Repeal Of 1993 West Bengal Building Act Does Not Extinguish Pending Proceedings: Calcutta High Court

The Calcutta High Court recently upheld compensation orders passed against R.D.B. Builders in a long-running flat dispute, holding that the repeal of the West Bengal Building (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993 does not extinguish proceedings already pending under it.

A Single Bench of Justice Krishna Rao, by order dated 26 February, clarified that the Supreme Court of India's 2021 ruling in Forum for People's Collective Efforts v. State of West Bengal, which invalidated the State enactment, did not retrospectively nullify pending proceedings or wipe out accrued liabilities.

The Court held:

“The Hon'ble Supreme Court has not passed any specific order that the repeal of the Act of 1993 would be effective retrospectively. The Hon'ble Court also not passed any order for transfer of all pending cases under the Act of 1993 to the concern authorities under RERA.”

R.D.B. Builders had developed a residential complex at Picnic Garden Road, Kolkata, comprising 64 flats and 45 parking spaces.

Several purchasers alleged that the flats handed over to them were smaller than promised and that portions of the common area land had been improperly sold. Complaints were first lodged in 2006 before the authority constituted under the West Bengal Building Act, 1993. The dispute thereafter travelled through revision proceedings and writ petitions for nearly 17 years.

In January 2022, the Calcutta High Court remanded the matter to the Principal Secretary, Housing Department, directing the authority to pass a fresh, reasoned order.

On 31 July 2023, the authority directed the promoter to pay 10% of the purchase value of each flat with 12% simple interest, along with additional compensation calculated on an interest basis for the delay in handing over possession.

Challenging the order, the builder contended that following the decision of the Supreme Court of India, the 1993 Act stood impliedly repealed on account of repugnancy with the Real Estate (Regulation and Development) Act, 2016 (RERA). It argued that once RERA occupied the field, the Housing Department lacked the authority to continue the proceedings and that the compensation order was without jurisdiction.

The flat purchasers, on the other hand, submitted that their complaint had been instituted in 2006 and had continued pursuant to successive judicial orders. They contended that the Supreme Court had not specifically directed termination or transfer of pending proceedings, nor had it declared that the repeal would operate retrospectively.

Agreeing with the purchasers, Justice Rao held that the repeal of a statute does not automatically extinguish pending proceedings unless the repealing law evinces a clear intention to that effect.

The Court recorded that the Supreme Court had repealed the Act of 1993 by its judgment dated 4 May 2021. It had not directed that pending proceedings would stand terminated.

Referring to Section 6 of the General Clauses Act, 1897, the Court observed that pending investigations, legal proceedings and accrued liabilities ordinarily survive the repeal of a statute. It held:

“The Hon'ble Court has not passed any order that the pending proceeding under the Act of 1993 is to be transferred or terminated or cancelled. Taking into consideration of Section 6 of the General Clauses Act, this Court did not find any illegality in the impugned order."

The Court further clarified the scope of the saving principle, observing that the “rights and liabilities saved are rights and liabilities as accrued or incurred under the repealed Act; and remedies can be pursued and proceedings instituted or continued only so far as that Act would warrant them, if not repealed."

Accordingly, the Court found no jurisdictional infirmity in the order dated 31 July 2023 and dismissed the writ petition, affirming the compensation awarded to the flat purchasers.

Appearances for Petitioners (R.D.B. Builders Private Limited & Anr.): Advocates Soumya Majumder, Sr. Adv., Mainak Ganguly, Siddharth Shroff.

Appearances for Private Respondents: Advocates Pradip Kumar Dutta, Sr. Adv., Chanchal Kumar Dutta, K. Mallick.

Appearances for the State of West Bengal: Amal Kr. Sen, Ld. A.A.G., Sabyasachi Mondal.