In a 237-page order, The 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, 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.
The move is likely to have wider implications for an industry where the practice of one-sided agreements is common and where builders routinely delay or modify projects, increasing the costs for consumers.
For instance, allotees who failed to pay instalments on time were to cough up 15-18 per cent interest, whereas the builder 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 May 2010. The residents had complained of delay in possession and alleged arbitrary changes in the building plan and structure by the builder.
The project 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 two 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. Belaire and one project DLF made unfair practices
The two projects are expected to have a total of 2,200 flats, priced between Rs 1.5 crore and Rs 3 crore each, making the total worth of the apartments Rs 4,500-5,000 crore.
The order passed by CCI chairman HC Gupta and four of its members, R Prasad, Geeta Gouri, Anurag Goel and ML Tayal, said DLF’s turnover for the years ended March 31 of 2009, 2010 and 2011 were Rs 10,035.39 crore, Rs 7,422.87 crore and Rs 9,560.57 crore, respectively. The average turnover for the three years thus worked out to be Rs 9,006.27 crore. The penalty of 7 per cent of this average turnover was Rs 630.43 crore, rounded off to Rs 630 crore, the order said.
The commission passed the order in a case arising from complaints by some people who had booked flats in DLF projects in Gurgaon in May 2010. They had complained that the company had imposed heavy interest rates for delays in payments when it had even failed to give possession of homes.
The commission then referred the matter to the director-general (investigations) for enquiry. The Commission also directed DLF to modify “unfair conditions” within three months.
DLF can appeal against the order by approaching the Competition Appellate Tribunal.
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