6 and 7 of List III of the Seventh Schedulewhich pertain to transfer of property and contracts notrelating to agricultural land. Since the enactment in theState of West Bengal follows the provisions of RERA“broadly and substantially”, the state enactment would alsobe covered by Entries 6 and 7 of List III of the SeventhSchedule; C

D

C

D

b. In the Counter Affidavit filed by the State of West Bengalit was contended that the State enactment falls under Entry24 of List II, as it deals with the housing industry. ThisEcontention is not correct and is not being pressed. This isfor the reason that the ambit of Entry 24 of List II hasbeen explained in the decisions of the Constitution Benchin Tika Ramji vs State of UP[10]and ITC Ltd vsAgricultural Produce Market Committee[11]to excludethose subjects which are specifically included in the otherFEntries of List III in the Seventh Schedule; and

c. In view of the above position, Entry 24 of List II will notcover the field which is covered by Entries 6 and 7 of ListIII. Hence, the present case has to be adjudicated uponby considering both RERA and WB-HIRA as beingGreferable to subjects in Concurrent List. Consequently, theCourt will have to determine as to whether Article 254has a nullifying effect on the state enactment.

10 (1956) SCR 393H11 (2002) 9 SCC 232

(III) Article 254 and Repugnancy

a. In view of the language of Article 254, the state law wouldbe void only if it is in consistent with and repugnant to alaw made by Parliament in the Concurrent List and, insuch an event, only to the extent of the repugnancy;

b. Repugnancy would arise if there is a conflict between astate enactment and central enactment which cannot bereconciled or if the central enactment occupies the wholefield completely and exhaustively. Applying the above tests,there is no repugnancy or inconsistency between WB-HIRA and RERA. Irrespective of Sections 88 and 89 ofRERA, Article 254 is not attracted;

c. The submission of the petitioner is based on the substantialidentity between WB-HIRA and RERA. This substantialidentity is indicative of consonance, conformity andsymmetry. Identity of subject matter does not constituteinconsistency or repugnancy, particularly when the centralenactment is not a complete and exhaustive code; and

d. In the present case, the state law is complementary to thecentral law.

(IV) Sections 88 and 89 of RERA

a. Sections 88 and 89 indicate that RERA was not intendedby Parliament to be a complete and exhaustive code nor isit intended to be exclusive in operation. Sections 88 and 89allow other laws to operate and wherever there is aninconsistency with RERA, the central act would prevail.;

b. Sections 88 and 89 indicate a Parliamentary intent thatRERA should co-exist with other legislations;

c. Section 88 refers to “any other law for the time being inforce”. Such an expression has been construed by thisCourt to cover laws which were operating when RERAwas enacted as well as laws made after the enforcementof RERA;

d. The expression ‘laws for the time being in force’ has beendeployed in Section 2(zr) and Section 18(2) of RERA as A

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728SUPREME COURT REPORTS

well as in Section 89. This supports the contention of theState of West Bengal; A

e. Parliament has chosen to repeal only the Maharashtra Actby way of Section 92 of RERA. Prior to WB-HIRA, inthe State of West Bengal, the WB 1993 Act was operating.Parliament did not repeal this Act. The WB 1993 Act wasrepealed only by Section 86 of WB-HIRA to align the StateAct with the RERA. The fact that Parliament repealedonly the Maharashtra Act indicates that RERA does notevince any intention to shut out other state enactments.On the contrary the Parliamentary intent is to make RERApermissive and accommodative of state legislation; B

C

f. The fact that other states had not enacted a law like WB-HIRA does not take away the plenary legislative powersof the State of West Bengal;

g. In exercise of the rule making power under Section 80(1)of the WB-HIRA, the State of West Bengal has framedrules on 5 June 2018. A dedicated web-site has been madeoperational. The regulatory authority has been establishedon 23 July 2018 while its Chairperson and Members wereappointed on 25 June 2020 and 30 June 2020. TheAppellate Tribunal has been established on 29 July 2019and both the Authority and the Appellate Tribunal areadjudicating all complaints; and D

E

h. One of the reasons for enacting WB-HIRA was to enablethe State to have its own State Advisory Council forFadvising and recommending to the State government onthe implementation of the law on major questions of policy,protection of consumer interest and development of thereal estate sector.

(V) The few inconsistencies between WB-HIRA and RERAGare of a minor nature:

a. There is no real conflict with the provisions of RERA underwhich an adjudicating officer decides disputes as tocompensation under Section 71. Under Section 31, acomplaint can be filed both before the ‘Authority’ and the H

‘Adjudicating Officer’. Under WB-HIRA, the Authoritydecides and there is an appeal provided to the Tribunaland then to the High Court. Consequently, there is noconflict;

b. While under WB-HIRA, the Chairperson of the Tribunalcan be removed in consultation with the Chief Justice ofthe High Court, as in the case of RERA, both Actscontemplate an enquiry by a Judge of the High Court. Thissecures the independence of the Chairperson;

c. As regards the definition of ‘garage,’ ‘planning area,’ and‘force majeure’, there is no significant difference. RERAadopts a declaration of planning area in the law relating toTown and Country Planning of the State and hence aseparate provision in the State Act is not required. Similarly,the definitions of ‘garage’ and force majeure are notvariant;

d. The State Advisory Council is to act in compliance withthe rules framed by the Central government. Where therules have not been framed by the Central government orthere is an issue which is not governed by the Central Act,the State can prescribe a rule or policy on therecommendation of the State Advisory Council. Sections83 and 84 of RERA contemplate a role for the State in thisregard;

e. Under RERA grants are made by the Central governmentwhereas under WB-HIRA grants are given by the Stategovernment. This does not result in a conflict. The Statecannot provide for grants by the Central government.Moreover, there is nothing to prevent the Centralgovernment from making a grant under Article 282 of theConstitution;

f. Even if the Central Act provides certain additional featureswhich are absent in the State Act, the State Act would bebound to treat those as being superimposed on the Statelaw in view of Section 89 of RERA. Moreover, a Removalof Difficulties Order can be issued under Section 85 ofWB-HIRA; and A

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Ag. Article 256 of the Constitution does not enable the UnionExecutive to give directions to the State legislature.Federalism is a basic feature of the Constitution. WB-HIRA follows the principle of cooperative federalism. TheUnion government has no authority to direct the Statelegislature 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’defenseC

19. The interesting feature of the case with which we commencethe discussion is that when it was enacted, WB-HIRA was intended tocover the field of ‘housing industry’ under Entry 24 of List II. TheStatement 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 itsown State Legislation… …”

20. The long title to the state enactment explains that WB-HIRAis “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 theState of West Bengal before this Court the subject of the legislation isasserted to fall within the purview of the following Entries in the StateList 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 and52 of List I

G•Entry 35- Works, lands and buildings vested in or in thepossession of the State •Entry 64-Offences against laws with respect to any of thematters in this List •Entry 66- Fees in respect of any of the matters in this List, butHnot including fees taken in any court.

Even as among the above Entries, the Counter Affidavitsubstantively dwells on Entry 24 of the State List. The defense in theCounter is that (i) housing as an industry falls in Entry 24 of the StateList; (ii) Entry 24 is subject to the provisions of Entries 7[12] and 52[13] ofList I; (iii) there is no declaration by Parliament within the meaning ofEntries 7 or 52; (iv) WB-HIRA falls within the ambit of ‘industry’ inEntry 24 of the State List. That indeed is the basis of the CounterAffidavit. 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 curatedlegislations, specific to the need of the State. Furthermore, Statelaw can also be amended by the State itself without approachingthe central government as and when the occasion arises to meetthe necessity of the people of the state. That, even the Real EstateActivities being an industry’ vests in the State Legislaturecompetence to enact a legislation on the subject mattersby virtue of Entry 24 of the State List in the SeventhSchedule to the Col since the matter falls within the purviewof the State list unless brought under the Control of theUnion by the relevant Legislation.

16. That it is imperative to note that Entry 24 of State List in itswidest amplitude takes in all Industries. In other words, thelegislative power of the State under Entry 24 of State Listis eroded only to the extent to which control was assumedby the Union pursuant to a declaration made by parliamentunder Entry 52 of Union List. In the absence thereof, underEntry 52 of Union List, the State Legislature will have powerto legislate under Entry 24 of State List. That under Entry 52of the Union List, it is required that an express declaration bemade by the Parliament, an abstract declaration is notcontemplated. In the event the Parliament passes a law containinga declaration specifying the industry and indicating the nature andextent of the Union control over the concerned industry, then tothat 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 ofdefence or for the prosecution of war.”

13 “52. Industries, the control of which by the Union is declared by Parliament by lawto be expedient in the public interest.”

AB

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Areiterated that even in the case of a declaration under Entry52 by the Central Government, “industry” as a whole isnot taken out of Entry 24 of the State List.

17. That, in furtherance of the above, it is further submitted that aperusal of RERA exhibits that there is no declaration even in theBabstract that the Union intends to assume control over the realestate sector.”

22. As a matter of fact, it has also been urged that Entries 6 and7 of the Concurrent List would not cover the subject of the housingCindustry since the field covered by these Entries “merely enables themanner and mode in which property is to be transferred and contractsare to be executed”. This submission is sought to be buttressed by statingthat WB-HIRA is merely an extension of RERA with a wider purviewof the housing industry as opposed to RERA which deals with a limitedDextent only with real estate. In other words, since the legislation fallsunder Entry 24 of the State List, there was – in the submission - nonecessity of reserving the law for the assent of the President.

23. Faced with the judgments of this Court defining the ambit ofthe expression “industry” in the Union and the State Lists, the basis ofEasserting the legislative competence of the State legislature (‘industry’in Entry 24 of List II) over the subject of the State enactment as set outin the Counter Affidavit has been specifically given up in the course ofthe oral submissions in this Court. As a matter of fact, the writtensubmissions which have been placed on the record during the course ofthe hearing specifically state that the claim of WB-HIRA being referableFto Entry 24 of the State List “as it deals with housing industry” is “notaccurate and is not being pressed”. The reason which has been adducedis that the ambit of Entry 24 of List II has been explained to excludefrom within its fold subject matters which are specifically included in theother Entries of the three Lists of the Seventh Schedule.

G24. Before proceeding with the discussion any further, it would benecessary for this Court to dwell on the concession which has beenmade on behalf of the State of West Bengal. The concession is based ona correct assessment of the ambit of the expression ‘industry’ in thethree lists. In Tika Ramji vs State of UP[14 ](“Tika Ramji”), there was H14 1956 SCR 393

a challenge to the validity of the UP Sugarcane (Regulation of Supplyand Purchase) Act 1953 under which the UP Sugarcane Supply andPurchase Order 1954 was made. The vires of the Act was challengedon the ground that the Act was respect to the subject of industries, thecontrol of which by the Union is declared by Parliament by law to beexpedient in the public interest, within the meaning of Entry 52 of List I.Parliament enacted the Industries (Development and Regulation) Act1951 declaring that it was expedient in the public interest that the Unionshould take in its control the industries specified in the First Schedulewhich included the industry engaged in the manufacture or productionof sugar. In Tika Ramji (supra), the argument was that the expression‘industries’ should be construed as not only including the process ofmanufacture or production but also activities antecedent, such asacquisition of raw-material and subsequent, such as the disposal offinished products. A Constitution Bench of this Court held that theexpression ‘industry’ in its wide sense would be capable of comprisingthree different aspects: first, raw materials which are an integral part ofthe industrial process; second, the process of manufacture and production;and third, distribution of the products of the industries. The Court heldthat the process of manufacture or production would be comprised inEntry 24 of List II except where the industry is a controlled industrywhen it would fall under Entry 52 of List I. The Constitution Benchrejected the contention that the expression “industries” in Entry 52 ofList I was wide enough to encompass the power to legislate in respectof raw material said to be an integral part of the industrial process or thedistribution of the products of the industry.

25. The decision in Tika Ramji (supra) was followed by aConstitution Bench in Calcutta Gas Co. (Proprietary) vs State ofWest Bengal[15] which held that the expression ‘industry’ in all the threeLists must be given the same meaning and since ordinarily, industry is inthe field of State legislation, the word must be construed in such a mannerthat no entry in List II is deprived of its entire content. A ConstitutionBench of this Court in ITC Ltd. vs Agricultural Produce MarketCommittee[16 ]reiterated the principles which have been enunciated inTika Ramji (supra). Justice YK Sabharwal, (as the learned Chief Justicethen was), speaking for himself and Justice Brijesh Kumar, reiteratedthe principles which were adopted by the Constitution Bench in Tika 15 AIR 1962 SC 1044

16 (2002) 9 SCC 232

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ARamji (supra). After considering the precedents of this Court, thejudgment 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 ofEntry 52 of List I has been firmly confined by TikaBRamji [1985 Supp SCC 476: 1985 Supp (1) SCR 145]to theprocess of manufacture or production only. Subsequentdecisions including those of other Constitution Benches havereaffirmed that Tika Ramji case [AIR 1956 SC 676 : 1956 SCR393] authoritatively defined the word “industry” — to mean theprocess of manufacture or production and that it does not includeCthe raw materials used in the industry or the distribution of theproducts of the industry. Given the constitutional framework, andthe weight of judicial authority it is not possible to accept anargument canvassing a wider meaning of the word “industry”.Whatever the word may mean in any other context, it must beDunderstood in the constitutional context as meaning “manufactureor production”.”

26. In view of the settled exposition of the ambit of Entry 24 ofList II to the Seventh Schedule, there can be no manner of doubt thatEthe subject of WB-HIRA is not ‘industries’ within the meaning of Entry24. Both the central legislation – RERA and the State legislation – WB-HIRA have substantially similar provisions. These provisions seek toregulate the contractual relationship between builders/promoters and theirbuyers in the real estate sector. They recognize rights and obligationsFinter se promoters, buyers and real estate agents. Both the State lawand the Central law provide for remedial measures to enforce compliancewith contractual rights and corresponding obligations. Hence, quitecorrectly, the arguments before this Court have been addressed on thebasis that the subject of both the central and the state legislations –RERA and WB-HIRA falls under Entries 6 and 7 of the Concurrent ListGto the Seventh Schedule. Entries 6 and 7 are extracted below:

“6. Transfer of property other than agricultural land; registrationof deeds and documents.

