DLF not in tune with fair trade practices, says CCI

New Delhi: The country’s antitrust watchdog has found DLF Ltd’s agreements with buyers in relation to another Gurgaon housing project to be a violation of fair trade practices, adding to the real estate company’s woes.

The Competition Commission of India (CCI) ordered a probe into DLF’s Skycourt project, adding that on the face of it, the agreements appeared to fall foul of antitrust principles.

The CCI, in its order, said that DLF occupied the position of a dominant player in the Gurgaon market for sale of residential units.

Despite the fact that these findings date back to 2007-2010, the antitrust regulator noted that “market dynamics have not changed much” and DLF “still holds a dominant position” in the Gurgaon market.

The project being investigated is Skycourt at Sector 86, DLF Gardencity, Gurgaon, Haryana.

Vijay Kapoor, who complained to CCI, was offered a flat at ₹ 1 crore with no hidden costs in December 2012, with a booking amount of ₹ 10.31 lakh.

Kapoor received his allotment letter on 7 January 2013. However, according to Kapoor, DLF demanded an additional ₹ 10.89 lakh soon after, without which his allotment would be cancelled and booking amount forfeited. He alleged that DLF’s agreement with him was “unfair, discriminatory and one-sided” and that DLF had abused its dominant position.

This is not the first such allegation against DLF. Aside from ordering a probe in relation to Regal Gardens at DLF Garden City, Gurgaon, recently, DLF is also fighting a case in relation to three projects in Gurgaon—the Belaire, Magnolia and Park Place—before the apex court.

DLF had been penalized ₹ 630 crore by CCI in 2011 in this case, which was upheld by the Competition Appellate Tribunal (Compat). While the Supreme Court is still considering the merits of the appeals, it has directed that DLF pay the entire penalty amount, albeit in a staggered manner.

It is yet unclear whether the CCI probe order on DLF will eventually lead to a levy of penalty, said Sandipan Pal, an analyst at Motilal Oswal Securities Ltd. “Considering the earlier 2011 CCI probe into DLF’s projects led to a penalty of ₹ 630 crore only in 2014, we have to wait and see what these probes lead to,” said Pal.

DLF didn’t respond to an email query on the recent CCI probe orders.