Realty players under CCI scanner for cartel, unfair practices

Widening its probe into suspected anti-consumer practices in the real estate sector, fair trade watchdog CCI has issued notices to at least 20 developers and their industry body Credai for alleged cartelisation and unfair trade practices.
Among other charges, these developers are being probed for inserting one-sided clauses in favour of the companies and against the interest of consumers in the buyer agreements for sale of flats, apartments and other residential properties, along with other other anti-competitive practices.
A senior Competition Commission (CCI) official told PTI that certain details have also been sought from these real estate players, while they would also be given an opportunity to present their case before the regulator.

However, it could not be ascertained whether any company has already been found prima facie guilty of violating any provisions of the Competition Act.
The CCI has pulled up many realty players in the past for violating fair trade norms, while a huge penalty of Rs 630 crore was earlier imposed on DLF. The order was later upheld by the Competition Appellate Tribunal as well and DLF has now filed an appeal in the Supreme Court.
Among others, information has been sought in the present case from Unitech, Omaxe, Puravankara, Parsvnath, Supertech, BPTP, Oberoi Realty, Amrapali, Ansal Properties & Infra, Prestige Estates, Tata Housing, Gaursons, K Raheja, Avalon, Purohit Construction, Aparna Construction and Amit Enterprises, as also from the Confederation of Real Estate Developers' Associations of India (Credai).

Sources said that notices were issued following a detailed investigation report by the CCI's Director General that flagged off various issues in the realty sector. The Director General had probed certain alleged common practices by builders and developers who are members of Credai.

Some of the companies have already submitted their written responses to CCI on this matter.
When contacted, a Tata Housing spokesperson said the company has filed its response to the CCI notice well within the stipulated time.
An Omaxe spokesperson also said it had received a notice from CCI "like all other major developers in India" and it has filed its reply to the regulator.

"The matter came before CCI on July 24. A few other developers sought time to file reply. The adjourned date is September 24, 2014," the spokesperson added.
A Puravankara spokesperson denied that it was making one-sided contracts with consumers and not disclosing crucial information to customers including total common areas calculation.
CCI took up the whole matter following a complaint by Jyoti Swaroop Arora against Tulip Infratech and two others.
Unitech spokesperson declined to comment on the matter, while Credai did not immediately reply to queries.