7. Contracts, including partnership, agency, contracts of carriage,and other special forms of contracts, but not including contractsHrelating to agricultural land.”

Now it is true that the edifice of the defense which was set upbefore this Court in the Counter Affidavit is premised on the Stateenactment being a law on the subject of ‘industries’ falling within theambit of Entry 24 of the State List. The genesis of this defense traces itsorigin to the Statement of Objects and Reasons accompanying the Billwhen it was introduced in the State legislature in West Bengal. Indeed,the long title also indicates that the State legislation sought to establish aHousing Industry Regulatory Authority (“HIRA”). But thesereferences in the Statement of Objects and Reasons; the long title andtheCounter Affidavit do not preclude the State of West Bengal from asserting,in the course of the submissions, that the State legislation in pith andsubstance is not one which is on the subject of industries within themeaning of Entry 24 of List II and that it falls within the ambit of Entries6 and 7 of List III. Indeed, as we have noticed in the earlier part of thisjudgment, there is a substantial overlap between the provisions of RERAand WB-HIRA. Even the inconsistencies which have been noticed earlierare on the same subject matter. The provisions of RERA essentiallyseek to regulate the contractual relationship between builders/promotersand purchasers in the real estate sector. RERA, truly speaking, fallswithin the ambit of Entries 6 and 7 of the Concurrent List. The substantialoverlap between the state and the central legislation is evident on acomparative analysis of the two legislations which has been alluded to inthe earlier part of this judgment. The State of West Bengal is not precludedfrom seeking to sustain its legislation on the basis that in pith and insubstance it falls within the ambit of Entries 6 and 7 of the ConcurrentList. The analysis of the constitutional challenge in the present casemust therefore proceed on the basis that both the central legislation –RERA, and the state legislation –WB-HIRA, fall within the subjectsembodied in Entries 6 and 7 of List III of the Seventh Schedule. Thatindeed is the foundation on which submissions have been urged and thefurther analysis is based. In a matter involving the constitutional validityof its law the State of West Bengal has not been precluded by this courtfrom urging the full line of its defense.

H.2 The Constitutional Scheme of Article 254 andrepugnancy

27. The distribution of legislative powers in Part XI of theConstitution envisages that Parliamentary legislation extends to the entireterritory of India or its part while state legislation extends law to the AB

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Awhole or any part of a state. Under Article 246[17], the legislative powerto make laws “with respect to” any of the matters enumerated in List Iof the Seventh Schedule – the Union List – is entrusted to Parliament.Clause (1) of Article 246 which embodies this principle is prefaced witha non-obstante provision which gives it precedence over clauses (2) and(3). Article 246 (2) enunciates the principles governing the exercise ofBlegislative power “to make laws with respect to any of the mattersenumerated in List III of the Seventh Schedule, the Concurrent List.Clause (2) begins with a non-obstante provision which gives it precedenceover Clause (3). Clause (2) embodies the principle that Parliament and(subject to clause (1)) the legislature of any State have the power toCmake laws with respect to any of the matters in List III. Clause 3stipulates that the legislature of any State has the exclusive power tomake laws for the State or any part of it “with respect to any of thematters enumerated in List II”, the State List. Some of the salient featuresof Article 246 need to be noticed.

D(i)An exclusive power has been entrusted to Parliament tolegislate on matters enumerated in List I;

(ii) The plenary power entrusted to Parliament to legislate withrespect to a matter enumerated in List I is reaffirmed by thenon-obstante provision which operates notwithstandingEanything in Clauses (2) and (3);

(iii) On matters which have been enumerated in List III:

a. Parliament has the power to make laws notwithstandingclause (3); and 17 “246. Subject matter of laws made by Parliament and by the Legislatures of StatesF(1)Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power tomake laws with respect to any of the matters enumerated in List I in the SeventhSchedule (in this Constitution referred to as the Union List)

(2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), theLegislature of any State also, have power to make laws with respect to any of thematters enumerated in List III in the Seventh Schedule (in this Constitution referred toas the Concurrent ListG(3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power tomake laws for such State or any part thereof with respect to any of the mattersenumerated in List II of the Seventh Schedule (in this Constitution referred to as theState List)

(4) Parliament has power to make laws with respect to any matter for any part of theterritory of India not included (in a State) notwithstanding that such matter is a matterHenumerated in the State List.”

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

b. The State legislature also has the power to make lawssubject to clause (1).

(iv) The State legislatures have the exclusive powers to makelaws for the State or any part of it with respect to matters inList II, this power being subject to clauses (1) and (2);

(v) Clauses (1) and (2) of Article 246 employ non-obstanteprovisions in respect of

a. The exclusive power entrusted to Parliament over List Imatters;

b. The power entrusted to Parliament over List III matters;

(vi) Though, the legislature of a State has exclusive power tomake laws with respect to matters on the State List, this issubject to clauses (1) and (2).

28. Parliament, under Article 248, has been entrusted with theresiduary powers of legislation (subject to Article 246A) to make anylaw with respect to any matter which is not enumerated in the Concurrentor State Lists. The 101[st] Amendment to the Constitution, which cameinto force from 16 September 2016, inserted Article 246A[18] to make aspecial provision with respect to the goods and services tax. Article246A begins with a non-obstante provision, giving it overriding forceover Articles 246 and 254. Under clause (1), Parliament and, subject toclause (2), the legislature of a State has the power to make laws withrespect to goods and services tax imposed by the Union or by the State.Under clause (2), Parliament has been entrusted with the exclusivepower to make laws with respect to goods and services tax wherethesupply of goods, services or both takes place in the course of inter-statetrade 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 withrespect to goods and services tax imposed by the Union or by such State.(2) Parliament has exclusive power to make laws with respect to goods and services taxwhere 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 taxreferred to in clause (5) of article 279A, take effect from the date recommended by theGoods and Services Tax Council.”

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A29. Article 254[19 ]contains provisions for inconsistencies betweenlaws made by Parliament and by the legislatures of the States. Clause(1) of Article 254 stipulates that where a State law “is repugnant” to aParliamentary law which Parliament is competent to enact or to aprovision of an existing law “with respect to one of the mattersenumerated in the Concurrent List”, then the law made by Parliament isBto prevail and the law made by the legislature of a State shall “to theextent of the repugnancy” be void. The provisions of clause (1) aresubject to clause (2). Clause (1) also provides that in the event of arepugnancy between a law enacted by the State legislature with aprovision of a law made by Parliament which it is competent to enact orCto a provision of an existing law with respect to a matter enumerated inthe Concurrent List, the law enacted by Parliament is to prevail whetherit was enacted before or after the State law or, as the case may be, theexisting 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 theConcurrent List contains a provision which is repugnant to an earlierDlaw 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 itis has been reserved for the consideration of the President and hasreceived such assent. Despite the grant of Presidential assent, theParliament is not precluded from enacting any law with respect to theEsame matter in future including a law adding to, amending, varying orrepealing the law made by the legislature of the State.

19 254. Inconsistency between laws made by Parliament and laws made by the Legislaturesof States(1)If any provision of a law made by the Legislature of a State is repugnant to anyFprovision of a law made by Parliament which Parliament is competent to enact, or toany provision of an existing law with respect to one of the matters enumerated in theConcurrent 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 thecase may be, the existing law, shall prevail and the law made by the Legislature of theState 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 mattersGenumerated in the concurrent List contains any provision repugnant to the provisionsof 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 theconsideration of the President and has received his assent, prevail in that State: Providedthat nothing in this clause shall prevent Parliament from enacting at any time any lawwith respect to the same matter including a law adding to, amending, varying or repealingHthe law so made by the Legislature of the State

30. Some of the salient features of Article 254 may be noticed atthis stage:

A

(i) Firstly, Article 254(1) embodies the concept of repugnancyon subjects within the Concurrent List on which both theState legislatures and Parliament are entrusted with thepower to enact laws; B

(ii) Secondly, a law made by the legislature of a State which isrepugnant to Parliamentary legislation on a matterenumerated in the Concurrent List has to yield to aParliamentary law whether enacted before or after the lawmade by the State legislature; C

(iii) Thirdly, in the event of a repugnancy, the Parliamentarylegislation shall prevail and the State law shall “to the extentof the repugnancy” be void;

(iv) Fourthly, the consequence of a repugnancy between theState legislation with a law enacted by Parliament withinDthe ambit of List III can be cured if the State legislationreceives the assent of the President; and

(v) Fifthly, the grant of Presidential assent under clause (2) ofArticle 254 will not preclude Parliament from enacting alaw on the subject matter, as stipulated in the proviso toclause (2).

E

31. A long line of precedent of this Court has developed on thecontent of the concept of repugnancy as envisaged in Article 254. Itbecomes necessary to visit some of those precedents in order to preparea jurisprudential foundation for addressing the central challenge in thepresent case. In Zaverbhai Amaldas vs State of Bombay[20](“Zaverbhai”), the contention of the State was that as a result oftheEssential Supplies (Temporary Powers) Act (Act 24 of 1946) whichwas followed by amendments in 1948-1949 and 1950, Section 2 ofBombay Act 36 of 1947 had become inoperative. The amendments of1948 and 1949 were made when Section 107(2) of the Government ofIndia Act was in force. At the time when the Amending Act of 1950 wasenacted, the Constitution had come into operation. Justice TLVenkatarama Aiyar speaking for the Constitution Bench, held that there F

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Awas no express repeal of the Bombay Act by Central Act 52 of 1950 interms of the proviso to Article 254(2). Hence, the question to be decidedwas whether the amendments made to the Essential Supplies (TemporaryPowers) Act by the Central legislature in 1948, 1949 and 1950 were“further legislation” under Section 107(2) of the Government of IndiaAct, 1947 or a “law with respect to the same matter” falling withinBArticle 254(2). In this context, the Court held:

“8…The important thing to consider with reference to thisprovision is whether the legislation is “in respect of the samematter”. If the later legislation deals not with the matterswhich formed the subject of the earlier legislation but withCother and distinct matters though of a cognate and alliedcharacter, then Article 254(2) will have no application. Theprinciple embodied in Section 107(2) and Article 254(2) isthat when there is legislation covering the same groundboth by the Centre and by the Province, both of them beingDcompetent to enact the same, the law of the Centre shouldprevail over that of the State.”

Dealing with the issue, the Court held that a State legislation whosesubject matter is identical to a law enacted by the Parliament would beErepugnant under Article 254(1):

“11. It is true, as already pointed out, that on a question underArticle 254(1) whether an Act of Parliament prevails against alaw of the State, no question of repeal arises; but the principle onwhich the rule of implied repeal rests, namely, that if the subject-Fmatter of the later legislation is identical with that of theearlier, so that they cannot both stand together, then theearlier is repealed by the later enactment, will be equallyapplicable to a question under Article 254(2) whether thefurther legislation by Parliament is in respect of the sameGmatter as that of the State law. We must accordingly hold thatSection 2 of Bombay Act 36 of 1947 cannot prevail as againstSection 7 of the Essential Supplies (Temporary Powers) Act 24of 1946 as amended by Act 52 of 1950.”

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FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

32. The judgement of the Constitution Bench in Tika Ramji(supra) explained the concept of repugnancy arising by reason of bothParliament and the State legislature having operated in the same field inrespect of a matter enumerated in the Concurrent List. Justice NHBhagwati adopted the three tests of repugnancy on inconsistency speltout by Nicholas’ text on the Australian Constitution and observed:

“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 thecompeting statutes (R. v. Brisbane Licensing Court, [1920] 28CLR 23).

(2) Though there may be no direct conflict, a State lawmay be inoperative because the Commonwealth law, or the awardof the Commonwealth Court, is intended to be a completeexhaustive code (Clyde Engineering Co. Ltd. v. Cowburn,[1926] 37 CLR 466).

(3) Even in the absence of intention, a conflict mayarise when both State and Commonwealth seek to exercisetheir powers over the same subject-matter(Victoria v. Commonwealth, [1937] 58 CLR 618; Wenn v.Attorney-General (Vict.), [1948] 77 CLR 84).”

Section 109 of the Australia Constitution Act of 1900[21] envisagesa style of federalism and repugnance in similar terms to the IndianConstitution. Therefore, Australian jurisprudence would also be instructivein interpreting repugnance between provisions of the State law againstParliamentary 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 onetest of inconsistency as conclusive: “If, however, a competentlegislature 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 theCommonwealth, the latter shall prevail, and the former shall, to the extent of theinconsistency, be invalid.”

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whole field, that is a conclusive test of inconsistency where anotherLegislature assumes to enter to any extent upon the same field”.Dixon, J. elaborated this theme in Ex parte McLean [(1930) 43CLR 472, 483]:

“When the Parliament of the Commonwealth and theParliament of a State each legislate upon the same subjectand prescribe what the rule of conduct shall be, they makelaws which are inconsistent, notwithstanding that the ruleof conduct is identical which each prescribes, and Section109 applies. That this is so is settled, at least when the sanctionsthey impose are diverse. But the reason is that, by prescribing therule to be observed, the Federal statute shows an intention tocover the subject-matter and provide what the law upon it shallbe. If it appeared that the Federal law was intended to besupplementary to or cumulative upon State law, then noinconsistency would be exhibited in imposing the same duties orin inflicting different penalties. The inconsistency does not lie inthe mere co-existence of two laws which are susceptible ofsimultaneous obedience. It depends upon the intention of theparamount Legislature to express by its enactment, completely,exhaustively, or exclusively, what shall be the law governing theparticular conduct or matter to which its attention is directed. Whena Federal statute discloses such an intention, it is inconsistent withit for the law of a State to govern the same conduct or matter”.

