Rectifying the Parallel Regime of RERA & WB-HIRA

The Supreme Court issued an important verdict on May 4, 2021, when it declared that the West Bengal Housing Industry Regulatory Act, 2017 (WB-HIRA) is “repugnant” to the Parliamentary law of Real Estate (Regulation and Development) Act, 2016 (RERA). The state law created a “parallel regime” and encroached upon the identical Central law RERA, 2016, enacted the year before, and was in direct conflict with the central legislation by lacking necessary safeguards to protect consumers.

Background

The Bench of Justices D. Y. Chandrachud and M. R. Shah in Writ Petition (C) No. 116 of 2019 [Forum for People’s Collective Efforts (FPCE) & Anr. vs. State of West Bengal & Anr.], in its 190-page judgment, struck down as unconstitutional West Bengal State law WB-HIRA meant to protect home buyers, enacted in 2017, a year after the Centre passed the RERA, stating that if Parliament had passed legislation, it was not open for states to enact similar statute.

Before Parliament enacted the RERA in 2016, state legislatures had enacted several laws to regulate the relationship between promoters and purchasers of real estate. Before the WB-HIRA, one of the laws the state legislature had enacted was the West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993 (the “WB 1993 Act”). Upon receiving the assent of the President, the Act was published in the Calcutta Gazette, Extraordinary on March 9, 1994.

In the State of West Bengal, the Real Estate (Regulation and Development) Bill, 2016 (the “RERA Bill 2016”) was introduced and draft rules under the RERA were framed on August 18, 2016, but no further progress was made in that regard. On August 16, 2017, the motion to pass the WB-HIRA Bill was adopted in the State Legislative Assembly. The Housing Industry Regulatory Authority was established under Section 20 of the West Bengal Housing Industry Regulatory Act, 2017 to regulate and promote the housing sector, to ensure the sale of plots, apartments or buildings, as the case may be, or sale of real estate projects in an efficient and transparent manner, to protect the interests of consumers in the real estate sector and to establish a mechanism for speedy dispute redressal and for matters connected therewith or incidental thereto. The State enactment received the assent of the Governor of West Bengal and was published in the Official Gazette on October 17, 2017, and came into effect from June 1, 2018.

The WB-HIRA repealed the WB 1993 Act. The remaining provisions of WB-HIRA were enforced by a notification dated March 29, 2018, issued by the Governor of the State of West Bengal in exercise of the power conferred by sub-section (3) of section 1 of WB-HIRA. Thereafter, on June 8, 2018, the State of West Bengal framed rules under WB-HIRA.

Because the Supreme Court declared the provisions of WB-HIRA to be invalid and struck them down in the current judgment, there will be no revival of the provisions of the WB 1993 Act, which were repealed upon the enactment of WB-HIRA, because the provisions of the WB 1993 Act are repugnant to the corresponding provisions of the RERA, which were impliedly repealed upon the enactment of the RERA in 2016.

The State Legislature has encroached upon the legislative authority of Parliament and this exercise conducted by the State Legislature is unconstitutional. The valuable safeguards introduced by Parliament in the public interest and certain remedies created by Parliament were absent in WB-HIRA.

Inconsistencies with RERA

RERA is a complete and exhaustive code which regulates the contractual relationship between a builder/promoter and a buyer/consumer in the real estate sector and provides remedial measures. RERA regulates the rights and obligations between promoters and buyers of real estate, in addition to the provisions of the Indian Contract Act, 1872. The enactment, in ensuring the actual transfer of property to the buyer, furthers the objects of the Transfer of Property Act, 1882. It provides for the enforcement of contracts through remedial measures that are in addition to the remedies provided in the Consumer Protection Act, 1986 and its successor legislation of 2019. RERA, in other words, is a special statute governing the real estate sector, encompassing rights and obligations found in different central enactments.

WB-HIRA covers the identical field of regulating the contractual behaviour of promoters and buyers in real estate projects. The State law is a ‘copy and paste’ replica of the central legislation (except for certain provisions which are inconsistent with RERA) and covers the field which is occupied by the central enactment. WB-HIRA is a “virtual replica” of the Central Law. A significant and even overwhelmingly large part of WB-HIRA overlaps with the provisions of RERA, but it does not complement the central law by fortifying the rights, obligations, and remedies.

