CCI TOGAY SLAPPED PENALTY OF OVER Rs 600 CRORES ON DLF

CCI today slapped a penalty of over Rs 600 crore on DLF

New Delhi : The Competition Commission of India (CCI) today slapped a penalty of over Rs 600 crore on real estate major DLF, holding it guilty of abusing its dominant position in the market and imposing unfair conditions on the sale of its services to consumers.
In its order, the anti-competitive activities watchdog asked DLF “to cease and desist from formulating and imposing such unfair conditions in its agreements with buyers in Gurgaon and suitably modify unfair conditions imposed on its buyers within 3 months of the date of receipt of the order.” The Commission levied a penalty at the rate of 7 per cent of the company’s average annual turnover of the last three years, amounting to Rs 630 crore, a sum “commensurate with the severity of the violation through such blatant abuse of dominance.”
The commission also said the abuse of dominant position has been in respect of “the basic necessity of housing and … DLF has been grossly abusing its dominant position, and that too against a vulnerable section of consumers, who have little ability to act or organize against such abuse.”
The case pertains to last year May, when, after receiving complaints by some people, who booked flats in DLF projects, the CCI had ordered an investigation by the Director General Investigations. According to one such complaint, DLF had promised to complete its residential project in Gurgaon, called Belaire, in 2009, but buyers are yet to get possession. Also, DLF has increased the number of floors in the apartment complex from the original figure given to buyers. This led to the number of apartments in Belaire increasing to 564 from 384.
After the order, the DLF scrip plunged 5.92 per cent. The Commission said that DLF and other service providers issue advertisements for launching projects without the land in question being actually purchased, registered in their name and possession taken and without taking prior approval of competent authorities.
The issue: Last May CCI received complaints from allottees who had booked flats in some DLF projects. Abuse of dominance was alleged against four developers — DLF New Gurgaon Homes Developers, DLF Home Developers Ltd and others, DLF Limited and others, and DLF New Gurgaon. One complainant, Belaire Owners’ Association, alleged that the firm had not provided Gurgaon project Blaire within promised time.