To the same effect are the observations of Evatt, J. in StockMotor Plough Ltd. v. Forsyth [(1932) 48 CLR 128, 147]:

“It is now established, therefore, that State and Federallaws may be inconsistent, although obedience to both laws ispossible. There may even be inconsistency although eachlaw imposes the very same duty of obedience. Theseconclusions have, in the main, been reached, by ascribing“inconsistency” to a State law, not because the Federal lawdirectly invalidates or conflicts with it, but because theFederal law is said to “cover the field”. This is a veryambiguous phrase, because subject-matters of legislation bear littleresemblance to geographical areas. It is no more than a cliche forexpressing the fact that, by reason of the subject-matter dealt with, and the method of dealing with it, and the nature andmultiplicity of the regulations prescribed, the Federal authority hasadopted a plan or scheme which will be hindered and obstructedif any additional regulations whatever are prescribed upon thesubject by any other authority; if, in other words, the subject iseither touched or trenched upon by State authority” (emphasissupplied)

33. The decision has also adverted to a judgment of Justice BNRau, speaking for the Calcutta High Court in O P Stewart vs B KRoy[22], where it was observed:

at p.632 “It is sometimes said that two laws cannot be said to beproperly repugnant unless there is a direct conflict between them,as when one says “do” and the other “don’t”, there is no truerepugnancy, according to this view, if it is possible to obey boththe laws. For reasons which we shall set forth presently, we thinkthat this is too narrow a test: there may well be cases of repugnancywhere both laws say “don’t” but in different ways. For example,one law may say, “No person shall sell liquor by retail, that is, inquantities of less than five gallons at a time” and another law maysay, “No person shall sell liquor by retail, that is, in quantities ofless than ten gallons at a time”. Here, it is obviously possible toobey both laws, by obeying the more stringent of the two, namelythe second one; yet it is equally obvious that the two laws arerepugnant, for to the extent to which a citizen is compelled toobey one of them, the other, though not actually disobeyed, isnullified”.”

Significantly, after comparing the gamut of impugned provisionsbefore it, in holding that no provision of the impugned Act and the Rulesmade by the UP legislature and its delegate stood invalidated by anyprovision contained in Act 65 of 1951 as amended in 1953 or 1955 andthe Sugarcane Control Order 1955 issued under it, the Constitution Benchheld:

“31. In the instant case, there is no question of any inconsistencyin the actual terms of the Acts enacted by Parliament and theimpugned Act. The only questions that arise are whether 22 AIR 1939 Cal 628

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AParliament and the State Legislature sought to exercise theirpowers over the same subject-matter or whether the laws enactedby Parliament were intended to be a complete exhaustive codeor, in other words, expressly or impliedly evinced an intention tocover the whole field. It would be necessary, therefore, to comparethe provisions of Act 65 of 1951 as amended by Act 26 of 1953,BAct 10 of 1955 and the Sugar Control Order, 1955 issued thereunderwith those of the impugned Act and U.P. Sugarcane Regulationof Supply and Purchase Order, 1954 passed thereunder.

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34…Suffice it to say that none of these provisions dooverlap, the Centre being silent with regard to some of theCprovisions which have been enacted by the State and theState being silent with regard to some of the provisionswhich have been enacted by the Centre. There is norepugnancy whatever between these provisions and the impugnedAct and the Rules framed thereunder as also the U.P. SugarcaneDRegulation of Supply and Purchase Order, 1954 do not trenchupon the field covered by Act 10 of 1955. There being norepugnancy at all, therefore, no question arises of the operation ofArticle 254(2) of the Constitution and no provision of the impugnedAct and the Rules made thereunder is invalidated by any provisioncontained in Act 65 of 1951 as amended by Act 26 of 1953 or ActE10 of 1955 and the Sugarcane Control Order, 1955 issuedthereunder.”(emphasis supplied)

34. To complete this trinity of cases we may next advert to thedecision in Deep Chand vs State of UP[23]. The Constitution Benchdealt inter alia with the issue as to whether the provisions of the UttarFPradesh Transport Service (Development) Act, 1955 where repugnantto the provisions of a subsequent Parliamentary enactment– the MotorVehicles (Amendment) Act 1956. As in the case of Tika Ramji (supra),the Court cited the three pronged test of repugnancy formulated byNicholas in his text on the Australian Constitution. The Constitution BenchGrecorded that the decision in Tika Ramji (supra) had accepted the threerules with the decision in Zaverbhai (supra) having laid down a similartest. Reformulating the principle, Justice K Subba Rao in his separateopinion observed:

H23 (1959) Supp (2) SCR 8

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

“28…

Repugnancy between two statutes may thus be ascertained onthe 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 codein respect of the subject-matter replacing the Act of the StateLegislature and

(3) Whether the law made by Parliament and the law madeby the State Legislature occupy the same field…”

The judgment noted that a comparison of the provisions of the UPAct and the Amending Act indicated that both the legislations wereintended to operate “in respect of the same subject matter in the samefield”. Justice K Subba Rao noted that the unamended Motor VehiclesAct 1939 did not make any provision for the nationalization of transportservices but the States introduced amendments to implement the schemeof nationalization of road transport. With a view to introduce a Unionlaw throughout the country, Parliament enacted the Amendment Act byinserting Chapter IVA in the Motor Vehicles Act, 1939. This object, theCourt ruled, would be frustrated if the argument that both the UP Actand the Amending Act should co-exist in respect of schemes to be framedafter the Amendment Act, were accepted. Additionally, the learned judgealso observed that the provisions of the scheme, the principles ofcompensation and the manner of its payment differed in the two Acts.

35. In State of Orissa vs M/s M A Tulloch[24], the legislation inissue was the Orissa Mining Areas Development Fund Act, 1952 underwhich certain areas were constituted as mining areas and the Stategovernment was empowered to levy a fee at a percentage of the valueof the mined ore at the pit’s mouth. Entry 23 of the State List covers“regulation of mines and mineral development subject to the provisionsof List I with respect to regulation and development under the control ofthe Union”. Entry 54 of the Union List deals with “regulation of minesand mineral development to the extent to which such regulation anddevelopment under the control of the Union is declared by Parliamentby law to be expedient in the public interest”. The Parliament A

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Asubsequently enacted the Mines and Minerals (Development andRegulation) Act, 1957 which contains the declaration envisaged by thelatter part of Entry 54 of the Union List. The High Court had held that onthe coming into force of the Central Act, the Orissa Act ceased to beoperative by reason of the withdrawal of legislative competence sincethe entry in the State List is subject to a Parliamentary declaration and aBlaw enacted by Parliament. Justice N Rajagopala Ayyangar, speakingfor the Constitution Bench, dealt with the issue of repugnancy in thefollowing observations:

“14…Repugnancy arises when two enactments both within thecompetence of the two Legislatures collide and when theCConstitution expressly or by necessary implication provides thatthe enactment of one legislature has superiority over the otherthen to the extent of the repugnancy the one supersedes the other.But two enactments may be repugnant to each other even thoughobedience to each of them is possible without disobeying the other.DThe test of two legislations containing contradictoryprovisions is not, however, the only criterion of repugnancy,for if a competent legislature with a superior efficacyexpressly or impliedly evinces by its legislation an intentionto cover the whole field, the enactments of the otherlegislature whether passed before or after would beEoverborne on the ground of repugnance. Where such is theposition, the inconsistency is demonstrated not by a detailedcomparison of provisions of the two statutes but by the mereexistence of the two pieces of legislation.”

FThe Court held that the intent of the subsequent Parliamentaryenactment was to cover the entire field and there was an implied repealof the Orissa Act.

36. In 1979, a Constitution Bench in M Karunanidhi vs UnionGof India[25](“M Karunanidhi”) revisited the issue of repugnancy in thecontext of the Tamil Nadu Public Men (Criminal Misconduct) Act, 1973.Though the State legislation was subsequently repealed, it was urgedthat during the time that it was in force, it was repugnant to the provisionsof the India Penal Code, the Prevention of Corruption Act and the Criminal H25 (1979) 3 SCC 431

Law (Amendment) Act, 1952. The State Act had the assent of thePresident. Hence by virtue of Article 254(2), it was urged that theaforementioned Central Acts stood repealed and could not revive evenafter the State Act was repealed. Justice S Murtaza Fazal Ali formulatedthe principles governing repugnancy in the following observations:

“8…

1. Where the provisions of a Central Act and a State Act inthe Concurrent List are fully inconsistent and are absolutelyirreconcilable, the Central Act will prevail and the State Act willbecome void in view of the repugnancy.

2. Where however a law passed by the State comes intocollision with a law passed by Parliament on an Entry in theConcurrent List, the State Act shall prevail to the extent of therepugnancy and the provisions of the Central Act would becomevoid provided the State Act has been passed in accordance withclause (2) of Article 254.

3. Where a law passed by the State Legislature while beingsubstantially within the scope of the entries in the State Listentrenches upon any of the Entries in the Central List theconstitutionality of the law may be upheld by invoking the doctrineof pith and substance if on an analysis of the provisions of the Actit appears that by and large the law falls within the four corners ofthe State List and entrenchment, if any, is purely incidental orinconsequential.

4. Where, however, a law made by the State Legislatureon a subject covered by the Concurrent List is inconsistent withand repugnant to a previous law made by Parliament, then such alaw can be protected by obtaining the assent of the Presidentunder Article 254(2) of the Constitution. The result of obtainingthe assent of the President would be that so far as the State Actis concerned, it will prevail in the State and overrule the provisionsof the Central Act in their applicability to the State only. Such astate of affairs will exist only until Parliament may at any timemake a law adding to, or amending, varying or repealing the lawmade by the State Legislature under the proviso to Article 254.”

The Constitution Bench held that although the ingredients ofcriminal misconduct as defined in Section 5(1)(d) of the Prevention of A

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ACorruption Act were substantially the same in the State Act as in theCentral Acts, the prescribed punishment varied. The Court held that theState Act did not contain a provision repugnant to the Central Acts but itwas “a sort of complementary Act which runs pari passu the CentralActs”. The Court held:

“37. Last but not the least there is a very important circumstancewhich completely and conclusively clinches the issue and takesthe force out of the argument of Mr Venugopal on the question ofrepugnancy. It would be seen that in the original State Act, Section29 ran thus:

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“Act to override other laws, etc.—The provisions of thisAct shall have effect notwithstanding anything inconsistenttherewith contained in any other law for the time being in force orany custom, usage or contract or decree or order of a court orother authority.”

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“Saving—The provisions of this Act shall be in addition to,and not in derogation of, any other law for the time being in force,and nothing contained herein shall exempt any public man fromany proceeding by way of investigation or otherwise which might,apart from this Act, be instituted against him.”

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This amendment received the assent of the President on April 10,1974 and was published in the Tamil Nadu Government GazetteExtraordinary dated April 16, 1974. We have already shown thatalthough the State Act was passed as far back as December 30,1973 it received the assent of the President on April 10, 1974, thatis to say, on the same [ Ed. : But see paras 4 and 7 of this judgmentand 1974 MLJ (Stat.) Mad. Acts p. 2 wherein it is stated that ActII of 1974 was assented to by the President on Dec. 30, 1973 andpublished in T. N. Govt. Gaz. Extra., Pt. IV, S. 2 at p. 5, datedJan. 2, 1974] date as Act 16 of 1974. The Act was howeverbrought into force on May 8, 1974 when the new Section 29 whichhad already replaced the old section and had become a part of thestatute. Therefore, for all intents and purposes the State Act cannot F

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be read in isolation, but has to be interpreted in conjunction withthe express language contained in Section 29 of the State Act.This section has in unequivocable terms expressed the intentionthat the State Act which was undoubtedly the dominant legislationwould only be “in addition to and not in derogation of any otherlaw for the time being in force” which manifestly includes theCentral Acts, namely, the Penal Code, 1860, the Corruption Actand the Criminal Law (Amendment) Act. Thus, the Legislatureabout a month before the main Act came into force clearly declaredits intention that there would be no question of the State Act collidingwith the Central Acts referred to above. The second part of Section29 also provides that nothing contained in the State Act shallexempt any public man from being proceeded with by way ofinvestigation or otherwise under a proceeding instituted againsthim under the Central Acts. It is, therefore, clear that in view ofthis clear intention of the legislature there can be no room for anyargument that the State Act was in any way repugnant to theCentral Acts. We have already pointed out from the decisions ofthe Federal Court and this Court that one of the important tests tofind out as to whether or not there is repugnancy is to ascertainthe intention of the legislature regarding the fact that the dominantlegislature allowed the subordinate legislature to operate in thesame field pari passu the State Act.”

Since the State Act created distinct and separate offences withdifferent ingredients and different punishments, it was held not to collidewith 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, notwithstandinganything inconsistent contained in any other law for the time being inforce”. Subsequently, by Tamil Nadu Act 16 of 1959, a new Section 29was substituted. The substituted Section 29 provided that the provisionsof the Act were in addition to and not in derogation of any other law forthe time being in force and nothing in the Act would exempt a “publicman” from any proceeding by way of an investigation or otherwise,which might apart from the Act be instituted against them. Theamendment received the assent of the President on 10 April 1974 andwas published in the Gazette on 16 April 1974. The State Act thoughenacted in December 1973 received the assent of the President AB

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Asubsequently. Interpreting the provisions of the substituted Section 29,the Constitution Bench held:

“37…

This section has in unequivocable terms expressed the intentionthat the State Act which was undoubtedly the dominant legislationBwould only be “in addition to and not in derogation of any otherlaw for the time being in force” which manifestly includes theCentral Acts, namely, the Penal Code, 1860, the Corruption Actand the Criminal Law (Amendment) Act. Thus, the Legislatureabout a month before the main Act came into force clearly declaredCits intention that there would be no question of the State Act collidingwith the Central Acts referred to above. The second part of Section29 also provides that nothing contained in the State Act shallexempt any public man from being proceeded with by way ofinvestigation or otherwise under a proceeding instituted againsthim under the Central Acts. It is, therefore, clear that in view ofDthis clear intention of the legislature there can be no room for anyargument that the State Act was in any way repugnant to theCentral Acts. We have already pointed out from the decisionsof the Federal Court and this Court that one of the importanttests to find out as to whether or not there is repugnancy isEto ascertain the intention of the legislature regarding thefact that the dominant legislature allowed the subordinatelegislature to operate in the same field pari passu the StateAct.”

