The Competition Commission, in August 12, 2011, had imposed the penalty on DLF for grossly abusing its dominant position, after aggrieved flat owners of Belaire housing complex, Gurgaon, complained about prolonged delays in project.
A similar complaint was filed by the flat owners of another DLF project, Park Place. Buyers of these 2 projects, which together entail about 2,000 flats had alleged that the builder imposed one-sided contract clauses on them. They also objected to DLF unilaterally increasing the number of floors in the projects. Rs. 630-crore fine, it is the highest such penalty imposed by the CCI so far.
DLF challenged..!
In October, DLF challenged the fine imposed on it and moved the COMPAT to appeal against the CCI order.
In the first hearing of the case on recently, a 3 member bench, headed by Dr. Justice Arijit Pasayat stayed the imposition of fine.
The COMPAT tribunal clarified in an interim order that if DLF loses its case, the company will have to deposit the entire amount along with 9% interest. The COMPAT tribunal has asked the DLF to give an undertaking to this effect. Meanwhile, the COMPAT also directed DLF and the flat owners' association to submit a draft of the revised terms of their agreement, as directed by the CCI in its order, within a period of 8 weeks.
Final Argument..!
The tribunal will hear the final argument in the case in the second week of February, 2012.
According to Mr Sriram Khattar, Senior Executive Director, DLF said, ''Our company DLF is pleased that the tribunal appreciated its contention that the order passed by the Competition Commission imposing fine & directing modification of terms of agreement, is contrary to law and as such admitted the appeal."
Mr Harsh Sehgal, President, Park Place Residents' Welfare Association, said, '' Anyway, the fine amount was not coming to us. But, yes, we would have felt better if the tribunal had set a precedence. It could have had a ripple effect on the Indian real estate sector.The flat's association would like removal of clauses that were loaded in favour of the builder. For instance, an allottee who failed to pay instalments on time were to cough up 18% interest, whereas the DLF (Builder) would only have to shell out compensation at the rate of Rs. 5 per sq. ft a month for delay. That is only about 1% per year. so, We want the clauses to be made equitable and reciprocal"
For 2010-11, DLF's net profit was pegged at Rs. 1,640 crore & consolidated revenue of Rs 10,145 crore.
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