The Supreme Court on 4th May, 2021 knocked down the West Bengal Housing Industry Regulation Act on the grounds of being unconstitutional in view of the RERA (Regulation and Development) Act. However, the Supreme Court believes that HIRA has failed to protect the interest of homebuyers.
The Supreme Court in its judgement specifically mentioned that the knocking down of the 2017 state act would not resuscitate the 1993 Act which was earlier in force in West Bengal for the regulation of promotion of construction.
The Supreme Court used its power under Article 142 to put an end to speculations and to circumvent any chaos in the West Bengal real estate industry. The highest court of India made everything crystal clear by specifying that all the sanctions, permissions and registrations previously granted under the Housing Industry Regulation Act (HIRA) prior to the date of this judgement shall continue to remain valid.
An NGO, Forum for People’s Collective Efforts and Homebuyers Association filed a plea challenging the constitutional validity of the West Bengal Housing Industry Regulation Act, 2017.
Justices Chandrachud and M.R. Shah were on a video call to pronounce the verdict of the West Bengal Housing Industry Regulation Act.
The Real Estate Regulation and Development (RERA) Act was in action before the state passed the Housing Industry Regulation Act (HIRA). Both RERA and HIRA were legislated to assure transparency and accountability to customers and also to control the ongoing activities in the real estate sector.
|RERA act protects the interest of home-buyers, ensures the sale of property in a transparent manner and also works as an adjudicating body for speedy real estate dispute redressal.|
Although, 95% and 98% of the West Bengal Housing Industry Regulation Act is identical to the Real Estate Regulating and Development Act, still to some extent it conflicts with RERA. Justice Chandrachud said that the fundamental rules of HIRA overlap and is a word-to-word copy of Centre’s RERA.
The bench of justices said, “There is an overlapping of rules between the state law and the central act. They further added, the state enactment does not complement the central law and it does not fortify the consumer’s right under the central act. They explained how inconsistency can result between a central act and a state act.
The Supreme Court mentioned that a state can have legislation but to be in conflict with the Centre’s law is not acceptable. Justices said, West Bengal HIRA is repugnant to the RERA which is unconstitutional, therefore, they want to create a parallel regime by knocking down HIRA.