The CCI (Competition Commission of India), has slapped a 630-crore penalty on real estate firm DLF, threatening to turn an isolated dispute by flat buyers.
In its CCI said ''The brutal disregard to consumer right that has been displayed in its action of cancelling allotments and forfeiting deposits and…keeping buyers in the dark about the eventual shape, size, location etc of the apartment cannot be termed as fair.”
The CCI find, DLF guilty of beginning work on a residential project, The Belaire, in Gurgaon Phase V, without approvals, increasing the number of floors mid-way through the project, delaying completion, and forfeiting the booking amount of some buyers.
For instance, allotees who failed to pay instalments on time were to cough up about 18% interest, whereas the DLF would only have to shell out compensation at the rate of Rs 5 per square foot a month for delay beyond three years. Buyers complained that they also had no exit option except when DLF failed to deliver possession within the agreed time. The money would be refunded without interest and that too only after DLF resold the apartments
The case relates to a complaint filed by The Belaire Owners' Association in Gurgaon against DLF in 2010 May. The residents had complained of delay in possession and alleged big changes in the building plan and structure by the builder.
The Belaire was started in 2006, and DLF increased the number of floors to 29 from 19, increasing the number of apartments to 564 from 384. DLF promised to complete it in 2009, but more than 2 years later, buyers are yet to get possession.
Same time, DLF sold flats on 10 new floors of the expanded project at a lower price than what the earlier buyers had paid.
CCI referred the matter to the director-general (investigations) for enquiry. The Commission also directed DLF to modify “unfair conditions” within three months. DLF will appeal against the order by approaching the Competition Appellate Tribunal.
In its CCI said ''The brutal disregard to consumer right that has been displayed in its action of cancelling allotments and forfeiting deposits and…keeping buyers in the dark about the eventual shape, size, location etc of the apartment cannot be termed as fair.”
The CCI find, DLF guilty of beginning work on a residential project, The Belaire, in Gurgaon Phase V, without approvals, increasing the number of floors mid-way through the project, delaying completion, and forfeiting the booking amount of some buyers.
For instance, allotees who failed to pay instalments on time were to cough up about 18% interest, whereas the DLF would only have to shell out compensation at the rate of Rs 5 per square foot a month for delay beyond three years. Buyers complained that they also had no exit option except when DLF failed to deliver possession within the agreed time. The money would be refunded without interest and that too only after DLF resold the apartments
The case relates to a complaint filed by The Belaire Owners' Association in Gurgaon against DLF in 2010 May. The residents had complained of delay in possession and alleged big changes in the building plan and structure by the builder.
The Belaire was started in 2006, and DLF increased the number of floors to 29 from 19, increasing the number of apartments to 564 from 384. DLF promised to complete it in 2009, but more than 2 years later, buyers are yet to get possession.
Same time, DLF sold flats on 10 new floors of the expanded project at a lower price than what the earlier buyers had paid.
CCI referred the matter to the director-general (investigations) for enquiry. The Commission also directed DLF to modify “unfair conditions” within three months. DLF will appeal against the order by approaching the Competition Appellate Tribunal.
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