What is the Impact of the FPCE Judgment on MOFA

In a recent judgment delivered in Forum for People’s Collective Efforts (FPCE) v. State of W.B.[1] (FPCE), the Supreme Court struck down the West Bengal Housing Industry Regulation Act, 2017[2] (HIRA). After a detailed analysis, the Court declared that HIRA, a State enactment, was repugnant to the Real Estate (Regulation and Development) Act, 2016[3] (RERA). The Court further opined that “a significant and even overwhelmingly large part” of HIRA “overlaps” with RERA and therefore struck down HIRA.[4] According to the Court, HIRA was inconsistent and repugnant to RERA. However, while striking down HIRA, the Court, in the concluding portion of its opinion also declared, in two paragraphs, that the West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993[5] (the 1993 Act), which had been expressly repealed by HIRA, was also repugnant to RERA and would therefore stand impliedly repealed.[6] The Court further clarified that the 1993 Act would not revive upon striking down HIRA.[7]

There has been much discussion in both real estate and legal circles, particularly in Maharashtra, on the impact of the FPCE judgment[8] on the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963[9] (MOFA). This probably could be because of certain similarities between the 1993 Act and MOFA. However, MOFA has not been repealed by the State of Maharashtra and still stands in the statute books. Some are of the view that MOFA and RERA (a Union Act) extensively overlap with each other and RERA will override MOFA in light of Section 89[10] of RERA which states that RERA will have an overriding effect. However, the Bombay High Court in Hubtown Solaris Premises CHS Ltd. v. Municipal Corpn. of Greater Mumbai[11] has held that in light of Section 88[12] of RERA, MOFA continues to be valid even after the enactment of RERA. Section 88 states that application of other laws (which would include MOFA) are not barred and RERA can be applied in addition to and not in derogation of the provisions of any other law in force.

While it is given that MOFA will be vulnerable to repeated attacks after advent of RERA, the question that is being asked is whether the FPCE judgment[13] and its findings can be relied upon as precedent in the event the constitutional validity of MOFA is challenged?

A recent column written by two lawyers on Bar and Bench[14] suggests that “the Supreme Court’s finding on the implied repeal of the 1993 Act by RERA would squarely apply to MOFA as well.” This author is however of the view that the findings of the FPCE case[15] would have no application to MOFA and the validity of MOFA would have to be independently tested whilst being pitted against RERA.

The challenge in the writ petition filed by the petitioners under Article 32[16] of the Constitution of India (the Constitution) was confined to HIRA. It was contended that HIRA was a “virtual replica” of RERA, and it was directly inconsistent with the provisions of RERA. It was also submitted that HIRA had neither been reserved for nor had it received assent of the President of India under Article 254(2)[17] of the Constitution and therefore it could not prevail over RERA.

In a critical analysis of the FPCE judgment[18] published by Live Law[19], this author wrote that the Supreme Court has travelled beyond its brief by dealing with the validity of the 1993 Act. The challenge before the Supreme Court was confined to the validity of HIRA.[20] The petitioners do not appear to have challenged the 1993 Act. There is nothing in the Court’s opinion to show that the petition had been amended or modified to incorporate a challenge to the 1993 Act. Nor has the Court recorded that the petitioners had attacked the 1993 Act through a counter-affidavit or a separate application. However, the Court has recorded submissions made by the petitioners on the 1993 Act [see Part G(1)(VI) of the judgment][21], in which the petitioners argued that upon the declaration of HIRA as unconstitutional, the 1993 Act may also be declared as repealed in view of Section 89 of  RERA read with Article 254(2) of the Constitution. But assuming for a moment that the 1993 Act has been challenged, the Court has given no reasons as to why the 1993 Act was repugnant to RERA and Article 254 of the Constitution. Unlike the detailed comparison made by the Court between HIRA and RERA[22], no such comparison had been made between the 1993 Act and RERA to examine whether there is repugnancy or not. In fact, while declaring Sections 3 to 17 of the 1993 Act as repugnant to RERA, no reasons or findings have been set out by the Court to come to this conclusion.[23] In the absence of any reasoning or analysis, the FPCE judgment[24] cannot be relied on as an authority for the purpose of ascertaining whether MOFA is repugnant or inconsistent to or overridden by RERA. In other words, the ratio of FPCE judgment[25] will not have any application to MOFA.

