Competition has been always there in realty business. But once again DLF has caused some distress in their business practices which seems against the regulation; for CCI again has directed DLF to “cease and desist” from arbitrary business practices. The recent order has come after a comprehensive investigation on accusations that DLF gives rein to anti-competitive practices with regard to some projects in Haryana and Gurgaon.
DLF Ltd. is a page-oner in colonization and real estate business. The company is mainly known for its advanced commercial real estate development across the country. Now the big-gun has been already imposed a penalty by Competition Commission of India (CCI), thus the commission is unable to further penalize the organization (dated Jan 4, 2017).
CCI finds DLF indulging in the conduct which is proved to be unfair and offensive in terms of the provisions of Section 4 of the “cease and desist’’ act. Section 4 of the Competition Act refers to abuse of dominant position. However, DLF group holds a dominant position in the current and competitive market; we will have to watch how this penalization affects their business practice. ‘Provision of services for development/ sale of residential apartments in Gurgaon‘ was contemplated as the relevant market.
This is not the first time the company is facing such kind allegations, in previous several occasions the company was directed not to foster unethical business proceedings. Now CCI again pointed at DLF Gurgaon Home Developers Pvt. Ltd and asked them to take heed of their unfair trade ways but didn’t compel any additional penalty charges. This time the charge against the company is to foisting highly uninformed and unscrupulous conditions on property buyers at a project in Gurgaon. Also the allegation was doing rounds of company’s abusive act towards the civic bodies and existing buyers. Two individual complains were launched in 2014 and 2016 were alliance by the regulator, which required a detailed investigation ordered by the Director General (DG).
The order discloses, “The Commission is of the view that since a penalty of Rs 630 crore has already been imposed on the Opposite Party Group (DLF) in the Belaire’s case for the same time period to which the present cases belong, no financial penalty… is required to be imposed.”
In the year 2011 DLF was penalized a fine of Rs. 630 crore after founding infringement of completion regulations following by a protest by Belaire Owners’ Association in Gurgaon. The penalty has been confronted by the company. The recent allegation of abuse of dominance including obligatory purchase of the parking lot and one-sided agreement went in the favor of DLF.
Quoting the DG’s report, the regulator said “there is no doubt that the strength which the OP (opposite party) Group possesses in residential real estate segment in the geographic region of Gurgaon is incomparable”.
Asking about this conclusion CCI said, “The assessment done by the Commission in the previous orders would also apply in the present matters since the issues, the relevant period and the opposite parties involved are the same.’’ It also added, “The Commission is of the view that the terms and conditions imposed on the allotters in the instant matters as analyzed by the DG in detail are abusive in nature.’’
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By LNN (Liyans News Network)