DLF, Unitech, Ansal, other realty players under CCI lens for cartelisation

Written by PTI | New Delhi | Updated: Aug 6 2014, 15:54pm hrs
Real EstateCCI has issued notices to at least 20 developers and industry body Credai for alleged cartelisation and unfair practices.
Widening its probe into suspected anti-consumer practices in the real estate sector, fair trade watchdog CCI has issued notices to at least 20 developers and industry body Credai for alleged cartelisation and unfair practices.

Among other charges, these developers are being probed for inserting one-sided clauses in favour of the companies and against the interest of consumers in buyer agreements for sale of flats, apartments and other residential property.

A senior Competition Commission of India official said certain details have also been sought from these real estate players, while they would also be given an opportunity to present their case before the regulator. However, it could not be ascertained whether any company has already been found prima facie guilty of violating any provisions of the Competition Act.

The CCI has pulled up realty players in the past for violating fair trade norms, while a huge penalty of R630 crore was earlier imposed on DLF. The order was later upheld by the Competition Appellate Tribunal as well and DLF has now filed an appeal in the Supreme Court.

Information has been sought in the present case from Unitech, Omaxe, Puravankara, Parsvnath, Supertech, BPTP, Oberoi Realty, Amrapali, Ansal Properties & Infra, Prestige Estates, Tata Housing, Gaursons, K Raheja, Avalon, Purohit Construction, Aparna Construction and Amit Enterprises, as also from the Confederation of Real Estate Developers' Associations of India (Credai).

Sources said notices were issued following a detailed probe report by CCI's director general that flagged off various issues in the realty sector. The director general had probed certain alleged common practices by builders and developers who are members of Credai. Some of the companies have already submitted their written responses to CCI on this matter.

A Tata Housing spokesperson said the company has filed its response to the CCI notice within the stipulated time. An Omaxe spokesperson also said it had received a notice from CCI "like all other major developers in India" and has filed its reply. A Puravankara spokesperson denied the company was making one-sided contracts with consumers and not disclosing crucial information to customers, including calculation for total common areas.

CCI took up the matter following a complaint by Jyoti Swaroop Arora against Tulip Infratech and two others.

The fair trade regulator is expected to take up the matter for further hearing of realty developers in late September.

Gaursons MD Manoj Gaur downplayed the matter, saying it is not a serious issue.

"CCI had sought clarification from us on issues including market dominance and buyer pacts. We have replied to their notice and also submitted the buyers agreements. There is no monopoly and unfair trade practice," he said.

Avalon group director Ajay Singhal said the company has already appeared in the case and submitted that it was open to any fair investigation. Supertech said it had previously given its reply to CCI in a separate case.