Competition watchdog Competition Commission of India (CCI) on Thursday modified the apartment buyers? agreement between real estate major DLF and apartment buyers in its two projects, wherein the realty major was found to have abused its dominant position.
The commission in its earlier order dated August 12, 2011 had held that DLF was a dominant enterprise which had violated the Competition Act 2002 by entering into an agreement with apartment allottees that was one-sided, abusive and unfair to the allottees.
?Accordingly the apartment buyers? agreement has been amended such that the abusive and unfair conditions present in the original one-sided agreement have been removed,? said the CCI supplementary order, which has also considered the relevant provisions of the laws applicable to the development of group housing projects in Haryana, particularly the mandatory requirements which must be followed by every developer but were not followed by DLF.
The agreement has been modified after a direction from the Competition Appellate Tribunal (COMPAT), where DLF had challenged a penalty of R630 crore imposed on it by CCI.
Thursday’s order has been sent to COMPAT which is expected to hold a hearing on the case this month.
The COMPAT had asked CCI in March 2012 to pass an order specifying the extent and manner in which terms and conditions of the apartment buyers? agreement need to be modified.
CCI said the the terms of the agreement have been modified in a manner ?which it considers fair and reasonable and takes into account the interest of both parties?.
The CCI had passed its order against DLF following its inquiries into complaints filed by flat buyer associations of two DLF projects in Gurgaon, DLF Park Palace and The Belaire, alleging delays in the project and increase in the number of floors than planned earlier, among other things.
The order said, ?The commission considers that the defaults can be on the part of the company as well on the part of the allottees and the agreement should provide for defaults of both the parties and the agreement must be equitable in dealing with both the sides and levy of interest /penalty should be of equal level on both sides.?
?Besides making the defaults on delays equitable, we have also recommended the payment schedule to be linked with construction and not time. Moreover, the copy of the agreement should be sent to the allottee also,? said a CCI member.
Though there may not be any legal impact on the real estate industry, experts opine that other real estate developers might follow suit in changing their apartment buyers’ agreements.
