In a big jolt to DLF, an appellate tribunal has upheld a ruling to impose a Rs. 630-crore penalty on India’s largest real estate company for not informing buyers about changes in construction plans.
The company had gone ahead and built an additional 200 flats in Gurgaon’s DLF Belaire project.
On Monday, the Competition Appellate Tribunal (COMPAT) ruled that these flats flouted original plans.
It upheld an August 2011 ruling by the Competition Commission of India that imposes a fine of Rs. 630 crore after the Belaire Owners Association filed a complaint with the anti-trust body seeking appropriate action.
The owners association said the extra 200 apartments were not part of the original plans on which the company had sold 364 flats in the project.
DLF raised the number of floors from 19 to 29 to build the extra flats, triggering protests from the first set of allottees.
DLF challenged the CCI ruling in COMPAT, arguing the extra floors were within limit.
On Monday, the company said it will challenge the COMPAT ruling in the Supreme Court.
“The company wishes to point out that it has successfully delivered Park Place, Belaire and Magnolia projects, which were the subject matter of the above appeals,” DLF said in a statement .
At the time of its launch an apartment in the project was sold for about Rs. 6,250 per square feet. The current price is around Rs. 13,500 per square feet.
Two other housing associations — Park Place and Magnolias — have filed similar cases against DLF for diverting from the original plan and raising the number of apartments.
The CCI did not impose any further monetary penalty but had pulled up the real estate major for misusing its dominant position.
The penalty amount of Rs. 630 crore will go the state exchequer. “We are planning to file a compensation claim with the CCI in over a month… each apartment owner will demand a compensation of around Rs. 50 lakh,” said Sanjay Bhasin, president of Belaire Owners’ Association.
CCI chairman Ashok Chawla did not respond to calls and text messages by HT.
Inspite of the penalty, the company’s shares surged 7.5% to Rs. 183 on the BSE on Monday.