Compat upholds Rs 630 crore penalty on DLF; company to move SC

The Competition Appellate Tribunal today upheld a Rs 630 crore penalty imposed on realty major DLF by fair trade regulator CCI and emphasised that abuse of dominant position should be dealt with iron hands.
DLF said it would move the Supreme Court on the matter.
In August 2011, the Competition Commission of India (CCI) found DLF violating fair trade norms and imposed the fine on a complaint by Belaire Owners' Association.
The association alleged DLF imposed highly arbitrary, unfair and unreasonable conditions on allottees of apartments in The Belaire in Gurgaon, which had serious adverse effects and ramifications on the rights of the buyers.

"The order of CCI as well as this judgement is expected to go a long way to ameliorate all the conditions of the customers...If the consumer is exploited by a mighty builder, then such mighty builder cannot claim soft attitude from the State. We, therefore, refuse to bring down the penalty in any manner," Compat said in a 139-page order today.
The tribunal was of the opinion that DLF abused its dominant position. It said that as a dominant player, DLF has a special duty to be within the four corners of the law.

The Rs 630 crore fine is equivalent to 7 per cent of DLF's turnover, the CCI had said.

"It was also urged that since we have found the approach of the CCI in relying on the clauses of the ABA (apartment buyer's agreement) and dealing with the same incorrectly, therefore, we should lessen the penalty. We do not agree.
"An abuse of dominance, whether it is on one count or on many, remains an abuse and therefore it must be dealt with iron hands," the tribunal said.
Compat emphasised it was expressing observations only in respect of the ABA executed prior to May 20, 2009.
"The company is yet to examine the detailed order, therefore, the company at this stage will not be in a position to make any further comments," DLF said in a statement.

"The company shall be challenging the said order passed by the Compat in the Supreme Court for which Compat has given us 60 days time," DLF said.
According to DLF, it successfully delivered the Park Place, Belaire and Magnolia projects, which were the subject matter of the appeals.
"The company has respected in true letter and spirit the customer commitments made by it. In testament thereof, out of over 2,600 total number of apartments, over 2,200 have been handed over, and over 1,800 number of families are already residing therein," the statement added.
"This is a huge victory for all the buyers of real estate in our country who have so far felt completely helpless against dominant real estate companies," Belaire Owners Association President Sanjay Bhasin said.

This order will restore the balance between real estate developers and property buyers, Bhasin added.