The important provisions of WB-HIRA which are inconsistent with RERA are mentioned herein below:

  1. Force majeure events – The RERA restricts force majeure events to fire, cyclone, drought, flood, war, earthquake, or any other natural calamity that hinders the development of the projects, while WB-HIRA includes “any other circumstances as may be prescribed” as an added eventuality.
  2. Planning Area – The RERA specifies that only the projects that fall within the planning areas are subject to the RERA. According to Section 2 (zh) of the RERA, a “planning area” is a planning area or a development area, a local planning area, a regional development plan area, any other area specified as such by the appropriate government or any competent authority, while the WB-HIRA does not define the term “planning area”.
  3. Garage Area – RERA defines a garage as being ‘a place within a project having a roof and walls on three sides for parking any vehicle. It does not include uncovered parking spaces such as open parking areas. On the other hand, WB-HIRA has no such restrictions in defining garage or parking spaces and only mentions spaces as sanctioned by the competent authority.
  4. Compounding of Offences – If any person is found to have violated the RERA, they can be punished under the provision in the Code of Criminal Procedure, 1973 while WB-HIRA does not have provision for the compounding of offences.

Apart from the above, the subject of the provisions of the state enactment is identical, the content is identical. In essence and substance, WB-HIRA has enacted a parallel mechanism and parallel regime which the RERA already entails. In other words, the State legislature has enacted legislation on the same subject matter as the central enactment. Not only is the subject matter identical, but the statutory provisions of WB-HIRA are nearly identical to those of RERA.

WB-HIRA, since its enforcement in the State of West Bengal, would have been applied to building projects and implemented by the authorities constituted under the law in the state. In order to avoid uncertainty and disruption in respect of actions taken in the past, recourse to the jurisdiction of this Court under Article 142 was necessary. The Court, as such, exercised its extraordinary powers under Article 142 and gave effect to its judgment striking down the provisions of WB-HIRA prospective. The Court directed that the striking down of WB-HIRA will not affect the registrations, sanctions, and permissions previously granted under the legislation prior to the date of this judgment.

Down the Road

After the repeal of the WB-HIRA, the Government of West Bengal, Housing Department, by its Notification dated July 27, 2021, framed the West Bengal Real Estate (Regulation and Development) Rules, 2021, and the rules will come into force from the date of their publication in the Official Gazette. Thereafter, by another Notification dated July 29, 2021, the Government of West Bengal, Housing Department established an Authority known as the West Bengal Real Estate Regulatory Authority with immediate effect to exercise the powers conferred on it and to perform the functions assigned to it under the RERA throughout the State of West Bengal. With a further notification dated July 30, 2021, the Government of West Bengal, Housing Department, established an Appellate Tribunal known as the West Bengal Real Estate Appellate Tribunal with immediate effect. It is a sad plight that though the authorities have been established by several notifications dated July 29, 2021 and July 30, 2021, respectively, the positions of Chairperson, Members of the Regulatory Authority, Judicial Member, and Administrative Member of the Appellate Authority are still vacant. By a notice dated July 7, 2022, the Search Committee constituted under the West Bengal Real Estate (Regulation and Development) Rules, 2021, invited eligible and willing persons for the above-mentioned position.

A time-bound and proper implementation of the real estate regulatory law RERA in the state is required. Lack of implementation of RERA has left home buyers in the lurch as neither new complaints can be filed against builders nor existing complaints already filed before the erstwhile WB-HIRA can be continued and home buyers are being subjected to even more ruthless exploitation by builders since there is no mechanism in the state at present for redressal of home buyers’ grievances.

WB-HIRA is a “virtual replica” of the Central Law. A significant and even overwhelmingly large part of WB-HIRA overlaps with the provisions of RERA, but it does not complement the central law by fortifying the rights, obligations, and remedies.

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Women’s Right to Residence under the Domestic Violence Act: An Expansive Interpretation

In an important verdict safeguarding the interests of women victims of domestic violence, the Supreme Court on May 12, 2022, held that a victim of domestic violence can enforce her right to reside in a shared household, irrespective of whether she lived in the shared household. The Court dealt with the expression ‘the right to reside in a shared household’ in the context of Indian women and said it needed “expansive interpretation” and “cannot be restricted to the actual residence but can be extended to other homes irrespective of one’s right over the property.”

A bench of Justices M R Shah and B V Nagarathna in Criminal Appeal No. 511 of 2022 in the case of Prabha Tyagi v. Kamlesh Devi, while hearing a plea of a domestic violence victim after she was widowed, dealt with the unique situation of Indian women who live at places different from matrimonial homes, such as the workplaces of their husbands. The court also went on to treat each individual aspect of the expression ’women’s right to reside in a shared household’ under the Domestic Violence Act of 2005 (D.V. Act), giving to rest the varied opinions of multiple High Courts on the matter.

