DLF to challenge CCI order in Competition Appellate Tribunal

India’s largest real estate company DLF Ltd is planning to move the Competition Appellate Tribunal by early next week, to appeal against the Competition Commission of India’s (CCI) order imposing a Rs 630-crore penalty on the firm.

DLF, which is reportedly consulting law firms, is in the process of engaging its counsel. Confirming the company’s move a spokesperson said: “We continue to believe our case is very strong.”

The developer may try to defend itself against the observation made by CCI that DLF was the market leader in Gurgaon. Some industry research reports, the company plans to highlight while placing its counter argument, have shown that several realtors had dominated the Gurgaon realty sector through the years.

One such research report has said DLF had the highest market share of overall residential development in Gurgaon in 2008 and 2009 at 11.8 per cent and 11.9 per cent, respectively, but not in 2007, where Unitech had topped the list with 14.71 per cent market share.

In 2010, Emaar MGF had the highest market share of eight per cent and DLF was ranked 20 with 1.64 per cent market share in Gurgaon.

In the luxury residential segment, DLF was the third largest market player in 2007, according to industry estimates for Gurgaon. In 2008, it did not figure anywhere in the list and in 2009, it was ranked fifth.

Belaire Owner’s Association had filed a petition against DLF alleging violations by the builder at the high-end residential complex (Belaire), based on which CCI had imposed a penalty of Rs 630 crore.

According to Sanjay Sharma, MD Qubrex, a real estate consultancy firm that produced an expert report to CCI on DLF’s market share said: “The market share represented by JLL (Jones Lang Lasalle) and Genesis is misrepresented.” DLF had submitted the JLL and Genesis research reports to CCI, to demonstrate its market share over the years.

While the Belaire association had complained that DLF had increased the number of floors from 19 to 29, experts argued the application form had stated the company intended to increase the number of floors that were not sanctioned by the authority when the agreements with the home buyers were signed.

The Competition Appellate Tribunal takes about 12-18 months to deliver a verdict. Terming the penalty imposed on DLF by CCI too harsh, R R Singh, director general of NAREDCO said: “Proper scrutiny is possible only if the case reaches the Supreme Court.”