SC strikes down West Bengal’s real estate law, HIRA


The WBHIRA is identical with the centre’s RERA and encroaches upon an act of parliament, the top court said in its ruling, on May 4, 2021

The Supreme Court (SC), on May 4, 2021, struck down West Bengal’s version of the real estate law, terming it ‘unconstitutional’, for encroaching upon the authority of a central law on this subject.

A two-judge bench of the apex court said the West Bengal Housing Industry Regulation Act (HIRA), 2017, was identical with the central Real Estate (Regulation and Development) Act, 2016 (RERA) and West Bengal ‘encroached upon the domain of the parliament’ by coming up with a law that was repugnant to the parliament’s law. The SC’s judgement came on a plea of a home buyers’ forum, Forum for People’s Collective Efforts (FPCE).

The top court clarified that buyers who purchased properties in West Bengal, in projects that were registered under the WB HIRA before its verdict, will not have reasons to worry as their registration would remain valid.

 

Impact of the SC ruling on housing projects in West Bengal

Industry leaders are of the opinion that the SC move would have no negative impact on the real estate market in West Bengal, since they were already following the norms laid under the central act.

According to Rishi Jain, managing director, Jain Group, the impact of the SC’s decision would be negligible on real estate, since the HIRA and the RERA were identical. Nakul Himatsingka, managing director of Ideal Group, added that this was because ‘the two laws were very similar with just small differences in wordings and adjustments to local conditions’.

Jitendra Khaitan, MD, Pioneer Property Management Limited, added that the judgment bode well for the state’s real estate sector. The central government’s SWAMIH fund, for example, was not taking over any stressed projects in West Bengal, because they could only take over projects where the RERA was applicable, he opined.

“(We) will have to wait for a clarification in this regard from the government. I believe the rules that were there were more or less the same and the Supreme Court has said that older projects continue to have the same registration. So, I think this is just a matter of another notification and there should not be any impact on consumers or projects, due to this judgement,” said Arya Sumant, MD, Eden Realty.

 

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