 

Constructive Residence Sufficient

The court clarified that it was not mandatory for an aggrieved person, when she was related by consanguinity, marriage or through a relationship in the nature of marriage, adoption or family members living together as a joint family, to actually reside with those persons against whom the allegations had been levelled at the time of the commission of domestic violence.

 

The court explained the matter by way of illustration, stating that there could be several situations and circumstances in which every woman in a domestic relationship can enforce her right to reside in a shared household irrespective of whether she has any right, title or beneficial interest in the same, and that the said right could be enforced by any woman under the said provision as an independent right.

 

The court further added that in India, it is a societal norm for a woman, on her marriage, to reside with her husband, unless due to professional, occupational or job commitments, or for other genuine reasons, the husband and wife decide to reside at different locations. Even in a case where the woman in a domestic relationship is residing elsewhere on account of a reasonable cause, she has the right to reside in a shared household.

 

Moreover, a woman who is, or has been, in a domestic relationship has the right to reside not only in the house of her husband, if it is in another place which is also a shared household, but also in the shared household, which may be in a different location that where the family of her husband resides.

 

Subsisting Domestic Relationship

The court categorically stated that the words ‘has been’ and ‘have lived’ appearing in the definition of ‘aggrieved person’ and ‘respondent’ in the D.V. Act were plain and clear and they took in their sweep even a past relationship. Therefore, it was not necessary that at the time of filing of an application by an aggrieved person, the domestic relationship should be subsisting, and if the accused, at any point of time, had lived with the aggrieved person or had the right to live and had been subjected to domestic violence or later subjected to domestic violence on account of a domestic relationship, then the aggrieved person is entitled to file an application under Section 12 of the D.V. Act and claim relief under the law.

 

Person Aggrieved

The bench further clarified that a woman in a domestic relationship who is not aggrieved, in the sense that she has not been subjected to an act of domestic violence by the respondent, has a right to reside in a shared household. Thus, a mother, daughter, sister, wife, mother-in-law and daughter-in-law or such other categories of women in a domestic relationship have the right to reside in a shared household de hors a right, title or beneficial interest in the same. Therefore, the right of residence of the aforesaid categories of women and such other categories of women in a domestic relationship is guaranteed under Sub-Section (1) of Section 17 and she cannot be evicted, excluded or thrown out of such a household even in the absence of there being any form of domestic violence. Hence, the expression ‘right to reside in a shared household’ has to be given an expansive interpretation. If any of the categories of women mentioned above is evicted from a shared household, she becomes an ‘aggrieved person’ within the meaning of Section 17 of the DV Act.

 

Joint Family

The court further clarified that the act, being a piece of civil code, is applicable to every woman in India, irrespective of her religious affiliation and/or social background, for a more effective protection of their rights. Thus, the expression ‘family members living together as a joint family’, means the members living jointly as a family. In such an interpretation, even a girl child or children who are cared for as foster children also have a right to live in a shared household and are conferred with the right.

 

Domestic Incidence Report

The court pointed out that in cases where an aggrieved person independently makes an application before the Magistrate, there would be no requirement on the part of the Magistrate to consider or call for a Domestic Incident Report. However, in cases where the application has been made by a Protection Officer or a service provider on behalf of the aggrieved person, the same shall be mandatorily accompanied by a Domestic Incident Report and when such a report is submitted, the Magistrate is required to take such report into consideration.

 

Hence, Section 12 of the DV Act does not make it mandatory for a Magistrate to consider a Domestic Incident Report filed by a Protection Officer or service provider before passing any order under the Act. Even in the absence of a “Domestic Incident Report”, relief such as the right to reside in shared matrimonial homes can be enforced and the Magistrate is empowered to pass both an ex parte or interim as well as a final order.

 

Expansive Interpretation

 

The court in this case, provided a massive relief to women considering the unique societal context in India where most women are not educated and do not have financial independence so as to live alone. In that scenario, they may be dependent for residence in a domestic relationship not only for emotional support but also for economic support.

 

With additional clarification of the applicability of the code irrespective of religion, relationship, or rights over property, the court has conjured up a clear picture of the scope of the act. In doing so, the court sought to reflect the legislative intent and internal policy as apparent from the language in the enactment and its object. However, the bench in a later case did observe that it was not in favour of a carte-blanche right of residence to women in matrimonial homes. If the woman was accused of misbehaving, conditions could be imposed by the court not to trouble the elderly and family members. The court could also direct the provider to offer alternate accommodation or monetary value of rent in such circumstances.

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With additional clarification of the applicability of the code irrespective of religion, relationship, or rights over property, the court has conjured up a clear picture of the scope of the act. In doing so, the court sought to reflect the legislative intent and internal policy as apparent from the language in the enactment and its object.

