Examining validity of West Bengal’s HIRA Act

By Vikram Wadehra and Nupur Rathi, Vidhii Partners
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The West Bengal Housing Industry Regulation Act, 2017 (HIRA), was notified on 1 June 2018. Section 20 of which established the Housing Industry Regulatory Authority (authority). The statute regulates all projects above 500 square metres or more than eight apartments in total, and section 3 requires them to be registered with the authority. HIRA intends the authority to regulate and promote real estate in West Bengal state in a transparent manner by protecting the interest of consumers.

From the start, it appears that the government contemplated constituting a sub-committee in the central advisory council with the objective of persuading the West Bengal government to adopt the Real Estate (Regulation and Development) Act, 2016 (RERA), in place of its own legislation. However, the Supreme Court recently admitted a plea challenging the constitutional validity of the HIRA and has directed the West Bengal state and the central government to respond (Forum for People’s Collective Efforts (FPCE) and Anor v The State of West Bengal and Anor).

HIRA
Vikram Wadehra
Partner
Vidhii Partners

The petitioner argues that the central government’s RERA is an exhaustive and complete code and that there is no scope for similar legislation to be enacted in a state, except in circumstances where article 254(2) of the constitution applies. Article 254 recognizes the possibility of repugnancy arising between laws made by state and central legislatures. In such cases the law enacted by the central legislature would prevail. The only exception to this is where the law enacted by the state legislature has received the assent of the president; in that case the law enacted by the state legislature would prevail, unless parliament subsequently enacts any law with respect to the same matter. This would include any law adding to, amending, varying or repealing the law so made by the legislature of the state.

It is argued that HIRA was neither reserved for consideration of the president nor had the assent of the president ever been obtained. Even more pertinently, RERA was in force before the state of West Bengal enacted HIRA. It is also argued that HIRA is in direct conflict with the earlier enacted RERA. The conflict between the two statutes includes such differences as the sale of open car parking spaces as opposed to garages with walls and roofs, the compounding of offences, which courts should try such offences and the definition of force majeure events. Both HIRA and RERA were enacted with similar objectives, that is to ensure better accountability to consumers and to regulate and promote the real estate sector. The question to be decided is what happens where there is inconsistency or repugnancy.

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Vikram Wadehra is a partner and head of the Kolkata office of Vidhii Partners. Nupur Rathi is an associate at the firm.

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