THE COMPETITION COMMISSION OF INDIA REWRITES THE SALE AGREEMENT OF DLF- ANOTHER KICK TO THE REALTY MAJOR FOR MISUSING ITS DOMINANCE !!!!
BELAIRE OWNERS’ASSOCIATION .…. INFORMANT
VS.
DLF LTD. …. OPPOSITE PARTY-1
HARYANA URBAN DEVELOPMENT …. OPPOSITE PARTY-2
AUTHORITY
DEPARTMENT OF TOWN & COUNTRY …. OPPOSITE PARTY-3
PLANNING, STATE OF HARYANA
Through:- Shri Vaibhav Gaggar, advocate for informant and
Shri Ravinder Narain, advocate for opposite party no.1
Supplementary Order u/s 27 of the Competition Act, 2002
The Commission vide its order dated 12th August, 2011(the order) in above case had held DLF Ltd. as a dominant enterprise in the geographic area of Gurgaon in the relevant market. The Commission found that DLF Ltd. had abused its dominant position and violated the provisions of Section 4 of the Competition Act, 2002(the Act) as DLF had made the flat owners i.e. members of the Informant association to sign a highly abusive apartment buyers agreement. In para 12.90 of its order, the Commission had noted a number of clauses of the agreement as examples of abusive nature. The Commission observed in para 12.91 that DLF Ltd. had made it clear to the allottees that no alterations/modifications were to be made in the said agreement by the allottees. The Commission in para 12.95 had observed regarding commencement of project without sanction/approval, increase in number2 of floors midway, increase of Floor Area Ratio(FAR) and density per acre(DPA), inordinate delay in completion and possession, forfeiture of amounts, etc. The Commission found that the clauses of the agreement were biased in favour of DLF Ltd. In para 12.101, the Commission observed that certain clauses in the agreement gave DLF a sole discretion in respect of making changes in zoning plans, usage pattern, super area, carpet area and for alteration of structure and even a case of change of location of apartment and if a refund became due, no interest was payable by the builder. No rights had been given to buyers for raising objections. Even if the buyers had paid full amount, the builder could create mortgage on the property of the buyers for raising finance for its own purpose. DLF Ltd. inserted such clauses which made exit next to impossible for buyers. In case of delay by the builder, DLF Ltd. was to pay compensation of Rs. 5 per sq. feet per month equivalent to about 1% per annum interest, while in case of delay in payment by the buyer, the interest charged was 15% per annum for the first 90 days and 18% thereafter.
The Commission came to conclusion that the conduct of DLF Ltd. was unfair in terms of section 4 and was being carried out by it because of its being a dominant enterprise and amounted to abuse of dominance.
THIS ORDER MAY BE USED AS A BENCH MARK FOR DRAWING UP AGREEMENTS BY ALL THE BUILDERS.
THE CONTENTS ALSO APPLIES TO THE HIRANANDANI UPSCALE OR ITS ASSOCIATE COMPANY SAUDELA CONSTRUCTION COMPANY, WHICH HAS DRAWN THE SALE AGREEMENT ON THE SIMILAR LINES OF DLF !!!