Track2Realty Exclusive: When the Competition Commission of India (CCI) alleged that DLF misused its dominant market position and imposed unfair conditions on home-buyers at two of its many projects, the real estate fraternity, legal experts and others strongly questioned the basis of the CCI order and the enormous penalty of Rs 630 crore levied on the real estate major. However, within a year the real estate sector itself approached the CCI through its associations against the cement cartel, and got them nailed as well. Consumers too are approaching repeatedly the anti-monopoly body. Track2Realty wonders whether the CCI has become the new regulator in the sector by default.
In the wake of the Competition Commission of India (CCI) imposing a hefty penalty of Rs. 630 crore on DLF, the anti-monopoly regulator has been flooded with the consumer complaints. In the year 2012, around 200 complaints against developers were filed with the CCI, out of which 70 real estate companies came under CCI scanner. However, prima facie it seems the CCI has been eventually forced to draw a line that bifurcates between what falls in its domain and what is the consumer protection ambit.
In the absence of a scientific analysis of market dominance, both in product category as well as the relevant market, the sector is keeping its fingers crossed as there has been a clear anomaly in defining the realty market by the CCI. What worries the realty sector most is that any frivolous complaint against them can be termed as exploitative since there is no defined parameter and the CCI has in several complaints used different standards to judge the realtor’s dominance vis-à-vis the product category and geographical market.
Facts speak for themselves. The CCI dismissed the plea of two individuals against the realty company Unitech alleging that Unitech failed to fulfill its obligation by not handing over the possession on time and therefore violated section 4 of the Competition Act (2002) by abusing its dominant position.
In two separate complaints filed by Poonam Gupta and Rohit Gupta against Unitech Limited, they had common facts and common issues and hence both these matters were clubbed by the CCI under Regulation 27 of the Competition Commission of India (General) Regulations, 2009. Earlier a complaint against Tulip was not sent for investigation under the similar circumstances.
Industry body NAREDCO suggests realty market dominance has to be defined on pan-India basis, as the consumer base is not micro-specific. It is a fundamental right for any citizen to re-locate to any geography in India; hence, his participation in the industry market share has to be on a pan-India basis. Real Estate cannot be region specific, thus a consumer has to be protected on a pan-India basis from undue & unfair competition.
Sunil Dahiya, Senior Vice President of NAREDCO says most of the complaints dismissed by CCI were directed towards it seeking ‘huge damages to the developer’ without actually concentrating instead on the sum & substance of the complainant to seek redressal of his own interest, if affected, that is.
“In the absence of a single regulator for the realty sector, any harsh view by another is viewed by any prospective complainant as a platform to give vent to his anger without taking an onus to pursue the grievance in the said complaint. This delay thus will anguish the redressal mechanism when the pursued complaint is finally disposed off as ‘dismissed’ and not under ‘purview’. Whereas a complaint in the right forum would finally redress the grievance. It is important to mention that such complaints pursued without sum & substance actually hurt the project as well as collective interest of other investors in the undergoing proceedings of such complaint(s),” says Dahiya.
…..to be continued