F37. A three judge Bench of this Court in HoechstPharmaceuticals Ltd. vs State of Bihar[26], considered the constitutionalvalidity of Section 5(1) of the Bihar Finance Act, 1981 which providedfor the levy of a surcharge on every dealer, whose gross turnover duringa year exceeded Rs 5 lacs, in addition to the tax payable by him. TheGAct received the assent of the President. The challenge was on theground that the price fixation of essential commodities in general anddrugs and formulations in particular was an occupied field by variousControl orders issued by the Union government under Section 3(1) ofthe Essential Commodities Act 1955, Justice AP Sen, speaking for the

three judge Bench, rejected the arguments of the appellant that therewas a repugnancy between sub-Section (3) of Section 5 which wasrelatable to Entry 54 of List II and the Control order issued by the Centralgovernment under Section 3(1) of the Essential Commodities Act relatableto Entry 33 of List III. The Court held that the question of repugnancyunder Article 254(1) between a law made by Parliament and the lawmade by the State legislature arises only in case both the legislationsoccupy the same field with respect to one of the matters enumeratedthe 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 tooverlapping found between List II on the one hand and Lists I and III onthe other. In such a case, the State law will fail not because of therepugnancy to the Union law but due to want of legislative competence.The Court rejected the argument that sub-Section (3) of Section 5 beinga State law must be struck down as ultra vires on the ground that thefixation of the price of essential commodities was an occupied fieldcovered by central legislation. The power of the State legislature to makea law with respect to the levy and imposition of a tax on the sale orpurchase of goods (relatable to Entry 54 of List II) and to make ancillaryprovisions is plenary and was not subject to the power of Parliament tomake a law under Entry 33 of List III. There was therefore no questionof a clash between the two laws and the question of repugnancy, theCourt held, “does not come into play”.

38. In State of Kerala vs Mar Appraem Kuri Company Ltd.[27],a Constitution Bench dealt with the question as to whether the KeralaChitties Act, 1975 became repugnant to the Chit Funds Act, 1982 enactedby Parliament on the date when the Parliamentary legislation receivedthe assent of the President or subsequently, when a notification wasissued under Section 1(3) bringing the Central Act into force in the Stateof Kerala. On comparing the Central and State statutes in the course ofthe judgment, Chief Justice SH Kapadia, noticed various provisions ofthe State Act in conflict with the Central legislation. The High Court hadalso noticed several inconsistencies. The Court held that the Act of 1982was enacted as a Central legislation to ensure uniformity in the provisionsapplicable to Chit Fund institutions throughout the country. There wasthus 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 A

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Aoverriding effect to the law enacted by Parliament. Moreover, Section90 provided for the repeal of State legislations, manifesting, in the viewof the Court, an intent of Parliament to occupy the field hitherto occupiedby the State legislations. The Court observed that every aspect relatingto the conduct of chits as was covered by the State Act had been touchedupon by the Central Act in a more comprehensive manner. The CourtBheld 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 thesubject.

39. A two judge Bench of this Court in Innoventive IndustriesCLtd. vs ICICI Bank[28](“Innoventive Industries”), dealt with theprovisions of the Maharashtra Relief Undertakings (Special Provisions)Act 1958 vis-à-vis the provisions of the IBC. Speaking through JusticeRF Nariman the court held that the IBC is an exhaustive code on thesubject matter of insolvency in relation to corporate entities, referable to

DEntry 9 of List III of the Seventh Schedule which deals with “bankruptcyand insolvency”. On the other hand, the subject covered by theMaharashtra 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 isinconsistency in the actual terms of the competing statutes andthere is, therefore, a direct conflict between two or more provisionsof the competing statutes. In this sense, the inconsistency mustbe clear and direct and be of such a nature as to bring the twoFActs or parts thereof into direct collision with each other, reachinga situation where it is impossible to obey the one without disobeyingthe other. This happens when two enactments produce differentlegal results when applied to the same facts.

51.7. Though there may be no direct conflict, a State law may beGinoperative because the Parliamentary law is intended to be acomplete, exhaustive or exclusive code. In such a case, the Statelaw is inconsistent and repugnant, even though obedience to bothlaws 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-matterof the Parliamentary law is encroached upon is to find out whetherthe Parliamentary statute has adopted a plan or scheme whichwill be hindered and/or obstructed by giving effect to the Statelaw. It can then be said that the State law trenches upon theParliamentary statute. Negatively put, where Parliamentarylegislation does not purport to be exhaustive or unqualified, butitself permits or recognises other laws restricting or qualifying thegeneral provisions made in it, there can be said to be no repugnancy.

51.8. A conflict may arise when Parliamentary law and State lawseek to exercise their powers over the same subject-matter. Thisneed not be in the form of a direct conflict, where one says “do”and the other says “don’t”. Laws under this head are repugnanteven if the rule of conduct prescribed by both laws is identical.The test that has been applied in such cases is based on the principleon which the rule of implied repeal rests, namely, that if the subject-matter of the State legislation or part thereof is identical with thatof the Parliamentary legislation, so that they cannot both standtogether, then the State legislation will be said to be repugnant tothe Parliamentary legislation. However, if the State legislation orpart thereof deals not with the matters which formed the subject-matter of Parliamentary legislation but with other and distinctmatters though of a cognate and allied nature, there is norepugnancy.”

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 themeaning of Article 254(1), a law made by the legislature of a State canbe considered to be repugnant to a provision of a law made by Parliamentwith respect to one of the matters in the Concurrent List whichParliament is competent to enact. The doctrine of repugnancy underArticle 254(1) operates within the fold of the Concurrent List. Clause(1) of Article 254 envisages that the law enacted by Parliament willprevail and the law made by the legislature of the State shall be void “tothe extent of repugnancy”. Clause (1) does not define what is meant byrepugnancy. The initial words of Clause (1) indicate that the provisiondeals with a repugnancy between a law enacted by the State legislature A

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Awith: (i) A provision of a law made by Parliament which it is competentto enact; or (ii) To any provision of an existing law; and (iii) with respectto one of the matters enumerated in the Concurrent List.

41. The initial part of Clause (1) alludes to a law enacted by astate legislature being “repugnant” to a law enacted by Parliament or toBan existing law. The concluding part of clause 1 provides for aconsequence, namely that the State law would be void “to the extent ofthe repugnancy” and the Parliamentary enactment shall prevail. Theconcept of repugnancy emerges from the decisions of this Court whichhave elaborated on the context of clause (1) of Article 254. Clause (2)of Article 254 has also employed the expression “repugnant” whileCproviding that a law enacted by the legislature of a State which isrepugnant to a law enacted by Parliament or an existing law on a matterwithin the Concurrent List shall, if it has received the assent of thePresident, prevail in the State. The decisions of this Court essentiallycontemplate three types of repugnancy:

D(i)The first envisages a situation of an absolute orirreconcilable conflict or inconsistency between a provisioncontained in a State legislative enactment with aParliamentary law with reference to a matter in theConcurrent List. Such a conflict brings both the statutesEinto a state of direct collision. This may arise, for instance,where the two statutes adopt norms or standards of behavioror provide consequences for breach which stand opposedin direct and immediate terms. The conflict arises becauseit is impossible to comply with one of the two statutes withoutdisobeying the other; F

(ii) The second situation involving a conflict between State andCentral legislations may arise in a situation where Parliamenthas evinced an intent to occupy the whole field. The notionof occupying a field emerges when a Parliamentarylegislation is so complete and exhaustive as a Code as toGpreclude the existence of any other legislation by the State.

The State law in this context has to give way to aParliamentary enactment not because of an actual conflictwith the absolute terms of a Parliamentary law but becausethe nature of the legislation enacted by Parliament is suchas to constitute a complete and exhaustive Code on theHsubject; and

(iii) The third test of repugnancy is where the law enacted byParliament and by the State legislature regulate the samesubject. In such a case the repugnancy does not arisebecause of a conflict between the fields covered by thetwo enactments but because the subject which is sought tobe covered by the State legislation is identical to and overlapswith the Central legislation on the subject.

42. The distinction between the first test on the one hand with thesecond and third tests on the other lies in the fact that the first is groundedin an irreconcilable conflict between the provisions of the two statuteseach of which operates in the Concurrent List. The conflict between thetwo statutes gives rise to a repugnancy, the consequence of which isthat the State legislation will be void to the extent of the repugnancy.The expression ‘to the extent of the repugnancy’ postulates that thoseelements or portions of the state law which run into conflict with thecentral legislation shall be excised on the ground that they are void. Thesecond and third tests, on the other hand, are not grounded in a conflictborne out of a comparative evaluation of the text of the two provisions.Where a law enacted by Parliament is an exhaustive Code, the secondtest may come into being. The intent of Parliament in enacting anexhaustive Code on a subject in the Concurrent List may well be topromote uniformity and standardization of its legislative scheme as amatter of public interest. Parliament in a given case may intend to securethe protection of vital interests which require a uniformity of law and aconsistency of its application all over the country. A uniform nationallegislation is considered necessary by Parliament in many cases to preventvulnerabilities of a segment of society being exploited by an asymmetryof information and unequal power in a societal context. The exhaustivenature of the Parliamentary code is then an indicator of the exercise ofthe State’s power to legislate being repugnant on the same subject. Thethird test of repugnancy may arise where both the Parliament and theState legislation cover the same subject matter. Allowing the exercise ofpower over the same subject matter would trigger the application of theconcept of repugnancy. This may implicate the doctrine of implied repealin that the State legislation cannot co-exist with a legislation enacted byParliament. But even here if the legislation by the State covers distinctsubject matters, no repugnancy would exist. In deciding whether a caseof repugnancy arises on the application of the second and third tests,both the text and the context of the Parliamentary legislation have to be A

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Aborne 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 provisionsare among the factors that provide guidance in the exercise of judicialreview. The text of the statute would indicate whether Parliamentcontemplated the existence of State legislation on the subject within theBambit of the Concurrent List. Often times, a legislative draftspersonmay utilize either of both of two legislative techniques. The draftspersonmay provide that the Parliamentary law shall have overriding force andeffect notwithstanding anything to the contrary contained in any other

law for the time being in force. Such a provision is indicative of aCParliamentary intent to override anything inconsistent or in conflict withits provisions. The Parliamentary legislation may also stipulate that itsprovisions are in addition to and not in derogation of other laws. Thoseother laws may be specifically referred to by name, in which event thisis an indication that the operation of those specifically named laws is notto be affected. Such a legislative device is often adopted by ParliamentDby saving the operation of other Parliamentary legislation which isspecifically named. When such a provision is utilized, it is an indicator ofParliament intending to allow the specific legislation which is enlisted orenumerated to exist unaffected by a subsequent law. Alternatively,Parliament may provide that its legislation shall be in addition to and notEin derogation of other laws or of remedies, without specifically elucidatingspecifically any other legislation. In such cases where the competentlegislation has been enacted by the same legislature, techniques such asa harmonious construction can be resorted to in order to ensure that theoperation of both the statutes can co-exist. Where, however, thecompeting statutes are not of the same legislature, it then becomesFnecessary to apply the concept of repugnancy, bearing in mind the intentof Parliament. The primary effort in the exercise of judicial review mustbe an endeavour to harmonise. Repugnancy in other words is not anoption of first choice but something which can be drawn where a clearcase based on the application of one of the three tests arises forGdetermination.

H.3 Repugnancy – RERA and WB-HIRA

43. While proceeding with the analysis on the basis of the abovefoundation, two aspects of the RERA must be noticed at the fore-front.Firstly, the RERA factors in the existence of municipal or local authoritiesH

constituted under State legislation whose powers and functions in regardto the development of land are regulated by legislation enacted by theState legislatures. The RERA recognizes that local bodies constitutedunder laws enacted by the State legislatures regulate diverse aspects ofconstruction activity as an incident of the development of land. Secondly,in diverse provisions, the RERA has imposed the duty of complying withits regulatory provisions upon the ‘appropriate government’. Thisexpression encompasses, in respect of matters relating to the State, theState government. In the case of Union Territories, the definition of theexpression ‘appropriate government’ in Section 2(g) is bifurcated intothree categories:

(i) A Union Territory without a legislature;

(ii) The Union Territory of Puducherry; and

(iii) The Union Territory of Delhi.

44. Parliament while enacting the RERA has imposed the obligationto secure compliance with its provisions in diverse aspects upon theState governments. Each of these two facets needs to be developed andanalyzed for the purpose of the discussion.

45. The statutory dictionary which is adopted in the provisions ofSection 2 contains various definitions which expressly recognize theexistence of State enactments regulating construction activities. Thedefinition of the expression ‘commencement certificate’ in Section 2(m)is as follows:

“(m) “commencement certificate” means the commencementcertificate or the building permit or the construction permit, bywhatever name called issued by the competent authority to allowor permit the promoter to begin development works on animmovable property, as per the sanctioned plan;”

The definition of the expression “commencement certificate”adverts to a building or construction permit issued by “the competentauthority” to allow or permit the promoter to begin the developmentwork on an immoveable property in accordance with the sanctionedplan. This definition incorporates the notion of a “competent authority”(which is defined in Section 2(p)), and of a sanctioned plan (which isdefined in Section 2(zq)). The expression ‘competent authority’ is definedas follows:

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A“(p) “competent authority” means the local authority or anyauthority created or established under any law for the time beingin force by the appropriate Government which exercises authorityover land under its jurisdiction, and has powers to give permissionfor development of such immovable property;”

BThe above definition refers to a local authority or an authoritycreated or established under any law for the time being in force by theappropriate government, exercising authority over land within itsjurisdiction, with powers to permit the development of immoveableproperty.

C46. The expression ‘sanctioned plan’ is defined in Section 2(zq) inthe following terms:

“(zq) “sanctioned plan” means the site plan, building plan, serviceplan, parking and circulation plan, landscape plan, layout plan, zoningplan and such other plan and includes structural designs, ifDapplicable, permissions such as environment permission and suchother permissions, which are approved by the competent authorityprior to start of a real estate project;”

47. The expression ‘planning area’ is defined in Section 2(zh) inthe following terms:E“(zh) “planning area” means a planning area or a developmentarea or a local planning area or a regional development plan area,by whatever name called, or any other area specified as such bythe appropriate Government or any competent authority andincludes any area designated by the appropriate Government orFthe competent authority to be a planning area for future planneddevelopment, under the law relating to Town and Country Planningfor the time being in force and as revised from time to time;”

The above definition of a planning area clearly incorporates areference to its designation by an appropriate government or a competentauthority including an area designated for ‘future plannned development’Gunder the law relating to town and country plaining for the time being inforce, and as revised from time to time. The definition implicitly recognizesthe existence of town and country planning legislation in the Stategoverning planned development and the existence of development plansauthorized and sanctioned under the terms of such legislation.H

48. In a similar manner, the definition of the expression ‘completioncertificate’ in Section 2(q) recognizes that the real estate project hasbeen developed according to the plan, layout plan and specificationsduly 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, orsuch other certificate, by whatever name called, issued by thecompetent authority certifying that the real estate project has beendeveloped according to the sanctioned plan, layout plan andspecifications, as approved by the competent authority under thelocal laws;”

49. The expression ‘local authority’ is defined in Section 2(zc) as follows:

“(zc) “local authority” means the Municipal Corporation orMunicipality or Panchayats or any other Local Body constitutedunder any law for the time being in force for providing municipalservices or basic services, as the case may be, in respect of areasunder its jurisdiction;”

The above definition recognizes the existence of municipalcorporations, municipalities or Panchayats and local bodies constitutedunder any law for the time being in force for providing municipal servicesor basic services in respect of the areas under its jurisdiction.

