DOCTRINE OF REPUGNANCY & RERA

FORUM FOR PEOPLE COLLECTIVE EFFORTS V. STATE OF WB, 04.05.2021, 2JJ

Shubham Budhiraja[1]

DY CHANDRACHUD, J

MR SHAH, J

Summary of Judgment

Article 32 petition filed before Hon’ble Apex Court for declaring West Bengal Housing Industry Regulation act, 2017 (WB-HIRA) as unconstitutional by virtue of doctrine of repugnancy under Article 254 of Constitution of India.  The Apex court discussed the three test of repugnancy under Article 254, inter-play between Entry 24 List II & Entry 6, 7 List –III of seventh schedule, Scheme of RERA, & WB-HIRA, Absence of President assent under Article 255, meaning of term “law for time being in force” and its usage in context of Section 88 of RERA, and at last court held that WB HIRA is not only inconsistent with provisions of RERA as per first test of repugnancy (direct conflict) but also that RERA is exhaustive code so any parallel state law on same subject would defeat the parliament intent to have uniformity and applying doctrine of pith and substance, the true nature from all 4 corners is to cover the real estate sector and therefore state legislature on same field will not be permissible. Section 88 of RERA cannot be used to by-pass the prior sanction so required under Article 255. The Court importantly noted that WB-HIRA also lacks various safeguards to protect the interest of consumers. Hence, law declared as repugnant under Article 254, 255 & 246 of Constitution of India. Court used Article 142 to prevent registrations of already existing projects under WB-HIRA  

CONSTITUION OF INDIA

State List	Concurrent List
Entry 18 List II – Land Entry 24 List II- Industry	Entry 6 List III- Transfer of property except agricultural land Entry 7 List III- Contracts

Tests of repugnancy are three-fold

First, there may be a direct inconsistency or conflict between the actual terms of the competing statutes;

Second, even if there is no direct conflict, where Parliament has intended to occupy the entire field by enacting an exhaustive or complete code, the state law in the same field would be repugnant and inoperative; and

Third, a conflict may arise where the State Legislature has sought to exercise its powers over the same subject matter as the legislation by Parliament

 

First test of Repugnancy: Direct Conflict	Second test of repugnancy: Occupied field	Third test of repugnancy: implied repeal
1. RERA applies only to those real estate projects situated in a planning area while there is no concept of a planning area in the state legislation; 2. Section 6 of the RERA specifically confines force majeure events to specific eventualities whereas the corresponding provision of state enactment is much wider leaving it to be prescribed by the rules; 3. Under Section 38(3) of RERA, the Authority has been entrusted with the power to make a reference to the Competition Commission of India in the event of a monopoly situation while there is no such provision in the state enactment;  4. Unlike Section 70 of RERA which has a provision of compounding of offences, there is no corresponding provision in WB-HIRA; 5. Section 80(2) of the RERA provides that no court inferior to that of a Metropolitan Magistrate or Judicial Magistrate First Class shall try an offence, while there is no such provision in WB-HIRA	1. The entire subject of WB-HIRA is the same as RERA as a result of which the state law is repugnant to the central legislation; 2. The enforcement of the RERA would be completely obstructed in the State of West Bengal if WB-HIRA is given effect to	1. The subject matter of both the enactments is the regulation of the real estate sector; 2. Both cannot stand together. As a matter of fact, while WB-HIRA is fully operational in the State of West Bengal, RERA is non-operational; 3. The only exception would be where the State legislation contains distinct matters which are of a cognate and allied nature. However, in the present case, WB-HIRA deals on all fours with the subject matter of RERA and not with any distinct matter which is cognate or allied; and

ARTICLE 246 & ARTICLE 254

Some of the salient features of Article 246

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

(ii) The plenary power entrusted to Parliament to legislate with respect to a matter enumerated in List I is reaffirmed by the non-obstante provision which operates notwithstanding anything in Clauses (2) and (3);

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

a. Parliament has the power to make laws notwithstanding clause (3); and

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

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

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

a. The exclusive power entrusted to Parliament over List I matters;

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

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

Parliament, under Article 248, has been entrusted with the residuary powers of legislation (subject to Article 246A) to make any law with respect to any matter which is not enumerated in the Concurrent or State Lists

Some of the salient features of Article 254

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

(ii) Secondly, a law made by the legislature of a State which is repugnant to Parliamentary legislation on a matter enumerated in the Concurrent List has to yield to a Parliamentary law whether enacted before or after the law made by the State legislature;

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

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

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

In deciding whether a case of repugnancy arises on the application of the second and third tests, Following factors are to be kept in mind

-          The nature of the subject matter which is legislated upon,

-          the purpose of the legislation,

-          the rights which are sought to be protected,

-          the legislative history and the nature and ambit of the statutory provisions are among the factors that provide guidance in the exercise of judicial review.

