Compat orders CCI to look afresh into allegations against DLF

In fresh troubles for DLF, the Competition Appellate Tribunal today ordered CCI to look afresh into allegations of the realty giant abusing its dominant position with respect to a case wherein the fair trade watchdog had earlier declined to conduct a probe.
The Compat order followed an appeal by Ess Cee Securities Private Limited and Signature Securities Private Limited against the earlier decision of Competition Commission of India (CCI) against directing an investigation into alleged abuse of dominance by the realty player with regard to their DLF Capital Greens Phase-III residential project here.
The appellants had booked apartments in the project in 2010 with payment of preliminary booking amount and had also made certain subsequent payments.

They later alleged that "delayed interest charges were levied (on them by the developer) despite the substantial delay in the construction of the project", which they described as a "luxury residential project in Delhi".
In their complaint, the two appellants listed out "various allegations against the respondents (DLF Universal Limited and DLF Home Developers Limited) principally alleging abuse of dominance," the Compat observed in its 14-page order.
After looking into the complaint, the CCI had observed "in regards to dominance of DLF in the relevant market, it is noted that in the geographic region of Delhi, DLF is just one of the real estate developers engaged in the provision of services relating to development and sale of residential apartment."

The Tribunal, however, said, "It is apparent that the Commission has not considered relevant product market in terms of the request made by the informant.

"It may be recalled that informant in his information had stated that they had booked luxury apartments and therefore, their choice for selection of apartments was limited."
Citing submissions made by the appellants, the Compat observed, "It is quite clear that the Commission has not shown consistency in the manner in which they handled information on a similar subject in its earlier decision".
The Tribunal, however, said, "We do not wish to go any further in this matter to express our thoughts on whether the respondents are in a dominant position in the relevant market. Our basic objective behind this discussion was to see whether there is a consistency in the Commission's approach in determination of the relevant product market and it has come quite clear that impugned order lacks that consistency."

"If for some reason the Commission was not convinced with declaring relevant product market in the manner in which the informant had requested, it should have given a speaking well analyzed reason for not adhering to its established views.
"We, therefore, conclude by saying that the Commission has erred in defining the relevant market in this case and in our opinion relevant market should be 'the provision of services relating to development and sale of high-end luxury residential apartments in Delhi'. We have not ventured into determining the position of dominance as that is a matter which the Commission needs to examine."

Consequently, Compat remitted the case to CCI "for deciding whether the respondents are in a dominant position in the relevant market as determined above, and whether they have abused their dominance and thereby acted in contravention of Section 4(2) of the Act.