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MOFA: Repealed or still in force??

Express or Implied Repeal
The Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA) was repealed by the Section 56 of Maharashtra Housing (Regulation & Development) Act 2012 (MHA). The Section 56 of the MHA stated that on the date of it coming into force, the MOFA shall be repealed. However, the State Government had only notified certain provisions of MHA, which did not include Section 56. Thereafter, the Real Estate (Regulation & Development) Act 2016 (RERA) which came into force from 01st May 2016., repealed MHA.

In Forum for People's Collective Efforts (FPCE) v. State of West Bengal, the Supreme Court declared the West Bengal Housing Industry Regulation Act, 2017 (HIRA) and the West Bengal (Regulation of Promotion of Construction and Transfer by Promoters) Act, 1993 unconstitutional based on the reasoning that both these legislations were repugnant to the RERA, and therefore, void under Article 254(1) of the Constitution of India.

Citing other judgements in the said matter, the Hon'ble Supreme Court reiterated three tests of repugnancy, First, a direct inconsistency or conflict between the actual terms of the competing statutes; second, though there is no direct conflict between a State and Central statute, the latter may be intended to be an exhaustive code in which event it occupies the whole field, excluding the operation of the state law on the subject in the concurrent list; third, repugnancy may arise when both the State and Central statutes seek to exercise power over the same subject matter.

The Hon'ble Supreme Court held that a large part of HIRA overlaps with the provisions of RERA with many RERA provisions lifted bodily, word for word and enacted into HIRA. Furthermore, the Court held that the overlap between the provisions of HIRA and the RERA is so significant as to leave no manner of doubt that the test of repugnancy based on an identity of subject matter is clearly established. Most of the issues covered in MOFA are included in RERA as well. Hence, applying the reasoning of the Supreme Court in FPCE matter to the MOFA and RERA issue, one might conclude that MOFA has been impliedly repealed by RERA as per the third test of repugnancy.

Our Analysis
Since the RERA introduction in 2016, it has been widely presumed that MOFA provisions still prevail and RERA has overriding effect only in cases of inconsistency. However, the Supreme Court judgement in FPCE matter casts a shadow of uncertainty over the existence of MOFA.

Some provisions of MOFA are state specific and do not have a corresponding provision in RERA, such as Section 4A (effect of non-registration), Section 12A (curtailing the essential services) and Section 11(3) (deemed conveyance). Nearly 80% of the Co-operative Housing Societies in Maharashtra have not received the conveyance of land and building in their favour from the builder and thus making the deemed conveyance provision imperative for the state. Like Maharashtra, other states too have/had some specific provisions in their local real estate laws. Such provisions being peculiar to a state may vary from state to state and hence including the state specific provisions in a central statute cannot be considered as an option.

The Maharashtra Government can introduce a new legislation covering provisions/issues which are absent in RERA and are also otherwise not repugnant to RERA.

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