Second Probe Against DLF By CCI In Two Days

10/02/2015 5:11 PM IST | Updated 15/07/2016 8:24 AM IST
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INDIA - APRIL 04: A woman walks past the DLF Ltd. Hamilton court apartment complex in Gurgaon, India, on Thursday, April 3, 2008. DLF Assets Ltd., the real-estate company owned by India's third-richest family, plans to raise more than $2 billion in a private stock sale to buy office properties. (Photo by Pankaj Nangia/Bloomberg via Getty Images)

The Competition Commission has ordered a fresh probe against realty major DLF, finding the company to have prima-facie abused its dominant position, making it the second such probe ordered within two days.

The new order, in which the CCI has asked its investigative arm to conduct a detailed probe, relates to alleged "abuse of dominant position in development and sale of residential units in Gurgaon" for the Skycourt residential project of DLF Universal Ltd.

This follows another probe ordered by the CCI yesterday for probe into similar complaints related to the 'Regal Gardens at DLF Garden City' project in Gurgaon.

With regard to a few other projects, all of which have been incidentally been in Gurgaon, the CCI has already found DLF guilty of having abused its dominant market position. In one such case, the CCI had imposed a penalty of Rs 630 crore on DLF in August 2011.

The company challenged that order before the Competition Appellate Tribunal, which upheld the penalty, pursuant to which DLF has gone to the Supreme Court.

In the latest order, dated February 5 and released today, the CCI said, "At the outset it may be noted that the Commission has already received many informations where Opposite Party (DLF Universal) has been prima facie found to be dominant in market for 'provision of services for development of residential apartments in the territory of Gurgaon'.

"The issues raised in this case are also of the same nature where the Informant (an individual who had filed the complaint with CCI) is aggrieved by the conduct of the OP which is alleged to be one-sided and discriminatory resulting into abuse of dominant position.

"The Informant has alleged that owing to its dominant position, OP has imposed hidden costs and onerous conditions on the buyers by way of an 'Agreement' which is extremely one-sided and biased towards OP."

The fair trade regulator has asked the probe to be completed within 60 days.

The CCI said that "considering the previous orders of the Commission and investigations carried out by the Director General (CCI's investigation arm), it appears that market for provision of services for development and sale of residential units in Gurgaon is the relevant market in the present case.

"It may be mentioned here that the Commission has already held OP to be dominant in the above mentioned relevant market.

"Although such cases were before the Commission for the agreements which were entered into between 2007 to 2010, in the absence of any material pointing to the contrary, the Commission is of the view that vis-a-vis OP, the market dynamics have not changed much and OP still holds a dominant position in the relevant market defined above."

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