DLF courts more trouble over market dominance, but let off

New Delhi: A fortnight after penalising DLF with a hefty sum of Rs 630 crore, competition watchdog CCI has in another case directed the company to stop formulating and imposing unfair conditions in its agreements with home buyers, but did not impose any fine in this case.

After examining a complaint filed by the Park Place Residents’ Association in Gurgaon, the Competition Commission of India (CCI) found DLF guilty of abusing its dominant market position and asked it to modify unfair conditions imposed on its buyers within three months.

Reacting to the CCI order, DLF said, “The company will be filing an appeal with the Competition Appellate Tribunal (COMPAT) shortly as the company continues to believe that it has a strong case.”

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[caption id=“attachment_73943” align=“alignleft” width=“380” caption=“In an earlier case, DLF was asked to pay a penalty of Rs 630.44 crore, which was 7 percent of its three years’ average annual turnover. Reuters”]  [/caption]

n its 65-page order, CCI said it has directed “DLF and its group companies… to cease and desist from formulating and imposing such unfair conditions in its agreement with buyers in Gurgaon, (and) to substantially modify unfair conditions imposed on its buyers within 3 months of the date of receipt of this order.” Unlike last order dated August 16, CCI did not impose any penalty on the realtor.

In an earlier case, DLF was asked to pay a penalty of Rs 630.44 crore, which was 7 percent of its three years’ average annual turnover. “The Commission had already imposed a penalty on DLF Ltd… The nature of contravention of provisions is identical in its object and effect in the instant cases and emerges fromthe position of strength of DLF in the same relevant market,” the order said. “Therefore, it will not be appropriate to separately impose penalty again.”

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The Park Place Resident’s Welfare Association complained that DLF had diverted from the original stipulations of the agreement without keeping the buyers in loop. One such diversion was that of increasing the number of floors from 19 to 29 floors.

It was also alleged that the company, being a dominant undertaking, had devised a standard agreement which was one-sided. Besides, the CCI found that DLF had announced the project before getting necessary conditions and clearances and delayed the completion of the project.

The CCI, which became fully functional in May 2009, draws its power from the Competition Act 2002 to check anti-competitive practices and abuse of dominant market positions.