50. The definition of “occupancy certificate” in Section 2(zf) is asfollows:

“(zf) “occupancy certificate” means the occupancy certificate,or such other certificate by whatever name called, issued by thecompetent authority permitting occupation of any building, asprovided under local laws, which has provision for civicinfrastructure such as water, sanitation and electricity;”

The above definition recognizes that occupancy certificates areissued by a competent authority permitting the occupation of the buildingunder local laws upon being satisfied that the building has provision forcivic infrastructure such as water, sanitation or electricity.

51. Among the definitions provided in Section 2, clause (zr)stipulates that:

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SUPREME COURT REPORTS

A“(zr) words and expressions used herein but not defined in thisAct and defined in any law for the time being in force or in themunicipal laws or such other relevant laws of the appropriateGovernment shall have the same meanings respectively assignedto them in those laws”

BIn other words, those expressions and words which are used inthe RERA but for which there is no definition in Section 2 are to have ameaning ascribed to them “in any law for the time being in force or inthe municipal laws or such other relevant laws of the appropriategovernment”.C52. The above provisions of RERA are indicative of the fact thatParliament was conscious of the position that diverse activities relatingto construction projects are governed by municipal and local legislation.There is an existence in the States of various regimes of town and countryplanning governed by State enactments and regulations have been framedunder them. Likewise, municipal and local laws govern diverse aspectsDof construction activity in real estate projects including the applicationfor development, nature and extent of permissible development on land,issuance of commencement certificates allowing the promoter to begindevelopment of an immoveable property, completion certificates certifyingthe completion of the construction project in accordance with theEsanctioned plans and the grant of occupation permission to occupy theconstructed areas.

53. All the definitions which we have adverted to clearly postulatethe existence of State legislation which governs and regulates constructionactivity through municipal and local bodies. The RERA naturally has notFattempted to supplant these State enactments which govern thepermissible use of land for development, the applicable norms forconstruction activity, the nature and extent of development permissibleon land falling within municipal and local areas and the process ofcarrying out construction from its initiation to completion. In not intrudinginto this area, the RERA has followed the distribution of legislativeGpowers. Entry 5 of List II to the Seventh Schedule, as we have seenearlier, deals with local government, including the constitution and powersof municipal corporations and other local authorities for the purpose oflocal self-government or village administration. The control overdevelopment activities under municipal and local laws is governed byHState legislation.

54. The second aspect of RERA which deserves emphasis is thatits diverse provisions are regulated and enforced by the real estateregulatory authority which is constituted under Section 20 by theappropriate government. The appropriate government as noticed inSection 2(g) means the State government in respect of matters relatingto the State. The appointment of the real estate regulatory authority isenvisaged to be made by the appropriate government under Section 21.The power of removal is entrusted to the appropriate government underSection 26. The appointment of officers and employees of the authorityis entrusted to the appropriate government under Section 28. Section 32requires the authority to make recommendations to the appropriategovernment or the competent authority, as the case may be, to facilitatethe growth and promotion of a healthy, transparent, efficient andcompetitive real estate sector. The authority is entrusted with regulatoryfunctions to ensure compliance with the substantive norms envisagedfrom Sections 3 to 19. Section 3 requires the promoter to first register areal estate project with the real estate regulatory authority beforeadvertising, marketing, booking, selling or offering for sale or invitingpersons to purchase a plot, apartment or building in a real estate project.The authority receives applications for registration under Section 4 andit 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 therevocation of registration. Upon the lapsing or revocation of theregistration, the authority is entrusted with certain powers under Section8. Likewise, in the sphere of regulating real estate agents, the authorityis entrusted with the power of registration under Section 9. Chapter IIIof the RERA specifies the functions and duties of promoters. Section 11requires the promoter upon the grant of registration to create a web-page on the website of the authority. Sections 12 and 13 impose positiveobligations on the promoter. Section 14 requires the promoter to adhereto sanctioned plans, layouts and specifications as approved by thecompetent authority. Section 18 provides for the return of the amountreceived by the promoter and payment of compensation if the promoterhas failed to complete and is unable to give possession of an apartment,flat or building. The rights and duties of allottees are specified in Section19. Significantly, Section 31 envisages the filling of complaints with theauthority or an adjudicating officer in the event that there has been aviolation or contravention of the provisions of the Act or its rules andregulations by a promoter, allottee or real estate agent. The authority AB

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Ahas wide ranging powers under Sections 38 and 40 to impose a penaltyor 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 theestablishment of a Real Estate Appellate Tribunal by the appropriateBgovernment in Chapter VII. Consistent with the provisions of Sections43 to 57, the real estate regulatory authority has a vital role to play inregard to the imposition of penalties under Chapter VIII prescribespenalties for contravention of the provisions of the Act.

56. Besides the establishment of the real estate regulatory authority,Cthe RERA has, in Section 71[29], contemplated the appointment ofadjudicating officers for adjudging compensation under Sections 12, 14,18 and 19. These adjudicating officers are to be appointed by the authorityin consultation with the appropriate government.

D29 “71. Power to adjudicate.

(1) For the purpose of adjudging compensation under sections 12, 14, 18 and section19, the Authority shall appoint in consultation with the appropriate Government oneor more judicial officer as deemed necessary, who is or has been a District Judge to bean adjudicating officer for holding an inquiry in the prescribed manner, after giving anyperson concerned a reasonable opportunity of being heard: Provided that any personEwhose complaint in respect of matters covered under sections 12, 14, 18 and section 19is pending before the Consumer Disputes Redressal Forum or the Consumer DisputesRedressal Commission or the National Consumer Redressal Commission, establishedunder section 9 of the Consumer Protection Act, 1986, on or before the commencementof this Act, he may, with the permission of such Forum or Commission, as the case maybe, withdraw the complaint pending before it and file an application before theadjudicating officer under this Act.F(2) The application for adjudging compensation under sub-section (1), shall be dealtwith by the adjudicating officer as expeditiously as possible and dispose of the samewithin a period of sixty days from the date of receipt of the application: Provided thatwhere any such application could not be disposed of within the said period of sixtydays, the adjudicating officer shall record his reasons in writing for not disposing of theapplication within that period.

G(3) While holding an inquiry the adjudicating officer shall have power to summon andenforce the attendance of any person acquainted with the facts and circumstances ofthe case to give evidence or to produce any document which in the opinion of theadjudicating officer, may be useful for or relevant to the subject matter of the inquiryand if, on such inquiry, he is satisfied that the person has failed to comply with theprovisions of any of the sections specified in sub-section (1), he may direct to pay suchcompensation or interest, as the case any be, as he thinks fit in accordance with theHprovisions of any of those sections.”

57. Chapter IX provides for finance, accounts, audits and reports.Under Section 73, the Central government is empowered to make grantsand loans to the authority upon due appropriation by Parliament. A similarpower is entrusted to the State government under Section 74. Section 75contemplates the constitution of a fund called the Real Estate RegulatoryFund by the appropriate government. Section 77 requires the preparationof a budget and maintenance of accounts and other records as well aspreparation of an annual statement of accounts by the authority in suchform as is prescribed by the appropriate government in consultation withthe Comptroller and Auditor General of India. The annual report of theauthority is under Section 78(2) required to be placed before each Houseof Parliament, or as the case may be, before the State legislature orUnion Territory legislature. Section 82 entrusts to the appropriategovernment the statutory powers to supersede the authority. Section 83empowers 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 facetof the law which is that the statutory duty to ensure the implementationof the legislation is entrusted to the appropriate government which in thecase of the states means the state government.

58. Now, it is in this background that it becomes necessary toanalyze the provisions of Sections 88 and 89 of the RERA. Section 88stipulates that the application of other laws is not barred: the provisionsof the legislation “shall be in addition to, and not in derogation of, theprovisions of any other law for the time being in force”. At the sametime, Section 89 provides for overriding effect to the provisions of theRERA when it stipulates that it “shall have effect, notwithstanding anythinginconsistent therewith contained in any other law for the time being inforce”. The interpretation of these provisions and their interplay willhave an important bearing on the outcome of the present controversy.This is because, as we noticed earlier in this judgment, the State of WestBengal had originally supported its legislative authority over the subjectgoverned by WB-HIRA on the ground that the state enactment fallswithin 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 tenderedbefore this Court by the State of West Bengal. The submission now ofthe State of West Bengal accepts that in essence and in substance, WB-HIRA contains a substantial overlap with the provisions of the RERA

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Aand is a law which the State legislature enacted in exercise of its legislativeauthority under Article 246(2) while legislating on subjects in theConcurrent List. The State of West Bengal submitted that WB-HIRA,like the RERA is enacted with reference to the subjects incorporated inEntries 6 and 7 of List III of the Seventh Schedule. Simply put, thesubmission of the State of West Bengal is four-fold: firstly, though thereBis a substantial overlap between the State and the Central enactmentsand both of them govern the same subject matter and field, there is noconstitutional prohibition on the State legislature enacting legislation on asubject in the Concurrent List which is virtually identical to centrallegislation in the same list; secondly, Section 88 of the RERA containsCan expression that its provisions shall be in addition to, and not in derogationof any other law for the time in force; this being an indicator thatParliament contemplated that the RERA can co-exist with analogousState legislation; thirdly, the inconsistencies between WB-HIRA andRERA are of a minor nature and wherever the State enactment containsprovisions at variance with the Central law, the former will have to yieldDto the latter, and fourthly, the provisions of Section 92 of the RERAdemonstrate that where Parliament intended to repeal a specific Statelegislation – Maharashtra Act No II of 2014 - only that legislation wasrepealed.

59. While considering these submissions which have beenEarticulated by Mr Rakesh Dwivedi, learned Senior Counsel, it becomesnecessary to dwell on two lines of precedent of this Court. The first lineof precedent analyses provisions analogous to Section 88 of the RERAand would shed light on what is the ambit of a provision which statesthat the statute is in addition to and not in derogation of any other law forFthe time being in force. The second line of precedent explores the meaningof the expression ‘in any other law for the time being in force’. Doesthis expression in Section 88 freeze the applicability of that provision tolaws which were in force when the RERA enacted or does it also applyto laws which may be enacted subsequently?GH.3.1 Meaning of “is in addition to and not in derogation ofany other law”

60. The first line of precedent will facilitate judicial evaluation ofSection 88. In M D Frozen Foods Exports Private Limited vs HeroFincorp Limited[30], a Bench of two judges of this Court analyzed threeH30(2017) 16 SCC 741

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

issues of which the first is of relevance to the present case. That issuewas:

“11.1. (i) Whether the arbitration proceedings initiated by therespondent can be carried on along with the SARFAESI proceedingssimultaneously”

The appellant in that case had borrowed monies from therespondent by creating a mortgage against deposit of title deeds. Theaccount became a non-performing asset resulting in the lender invokingthe arbitration clause of the agreement with the borrower. Prior to it, anotification was issued under which the provisions of the Securitizationand Reconstruction of Financial Assets and Enforcement of SecurityInterest Act, 2002 (“SARFAESI Act”) were applied to certain non-banking financial institutions, including the respondent. The respondentissued a notice under Section 13(2) of the SARFAESI Act. In the courseof the arbitration proceedings, an interim order was passed from whichproceedings were carried in appeal under Section 37 of the Arbitrationand Conciliation Act 1996, resulting in the dispute travelling to this Court.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, notwithstandinganything inconsistent therewith contained in any other law for thetime being in force or any instrument having effect by virtue ofany such law.

***

37. Application of other laws not barred.—The provisions ofthis Act or the rules made thereunder shall be in addition to, andnot in derogation of, the Companies Act, 1956 (1 of 1956), theSecurities Contracts (Regulation) Act, 1956 (42 of 1956), theSecurities and Exchange Board of India Act, 1992 (15 of 1992),the Recovery of Debts Due to Banks and Financial InstitutionsAct, 1993 (51 of 1993) or any other law for the time being inforce.”

61. Justice Sanjay Kishan Kaul adverted to the above definition inthe course of the judgment. The Court noted the earlier decision inTranscore vs Union of India[31 ]holding that by virtue of Section 37, the A

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ASARFAESI Act is in addition to and not in derogation of the provisionsof the Recovery of Debts Due to Banks and Financial Institutions Act1993 (“RDDB Act”). The “only twist” was that instead of the recoveryprocess being under the RDDB Act, the Court was concerned with anarbitration proceeding. In this context, the Court observed:

B“30. The only twist in the present case is that, instead of therecovery process under the RDDB Act, we are concerned withan arbitration proceeding. It is trite to say that arbitration is analternative to the civil proceedings. In fact, when a question wasraised as to whether the matters which came within the scopeand jurisdiction of the Debt Recovery Tribunal under the RDDBCAct, could still be referred to arbitration when both parties haveincorporated such a clause, the answer was given in theaffirmative. [HDFC Bank Ltd. v. Satpal Singh Bakshi, 2012SCC OnLine Del 4815: (2013) 134 DRJ 566] That being theposition, the appellants can hardly be permitted to contend thatDthe 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 remediesand the provisions of the SARFAESI Act provide a remedy in additionto the provisions of the Arbitration Act. SARFAESI proceedings, theECourt held, are in the nature of enforcement proceedings, while arbitrationis an “adjudicatory process”.

