Abuse of dominant position slapped down

The Competition Commission of India (CCI) recently found one of India’s largest real estate developers, DLF, guilty of imposing unfair or discriminatory conditions in the course of the sale of its residential units (see page 13). Acting on a complaint by a group of individuals who had been allotted apartments that were being constructed by DLF, the Belaire Owners’ Association, the CCI also imposed a penalty of ₹6.3 billion (US$140 million), which is 7% of its average turnover for the three preceding years.

DLF plans to appeal this order at the Competition Appellate Tribunal.

Crux of complaint

The complaint against DLF was that it had abused its dominant position in the market. In so doing, it delayed handing over apartments to the owners and violated building norms by increasing the number of floors from 19 to 29, which led to an increase in the number of apartments from 384 to 564. In addition it was alleged that DLF had charged exorbitant late fees and interest for delayed payments by the buyers and had introduced discriminatory and abusive clauses in an extremely one-sided apartment buyer’s agreement.

The Belaire Owners’ Association also alleged that the Haryana Urban Development Authority and Haryana government’s Department of Town and Country Planning, which allotted the land and gave clearances to DLF when it was clear that the company had violated the provisions of various statutes, had approved of and permitted DLF’s illegal, unfair and irrational actions.

Vivek Vashi is a partner in the litigation department at Bharucha & Partners, where Nitisha Bishnoi is an associate.