In Roger Shashoua v. Mukesh Sharma, the Supreme Court, after summing up various authorities on ratio decidendi opined,

… a ratio of a judgment has the precedential value and it is obligatory on the part of the Court to cogitate on the judgment regard being had to the facts exposited therein and the context in which the questions had arisen and the law has been declared. It is also necessary to read the judgment in entirety and if any principle has been laid down, it has to be considered keeping in view the questions that arose for consideration in the case. One is not expected to pick up a word or a sentence from a judgment de hors from the context and understand the ratio decidendi which has the precedential value. That apart, the Court before whom an authority is cited is required to consider what has been decided therein but not what can be deduced by following a syllogistic process.[26]

                                                                                                (emphasis supplied)

In Director of Settlements v. M.R. Apparao, the Supreme Court has also opined,

… what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has “declared law” it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle underlying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered.[27]

(emphasis supplied)

The question that arose before the Supreme Court in FPCE was confined to the constitutional validity of HIRA and not the 1993 Act.[28] The principal of law laid down was with respect to HIRA and not the 1993 Act.  Therefore, in the absence of any principal or reasoning set out with respect to the 1993 Act, this judgment will have no application to MOFA. The law declared by the Supreme Court under Article 141[29] of the Constitution in FPCE[30] is with respect to the validity of HIRA. At best, it can be said that the FPCE case[31] could give impetus to litigants to challenge MOFA but it would certainly not be relied on as precedent. However, even assuming for a moment that MOFA and the 1993 Act are pari materia, in the absence of any reasoning by the Court, FPCE[32] would not have any precedential value. This is because there is no law laid down by the Supreme Court specifically with respect to the 1993 Act that would have any application or bearing on MOFA. By no stretch of imagination can it be concluded that by striking down the 1993 Act, MOFA automatically stands impliedly repealed. Such a view has no sound legal basis.

In conclusion, this author is of the view that if MOFA is to be challenged, such grounds of challenge would have to be independently tested without being influenced by the FPCE judgment[33]. The judgment cannot be used to support an argument against the validity of MOFA.


* Dormaan Jamshid Dalal, Practicing Advocate at Bombay High Court and NCLT, Mumbai. He can be contacted on Twitter@DormaanD.

[1] 2021 SCC OnLine SC 361.

[2] West Bengal Housing Industry Regulation Act, 2017.

[3] Real Estate (Regulation and Development) Act, 2016.

[4] 2021 SCC OnLine SC 361, para 109.

[5] West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993.

[6] 2021 SCC OnLine SC 361, paras 119 and 120.

[7] 2021 SCC OnLine SC 361, para 121.

[8] 2021 SCC OnLine SC 361.

[9] Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963.

[10] 89. Act to have overriding effect.—The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

[11]2020 SCC OnLine Bom 9174.

[12] 88. Application of other laws not barred.—The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.

[13] 2021 SCC OnLine SC 361.

[14] <https://www.barandbench.com/columns/has-mofa-been-impliedly-repealed-by-rera-analysis-fpce-v-state-of-west-bengal> (last visited on 1-7-2021 at 3.18 p.m.).

[15] 2021 SCC OnLine SC 361.

[16] 32. Remedies for enforcement of rights conferred by this Part.—(1) The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed.

(2) The Supreme Court shall have power to issue directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate, for the enforcement of any of the rights conferred by this Part.

(3) Without prejudice to the powers conferred on the Supreme Court by clauses (1) and (2), Parliament may by law empower any other court to exercise within the local limits of its jurisdiction all or any of the powers exercisable by the Supreme Court under clause (2).

(4) The right guaranteed by this article shall not be suspended except as otherwise provided for by this Constitution.

[17] 254. Inconsistency between laws made by Parliament and laws made by the Legislatures of States.—

(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.

(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:

Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.

[18] 2021 SCC OnLine SC 361.

[19] <https://www.livelaw.in/columns/supreme-court-forum-for-peoples-collective-efforts-state-of-west-bengal-174409> (last visited on 1-7-2021 at 3.22 p.m.).

[20] 2021 SCC OnLine SC 361, para 1.

[21] 2021 SCC OnLine SC 361, para 21.

[22] 2021 SCC OnLine SC 361, paras 16 to 19.

[23] 2021 SCC OnLine SC 361, paras 119 and 120.

[24] 2021 SCC OnLine SC 361.

[25] 2021 SCC OnLine SC 361.

[26] (2017) 14 SCC 722, 756 at para 59.

[27] (2002) 4 SCC 638, 650 at para 7.

[28] 2021 SCC OnLine SC 361, para 1.

[29] Article 141  of the Constitution.

[30] 2021 SCC OnLine SC 361.

[31] 2021 SCC OnLine SC 361.

[32] 2021 SCC OnLine SC 361.

[33] 2021 SCC OnLine SC 361.

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