The Competition Commission of India (CCI) on Wednesday said it was ‘likely to deliver an order at the earliest’ on a complaint against DLF, the country’s largest real estate developer, for alleged abuse of its dominant position by putting ‘discriminatory and abusive clauses’ in the apartment agreements provided to the allottees of the Belaire and Park Place projects in Gurgaon.
DLF had earlier moved the Competition Appellate Tribunal, questioning CCI’s powers to initiate proceedings against an issue dating to 2006, much before CCI got its authority to act on such cases. The tribunal refused to stay the proceedings, but asked CCI to consider the jurisdiction issue and continue with the case. The next hearing at the tribunal is on September 15.
DLF had argued that all apartment agreements were executed in January 2007, so CCI could not initiate any proceeding against it. The real estate player challenged the move to formulate a case against them under Section 4 of the Competition Commission Act, which took effect from May 20, 2009.
In Wednesday’s hearing, the petitioner’s counsel, M L Lahoty, argued that preliminary investigation was allowed under Section 26 (1) of the Competition Commission Act and since DLF had failed to deliver the projects on time, CCI could intervene, as it was ‘continuous obligation’ for both parties.
“Although the agreements were signed between September 2006 and April 2007, DLF till now has not been able to deliver the projects, so it is a case which is ongoing and thus, can be investigated,” said Lahoty.
The petitioner’s counsel also said there were at least 20 clauses in the apartment agreements, where DLF said they could do things at their ‘own discretion’ and this meant that DLF was using its ‘dominant position’ to make customers’ sign on the dotted lines.
Meanwhile, the CCI Directorate General (DG), which is doing an independent investigation, is expected to file a report by 15 October.
The petition before CCI, filed by Belaire Owner’s Association against DLF Ltd, Department of Town & Country Planning, Haryana, and Haryana Urban Development Authority, says DLF has failed to deliver the residential projects on time and put “discriminatory and abusive clauses” in the apartment agreements provided to the allottees. It also says the builder is abusing its dominant position in the market.
The two projects are expected to have a total of 2,200 flats, priced between Rs 1.5 crore to Rs 3 crore, making the apartments worth Rs 4,500 to Rs 5,000 crore in all.
The projects, which started in August 2006, were expected to be completed in three years, but the developer has extended the deadline to April 2011.
“We are happy with the proceedings and expect that CCI will soon pass an order, which will stop DLF from cancelling any apartments and also not let them re-sell any of the cancelled apartments,” said Lahoty.
A DLF official refused to comment on the matter. The CCI officials said they would not comment on ongoing cases.
