Introduction

The case of Forum For People's Collective Efforts (fpce) And Another v. State Of West Bengal And Another adjudicated by the Supreme Court of India on May 4, 2021, marks a pivotal moment in the jurisprudence surrounding real estate regulation in India. This landmark judgment addressed the constitutional validity of the W.B. Housing Industry Regulation Act, 2017 (WB-HIRA) in light of the Real Estate (Regulation and Development) Act, 2016 (RERA), a central legislation. The core issue revolved around whether the State of West Bengal could enact a parallel legislation to RERA without infringing upon constitutional provisions governing legislative competence and federalism.

Summary of the Judgment

The Supreme Court, led by Justice D.Y. Chandrachud, delivered a unanimous verdict declaring the WB-HIRA unconstitutional. The Court held that WB-HIRA was repugnant to RERA under Article 254(1) of the Constitution, which dictates that in cases of conflict between central and state laws on concurrent subjects, the central law prevails. The absence of Presidential assent for WB-HIRA, combined with its substantial overlap and conflict with RERA, led the Court to declare WB-HIRA void to the extent of its repugnancy. Consequently, WB-HIRA cannot coexist with RERA, ensuring the primacy of RERA in regulating the real estate sector across India.

Analysis

Precedents Cited

The judgment extensively referenced a myriad of precedents to underscore the principles of legislative competence and repugnancy in federal law structures. Key cases include:

• Tika Ramji v. State of U.P. (1956) – Defined "industry" under List II Entry 24, emphasizing that it pertains to the process of manufacture or production.
• Calcutta Gas Co. (Proprietary) Ltd. v. State of W.B. (1962) – Reiterated that central legislations should not be precluded by state laws unless explicitly intended.
• Msl. Innoventive Industries Ltd. v. ICICI Bank & Anr. S (2018) – Clarified that laws within the Concurrent List can coexist unless there is direct conflict or intent to override.
• Rajiv Sarin v. State of Uttarakhand (2011) – Highlighted the necessity of “repugnancy” and Presidential assent in determining the validity of state laws conflicting with central laws.
• Depts. of Customs v. Sharad Gandhi (2020) – Emphasized contextual interpretation of "for the time being in force" based on legislative intent.

These precedents collectively reinforced the Court's stance that central legislation, especially exhaustive codes like RERA, occupy the entire field of their subject matter, precluding state legislations from overriding them without explicit constitutional provisions.

Legal Reasoning

The Court's legal reasoning was anchored on the constitutional framework delineated in the Seventh Schedule of the Indian Constitution, which outlines the distribution of legislative powers between Parliament and State Legislatures. Key points include:

• Concurrent List (List III), Entries 6 and 7: Both WB-HIRA and RERA fall under these entries, which empower both central and state legislatures to enact laws on real estate-related subjects.
• Article 254(1): In cases of conflict between central and state laws on concurrent subjects, the central law prevails.
• Sections 88 and 89 of RERA: Section 88 states that RERA is in addition to, and not derogatory of, any other law. Section 89 grants RERA overriding effect over inconsistent state laws.
• Absence of Presidential Assent: WB-HIRA was not reserved for Presidential assent under Article 254(2), making it unconstitutional when conflicting with RERA.
• Substantial Overlap and Conflict: WB-HIRA replicated RERA's provisions verbatim, creating a parallel regulatory framework that undermined RERA's uniform applicability.

The Court deduced that WB-HIRA's enactment was an attempt by the State of West Bengal to duplicate central legislation without adhering to constitutional mandates, thereby infringing upon federal principles and the supremacy of central law in regulated fields.

Impact

This judgment has far-reaching implications for the real estate sector in India:

• Uniform Regulation: Ensures that RERA remains the singular regulatory authority for real estate across all states, promoting uniformity and standardization.
• Federal Balance: Reinforces the constitutional doctrine of federalism, asserting central supremacy in concurrent legislative areas.
• Legal Certainty: Eliminates conflicting state legislations, reducing legal ambiguities and fostering a more predictable regulatory environment for stakeholders.
• Consumer Protection: Strengthens consumer protection mechanisms by maintaining the integrity and comprehensive framework of RERA.

Future state attempts to legislate on real estate matters will now be scrutinized for repugnancy and adherence to constitutional provisions, limiting states to enact supplementary rather than parallel legislations.

Complex Concepts Simplified

Repugnancy: In constitutional law, repugnancy refers to the conflict between two laws enacted on the same subject matter by different legislative bodies. According to the Indian Constitution, when such a conflict arises under the Concurrent List, central legislation takes precedence over state laws.

Article 254(1): This constitutional provision dictates that in cases where state and central laws on the same concurrent subject conflict, the central law shall prevail, rendering the conflicting state law void to the extent of the inconsistency.

Presidential Assent under Article 254(2): For a state law to prevail over a central law on a concurrent subject, it must be reserved for consideration by the President. The President can then decide to assent to or reject the state law. In this case, WB-HIRA did not receive such assent, leading to its invalidation.

Concurrent List (List III): One of the three lists in the Seventh Schedule of the Indian Constitution, it delineates subjects on which both central and state legislatures can enact laws. Entries 6 and 7 specifically pertain to real estate and contractual matters.

Conclusion

The Supreme Court's judgment in Forum For People's Collective Efforts v. State Of West Bengal serves as a definitive affirmation of RERA's primacy over state legislations like WB-HIRA in regulating India's real estate sector. By declaring WB-HIRA unconstitutional due to its repugnancy with RERA and its lack of Presidential assent, the Court has reinforced the constitutional hierarchy and the federal structure of Indian legislation. This ensures a harmonized, uniform regulatory framework under RERA, enhancing consumer protection, legal certainty, and fostering a balanced real estate market across the nation.