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Property Rights of Daughter in India: Post-Supreme Court Ruling, 2022

In January 2022, the Apex Court, through its decision in Arunachala Gounder (dead) v. Ponnuswamy’s[1] held that the self-acquired property of a Hindu male dying intestate would devolve by inheritance and not by succession. Further, the daughter shall be entitled to inherit such property, as well as property obtained through the partition of a coparcenary or family property.  It was also observed that, in case a woman dies intestate, then the ancestral property devolved on her from her father would be bestowed upon her father’s heirs and the property devolved on her from her husband’s side would be assigned to her husband’s heir in case she dies issueless.

The Court observed that “The basic aim of the legislature in enacting Section 15(2) is to ensure that the inherited property of a female Hindu dying issueless and intestate, goes back to the source.”

The judgment establishes a scheme of succession that is in alignment with the “rule of proximity and the entitlement of the sole surviving daughter” to her father’s separate properties, even as far back as before the enactment of the 1956 Act.

Prior to this deliberation, the Supreme Court on August 11, 2020, also expanded on a Hindu woman’s right to be a joint legal heir and inherit ancestral property on terms equal to male heirs in the case of Vineeta Sharma vs. Rakesh Sharma & Ors.

Different benches of the Supreme Court and various High Courts have taken conflicting views on the issue in the past.

  1. In Prakash vs. Phulavati (2015), the Supreme Court held that Section 6 is not retrospective in operation and the benefit of the 2005 amendment could be granted only to “living daughters of living coparceners” as on September 9th, 2005 (the date when the amendment came into force).
  2. In February 2018, the Court ruled that, contrary to the 2015 ruling, the share of a father who died in 2001 will also pass to his daughters as coparceners during the partition of the property as per the 2005 law.
  3. Then in Danamma @Suman Surpur vs. Amar (April 2018), the Court reiterated the position taken in 2015.

         These clashing views by benches of equal strength led to a reference to a three-Judge Bench in the case. The three-judge bench of Justices Arun Mishra, S. Abdul Nazeer and M. R. Shah passed the verdict in a reference that was made in appeals raising the issue of whether the amendment to the Act granting equal rights to daughters to inherit ancestral property would have retrospective effect. What this means is that whether with the passing of the Hindu Succession (Amendment) Act, 2005, a daughter of a coparcener shall by birth become a coparcener in her own right in the same manner as the son, or if she can be denied her share on the ground that she was born prior to the enactment of the Act on September 9, 2005, and therefore cannot be treated as a coparcener.

The verdict makes it clear that the amendment to the Hindu Succession Act, 1956 granting equal rights to daughters to inherit ancestral property would be retrospective. The daughters cannot be deprived of their right to equality conferred upon them by Section 6. Daughters, like sons, have an equal birth right to inherit joint Hindu family property. Since the right to coparcenary of a daughter is by birth, it is not necessary that the father should be alive on September 9, 2005. The Court has thus overruled an earlier 2015 decision.

         The Court also stated that the statutory fiction of partition created by the proviso to Section 6 of the Hindu Succession Act, 1956 as originally enacted, did not bring about the actual partition or disruption of the coparcenary. An unregistered partition, or oral partition, without any contemporaneous public document, cannot be accepted as the statutorily recognised mode of partition. However, in exceptional cases, where the plea of oral partition is supported by public documents and the partition is finally evinced in the same manner as it had been affected by a decree of a court, it may be accepted. 

         The Court has clearly settled the issue on the effective date of the 2005 amendment, by laying no relevance on the date of birth of the daughter or alternatively, the date of death of the father, whether prior to the 2005 amendment or post. So long as the daughter is alive post 2005, she has an equal right as a son in the coparcenary property. Therefore, it is irrelevant whether her father was alive or not or whether she was married or not on the cutoff date of September 9, 2005.

         If a daughter is born before September 9, 2005, she would become a coparcener, in her own right, in the same manner as sons. i.e., with the same rights and liabilities, provided there had been no parting/partition/devolution before December 20, 2004. As long as the property remained coparcenary property and was not partitioned as of the date, a daughter can now claim an interest in the same.    

         Putting the last nail on male primacy in the division of Hindu ancestral property, the Supreme Court cleared the legal cobwebs to declare that daughters will have inheritance rights equal to those of sons from the properties of fathers, grandfathers and great-grandfathers right from the codification of the law in 1956. The Bench held that daughters will have equal coparcenary rights in Hindu Undivided Family properties irrespective of whether the father was alive or not on September 9, 2005, asserting that this right under Section 6 of the Hindu Succession Act, 1956 is acquired by birth. Daughters can claim the benefit in the case of Intestate Succession and not Testamentary Succession. However, daughters, while claiming coparcenary rights, would not be able to question the disposal or alienation of ancestral properties by the existing coparceners prior to December 20, 2004.

