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Compat rejects DLF plea; upholds Rs 630 cr penalty

May 19, 2014 15:31 IST

In a setback to DLF, the competition Appellate Tribunal on Monday upheld the CCI order imposing Rs 630 crore penalty on the realty major for unfair business practices.

In August 2011, the Competition Commission of India had found DLF violating fair trade norms and imposed a fine of Rs 630 crore on it following a complaint by a Belaire Owners' Association in Gurgaon.

During the hearing today, the tribunal upheld CCI decision to impose Rs 630 crore fine on DLF. It had challenged the fair trade watchdog's order at the tribunal, Compat.

In its order, CCI had asked DLF to cease and desist from formulating and imposing unfair conditions in its agreements with buyers in Gurgaon. The realty firm was also directed to suitably modify unfair conditions imposed on its buyers.

It was in May 2010 that the buyer's association had complained against DLF.

The association had alleged that DLF "imposed highly arbitrary, unfair and unreasonable conditions on the apartment allottees of the Housing Complex The Belaire, which has serious adverse effects and ramifications on the rights of the allottees".

Meanwhile, DLF said it will move Supreme Court against the Competition Appellate Tribunal (Compat) ruling that has upheld the CCI order imposing Rs 630 crore penalty.

"The Compat has pronounced the order today upholding certain findings of the earlier orders of CCI. The company is yet to examine the detailed order, therefore, the company at this stage will not be in a position to make any further comments," DLF said in a statement.

"The company shall be challenging the said order passed by the Compat in the Supreme Court for which Compat has given us 60 days time," DLF added. The company said that it has successfully delivered Park Place, Belaire and Magnolia projects which were the subject matter of the above appeals.

"The company has respected in true letter and spirit the customer commitments made by it. In testament thereof, out of over 2,600 total number of apartments, over 2,200 have been handed over, and over 1,800 number of families are already residing therein," the statement said.

Reacting to the Compat order, Belaire Owners Association President Sanjay Bhasin said: "This is a huge victory for all the buyers of real estate in our country who has so far felt completely helpless against dominant real estate companies".

This judgement would restore the balance between the real estate developers and property buyers, Bhasin added. 

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