Punjab and Haryana High Court to examine legality of RERA

Saurabh Malik
Tribune News Service
Chandigarh, November 19

The Punjab and Haryana High Court today made clear its intent to examine the constitutional legality of the Real Estate (Regulation and Development) Act, 2016. The Bench made it apparent that it would go deep into the origin of power enabling the enactment of the RERA Act, making it perhaps the first High Court in the country to do so.

The vires of the Act were challenged before the Bombay High Court, but probably the issue regarding origin of power enabling the enactment was not considered, the Bench of Justice Rajan Gupta and Justice Manjari Nehru Kaul was told.

RERA, among other things, provides for an adjudicatory mechanism for the speedy dispute redressal, but has origin in Entry 6 of the concurrent list, which empowers enactment of statutes relating to transfer of property. The existence of RERA may become doubtful in view of judicial scrutiny. 

The legal controversy stems from the fact that Entry 18 of List II of the Seventh Schedule of the Constitution gives the states the right to legislate over land, rights in, or over, land and colonisation.

The Centre, however, enacted RERA by the power vested in it by virtue of Entries 6 and 7 in the concurrent list of the Seventh Schedule dealing with issues such as transfer of property.

The question that the Bench has raised is how could RERA, which aims at protecting the rights of the buyers and providing grievance redressal system in the real estate sector, be related to Entry 6 of the concurrent list which empowers the enactment of statutes relating to transfer of property?

The developments took place on a petition by Athena Infrastructure Ltd for quashing two orders passed by the Real Estate Regulatory Authority and Haryana Real Estate Appellate Tribunal. A query was put to the petitioner’s counsel regarding relevant entry in the Seventh Schedule. The state counsel, who was asked to assist, submitted, that it being a central legislation, the source of enactment could be only Entry 6 of the concurrent list, which empowers enactment of statutes relating to transfer of property other than agricultural land; registration of deeds and documents.

He also referred to the preamble of Act, which provides for regulation and promotion of the real estate sector to ensure sale of plots, apartments and buildings in an efficient and transparent manner and to establish an adjudicatory mechanism for the speedy dispute redressal and also to establish the appellate tribunal to hear appeals. The Bench granted him a week’s time to examine the issue.