RERA Dispensation and Co-operative Federalism

By I C Naik

TOI recently reported the Centre’s warning to the States against the dilution of real estate regulation norms by their governments. Union minister of state for housing reportedly wrote a warning letter to Haryana chief minister in that behalf. The housing ministry has reportedly appealed to every state to frame their rules in sync with the RERA (the Real Estate (Regulation and Development) Act, 2016) enacted by the Centre and is in operation since May 1.

Warning has emanated particularly for Haryana Government (BJP ruled) exempting the incomplete projects from provisions of RERA. The Chandigarh Report contains State wise gestures on this issue for a few prominent States : “While Gujarat has kept all housing projects launched before November 2016 out of RERA’s ambit, states including Haryana, Madhya Pradesh, Rajasthan, Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh and Andhra Pradesh have incorporated provisions to give complete relief to incomplete projects. Exceptions are UP and Karnataka which as per sources, are going to amend their rules to bring all incomplete projects under regulation.

The foundation of today’s Indian federal government was laid nearly a century ago during British regime under the Government of India Act 1919 and reinforced under 1935 Act both passed by English Parliament. It is a concept of “cooperative federalism” intended to minimize friction and promote trust among governments of the constituents of the federal system-the States and Centre. The makers of present constitution have crafted features to ensure smooth working of the governments. one example  is in Article 261:

“Public acts, records and judicial proceedings.—

(1) Full faith and credit shall be given throughout the territory of India to public acts, records and judicial proceedings of the Union and of every State.

(2) The manner in which and the conditions under which the acts,  records and proceedings referred to in clause (1) shall be proved and the effect  there of determined shall be as provided by law made by Parliament.

The constitutional relationship between Centre and the States is regulated by what is provided under Articles 245-263 in PART XI RELATIONS BETWEEN THE UNION AND THE STATES. Matters on which laws can be enacted by the State applicable to that State’s territory in part or whole, are enumerated in “the State List“ i.e. List  II as also in concurrent list i.e. List III. The matters listed in List I i.e. the Union List, Concurrent List and matters not listed in any of the lists are such that the only Parliament can make laws. Despite being a cooperative federalism, the Parliament has an edge provided under the shame Part especially under Article 254 extracted below:

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.

Can we hope PM Modi’s India will manage Cooperative Federalism with much more maturity and not waste time in infighting thorough PIls and save citizens getting irritated for such trivial motivated misinterpretation of Constitutional mandates?   Will the Centre take States to task to set right this anomaly rather than waiting for the Apex Court to interpret such common sense legal issues? It appears to be an appropriate time to revamp the fundamentals of Cooperative Federalism providing for suitable financial penal consequences to defaulting States via Centre State fiscal management.

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