The Competition Appellate Tribunal (COMPAT) will today, November 9, hear an appeal by realty major DLF against a Competition Commission order, wherein the company has been asked to pay a penalty of Rs. 630 crore for abuse of dominant market position.
DLF approached the COMPAT last month, seeking relief from the orders of the fair trade watchdog, the Competition Commission of India (CCI), and the matter was then posted for hearing on November 9.
The petition would be placed before a three-member COMPAT bench, headed by Justice Arijit Pasayat.
DLF has challenged the CCI directive on various grounds, including the jurisdiction of the case, the basis for determining relevant market and dominant position, and, the company not being served with show-cause notices before passing the orders.
The case pertains to the CCI’s imposition of a hefty penalty of Rs.630 crore on DLF on August 12 for abusing its dominant position and also issued a ‘cease and desist’ order against unfair conditions on the buyers of its flats.
Later in the same month, CCI passed another order in a separate case, wherein it asked DLF to ‘cease and desist’ from misuse of dominant position, but did not impose any penalty.
These orders followed inquiries into complaints filed by the flat buyer associations of two separate DLF projects in Gurgaon in the National Capital Region.
In its appeal, DLF is believed to have termed the orders as “patently erroneous, illegal and without jurisdiction”.
It also has questioned the CCI’s jurisdiction to look into the flat buyers’ complaints, pointing out that the matter relate to the ‘sale of immovable property’ and not the ‘sale of service’.
DLF has argued that its market share in Gurgaon cannot be determined on the basis of all-India sales figures. It was found to be the market leader based on a third-party analysis of the overall country-wide turnover of companies present in the Gurgaon real estate market.
DLF has contended that different kinds of properties, such as secondary or re-sale markets and investment markets, have to be considered for arriving at the relevant market but the same has not been followed by the CCI order.
Sources said DLF has also argued that CCI did not serve a show-cause notice before passing the order. In another high-profile order passed by the CCI recently, it had issued notices to the National Stock Exchange (NSE) before the final directive, they added.
On the terms and conditions imposed on the flat-buyers, it has said that this is as per industry practice, followed by even Government’s development authorities.
