Flat owners may seek compensation.
Even as the Competition Appellate Tribunal (Compat) on Wednesday stayed the Rs 630-crore penalty imposed by the Competition Commission of India (CCI) on real estate company DLF, flat owners at the two residential complexes in Gurgaon who had originally petitioned against the company, are planning to file individual compensation claims.
The flat owners of DLF Belaire and DLF Park Place in Gurgaon may move the Compat seeking compensation in two weeks, according to two people close to the development. The demand could be on the grounds of dilution of property value and ambience due to increase in the number of floors, from 19 to 29, and flats. The compensation demand could range between Rs 50 lakh to Rs 1.5 crore for each aggrieved member.
The CCI imposed a penalty of Rs 630 crore on DLF in August for “abusing its dominant position”. The penalty followed an inquiry by the competition watchdog on a complaint filed by the Belaire Owners’ Association. DLF subsequently moved Compat last month, challenging the CCI order.
At its first hearing on Wednesday, the Compat ordered a stay on the penalty, which was seven per cent of DLF’s average revenue in the last three years. If DLF loses the case, it will have to pay a nine per cent interest on the penalty amount. The company has been asked to give an undertaking in three months regarding its liability to pay the penalty and interest if it loses the case.
DLF is pleased the tribunal appreciated its contention that the CCI order imposing penalty and directing modifications of the terms of the agreement was contrary to the law and offered to hear the appeal. The CCI order had been stayed and the directions regarding modifications of the conditions would remain in abeyance, said Sriram Khattar, senior executive director, DLF Ltd.
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“The owners are not bothered about the stay on the penalty amount, as it would go to the government treasury,” said Sanjay Sharma, managing director, Qubrex, a real estate consultancy tracking the case. A three-member bench headed by Justice Arijit Pasayat has given eight weeks’ time to the flat owners’ association and DLF to suggest the modification in clauses or terms of the agreement. According to the apex tribunal, the CCI did not mention the extent and manner in which clauses should have been modified in accordance with the Competition Act.
The cease and desist order on DLF by the CCI, which prevents it from selling further units using the same agreement, got a status quo okay from the apex tribunal. The next hearing is scheduled for the second week of January.