Sunday, June 6, 2010


This is a copy of the article in Economic times(07-06-10)

NEW DELHI: In a bid to check rampant malpractices in the realty sector, the Competition Commission of India (CCI) has decided to suo motu inquire if
various developers are misleading the buyers, apart from looking into specific complaints against market leader DLF.

Taking note of, the general complaint of delayed possession, change in terms and conditions of sale agreements and developers making it almost impossible for a customer to opt out, the commission has also decided to look into complaints of misleading advertisements, a source said.

On the basis of complaints from individuals who have booked flats from various developers, the CCI has referred the complaints against DLF to the director general-investigations for a probe, the source said. When contacted, DLF officials said they have not received any notice from the CCI, a market watchdog created to check abuse of market dominance.

“We have not received any letter from the CCI in this regard so far. Therefore, we would not like to comment on this matter without knowing the exact nature of the complaint,” a DLF spokesperson said. According to one such complaint, DLF had promised to complete its residential project in Gurgaon called Blair in 2009 but the buyers are yet to get possession.

Another individual has alleged that for the project Height, DLF had initially announced it as an 18-floor apartment
but later on added 10 more storeys without informing the buyers. These complaints were admitted under section4 of the Competition Act of 2002, which pertains to abuse of dominance by a player in a relevant geography. The CCI on its part is learnt to have “prima facie” found that DLF has abused its dominant market position and the agreement was “one-sided” in nature and there were “variations from the initial stipulations.”

The CCI, sources said, could also look into similar practices by other developers. The Commission, which became fully functional last July, is empowered by an Act of Parliament to penalise the guilty or ban a prevalent malpractice.

The Commission sources said it was more of an industry issue and the buyers in general were facing such problems irrespective of any specific developer. It is, therefore, appropriate to look into the general practice along with specific complaints.

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