The Parliamentary legislation may also stipulate that its provisions are in addition to and not in derogation of other laws. Those other laws may be specifically referred to by name, in which event this is an indication that the operation of those specifically named laws is not to be affected. Such a legislative device is often adopted by Parliament by saving the operation of other Parliamentary legislation which is specifically named. When such a provision is utilized, it is an indicator of Parliament intending to allow the specific legislation which is enlisted or enumerated to exist unaffected by a subsequent law.

Alternatively, Parliament may provide that its legislation shall be in addition to and not in derogation of other laws or of remedies, without specifically elucidating specifically any other legislation. In such cases where the competent legislation has been enacted by the same legislature, techniques such as a harmonious construction can be resorted to in order to ensure that the operation of both the statutes can co-exist. Where, however, the competing statutes are not of the same legislature, it then becomes necessary to apply the concept of repugnancy, bearing in mind the intent of Parliament

“LAW FOR THE TIME BEING IN FORCE”

-          These decisions indicate that the expression “any other law for the time being in force” does not necessarily mean, such laws as were in existence when the statutory provision was enacted.

 

-          To the contrary, it widely considered to means not just the laws which were in existence when the statutory provision was enacted but also such laws which may come into existence at a later stage.

 

-          On the other hand, another line of judicial precedent also suggests the meaning to be ascribed to the expression must bear color from the context in which it appears, and not devoid of it.

 

SECTION 88 & ITS EFFECT

The submission is that since Section 88 allows for the existence of other laws by adopting the ‘in addition to and not in derogation of’ formula, Parliament did not intend to exclude State legislation even though it is identical to that which has been enacted by Parliament

The effect of Section 88 is to ensure that remedies which are available under consumer legislation, including Consumer Protection Act, 2019, are not ousted as a consequence of the operation of the RERA. Of course, it is also material to note that both sets of statutes, namely the Consumer Protection Act(s) and the RERA, have been enacted by the Parliament and both sets of statutes have to be therefore harmoniously construed. Section 88 of the RERA does not exclude recourse to other remedies created by cognate legislation. Where the cognate legislation has been enacted by a State legislature, Section 88 of the RERA is an indicator that Parliament did not wish to oust the legislative power of the State legislature to enact legislation on cognate or allied subjects. In other words, spaces which are left in the RERA can be legislated upon by the State legislature by enacting a legislation, so long as it is allied to, incidental or cognate to the exercise of Parliament’s legislative authority. What the State legislature in the present case has done is not to enact cognate or allied legislation but legislation which, insofar as the statutory overlaps is concerned is identical to and bodily lifted from the Parliamentary law. This plainly implicates the test of repugnancy by setting up a   parallel regime under the State law. The State legislature has encroached upon the legislative authority of Parliament which has supremacy within the ambit of the subjects falling within the Concurrent List of the Seventh Schedule. The exercise conducted by the State legislature of doing so, is plainly unconstitutional

There is, in other words, not only a direct conflict of certain provisions between the RERA and WB-HIRA but there is also a failure of the State legislature to incorporate statutory safeguards in WB-HIRA, which have been introduced in the RERA for protecting the interest of the purchasers of real estate. In failing to do so, the State legislature has transgressed the limitations on its power and has enacted a law which is repugnant to Parliamentary legislation on the same subject matter.

ABSENCE OF PRESIDENT ASSENT

The State of West Bengal initially argued that WB-HIRA did not require presidential since it had been enacted under List II, but that argument has been given up, and it is admitted that it comes under List III (the same as RERA). Further, it has also been clarified that Sections 88 and 89 of the RERA did not implicitly permit the States to create their own legislation creating a parallel regime alongside the RERA which would have not required presidential assent. Hence, it is clear that WB-HIRA did not have presidential assent and was repugnant to RERA under Article 254

CONCLUSION

WB-HIRA is repugnant to the RERA, and is hence unconstitutional. In exercise of the jurisdiction under Article 142, the striking down of WB-HIRA will not affect the registrations, sanctions and permissions previously granted under the legislation prior to the date of this judgment

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[1] Company Secretary, LLB Final Year & Bcome(H)