Competition panel slaps Rs630 crore fine on DLF-Aug 17, 2011

Competition panel slaps Rs630 crore fine on DLF

Published: Wednesday, Aug 17, 2011, 10:00 IST

By Ashutosh Kumar | Place: New Delhi | Agency: DNA

The Competition Commission of India (CCI) has imposed a fine of Rs630 crore on DLF Ltd, the biggest real estate developer in the country, for misusing its dominant market position in connivance with Haryana government agencies.

The informant in the case is Belaire’s Owners Association and the opponents are DLF, Haryana Urban Development Authority (HUDA) and Haryana town planning department. DLF is alleged to have put the buyers of the Gurgaon project at a disadvantage.

The Belaire project was initially supposed to have five multi-storied residential buildings in Zone 8, Phase-V of DLF City, Gurgaon. Each of the five buildings was to have 19 floors and 368 apartments.

“However, in place of 19 floors with 368 apartments, which was the basis of the apartment allottees booking their respective apartments, now 29 floors have been constructed. Consequently, not only the areas and facilities originally earmarked for the apartment allottees are substantially compressed, but the project has also been abnormally delayed,” the CCI noted in its order on the matter.

The apartments were supposed to be delivered to the buyers in 2009. However, with 564 apartments each instead of the earlier planned 368, they will now be completed only by the end of this year, says the company.

Also, the “amount collected from the allottees against a particular project is not deposited in a designated escrow account and utilised only for the construction of the concerned building,” the panel noted. “Indeed, it appears that various deposits by allottees become part of a large pool of funds, which may be deployed for any purpose at the discretion of DLF, without necessarily having a linkage with the purose for which the money was deposited.”

DLF said it is going through the CCI order and “examining” the legal options. “If industry sources are to be believed, DLF has contended that with almost all major developers present in Gurgaon, there is no monopoly or dominance like situation for the company,” said Rajeev Talwar, group executive director, DLF.