SC to examine CCI jurisdiction on DLF flat owners' plea

The Supreme Court Wednesday said it will examine whether the Competition Commission of India had the jurisdiction to entertain the plea by flat owners in three DLF residential complexes in Gurgaon who alleged that the real estate giant was exploiting its dominant position on conditions for providing services.

The bench of Justice Sudhansu Jyoti Mukhopadhaya and Justice N.V. Ramana, while making distinction between the "rendering of services" and "imposing the conditions of services", said they would examine the issue in the light of section 4(2)(a)(1) of the Competition Act, 2002.

The court said if the matter was "rendering of services", then it would go before the consumer forum.

"Satisfaction with the services provided can be a matter of consumer court," it said.

Rendering services may not come under the Competition Act, "but imposing the conditions of services may be so whether they are arbitrary, unfair or discriminatory", the court said, as it directed the hearing of the matter for Feb 18.

Section 4 of the Competition Act prohibits the abuse of dominant position and section 4(2)(a)(1) says there shall be an abuse of dominant position if an enterprise or a group directly or indirectly, imposes unfair or discriminatory condition in purchase or sale of goods or service.

The court said this while hearing a petition by DLF challenging imposition of Rs.630 crore penalty by the CCI for allegedly exploiting its dominant position to the disadvantage of its customers in three projects in Gurgaon.

DLF has assailed the CCI order of Aug 12, 2011, which was sustained by the COMPAT in 2013, saying that the commission could not have imposed penalty based on the three year average of the entire turnover of DLF's real estate operations in the country.

The real estate giant contended that the penalty should have been restricted to Rs.1,100 crore - the sale price of three housing complexes.

DLF has also challenged the jurisdiction of CCI in entertaining the pleas by the aggrieved flat owners.

The CCI has taken a position that DLF used its dominant position to the disadvantage of the flat allotees.

"It is an exploitation of disadvantaged customers who were trapped," CCI had told the court.

The association of flat owners and individual flat owners too have moved the apex court.