DLF gets CCI rap again for abuse of dominant position

Gurgaon-based real estate developer DLF has received a rap on the knuckles from the Competition Commission of India (CCI) for indulging in various acts of 'unfair and abusive' conduct.

While investigating complaints of home buyers, CCI found merit in the allegation that the builder had used its dominant position to forfeit booking amounts of some buyers, and arbitrarily increase the super area of flats and consequently the financial burden on home buyers.

According to a complaint filed by two buyers, who had booked flats in the New Town Heights project in Gurgaon in 2008,  the builder made demands for payment despite no work at the site. The complainants alleged that when they refused to pay, the builder started intimidating them.

After many reminders for payment sent by the builder, the complainants decided to cancel the booking and requested for refund of the booking amount. The builder, however, informed the buyers that "applications signed by buyers were irrevocable and the request for cancellation cannot be acceded to".

During the investigation, the CCI also found that when the apartment buyers raised issues with the builder about various misrepresentations, they were threatened that their allotments would be cancelled. The builder actually cancelled the allotment of certain buyers and forfeited their booking amount of about Rs 7 lakh each. The commission found that "this act of cancellation on arbitrary terms also amounts to abuse".

The investigation further revealed that the builder had arbitrarily increased the super area of flats in an apparent "abuse of its dominant position". The apartment's initial super area was 2,505 sq ft.,  which was increased by 125 sq ft. to make it to 2,630 sq ft.

Though the Commission found the company abusing its dominant position, it did not levy any penalty as "a penalty of Rs 630 crores has already been imposed on DLF in a similar case".