SC To Hear Plea Challenging West Bengal Real Estate Act HIRA's Validity

India’s apex court has agreed to hear a plea that challenges the constitutional validity of West Bengal’s version of the real estate law, say media reports. While the chief minister Mamata Banerjee-ruled state has defied the union government by launching a law to regulate its real estate sector despite the presence of a Central Act, a group of homebuyers, the Forum for People's Collective Efforts (FPCE), moved the Supreme Court, challenging the West Bengal Housing Industry Regulation Act (WBHIRA) in February. They had also approached the Prime Minister’s Office and several central agencies, seeking repeal of the state Act, which, they say, is against the true spirit of the original law.

While it runs the risk of getting scrapped for being unconstitutional (the constitutions says that in case a state law is found redundant because a central law is already present, the former would turn null and void), the recently passed HIRA is seen more as a developer-friendly law than a pro-homebuyer Act. The state law was notified on June 1, 2017, exactly one year after the centre promulgated the Central Act.

Inconsistencies in HIRA

The biggest blow that has come to homebuyers in West Bengal is the dilution of the force majeure clause.  The central law protects developers if they are not able to meet the terms of their contracts with buyers, in case of unforeseen circumstances stop them from doing so. These unforeseen situations could be a state of war or natural calamities such as drought, fire, earthquake, flood, etc. In the state version, developers would also be excused for not honouring a contract citing 'other circumstances as may be prescribed.'

While the Real Estate Regulation & Development Act, 2016, defines a 'garage' as "a place within a project having a roof and walls on three sides for parking any vehicle, but does not include an unenclosed or uncovered parking space such as open parking areas", the West Bengal law defines the space as a mere 'parking space that is sanctioned by the government authority.'

With additional inputs from Housing.com News