CCI likely to appeal against NCLAT order in DLF matter: Sources

The Commission in 2018 had found DLF in contravention of the Competition Act for abusing its dominant position and discriminatory practices

The Competition Commission of India (CCI) is likely to appeal against an order of the National Company Law Appellate Tribunal (NCLAT), which junked the clean chit given to real estate major DLF in a supplementary investigation, people close to the development told Business Standard. 

The antitrust body in 2018 had found DLF in contravention of the Competition Act for abusing its dominant position and discriminatory practices. The CCI ordered a supplementary investigation, thereafter, in which the director general-investigation took a view that DLF was not a dominant player in the market. 

 “The definition of the market had narrowed down to include only flats in the supplementary investigation, which then meant that DLF was not in a dominant position. Hence, there was no contravention,” a source said. 

 The NCLAT in its order said the CCI did not have the authority to order a supplementary probe when already a contravention had been found in the first probe. However, industry sources believe that Regulation 20, Sub-regulation 6 empowers the CCI to order a follow-up investigation whether or not it found a contravention in the first place. 

The regulation says: “If the Commission, on consideration of the report, is of the opinion that further investigation is called for, it may direct the director-general to make further investigation and submit a supplementary report on specific issues.” 

The NCLAT in its order said: “In any event taking shelter of Regulation 20(6) of Regulation 2009, the CCI was not authorised to pass an order for further investigation and the same cannot be justified.” 

It therefore ordered the CCI to examine the entire issue and pass appropriate order in accordance with law after giving opportunity of hearing to all concerned within a period of three months from the date of receipt of its order. 

The case was filed against DLF back in 2018 by Amit Mittal, a New Delhi resident, for unfair and discriminatory terms in the flat buyer agreement. 

An investigation was ordered by the competition watchdog and it was found in the DG report that the realty major was in violation of provisions under Section 4 of the Act. 

However, the CCI ordered the DG to investigate the matter further and submit the report. Later, it gave a clean chit to the company and closed the matter against the company. 

The order stated that in the supplementary investigation report though the DG noticed the involvement of the respondents but taking a U-Turn concluded that “Ops as a group was found to be having financial strength, however, the same does not appear to bestow a position of strength to the OP group”.

Again, Mittal, who bought a flat in DLF’s Regal Garden in Gurgaon, had appealed in NCLAT against the last CCI order.

The Law tribunal has asked CCI to come up with a fresh order based on the first DG report of 2016

“The CCI is required to examine the entire issue and pass appropriate order in accordance with law after giving the opportunity of hearing to all concerned within a period of three months from the date of receipt of copy of this order,” stated the NCLAT order.