The competition watchdog Competition Commission of India (CCI) on Tuesday, August 30, found realty developer DLF guilty of abusing its dominance at one more project, the Park Place in Gurgaon and has asked the developer to cease and desist from imposing unfair conditions on buyers. The order also directs DLF to suitably modify the unfair conditions imposed on existing buyers within three months.
However, the order has not slapped any additional penalty on DLF apart from Rs.630 crore that was imposed in the case of the Belaire project a fortnight ago.
“DLF will consider legal options, including moving the Competition Appellate Tribunal,” said Rajeev Talwar, Group Executive Director at DLF. In the Park Place matter, CCI found DLF guilty of commencing the project without proper approvals, increasing the number of floors mid-way, not following the time schedule for completion and possession and forfeiture of booking amount upon any cancellations.
In the Belaire project case too, the CCI had found DLF guilty on similar issues and had slapped penalty amounting to 7% of the realty developer’s average annual revenues of the last three years. The buyers in the Park Place project of DLF are planning to file for compensation with the Competition Appellate Tribunal (CAT) for delays in possession.
“We should get compensation at the same rate equal to what DLF charges for delayed payment,” said Harsh Sehgal, President of the Park Place Residents Welfare Association. DLF charges 18% interest if buyers delay their payments. On the other hand, the company pays Rs 10 per sq ft to the buyers for delay on its part.
“That amounts to only about 1-2 % of the total value of the apartment,” he said. “We will also be asking for restoration of all cancelled apartments apart from compensation for all original allottees for increasing the height of the building from 19 to 29 floors,” said Sehgal.
DLF had increased the number of apartments from 988 to 1,508 by increasing the number of floors across 13 towers in the Park Place project. The buyers in the Belaire project too are considering filing for compensation with CAT, said Amit Jain, Financial Head of Belaire Residents’ Association.
In its order on Tuesday, the commission did not put any additional penalty on DLF.
“We did not levy additional penalty on DLF as we can’t fine them twice for the same contravention,” said a senior CCI official requesting anonymity.
“We bunched together all the complaints against DLF relating to this project (Park Place) and have given an order, which is similar to the earlier one (referring to DLF’s Belaire project).”
The CCI order said the nature of contravention was identical to the previous case (Belaire project) and, therefore, the majority order stated, “It will not be appropriate to separately impose penalty again under this clause.”
The clause referred to is Section 4 of the Competition Act, which deals with abuse of dominant position. When asked what options do buyers of flats in projects of other developers have, the senior official said that they can file a complaint with CCI, after which it will initiate action against companies. In its earlier order, CCI stated the terms of the conditions found in the flat buyer agreement is an industry practice.