62. In KSL and Industries Limited vs Arihant ThreadsLimited[32 ](“KSL and Industries”), a three judge Bench of this Courtconsidered a reference made by a two judge Bench following aFdifference of opinion on the interpretation of Section 34 of the RDDBAct. In that case, the High Court had set aside the order of the DebtsRecovery Appellate Tribunal, in view of the bar contained in Section 22of the Sick Industrial Companies (Special Provisions) Act 1985(“(SICA”). Section 32 of the SICA contained a provision giving overridingforce notwithstanding anything inconsistent contained in any other lawGexcept the Foreign Exchange Regulation Act 1973 and the Urban Land(Ceiling and Regulation) Act 1976, among other instruments. Section32(1) was as follows:

H32 (2015) 1 SCC 166

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

“32. Effect of the Act on other laws.—(1) The provisions ofthis Act and of any rules or schemes made thereunder shall haveeffect notwithstanding anything inconsistent therewith containedin any other law except the provisions of the Foreign ExchangeRegulation Act, 1973 (46 of 1973) and the Urban Land (Ceilingand Regulation) Act, 1976 (33 of 1976) for the time being in forceor in the memorandum or articles of association of an industrialcompany or in any other instrument having effect by virtue of anylaw other than this Act.”

The RDDB Act which was a later enactment of 1993 containedSection 34 giving it overriding effect:

“34. Act to have overriding effect.—(1) Save as provided undersub-section (2), the provisions of this Act shall have effectnotwithstanding anything inconsistent therewith contained in anyother law for the time being in force or in any instrument havingeffect by virtue of any law other than this Act.

(2) The provisions of this Act or the rules made thereundershall be in addition to, and not in derogation of, the Industrial FinanceCorporation Act, 1948 (15 of 1948), the State FinancialCorporations Act, 1951 (63 of 1951), the Unit Trust of India Act,1963 (52 of 1963), the Industrial Reconstruction Bank of IndiaAct, 1984 (62 of 1984), the Sick Industrial Companies (SpecialProvisions) Act, 1985 (1 of 1986) and the Small IndustriesDevelopment Bank of India Act, 1989 (39 of 1989).”

Now, sub-Section (1) of Section 34 gives overriding effect to theRDDB Act notwithstanding anything inconsistent contained in any otherlaw for the time being in force. On the other hand, sub-Section (2)provides that the provisions of the Act and its rules would be in additionto and not in derogation of certain other named statutes. Adverting tothe provisions of Section 34(2), Justice SA Bobde (as the learned ChiefJustice then was) observed; “36 [Ed.: Para 36 corrected vide Official Corrigendum No.F.3/Ed.B.J./61/2014 dated 25-11-2014.] . Sub-section (2) wasadded to Section 34 of the RDDB Act w.e.f. 17-1-2000 by Act 1of 2000. There is no doubt that when an Act provides, as here,that its provisions shall be in addition to and not in derogation ofanother law or laws, it means that the legislature intends that such A

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an enactment shall coexist along with the other Acts. It is clearlynot the intention of the legislature, in such a case, to annul ordetract from the provisions of other laws. The term “inderogation of” means “in abrogation or repeal of”. The Black’sLaw Dictionary sets forth the following meaning for “derogation”:

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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.CIt states that this overriding effect is in relation to certain lawsand that the RDDB Act shall be in addition to and not in abrogationof, such laws. SICA is undoubtedly one such law.”

The Court held that the effect of sub-Section (2) was to preservethe powers of the authorities under the SICA and save the proceedings Dfrom being overridden by the RDDB Act. The Court held that bothSICA and the RDDB Act were special laws within their own sphere:

“39. There is no doubt that both are special laws. SICA is a speciallaw, which deals with the reconstruction of sick companies andmatters incidental thereto, though it is general as regards otherEmatters such as recovery of debts. The RDDB Act is also a speciallaw, which deals with the recovery of money due to banks orfinancial institutions, through a special procedure, though it maybe general as regards other matters such as the reconstruction ofsick companies which it does not even specifically deal with. Thusthe purpose of the two laws is different.”F

The Court noticed that Section 34(2) of the RDDB Act specificallyprovides that its provisions would be in addition to and not in derogationof the other laws mentioned in it, including SICA. The expression ‘not inderogation’ was then construed in the following observations:

“49. The term “not in derogation” clearly expresses the intentionGof Parliament not to detract from or abrogate the provisions ofSICA in any way. This, in effect must mean that Parliamentintended the proceedings under SICA for reconstruction of a sickcompany to go on and for that purpose further intended that allthe other proceedings against the company and its properties should H

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

be stayed pending the process of reconstruction. While the term“proceedings” under Section 22 of SICA did not originally includethe RDDB Act, which was not there in existence. Section 22covers proceedings under the RDDB Act.”

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Consequently, the Court answered the reference by holding thatthe provisions of SICA, in particular Section 22, shall prevail over theprovisions for the recovery of debts in the RDDB Act.

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63. To complete this trinity of judgments between 2015 and 2019,there is a three judge Bench decision of this Court in Pioneer UrbanLand and Infrastructure Limited vs Union of India[33]. This Courtconsidered a challenge to the constitutional validity of the amendmentsmade in 2018 to the IBC 2016, pursuant to a report of the InsolvencyLaw Committee. Under the amended provisions, allottees of real estateprojects were deemed to be financial creditors, triggering the applicabilityof the Code to real estate developers. The three judge Bench considered,in the course of its decision, the provisions of the RERA. The Courtadverted to the provisions of Sections 88 and 89 of the RERA on the onehand and to Section 238 of the IBC which is in the following terms:

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“238. Provisions of this Code to override other laws.—Theprovisions of this Code shall have effect, notwithstanding anythinginconsistent therewith contained in any other law for the timebeing in force or any instrument having effect by virtue of anysuch law.”

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Justice RF Nariman speaking for the three judge Bench noted that

(i) There is no provision analogous to Section 88 of the RERA inFthe IBC and the latter is meant to be a compete and exhaustivestatement of the law insofar as its subject matter is concerned;

(ii) While the non-obstante clause of RERA came into force on 1May 2015, the non-obstante clause of IBC came into forceon 1 December 2016; and G

(iii) The amendments to the IBC had come into force on 6 June2018.

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AIn this backdrop, the Court did not accept the submission thatRERA being a special enactment would have precedence over the IBCwhich 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)Bof the Code, it is clear that Parliament was aware of RERA, andapplied some of its definition provisions so that they could applywhen the Code is to be interpreted. The fact that RERA is inaddition to and not in derogation of the provisions of anyother law for the time being in force, also makes it clearthat the remedies under RERA to allottees were intendedCto be additional and not exclusive remedies. Also, it isimportant to remember that as the authorities under RERA wereto be set up within one year from 1-5-2016, remedies before thoseauthorities would come into effect only on and from 1-5-2017making it clear that the provisions of the Code, which came intoDforce on 1-12-2016, would apply in addition to RERA.”

The Court noted the decision in KSL & Industries (supra) inwhich it was held that notwithstanding the non-obstante clause containedin the RDDB Act which was later in time than the non-obstante clauseEin the SICA and the principle that the later Act would prevail over theearlier, this principle was departed from only because of the of thepresence of a provision, like Section 88 of the RERA, which wascontained in the RDDB Act which made it clear that the Act was meantto be in addition and not in derogation of other statutes. DistinguishingFthe decision, the Court observed:

“27. In view of Section 34(2) of the Recovery Act, this Courtheld that despite the fact that the non obstante clause contained inthe Recovery Act is later in time than the non obstante clausecontained in the Sick Act, in the event of a conflict, the RecoveryGAct i.e. the later Act must give way to the Sick Act i.e. the earlierAct. Several judgments were referred to in which ordinarily alater Act containing a non obstante clause must be held to haveprimacy over an earlier Act containing a non obstante clause, asParliament must be deemed to be aware of the fact that the laterAct is intended to override all earlier statutes including those whichHcontained non obstante clauses. This statement of the law was FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

departed from in KSL & Industries [KSL & IndustriesLtd. v. Arihant Threads Ltd., (2015) 1 SCC 166 : (2015) 1 SCC(Civ) 462] only because of the presence of a section like Section88 of RERA contained in the Recovery Act, which makes it clearthat the Act is meant to be in addition to and not in derogation ofother statutes. In the present case, it is clear that both tests aresatisfied, namely, that the Code as amended, is both later in pointof 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 heldto co-exist and in the event of a clash, RERA must give way to the IBC.

H.3.2 Meaning of “law for the time being in force”

64. The second line of precedent has been relied upon by MrRakesh Dwivedi on behalf of the State of West Bengal, as an aid to theconstruction of the expression “law for the time being in force”. In thedecision of the Constitution Bench in Sasanka Sekhar Maity vs Unionof India[34], Justice AP Sen construed the provisions of the second provisoto Article 31-A(1) of the Constitution and the expression “any law forthe time being in force”. The argument was that this expression mustmean the West Bengal Estate Acquisition Act, 1953 only. Rejecting thesubmission, the Constitution Bench held:

“27. Such a construction, if we may say so, would create a seriousimpediment to any kind of agrarian reform. The ceiling onagricultural holdings, once fixed cannot be static, unalterable forall times. The expression “any law for the time being in force”obviously refers to the law imposing a ceiling. Here it isthe West Bengal Land Reforms (Amendment) Act, 1971(President’s Act 3 of 1971) and now the West Bengal LandReforms (Amendment) Act, 1971 (W.B. Act 12 of 1972)which introduced Chapter II-B imposing a new ceiling onagricultural holdings of raiyats. That is the law for the timebeing in force, and no land is being acquired by the Stateunder Section 14-L within the ceiling limits prescribedtherein.

28. It will be noticed that the second proviso to Article 31-A(1)refers to the “ceiling limit applicable to him”, which evidently refers34 (1980) 4 SCC 716

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Ato the law in question and not earlier law, that is Section 6(1) ofthe West Bengal Estates Acquisition Act, 1953. It will be noticedthat both Section 4(3) and Section 6(2) of the West Bengal LandReforms Act, 1955 stood deleted by the West Bengal LandReforms (Amendment) Act, 1971 (President’s Act 3 of 1971)and thereafter by the West Bengal Land Reforms (Amendment)BAct, 1972 with retrospective effect from February 12, 1971.”

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65. In Thyssen Stahlunion GMBH vs Steel Authority ofIndia[35], a two judge Bench of this Court considered the expression “forCthe time being in force” in the context of an arbitration agreement andagreed 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 atthe time when the arbitration was entered into but also to any law thatmay be in force in the conduct of the arbitration proceeding. Speakingfor the bench, Justice DP Wadhwa held:D

“35. Parties can agree to the applicability of the new Act evenbefore the new Act comes into force and when the old Act is stillholding the field. There is nothing in the language of Section85(2)(a) which bars the parties from so agreeing. There is, however,a bar that they cannot agree to the applicability of the old ActEafter the new Act has come into force when arbitral proceedingsunder the old Act have not commenced though the arbitralagreement was under the old Act. Arbitration clause in thecontract in the case of Rani Constructions (Civil AppealNo. 61 of 1999) uses the expression “for the time being inFforce” meaning thereby that provision of that Act wouldapply to the arbitration proceedings which will be in forceat the relevant time when arbitration proceedings are held.We have been referred to two decisions — one of theBombay High Court and the other of the Madhya PradeshHigh Court on the interpretation of the expression “forGthe time being in force” and we agree with them that theexpression aforementioned not only refers to the law inforce at the time the arbitration agreement was enteredinto but also to any law that may be in force for the conductof arbitration proceedings, which would also include the H35 (1999) 9 SCC 334

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

enforcement of the award as well. The expression “unlessotherwise agreed” as appearing in Section 85(2)(a) of the newAct would clearly apply in the case of Rani Constructions in CivilAppeal No. 61 of 1999. Parties were clear in their minds that itwould be the old Act or any statutory modification or re-enactmentof that Act which would govern the arbitration. We accept thesubmission of the appellant Rani Constructions that parties couldanticipate that the new enactment may come into operation at thetime the disputes arise. We have seen Section 28 of the ContractAct. It is difficult for us to comprehend that arbitration agreementcould be said to be in restraint of legal proceedings. There is nosubstance in the submission of the respondent that parties couldnot have agreed to the application of the new Act till they knewthe provisions thereof and that would mean that any suchagreement as mentioned in the arbitration clause could be enteredinto only after the new Act had come into force. When theagreement uses the expressions “unless otherwise agreed” and“law in force” it does give an option to the parties to agree thatthe new Act would apply to the pending arbitration proceedings.That agreement can be entered into even before the new Actcomes into force and it cannot be said that agreement has to beentered into only after the coming into force of the new Act.”

66. The decision of a two judge Bench in Municipal Corporationof Delhi vs Prem Chand Gupta[36], considered Regulation 4(1) of theServices Regulations of 1959 which commenced with the expression“Unless otherwise provided in the Act or these regulations, the rules forthe time being in force and applicable to government servants in theservice of the Central Government shall, as far as may be, regulate theconditions of service of municipal officers and other municipal employees”.The Court rejected the submission that the rules for the time being inforce would be those which were in existence when the ServicesRegulations of 1959 were promulgated and not any later rules. JusticeSB Majmudar held that whenever the question of the regulation ofconditions 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

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Aphraseology “rules for the time being in force” would necessarily meanrules in force from time to time and not the rules in force only at a fixedpoint of time in 1959.

67. Another two judge Bench of this Court in Yakub Abdul RazakMemon vs State of Maharashtra[37], while construing the provisions ofBthe Juvenile Justice (Care and Protection of Children) Act, 2000 and itsinterplay with Terrorist and Disruptive Activities (Prevention) Act, 1987,speaking through Justice P Sathasivam (as the learned Chief Justicewas then), held:

“1554. Section 1(4) of the JJ Act was added by amendment withCeffect from 22-8-2006. In fact, this provision gives the overridingeffect to this Act over other statutes. However, it reads that theAct would override “anything contained in any other law for thetime being in force”. The question does arise as to whether thestatutory provisions of the JJ Act would have an overriding effectover the provisions of TADA which left long back and wasDadmittedly not in force on 22-8-2006. Thus, the question doesarise as what is the meaning of the law for the time being inforce. This Court has interpreted this phrase to includethe law in existence on the date of commencement of theAct having overriding effect and the law which may beEenacted in future during the life of the Act having overridingeffect. (Vide Thyssen Stahlunion GmbH v. SAIL [(1999) 9 SCC334 : AIR 1999 SC 3923] and MCD v. Prem Chand Gupta [(2000)10 SCC 115 : 2000 SCC (L&S) 404] .)”

