Penalty of Rs 630 crores on DLF: Compat upholds CCI order

In August 2011, the Competition Commission of India (CCI) found real estate company DLF violating fair trade norms to the detriment of their allottees and imposed a fine of Rs 630 crores on a complaint by Belaire Owners Association, Gurgaon. The association alleged that DLF had imposed highly arbitrary, unfair and unreasonable conditions on allottees of apartments in the complex.

DLF then filed an appeal before the Competition Appellate Tribunal (Compat). The tribunal has now upheld the order of the CCI. The penalty of Rs 630 crores is equivalent to seven per cent of DLF turnover. The tribunal has given 60 days to DLF for challenging the order before Supreme Court. In 2011, CCI had passed the order after its inquiries into complaints filed by flat buyers’ associations of two DLF projects in Gurgaon – DLF Park Palace and The Belaire – and finding DLF abusing its dominant position.

Builder’s high handedness towards allottees is well known. Recently realty major Parsvnath Developers was asked to return the entire principal amount paid by two flat buyers, with 18 per cent interest, and another Rs 7 lakh compensation to each for causing mental agony and harassment because of delay in handing over possession.

Keeping in view the expanding real estate industry and the plight of allottees, the Real Estate (Regulation and Development Bill 2013) was finalized for passage by the parliament. The pending bill now needs to be passed by the new parliament.