Workers walk past a DLF Ltd. construction site in New Delhi, India (Photographer: Pankaj Nangia/Bloomberg News)

Competition Commission Dismisses Two Complaints Against DLF

The Competition Commission of India has dismissed two complaints alleging abuse of dominance against realty major DLF with regard to conditions in the sale agreements of residential apartments in Gurgaon.

Apart from DLF, the complaints were also against DLF New Gurgaon Home Developers.
The complainants had booked an apartment in separate projects of DLF Home Developers in Gurgaon. Following a Delhi High Court order in July 2013, DLF Home Developers amalgamated with DLF New Gurgaon Home Developers, as per different CCI orders dated August 31.

In both the matters, it was alleged that the opposite party group (DLF and DLF New Gurgaon Home Developers), being a dominant player in the market, had imposed unfair and arbitrary terms and conditions in the apartment buyer’s agreement and that such a conduct violated the provision of Section 4 of the Competition Act. Section 4 pertains to abuse of dominant market position.

For the cases, the CCI considered the market for ‘provision of services for development and sale of residential apartments/ flats in Gurgaon’ as the relevant one.

Since the opposite party group doesn’t appear to be in a dominant position in the relevant period with the changed scenario, there remains no requirement to examine the allegations of abuse of dominance, since in the absence of dominance there can be no case of abuse of dominance in terms of Section 4 of the Act.
Competition Commission of India Order

The regulator noted that it’s conscious of the fact that the opposite party group was found to be in a dominant position in a separate case in 2010 and in other subsequent cases. The properties in relation to which the current allegations of abuse have been made were booked in 2011-12 and 2012-13, whereas in the previous cases the properties were booked during 2006-2009, the CCI said.

Noting that several players have entered the geographic market of Gurgaon to provide the services of development of residential apartments, the regulator said that in such a “changed market scenario” during the relevant period no individual player, including the opposite party group, appears to have had the ability to influence the conditions of competition in the relevant market.

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The regulator also made a reference to the probe into both the cases by its investigation arm—the director general. In February 2015, the CCI had ordered investigations after “prima facie” observing that the conduct of the opposite party group was abusive.

The investigations by the director general show the market dynamics as they existed then (2006-09) are “different” from those in 2011-12 and 2012-13, the CCI said.

Also read: DLF Banks On Sale Of Finished Inventory To Reduce Debt