         The provisions contained in the substituted Section 6 of The Hindu Succession Act, 1956 confer status of coparcener on the daughter born before or after amendment in the same manner as son with same rights and liabilities. The court was dealing with an interpretation of Section 6 after it was amended in 2005. The amendment granted equal rights to daughters in ancestral property. The rights can be claimed by the daughter born earlier with effect from September 9, 2005. The judgement widened the rights of daughters. The retrospective application of section 6 was analysed and ruled that the daughters would get the rights from 1956, when the law came into force. However, it would not reopen alienation of the ancestral property earlier through existing coparceners. Only a coparcener has the right to demand the partition of property. A share in a property is adulated by birth or death in a family.

A daughter, living or dead, as on the date of the amendment, shall be entitled to a share in her father’s property. It means that even if the daughter was not alive on the date of the amendment, her children could claim her rightful portion.

The court recognised that just like sons, the amendment also extended the status of the coparcener to a daughter, allowing her to enjoy the same rights as a son. Daughters possess the right of inheritance from birth, so it does not matter whether she is married or not, she will be entitled to an equal share.

While the prospective statute operates from the date of its enactment, conferring new rights, the retrospective statute operates backwards and takes away the impairment of the vested rights acquired under existing laws prior to its coming into force. This amendment operates in the future but by virtue of its retrospective effect, it confers rights on daughters from the time of their birth, even if the birth took place prior to the amendment.

The Court held that coparcenary was the birth right of daughters and it would be discordant to restrict it with the condition that the father must be alive. The goal of gender justice embodied in the Constitution is effectuated and the fundamental right to equality under the Indian Constitution has been upheld in the truest sense and translated into ground reality by substituting the provisions of Section 6 by the 2005 Amendment Act.


Impact


Daughters will now be treated at par with sons of coparceners and granted equal coparcenary rights in their father’s property upon birth itself. Daughters shall remain coparcener throughout life, irrespective of whether their father is alive or not. Hence, even their marital status will not affect the rights conferred to them by way of amendment, and hence they shall continue to be part of their father’s HUF post marriage. The door of alienation of their share of property will be opened for daughters without any ambiguity. Daughters can now seek partition of their father’s coparcenary property, claiming their equal share the same as their siblings and other coparceners and they cannot be denied on the basis of an oral family settlement. Upon acquiring a share in a coparcenary property, a female coparcener can bequeath her HUF share under her Will to any beneficiary she chooses and to the exclusion of others.

The law applies to ancestral property and to intestate succession in personal property where succession happens as per law and not through a Will. Suppose a Hindu makes a Will or makes a disposition of property in favour of the son according to The Hindu Succession Act, 1956 and not the daughter, then the daughter will not be able to question the Will and not claim the benefit of the Supreme Court Judgment. But if a Hindu dies intestate without making any disposition of property, then the daughters have the right to claim an equal right of inheritance.

The daughters, while claiming coparcenary rights, would not be able to question the disposal or alienation of ancestral properties by the existing coparceners prior to December 20, 2004. If a daughter is unable to reap any benefit from an ancestral property and enforce her right, and another male co-owner is reaping the benefits, she can enforce her rights by filing a suit following a 2005 amendment supported by a Supreme Court judgement on equal right of inheritance for daughters. Daughters can, however, claim partition of the property prior to the Amendment Act. Apportionment of benefit in the property will be accessible to the daughters distinctly along the other coparceners.

The judgements are landmarks and help in the forward march of women’s rights and the law. Traditionally, Indian business families prefer sons as successors, and daughters are not included in the business as successors. Thus, the latest rulings will have a wider impact on various family settlements and asset divisions, especially in family business. Though the judgments envisage rectifying one of the discriminatory social practices, it would require no less than a behavioural change in the mindset of Indian society to fulfil the goal of gender parity.

References:

[1] https://www.livelaw.in/pdf_upload/arunachala-gounder-dead-vs-ponnusamy-a-2022-livelaw-sc-71-407962.pdf

 

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If a daughter is born before September 9, 2005, she would become a coparcener, in her own right, in the same manner as sons. i.e., with the same rights and liabilities, provided there had been no parting/partition/devolution before December 20, 2004. As long as the property remained coparcenary property and was not partitioned as of the date, a daughter can now claim an interest in the same.    

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