CCI to probe market abuse charges against DDA

Regulator has asked its Director General to initiate a probe in respect of allegations regarding violation of various provisions of the Competition Act by the DDA

In its first probe into alleged abuse of market dominance by the Delhi Development Authority (DDA), fair trade regulator CCI has ordered an investigation into housing sale practices of the state government agency.

The Competition Commission of India (CCI) has asked its Director General, the regulator's investigating agency, to initiate a probe in respect of allegations regarding violation of various provisions of the Competition Act by the DDA.

The Director General has been asked to submit its report within two months.

The CCI has already passed orders against private sector real estate giant DLF in various cases and had also imposed fines of over Rs 600 crore against the company for abuse of its dominant position. Besides, a number of other private sector realtors have also been probed separately by CCI.

However, this is the first probe against DDA, which is the biggest land-owning agency in Delhi region and has been entrusted with the job of providing housing accommodation to the residents of the state.

Since its inception in 1957, DDA has been the main agency operating for the development of Delhi.

The CCI said in a release that the investigation has been ordered in response to a complaint filed by an individual, Adla Satya Narayan Rao, against DDA alleging contravention of Section 4 of the Competition Act.

This section relates to abuse of dominant position, directly or indirectly, by imposition of unfair or discriminatory condition in purchase or sale of goods or services, as also by predatory pricing.

The complainant alleged that he had applied for the DDA Housing Scheme 2010 in December 2010 by paying Rs 1.5 lakh. Subsequently, he was allotted a flat in Vasant Kunj and he paid an amount of Rs 91.28 lakh to DDA.

"The informant has alleged that in clause 1 of the Scheme 2010, DDA announced that all flats were complete and ready for occupation whereas the ground reality was different.

"Further, even though DDA received full payment from allottees, the flats were nowhere close to completion. Rao also alleged that the clauses 11, 12 and 14 of the DDA Scheme were one sided and heavily loaded in favour of the DDA," the CCI said.

After hearing the complainant and the DDA, CCI came to a conclusion that a prima facie case has been made for investigation of allegations made against DDA.

Accordingly, CCI asked its Director General to investigate the matter and submit a report within 60 days.