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HindustanTimes Mon,22 Dec 2014

SC orders DLF to pay Rs. 630 cr fine within 3 months for unfair practices

HT Correspondent, Hindustan Times  New Delhi, August 27, 2014
First Published: 16:00 IST(27/8/2014) | Last Updated: 01:09 IST(28/8/2014)

The Supreme Court on Wednesday directed real estate major DLF Ltd to deposit within three months the Rs. 630-crore penalty imposed on it by the Competition Commission of India (CCI) for abusing its dominant position and forcing flat buyers to accept changes in the building plans of three projects in Gurgaon.

The money will be deposited by the Supreme Court registry in a nationalised bank till the disposal of DLF’s appeal against the CCI order, which was upheld by Competition Appellate Tribunal (Compat).

Flat buyers’ associations in Belaire, Park Palace and Magnolias, three prestigious DLF projects in Gurgaon, had complained to CCI that the real estate company had allegedly delayed handing over possession of their flats and had built several additional floors that were not there in the original plan when the flats were sold to them.

Belaire and Park Palace, they submitted, were to comprise five multi-storeyed residential buildings, with 19 floors each. The total number of apartments, according to the original plan, was 368 and the construction was to be completed within 36 months. However 10 more floors were added to each tower. In Magnolia, the number of floors was increased from 17 to 26. These, and a one-sided agreement that allowed DLF to change the original plans, amounted to abuse of its dominant position, the flat buyers had contended.

CCI had found merit in this argument and ordered DLF to pay a fine of Rs. 630 crore on August 12, 2011. DLF’s appeal against this order was dismissed by Compat on May 19 this year.

Declining DLF’s submission to allow it six months to deposit the money, the Supreme Court directed it to deposit Rs. 50 crore with the SC registry within three weeks and the balance Rs. 580 crore within the fixed time frame.

DLF was also asked to give an undertaking within three weeks that in the event of its appeal being dismissed, it would pay interest at the rate of 9 per cent per annum on the deposited amount from the date of the CCI order.

“DLF will take all steps to comply with the directions of the Hon’ble Supreme Court and remains confident of the merits of its case,” the company said in a statement.

“This (the SC order) will cement the competition/anti-trust eco system and greatly restore the confidence of millions of homebuyers,” said Pankaj Mohindroo, secretary, Belaire Owners Association and president, Federation of Apartment Owners Association.


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