(Authored by Anil Nair) The Maharashtra Legislative Assembly recently passed the Maharashtra Housing (Regulation and Development) Bill.  This is the first such Bill to be passed by any state, which sets up a housing regulator to regulate property transactions.  The Bill seeks to set up a Housing Regulatory Authority to provide for relief to flat purchasers against sundry abuses, malpractices and difficulties related to the construction, sale, management and transfer of flats. According to news reports, the government felt that existing laws were not effective in protecting the interests of the flat purchasers and allowed the promoters to avoid statutory obligations imposed on them.  The Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 did not provide for an effective implementing arm for its various statutory provisions, as the buyers could only approach consumer forum or civil court for acts of omission or commission regarding its provisions. The current Bill passed by the Maharashtra Assembly proposes to repeal the 1963 Act.  As per the Statement of Objects and Reasons of the Bill, the Regulatory Authority will strive to encourage growth and promotion of a healthy, transparent, efficient and competitive real estate market.  The Bill specifies several conditions to be fulfilled by the developer to further transparency and fairness.  All projects proposing to develop more than four flats or of land area exceeding 250 square meters have to submit and update details of the project on the website of the Housing Regulatory Authority.  Developers would be required to disclose detailed information regarding the project including:

  • building-wise time schedule of completion of each phase of the project,
  • time schedule for connecting the project with the municipal services such as sewerage, water supply, electricity, drainage etc.,
  • nature of fixtures and fittings with regard to the flooring and sanitary fittings including the brand or the price range if the items are unbranded.

Failure to give possession of the flat on the agreed date would require repayment of the full amount paid by the buyer with interest.  The Authority would also be empowered to penalise the developer up to an amount of one crore rupees for non-compliance with provisions in the Bill.  Among other initiatives to assist the real estate industry, the Housing Regulatory Authority would promote rating of projects and of promoters, by the association of promoters, to improve the confidence level of investors and consumers through self-regulation. The full text of the Bill is available on the Government of Maharashtra website.

The doctrine of separation of powers implies that each pillar of democracy – the executive, legislature and the judiciary – perform separate functions and act as separate entities.  The executive is vested with the power to make policy decisions and implement laws.  The legislature is empowered to issue enactments.  The judiciary is responsible for adjudicating disputes.  The doctrine is a part of the basic structure of the Indian Constitution[1] even though it is not specifically mentioned in its text.  Thus, no law may be passed and no amendment may be made to the Constitution deviating from the doctrine.  Different agencies impose checks and balances upon each other but may not transgress upon each other’s functions.  Thus, the judiciary exercises judicial review over executive and legislative action, and the legislature reviews the functioning of the executive. There have been some cases where the courts have issued laws and policy related orders through their judgements.  These include the Vishakha case where guidelines on sexual harassment were issued by the Supreme Court, the order of the Court directing the Centre to distribute food grains (2010) and the appointment of the Special Investigation Team to replace the High Level Committee established by the Centre for investigating black money deposits in Swiss Banks. In 1983 when Justice Bhagwati introduced public interest litigation in India, Justice Pathak in the same judgement warned against the “temptation of crossing into territory which properly pertains to the Legislature or to the Executive Government”[2].  Justice Katju in 2007 noted that, “Courts cannot create rights where none exist nor can they go on making orders which are incapable of enforcement or violative of other laws or settled legal principles. With a view to see that judicial activism does not become judicial adventurism the courts must act with caution and proper restraint. It needs to be remembered that courts cannot run the government. The judiciary should act only as an alarm bell; it should ensure that the executive has become alive to perform its duties.” [3] While there has been some discussion on the issue of activism by the judiciary, it must be noted that there are also instances of the legislature using its law making powers to reverse the outcome of some  judgements.  (M.J. Antony has referred to a few in his article in the Business Standard here.)  We discuss below some recent instances of the legislature overturning judicial pronouncements by passing laws with retrospective effect. On September 7, 2011 the Parliament passed the Customs Amendment and Validation Bill, 2011 which retrospectively validates all duties imposed and actions taken by certain customs officials who were not authorized under the Customs Act to do the stated acts.  Some of the duties imposed were in fact challenged before the Supreme Court in Commissioner of Customs vs. Sayed Ali in 2011[4].  The Supreme Court struck down the levy of duties since these were imposed by unauthorised officials.  By passing the Customs Bill, 2011 the Parliament circumvented the judgement and amended the Act to authorize certain officials to levy duties retrospectively, even those that had been held to be illegal by the SC. Another instance of the legislature overriding the decision of the Supreme Court was seen in the Essential Commodities (Amendment) Ordinance, 2009 which was passed into an Act.  The Supreme Court had ruled that the price at which the Centre shall buy sugar from the mill shall include the statutory minimum price (SMP) and an additional amount of profits that the mills share with farmers.[5] The Amendment allowed the Centre to pay a fair and remunerative price (FRP) instead of the SMP.  It also did away with the requirement to pay the additional amount.  The amendment applied to all transactions for purchase of sugar by the Centre since 1974.  In effect, the amendment overruled the Court decision. The executive tried to sidestep the Apex Court decision through the Enemy Property (Amendment and Validation) Ordinance, 2010.  The Court had issued a writ to the Custodian of Enemy Property to return possession of certain properties to the legal heir of the owner.   Subsequently the Executive issued an Ordinance under which all properties that were divested from the Custodian in favour of legal heirs by a Court order were reverted to him.  The Ordinance lapsed and a Bill was introduced in the Parliament.  The Bill is currently being examined by the Parliamentary Standing Committee on Home Affairs. These examples highlight some instances where the legislature has acted to reverse judicial pronouncements.  The judiciary has also acted in several instances in the grey areas separating its role from that of the executive and the legislature.  The doctrine of separation of powers is not codified in the Indian constitution.  Indeed, it may be difficult to draw a strict line demarcating the separation.  However, it may be necessary for each pillar of the State to evolve a healthy convention that respects the domain of the others.  


[1] Keshavananda Bharti vs. State of Kerala  AIR 1973 SC 1461

[2] Bandhua Mukti Morcha  AIR 1984 SC 802

[3] Aravali Golf Club vs. Chander Hass  (2008) 1 SCC (L&S) 289

[4] Supreme Court in Commissioner of Customs vs. Sayed Ali (2011) 3 SCC 537

[5] Mahalakshmi Mills vs. Union of India (2009) 16 SCC 569