CCI: Passes once again order against DLF for abusing dominant position

Competition watchdog CCI (Competition Commission of India)  has again found realty major DLF guilty of abusing its dominant market position in one more housing project.

After scrutinising a complaint by flat owners of Magnolia in Gurgaon, the CCI has issued a "cease &  desist" order against the DLF Ltd but did not impose any financial penalty.
CCI  has already imposed one of Rs 630 crore, on a similar finding on another Gurgaon project, Belaire.

Legal Action..!
On the order, a DLF spokesperson said, "This order is on the same lines as the earlier CCI order. Our legal experts are studying the order and we will take requisite legal action. We continue to believe we have a strong case."

The CCI, according to an order posted on the website, directed DLF Ltd to stop imposing unfair conditions in agreements with flat buyers. It also asked the company "to suitably modify unfair conditions imposed on its buyers, within 3 months of the date of receipt of this order".
After examining the clauses in the agreement, the CCI order said, the director general investigations, concluded DLF Ltd had imposed unfair conditions on apartment buyers on account of the market power it enjoys.
The CCI, however, refrained from imposing a fine on the company, saying the "nature of contravention" in the case was similar to the earlier one filed by Belaire's Owners Association. "The nature of contravention is identical &  its object and effect in the instant case emerges from the position of strength of DLF Ltd  in the same market. The commission feels it will not be appropriate to impose a penalty again," the order said.
In late August last year (2011), the CCI had passed another order in a case filed by Park Place flat owners, wherein it asked DLF Ltd to 'cease and desist' from misuse of a dominant position but did not impose any penalty.
These orders followed inquiries into complaints filed by the flat buyer associations of the 2 DLF lyd projects in Gurgaon, alleging delay in the project and others complaints.

Competition Appellate Tribunal..!

DLF has already approached the Competition Appellate Tribunal seeking relief from the orders of CCI. The DLF Ltd has challenged the CCI directive on various grounds, including the jurisdiction of the case, the basis for determining relevant market and dominant position and the company not being served with show-cause notices before passing of the order.

The CCI, which became fully functional in May 2009, draws its power from the Competition Act 2002 to check anti-competitive practices and abuse of dominant market positions.

Src: PTI

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