DLF's stop-probe petition doesn?t seem maintainable, says competition tribunal

Points to SC ruling of last week; case on Gurgaon apartments adjourned to next month

It does not appear, the Competition Appellate Tribunal (CAT) told real estate giant DLF yesterday, that the Competition Commission of India (CCI) could be stopped from probing it for alleged abuse of its dominant position, given last week’s Supreme Court judgement.

Last week, the SC had ruled (in a different case) that CCI had the authority to order an investigation without a preliminary hearing into any allegation of anti-competitive agreements or abuse of a dominant position in the market. Its decision to investigate cannot be challenged before the CAT, the apex court had ruled.

Given this, the DLF petition did not seem maintainable, on the face of it, the CAT told the company. DLF counsel Ashok Desai sought an adjournment for time to study the SC order, as it was announced only a few days before. The tribunal fixed the next date of hearing on October 18.

DLF has sought to get CAT to stop the CCI from probing complaints from apartment allottees of its Gurgaon housing projects named Park Place and The Belaire. They have alleged that DLF had put in “discriminatory and abusive clauses” in the apartment agreement.

DLF says the apartment agreements were in early 2007 and CCI got the authority to act on such matters only in May last year. Hence, it should be stopped.

The petitioners’ counsel, M L Lahoty, said, “After the Supreme Court verdict that CCI has the power to conduct preliminary investigation under the Competition Commission Act’s Section 26 (1), the tribunal will ultimately have to pass an order asking CCI to continue with the investigation.”

The petitioners’ counsel also said that DLF has not yet furnished all the details of the residential projects in question sought from them by CCI and CAT. He said CCI would pass an order in a day or two, seeking all details of these two projects.

The CCI Directorate General, which is undertaking an independent investigation in the case, is expected to file a report by October 15.

The petition before CCI states DLF failed to deliver the residential project on time, is abusing its dominant position in the market and also put the impugned clauses in the agreement. The projects are expected to have 2,072 flats priced between Rs 1.5 crore and Rs 3 crore, making the apartments worth Rs 4,500 to Rs 5,000 crore in all. Started in August 2006 and to be completed in three years, the deadline has since been extended to April 2011.