F68. In Union Territory of Chandigarh vs Rajesh KumarBasandhi[38], Justice Brijesh Kumar considered the expression “for thetime being in force” in the law lexicon and held that it must be interpretedkeeping in mind the context in which it is used:

“10. A perusal of the meaning of the expression “for the timeGbeing” by different authors, based on decided cases makes it clearthat it cannot be said that it must in every case indicate a singleperiod of time. It may be for an indefinite period of time dependingupon the context in which the phrase is used. It is also evident 37 (2013) 13 SCC 1H38 (2003) 11 SCC 549

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

that generally it denotes an indefinite period of time, meaningthereby, the position as existing at the time of application of therules, maybe, amended or unamended. Therefore, to come to aconclusion as to whether it is for one time or for indefinite periodof time, the context, purpose and the intention of the use of thephrase will have to be seen and examined.”

69. Similarly, in Department of Customs vs Sharad Gandhi[39],a two judge Bench of this Court considered a case where the respondenthad been discharged of offences under Sections 132 and 175 of theCustoms Act, 1962. The Additional Chief Metropolitan Magistrateallowed an application for discharge holding that there was a completebar with regard to prosecution under the Customs Act, 1962, and thatthe Collector of Customs only had the power to confiscate the goodsand impose a penalty for a breach of Section 3 of the Antiquities and ArtTreasurers Act, 1972. Amongst other issues, the Bench had to interpretthe meaning of Section 30 of the Antiquities and Art Treasurers Act,1972, which reads as follows:

“30. Application of other laws not barred.—The provisions ofthis Act shall be in addition to, and not in derogation of, theprovisions of the Ancient Monuments Preservation Act, 1904(7 of 1904) or the Ancient Monuments and Archaeological Sitesand Remains Act, 1958 (24 of 1958), or any other law for thetime being in force.”

Justice KM Joseph, speaking for the two judge Bench, observed:

“39. We would think that though the words “any otherlaw for the time being in force” have been used, thecontext for the use of the provision is not to beoverlooked. We have referred to the relevant provisionsof the two specific enactments which show that the saidlegislation also deals with antiquities as it deals withcognate subjects, namely, ancient monuments andarchaeological sites. The common genus is manifest. Thelegislative intention was to declare that the AntiquitiesAct should not result in the provision contained in alliedor cognate laws being overridden upon passing of theAntiquities Act. Full play was intended for the provisions A

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Acontained in relation to antiquities contained in the twoenactments. Despite the passage of the Antiquities Act,a prosecution for instance would be maintainable if a caseis otherwise made out under the two enactments inrelation to antiquity. The Antiquities Act in other wordsis not to be in derogation of those provisions. They wereBto supplement the existing laws. It is therefore in thesame context that we should understand the words “anyother law for the time being in force”. For instance, theremay be laws made by the State Legislatures which relate toantiquity. There may be any other law which deal with a subjectCwith a common genus of which the specific law would be anintegral part. It is all such laws which legislature intended tocomprehend within the expression “any other law for the timebeing in force”. Take for example, a case where there is atheft of an antiquity. Can it be said that the prosecution underSection 379 would not be maintainable. The answer will be anDemphatic No. Certainly, the prosecution will lie. The Sale ofGoods Act, 1930 which relates to movable items generally willbe applicable, to the extent that it is not covered by any provisionin the Acts in question. The Contract Act, 1872 may continueto be applicable. But it is not the question of applying generalElaws that engage the attention of the legislature. The intentionbehind Section 30 was as noted is to provide for any otherlaw which deal with antiquity to continue to have forceand declare its enforceability even after passing of theAntiquities Act. In that view of the matter we are of theview that the words “any other law for the time being inFforce” must be construed as ejusdem generis.”

70. These decisions indicate that the expression “any other lawfor the time being in force” does not necessarily mean, such laws asGwere in existence when the statutory provision was enacted. To thecontrary, it widely considered to means not just the laws which were inexistence when the statutory provision was enacted but also such lawswhich may come into existence at a later stage. On the other hand,another line of judicial precedent also suggests the meaning to be ascribedto the expression must bear color from the context in which it appears,Hand not devoid of it.

71. For instance, in National Insurance Company Limited vsSinitha[40], in the context of a policy of insurance, the expression “for thetime being in force” was held to mean provisions then existing. Thedecision related to Sections 144 and 163A of the Motor Vehicles Act,1988, in which Section 163A was subsequently inserted. In the contextof adjustment of compensation, a two judge Bench of this Court heldthat Section 144 would not override Section 163A because of the use ofthe expression “laws for the time being in force” would encompass onlyexisting provisions of the Motor Vehicles Act, 1988, and not those insertedin the Act later. Speaking for the Bench, Justice JS Khehar (as thelearned Chief Justice was then) observed:

“16. Section 144, it may be pointed out, is a part of Chapter X ofthe Motor Vehicles Act, 1988, which includes Section 140. Section144 of the Act is being extracted herein:

“144.Overriding effect.—The provisions of this Chapter shall haveeffect notwithstanding anything contained in any other provisionof this Act or of any other law for the time being in force.”

Even though Section 144 of the Act mandates that the provisionsof Chapter X (which includes Section 140) have effectnotwithstanding anything to the contrary contained in any otherprovision of the Act or in any other law for the time being in force,Section 144 of the Act would not override the mandate containedin Section 163-A for the simple reason that Section 144 providedfor such effect over provisions “for the time being in force” i.e.the provisions then existing, but Section 163-A was not on thestatute book at the time when Section 144 was incorporatedtherein. Therefore the provisions contained in Chapter X wouldnot have overriding effect over Section 163-A of the Act.

17. As against the aforesaid, at the time of incorporation of Section163-A of the Act, Sections 140 and 144 of the Act were alreadysubsisting, as such, the provisions of Section 163-A which alsoprovided by way of a non obstante clause, that it would have by alegal fiction overriding effect over all existing provisions underthe Act as also any other law or instrument having the force oflaw “for the time being in force”, would have overriding effect,even over the then existing provisions in Chapter X of the Act A

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Abecause the same was already in existence when Section 163-Awas introduced into the Act.”

This again indicates that it is the statutory context and schemewhich will determine the nature and ambit of the expression “any otherlaw for the time being in force”.

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72. In the case of the RERA, the expression “law for the timebeing in force” is used in Section 89 as well as in Section 2(zr) andSection 18(2). Section 2(zr), as noticed earlier, stipulates that words andexpression used in the Act, but not defined in it and defined in any lawfor the time being in force or in municipal laws or other relevant laws ofCthe appropriate government, shall have the meaning assigned to them inthose laws. Evidently, a law for the time being in force in Section 2(zr) isnot 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 thepromoter to compensate allottees for the loss caused due to a defectivetitle to the land and the provision stipulates that the claim for compensationDshall not be barred by limitation provided “under any law for the timebeing 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 togetherE

73. From our analysis of the provisions of RERA on the one handand of WB-HIRA on the other, two fundamental features emerge froma comparison of the statutes. First, a significant and even overwhelminglylarge part of WB-HIRA overlaps with the provisions of RERA. Theseprovisions of the RERA have been lifted bodily, word for word andFenacted into the State enactment. Second, in doing so, WB-HIRA doesnot complement the RERA by enacting provisions which may be regardedas in addition to or fortifying the rights, obligations and remedies createdby the Central enactment. The subject of the provisions of the Stateenactment is identical, the content is identical. In essence and substance,GWB-HIRA has enacted a parallel mechanism and parallel regime asthat which has been entailed under the RERA. The State legislaturehas, in other words, enacted legislation on the same subject matter asthe Central enactment. Not only is the subject matter identical but inaddition, the statutory provisions of WB-HIRA are on a majority of countsidentical to those of the RERA. Both sets of statutes are referable to theHsame 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 alaw regulating ‘Industry” within the meaning of Entry 24 of List II hasbeen expressly given up before this Court (as we have explained, forvalid reasons bearing on the precedents of this Court).

74. In assessing whether this overlap between the statutoryprovisions of WB-HIRA and the RERA makes the former repugnant tothe latter within the meaning of that expression in clause (1) of Article254, it becomes necessary to apply the several tests which are a part ofour constitutional jurisprudence over the last seven decades. Repugnancycan be looked at from three distinct perspectives. The first is where theprovision of a State enactment is directly in conflict with a law enactedby Parliament, so that compliance with one is impossible along withobedience to the other. The second test of repugnancy is whereParliament through the legislative provisions contained in the statute hasenacted an exhaustive code. The second test of repugnancy is based onan intent of Parliament to occupy the whole field covered by the subjectof its legislation. In terms of the second test of repugnancy, a Stateenactment on the subject has to give way to the law enacted by Parliamenton the ground that the regulation of the subject matter by Parliament isso complete as a code, so as to leave no space for legislation by theState. The third test of repugnancy postulates that the subject matter ofthe legislation by the State is identical to the legislation which has beenenacted by Parliament, whether prior or later in point of time. Repugnancyin the constitutional sense is implicated not because there is a conflictbetween the provisions enacted by the State legislature with those of thelaw enacted by Parliament but because once Parliament has enacted alaw, it is not open to the State legislature to legislate on the same subjectmatter and, as in this case, by enacting provisions which are bodily liftedfrom and verbatim the same as the statutory provisions enacted byParliament. The overlap between the provisions of WB-HIRA and theRERA is so significant as to leave no manner of doubt that the test ofrepugnancy based on an identity of subject matter is clearly established.As the decision in Innoventive Industries (supra) emphasizes, lawsunder this head are repugnant even if the rule of conduct prescribed byboth the laws is identical. This principle constitutes the foundation of therule of implied repeal. The present case is not one where WB-HIRAdeals not with matters which form the subject matter of the Parliamentarylegislation but with other and distinct matters of a cognate and alliednature. WB-HIRA, on the contrary, purports to occupy the same subject A

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Aas that which has been provided in the Parliamentary legislation. Thestate law fits, virtually on all fours, with the footprints of the law enactedby Parliament. This is constitutionally impermissible. What the legislatureof the State of West Bengal has attempted to achieve is to set up itsparallel legislation involving a parallel regime.B75. But the submission which has been articulately presentedbefore the Court on behalf of the State of West Bengal is that Section 88of the RERA itself allows for the existence of State statutes by enactingSections 88 and 89, which stipulate that its provisions shall be in additionto and not in derogation of the provisions of any other law for time beingin force and override only inconsistent provisions. For the purpose of theCpresent discussion, we may accept the hypothesis of the State of WestBengal that the expression “any other law for the time being in force”does not, in the context of Section 88, imply the applicability of theprovision only to laws which had been enacted before the RERA.Conceivably, as the judgments of this Court construing similar expressionsDindicate, the trend has been to broadly configure the meaning of theexpression by extending it to laws which were in existence and thosewhich may be enacted thereafter. In other contexts, such an interpretationhas not been accepted but, for the purpose of the discussion, we willproceed on the hypothesis which has been put forth by the State of WestBengal that ‘law for the time being in force’ within the meaning of SectionE88 would also include subsequent legislation. The submission is that sinceSection 88 allows for the existence of other laws by adopting the ‘inaddition to and not in derogation of’ formula, Parliament did not intend toexclude State legislation even though it is identical to that which hasbeen enacted by Parliament. This submission is also sought to be Fbuttressed by adverting to Section 92 of the RERA, under which onlythe Maharashtra Actwas repealed.

76. Now, in assessing the correctness of the submission, it isnecessary to construe Section 88 in its proper perspective. Unless this isdone, the Court would be doing violence to the intent of Parliament andGto the constitutional principles which are embodied in Article 254.Parliament envisaged in Section 88 of the RERA that its provisions wouldbe in addition to and not in derogation of other laws for the time being inforce. True enough, this provision is an indicator of the fact thatParliament has not intended to occupy the whole field so as to precludealtogether the exercise of legislative authority whether under other CentralH

or State enactments. For instance, Section 71 of the RERA specificallycontemplates (in the proviso to sub-Section (1)) that a complaint in respectof matters covered by Sections 12, 14, 18 and 19 is pending in theadjudicating fora constituted by the Consumer Protection Act, 1986.The person who has moved the consumer forum may withdraw thecomplaint and file an application before the adjudicating officer constitutedunder the RERA. The effect of Section 88 is to ensure that remedieswhich are available under consumer legislation, including ConsumerProtection Act, 2019, are not ousted as a consequence of the operationof the RERA. Of course, it is also material to note that both sets ofstatutes, namely the Consumer Protection Act(s) and the RERA, havebeen enacted by the Parliament and both sets of statutes have to betherefore harmoniously construed. Section 88 of the RERA does notexclude recourse to other remedies created by cognate legislation. Wherethe cognate legislation has been enacted by a State legislature, Section88 of the RERA is an indicator that Parliament did not wish to oust thelegislative power of the State legislature to enact legislation on cognateor allied subjects. In other words, spaces which are left in the RERAcan be legislated upon by the State legislature by enacting a legislation,so long as it is allied to, incidental or cognate to the exercise ofParliament’s legislative authority. What the State legislature in the presentcase has done is not to enact cognate or allied legislation but legislationwhich, insofar as the statutory overlaps is concerned is identical to andbodily lifted from the Parliamentary law. This plainly implicates the testof repugnancy by setting up a parallel regime under the State law. TheState legislature has encroached upon the legislative authority ofParliament which has supremacy within the ambit of the subjects fallingwithin the Concurrent List of the Seventh Schedule. The exerciseconducted by the State legislature of doing so, is plainly unconstitutional.

