DLF may approach Compat next week against CCI order

Realty giant DLF may approach the Competition Appellate Tribunal (Compat) next week to challenge an order by competition watchdog CCI to pay a Rs 630 crore penalty for abuse of dominant market position.

The company is considering challenging the order on the basis of the Competition Commission of India's (CCI) classification of DLF as a "dominant player" in the relevant market, as well the competition watchdog's jurisdiction over the matter.

In its order dated August 16, the CCI found the company guilty of abusing its dominant market position and asked it to pay a penalty of Rs 630 crore. After the CCI order, DLF had said that it would examine all options, including an appeal before Compat, to contest the penalty.

Sources said DLF is likely to challenge the order next week before Compat, wherein it would also question why the CCI did not serve a show cause notice before passing the order, as was the case with another recent order passed against the National Stock Exchange (NSE).

DLF was found to be market leader based on a third-party analysis of the overall country-wide turnover of companies present in the Gurgaon real estate market.

However, DLF is contending that market position should be determined on the basis of the number of housing units sold in the entire NCR region, after taking into account secondary market housing sales and not just the primary market or units sold directly by developers, sources said.

"There is enough competition in the Gurgaon market in each category of the residential segment. There is no entry ban for any developer and there is no cartelisation," a source said, while asserting that the company did not violate the competition regulations.

To buttress its case of not being a dominant player, DLF is also arguing that it was given only 6 per cent of the total land development licences issued by the government in the Gurgaon region between 2002 and 2009, they added.