DLF found guilty of misusing dominant position in Gurgaon

Written by fe Bureau | New Delhi | Updated: Sep 1 2011, 05:09am hrs
Barely a fortnight after the Competition Commission of India imposed a R630-crore penalty on DLF, the anti-trust regulator on Tuesday passed yet another order against the company for misusing its dominant position in the property of Park Place in Gurgaon and thereby breaching Section 4 of the Competition Act.

Apart from that, the commission has also found that the project was undertaken by the company without prior approval from the authorities.

The commission, however, did not impose another penalty on the company since the said complaint was identical in its object to the one related to the Beliare Owners Association.

The commission had received a total of eight complaints against DLF for its misuse of its dominant position in Park Place which it disposed of following this order. A DLF spokesperson said that it would be appealing against the order in the Competition Appellate Tribunal shortly as it believes it has a strong case.

The complaint was filed against the country's largest realtor for changing its layout plan and imposing unfair conditions on the allottees in the form of an agreement.

For instance, while the layout plan was to construct 19 floors, DLF unilaterally decided to increase it to 29 floors without any monetary compensation to its existing alottees, the complaint said. Apart from that, the company has also failed to meet its deadline for the completion of construction.

The commission has also directed the countrys largest realtor to cease and desist from imposing unfair conditions and suitably modify these within three months of reciept of the order.

The nature of contravention of provisions of section 4 (of Competition Act) is identical in its object and effect in the instant cases and emerges from a position of strength of DLF in the same relevant market, the order said.

Owing to the similarity of complaints between the properties of Park Place and Belaire the director general wing of the commission initiated parallel investigations into the two, CCI sources said. After examining all facts related the DG concluded that, In terms of Section 4 (2) (a) of the Act, the above conditions under which services have been provided by DLF are unfair. It also stated that unfair conditions were imposed by the company on account of its market power.

This is an order in compliant with the Belaire order. If DLF appeals against the two orders, it would be contentious whether CCI had correctly determined the relevant market or not, said head - competition law practice at Vaish Associates MM Sharma.