77. The statutory overlaps between WB-HIRA and the RERAcannot be overlooked, as noted above. But quite apart from that, there isan additional reason why the test of repugnancy engrafted in clause (1)of Article 254 is attracted. This is because several provisions of theWB-HIRA are directly in conflict and dissonance with the RERA. Wherea State enactment in the Concurrent List has enacted or made a statutoryprovision which is in conflict with those which have been enacted byParliament, it may in a given case be possible to excise the provision ofthe State statute so as to bring it into conformity with the Parliamentaryenactment. But the present case, as we shall demonstrate, involves a AB

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Asituation where valuable safeguards which are introduced by Parliamentin the public interest and certain remedies which have been created byParliament are found to be absent in WB-HIRA. This is indicated fromthe following provisions:

(i) Section 2(n) of the RERA contains a statutory definition ofBthe meaning of ‘common areas’. Parliament has definedthe expression to mean what is set out in sub-clause 1(i) to(iii) which includes open parking areas. The WB-HIRAcontains a definition of the expression ‘common areas’ inSection 2(m). While this definition is pari materia, WB-HIRA has enacted the definition of the expression ‘carCparking area’ in Section 1 to mean such area as may beprescribed in exercise of the rule making power. The rulesframed by the State government define the expression tomean an area either enclosed or uncovered or openexcluding open car parking areas reserved as common areasDand to exclude all types of car parking areas sanctioned bythe competent authority;

(ii) Section 2(y) of the RERA defines the expression ‘garage’so as not to include an unenclosed or uncovered parkingspace such as open parking area. On the other hand, Section2(x) of WB-HIRA defines the expression ‘garage’ to meangarage and property space as sanctioned by the competentauthority; E

(iii) Section 6 of the RERA provides for an extension of aregistration under Section 5 on an application by the promoterFdue to force majeure. The explanation exhaustively definesforce majeure to mean a case of war, flood, drought, fire,cyclone, earthquake or any other calamity caused by natureaffecting the development of the real estate project. Theprovisions of Section 6 of the WB-HIRA, in contrast, whiledefining force majeure also incorporate “any otherGcircumstances prescribed”, thereby giving a wider discretionto the regulatory authority or the State to give extensions ofregistration to real estate projects in a manner which mayprejudicially affect the interest of home buyers;

(iv) Section 38(3) of the RERA empowers the real estateHregulatory 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,a valuable safeguard to protect home buyers in the RERAhas been omitted. Section 38(3) of the RERA is in thefollowing terms:

“(3) Where an issue is raised relating to agreement, action,omission, practice or procedure that— (a) has an appreciableprevention, restriction or distortion of competition inconnection with the development of a real estate project;or (b) has effect of market power or monopoly situationbeing abused for affecting interest of allottees adversely,then the Authority, may suo motu, make reference in respectof such issue to the Competition Commission of India.”

(v) Section 41 of the RERA is a pivotal provision under whichthe Central government is to establish a Central AdvisoryCouncil. The Minister of the Central government dealingwith Housing is to be the ex officio Chairperson. Themembership of the Central Advisory Council is stipulatedin 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 insuch notification, a Council to be known as the CentralAdvisory Council. (2) The Minister to the Government ofIndia in charge of the Ministry of the Central Governmentdealing with Housing shall be the ex officio Chairperson ofthe Central Advisory Council. (3) The Central AdvisoryCouncil shall consist of representatives of the Ministry ofFinance, Ministry of Industry and Commerce, Ministry ofUrban Development, Ministry of Consumer Affairs, Ministryof Corporate Affairs, Ministry of Law and Justice, NitiAayog, National Housing Bank, Housing and UrbanDevelopment Corporation, five representatives of StateGovernments to be selected by rotation, five representativesof the Real Estate Regulatory Authorities to be selected byrotation, and any other Central Government department asnotified. (4) The Central Advisory Council shall also consistof not more than ten members to represent the interests ofreal estate industry, consumers, real estate agents, A

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(1) The functions of the Central Advisory Council shall be to adviseand recommend the Central Government,— (a) on all mattersconcerning the implementation of this Act; (b) on major questionsof policy; (c) towards protection of consumer interest; (d) to fosterthe growth and development of the real estate sector; (e) on anyCother matter as may be assigned to it by the Central Government.(2) The Central Government may specify the rules to give effectto the recommendations of the Central Advisory Council onmatters as provided under sub-section (1).”

WB-HIRA on the other hand, provides for the constitution of aDState Advisory Council under Section 41,which is in the following terms:

“41. Establishment of State Advisory Council.-(1) The StateGovernment may, by notification, establish with effect from suchdate as it may specify in such notification, a Council to be knownas the State Advisory Council.

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(2) The Minister to the Government of the State of West Bengalin charge of the Department dealing ·with Housing shall be the exofficer Chairperson of the State Advisory Council.

(3) The State Advisory Council shall consist of representatives ofthe Finance Department, Department of Industry, Commerce &Enterprises, Department of Urban Development and MunicipalAffairs, Department of Consumer Affairs, Law Department, fiverepresentatives of the Real Estate Regulatory Authorities to beselected by rotations, and any other State Government departmentas notified.

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(4) The State Advisory Council shall also consist of not more thanten members to represent the interests of real estate industry,consumers, real estate agents, construction labourers, non-governmental organisations and academic and research bodies inthe real estate sector.”

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Section 42 of WB-HIRA, which defines the functions of the StateAdvisory Council, is as follows:

“42. Functions of State Advisory Council.-(1) The functions ofthe State Advisory Council shall be to advise and recommend theState 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 other matter as may be assigned to it by the State Government.

(2) The State Government may specify the rules to give effect tothe recommendations of the State Advisory Council on mattersas provided under sub-section (1 ).”

The State legislature while enacting WB-HIRA has replaced theCentral Advisory Council, which has a major policy making role, withthe State Advisory Council. Though the functions of the State AdvisoryCouncil are similar, its power is to advise and recommend to the Stategovernment in distinct in contrast to the functions of the Central AdvisoryCouncil, which is to make policy recommendations to the Centralgovernment on the subjects contemplated in clauses (a) to (e) of Section42. As a consequence, the advisory role of the Central government,based on the recommendations of the Central Advisory Council, hasbeen completely eroded in the provisions of WB-HIRA;

(vi) While Section 70 of the RERA contains a provision forcompounding of offences, but WB-HIRA does not containany such provision;

(vii) Section 71(1) of the RERA provides that the regulatoryauthority shall appoint adjudicating officers for the purposeof adjudging compensation under Sections 12, 14, 18 and19. The adjudicating officer is required to be a person whois or has been a District Judge. WB-HIRA does not containany provision for appointment of adjudicating officers forthe purpose of adjudging compensation. Under Section 40(3)

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Aof WB-HIRA, this power is entrusted to the regulatoryauthority and not to a judicial person or body. The fact thatan appeal against the orders of the regulatory authority lieto the Appellate Tribunal and thereafter to the High Courtcannot gloss over the fact that the valuable safeguard ofappointing judicial officers as adjudicating officers forBdetermining compensation under the RERA has not beenenacted in WB-HIRA; and A

(viii) Section 80(2) of the RERA provides that no Court inferiorto a Metropolitan Magistrate or JMFC shall try an offencepunishable under the Act. No such provision is contained inCWB-HIRA.

78. The above analysis indicates an additional reason why thereis a repugnancy between WB-HIRA and RERA- the above provisionsof the State enactment are directly in conflict with the Central enactment.Undoubtedly, as Article 254(1) postulates, the legislation enacted by theDState legislature is void “to the extent of the repugnancy”. But the aboveanalysis clearly demonstrates that in material respects, WB-HIRA hasfailed to incorporate valuable institutional safeguards and provisionsintended to protect the interest of home-buyers. The silence of the Statelegislature in critical areas, as noted above, indicates that importantEsafeguards which have been enacted by Parliament in the public interesthave been omitted in the State enactment. There is, in other words, notonly a direct conflict of certain provisions between the RERA and WB-HIRA but there is also a failure of the State legislature to incorporatestatutory safeguards in WB-HIRA, which have been introduced in theRERA for protecting the interest of the purchasers of real estate. InFfailing to do so, the State legislature has transgressed the limitations onits power and has enacted a law which is repugnant to Parliamentarylegislation on the same subject matter.

H.4 Lack of Presidential Assent for WB-HIRA

G79. Finally, another argument raised before us by the petitioner’swas that WB-HIRA had not received the President’s assent under Article254(2) of the Constitution, which was necessary since it was going theoccupy the same field as the RERA, a law which had been enacted bythe Parliament. This becomes important since a Constitution Bench of H

this Court in Rajiv Sarin v. State of Uttarakhand[41](“Rajiv Sarin”),speaking through Justice Mukundakam Sharma, has held the tworequirements 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 StateAct; and secondly, the Presidential assent has to be heldas being non-existent. The test for determining such repugnancyis indeed to find out the dominant intention of both the legislationsand whether such dominant intentions of both the legislations arealike or different. To put it simply, a provision in one legislation inorder to give effect to its dominant purpose may incidentally beon the same subject as covered by the provision of the otherlegislation, but such partial or incidental coverage of the samearea in a different context and to achieve a different purposedoes not attract the doctrine of repugnancy. In a nutshell, in orderto attract the doctrine of repugnancy, both the legislations must besubstantially on the same subject.”

80. Since we have already answered with the first requirement,the second remains. However, the State of West Bengal initially arguedthat WB-HIRA did not require presidential since it had been enactedunder 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, rejectingtheir argument, that Sections 88 and 89 of the RERA did not implicitlypermit the States to create their own legislation creating a parallel regimealongside the RERA which would have not required presidential assent.Hence, it is clear that WB-HIRA did not have presidential assent andwas repugnant to RERA under Article 254.

81. Therefore, this issue of whether presidential assent was neededremains merely academic. Having said so, we note that issues related toPresidential assent under Article 254(2) have been settled by a ConstitutionBench of this Court in Rajiv Sarin (supra), wherein it was held:

“Presidential assent and Article 254(2) of the Constitution A

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A

A63. It is in this context, that the finding of this Court inKaiser-I-Hind (P) Ltd. [(2002) 8 SCC 182] at para 65becomes important to the effect that “pointed attention”of the President is required to be drawn to the repugnancyand the reasons for having such a law, despite the enactmentby Parliament, has to be understood. It summarises theBpoint 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 procedureprescribed under the PP Eviction Act for evicting the tenants,Csub-tenants or unauthorised occupants, if it is reasonable and inconformity with the principles of natural justice, would abridgethe rights conferred under the Constitution.

2. (a) Article 254(2) contemplates ‘reservation forconsideration of the President’ and also ‘assent’.DReservation for consideration is not an empty formality.Pointed attention of the President is required to be drawnto the repugnancy between the earlier law made byParliament and the contemplated State legislation and thereasons for having such law despite the enactment byParliament.E

(b) The word ‘assent’ used in clause (2) of Article 254 would incontext mean express agreement of mind to what is proposed bythe State.

(c) In case where it is not indicated that ‘assent’ is qua a particularFlaw made by Parliament, then it is open to the Court to call for theproposals made by the State for the consideration of the Presidentbefore obtaining assent.

3. Extending the duration of a temporary enactment does notamount to enactment of a new law. However such extension mayrequire the assent of the President in case of repugnancy.””G(emphasis supplied)

As such, it is abundantly clear that the State of West Bengal wouldhave had to seek the assent of the President before enacting WB-HIRA,where its specific repugnancy with respect to RERA and its reasons forenactment would have had to be specified.Evidently, this was not done.H

FORUM FOR PEOPLE’S COLLECTIVE EFFORTS (FPCE) v. THE STATE OFWEST BENGAL [DR DHANANJAYA Y CHANDRACHUD, J.]

However, since we have already held WB-HIRA to be repugnant toRERA, this issue becomes moot.

A

I Conclusion

82. Before the WB-HIRA, the State legislature had also enactedthe WB 1993Act. Upon receiving the assent of the President, the Actwas published in the Calcutta Gazette, Extraordinary on 9 March 1994.Some of the salient provisions of the Act are detailed below:

B

(i) Section 3 provides for registration of promoters whoconstruct or intend to construct a building and for obtainingpermission for construction; C

(ii) Section 4 provides for the validity of the certificate ofregistration and for cancellation;

(iii) Section 5 provides for appeals;

(iv) Section 6 provides for adjudication of disputes by an officerappointed by the State government for adjudication;D

(v) Section 7 provides that the promoter shall before takingany advance payment for deposit, which shall not be morethan 40 per cent of the sale price, enter into a writtenagreement for sale which shall be registered; E

(vi) Section 8 restrains additions or alterations without theconsent of the transferee and for rectification of defects;

(vii) Section 9 contains a prohibition on a promoter creating amortgage or charge without the consent of the purchaserafter 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 theco-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

A(xiv) Section 16 provides for exemption to constructions by theState Government Housing Board and by the Housing andUrban Development Corporation; and

(xv) Section 17 provides for repeals and the earlier legislation of1972 is repealed.

B

The above provisions are repugnant to the corresponding provisionswhich are contained in the RERA. These provisions of the WB 1993Act impliedly stand repealed upon the enactment of the RERA in 2016,in accordance with Sections 88 and 89 read with Article 254(1) of theConstitution. Hence, we clarify with abundant caution that our strikingCdown of the provisions of WB-HIRA in the present judgment will not, inany manner, revive the WB 1993 Act, which was repealed upon theenactment of WB-HIRA since the WB 1993 Act is itself repugnant tothe RERA, and would stand impliedly repealed.

83. For the above reasons, we have come to the conclusion thatDWB-HIRA is repugnant to the RERA, and is hence unconstitutional.We also hold and declare that as a consequence of the declaration bythis Court of the invalidity of the provisions of WB-HIRA, there shall beno revival of the provisions of the WB 1993 Act, since it would standimpliedly repealed upon the enactment of the RERA.

E84. Since its enforcement in the State of West Bengal, the WB-HIRA would have been applied to building projects and implemented bythe authorities constituted under the law in the state. In order to avoiduncertainty and disruption in respect of actions taken in the past, recourseto the jurisdiction of this Court under Article 142 is necessary. Hence, inexercise of the jurisdiction under Article 142, we direct that the strikingFdown of WB-HIRA will not affect the registrations, sanctions andpermissions previously granted under the legislation prior to the date ofthis judgment

85. The writ petition is accordingly stand allowed in the aboveterms.G

86. Pending application(s), if any, stand disposed of.

Nidhi Jain

Writ petition allowed.

H