CCI pulls up Chandigarh Housing Board for anti-competitive practices

The role of the commission is to eliminate practices that have adverse effects on competition, promote and sustain competition, safeguard consumer interests, and ensure trade freedom in India’s markets

Reprimanding it for engaging in anti-competitive practices, the Competition Commission of India (CCI) on Wednesday issued a desist order against the Chandigarh Housing Board (CHB).

The order came on information provided by Ramesh Kumar, an allottee of a flat offered under a Self-Financing Housing Scheme launched by CHB in 2010. (HT)

The role of the commission is to eliminate practices that have adverse effects on competition, promote and sustain competition, safeguard consumer interests, and ensure trade freedom in India’s markets.

The orders have been issued under Section 4 (2)(a)(i) in conjunction with Section 4(1) of the Act, which addresses an abuse of dominant position under sub-section (1) when an enterprise directly or indirectly imposes unfair or discriminatory conditions in the purchase or sale of goods or services.

The order came on information provided by Ramesh Kumar, an allottee of a flat offered under a Self-Financing Housing Scheme launched by CHB in 2010.

It was alleged that CHB abused its dominant position under Section 4 of the Act by imposing unfair terms and clauses on allottees.

The board was criticised for failing to disclose the possession date of flats to allottees in its brochure and acceptance-cum-demand letter, as well as for charging penal interest for an entire month even for a one-day delay.

After identifying the relevant market as the “market for the provision of services for the development and sale of residential flats in Chandigarh”, the commission determined that CHB held a dominant position, allowing it to operate independently of the competitive forces present in the relevant market.

The commission also ruled that not disclosing the possession delivery date to flat applicants and imposing full-month penal interest for a one-day delay in the instalment payment constituted an abuse of dominant position under Section 4 (2)(a)(i) of the Act.

Given that CHB had already taken corrective measures, the orders indicated that CCI refrained from imposing any monetary penalty on the board.