Belaire Owner’s Association alleged DLF for abuse of its dominant position
The petition before Competition Commission of India (CCI), filed by Belaire Owner’s Association against DLF Limited states DLF has failed to deliver the residential project on time and put discriminatory and abusive clauses in the rent agreement provided to the allottees of the apartments. It also says the builder is abusing its dominant position in the market. According to the Belaire Owner’s Association, DLF has till now sent 34 cancellation letters to the allottees for default of payment. While the DLF agreement entitles the buyers to seek a penalty of Rs 10 per sq ft every month for the delayed period, it allegedly has tougher norms for its customers.
In a trend-setting move, CCI has initiated proceedings on a complaint against DLF for alleged abuse of its dominant position by putting discriminatory and abusive clauses in the rent agreement provided to the allottees of the apartments.In its first hearing on Tuesday (August 3), CCI took an oral undertaking from DLF that the company would not take any coercive action till the case is resolved. CCI also directed DLF to submit all relevant information regarding the project within two weeks and fixed the next date for hearing on August 19.
A DLF executive said the company had not violated the terms of the agreement with its customers and would support CCI in the proceedings of the case. The CCI officials said they would not comment on ongoing cases. Belaire Owner’s Association filed petition before CCI against DLF Limited, Department of Town & Country Planning, Haryana and Haryana Urban Development Authority (HUDA) states DLF has failed to deliver the residential project on time and put discriminatory and abusive clauses in the rent agreement provided to the allottees of the apartments. Both the projects are expected to have 2,200 flats priced between Rs 1.5 crore to Rs 3 crore, making the apartments worth Rs 4,500 to Rs 5,000 crore.
Sector analysts see this as a trend-setting case as the practice of asking customers to sign on the dotted lines without giving them an opportunity to negotiate the terms of agreement with the real estate developer is a common norm in the industry.
“The Competition Commission of India has received information alleging abuse of dominance by four developers– DLF New Gurgaon Homes Developers, DLF Home Developers Ltd and Others, DLF Limited and others, and DLF New Gurgaon,” Corporate Affairs Minister Salman Khurshid said in a written reply to the Lok Sabha. Khurshid was responding to a query whether government was aware of the various kinds of fraud and malpractices being adopted in the realty sector. He informed Lok Sabha that CCI has received complaints of “abuse of dominance” against DLF New Gurgaon Homes Developers, DLF Home Developers Ltd, DLF Ltd and DLF New Gurgaon.
The petitioners’ counsel M L Lahoty said DLF collected advances for bookings (in September 2006) much before they had any approved building plan. The actual agreement was also given to customers months after the company collected initial payments, he said. “By the time DLF gave the agreement letters to its customers, it had collected 27 per cent of the total money from the buyers,” Lahoty said.
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