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Ghaziabad authority fined Rs 1 crore for hiking price of low-end flats

The rate of the flats was hiked from ₹2 lakh to ₹7 lakh in the Pratap Vihar housing scheme. The scheme had nearly 348 flats meant for those in the EWS category.

noida Updated: Feb 28, 2018 23:24 IST
Peeyush Khandelwal
Peeyush Khandelwal
Hindustan Times
CCI,Ghaziabad development authority,GDA
The CCI in its order observed that it generally takes three years to complete the construction of a project but, in the present case, the authority was not able to provide possession even eight years after the announcement of the project(Sakib Ali/HT Photo)

The Competition Commission of India (CCI) on Wednesday imposed a penalty of ₹1 crore on the Ghaziabad development authority (GDA) for hiking the price of flats meant for the economically weaker section (EWS).

The rate of the flats was hiked from ₹2 lakh to ₹7 lakh in the Pratap Vihar housing scheme. The scheme had nearly 348 flats meant for those in the EWS category.

Satyendra Singh, an allottee, had approached the CCI with a petition filed under the Competition Act, 2002, and contended that the authority has indulged in unfair and arbitrary practices. The petition alleged that the GDA misused its position even after knowing that the allottees belong to the EWS category and that they were not in a position to challenge the authority over its unfair and arbitrary conduct.

The CCI, in its order, said after carefully considering “the detrimental effect on the consumers emanating out of the aforesaid anti-competitive conduct of the authority, the commission is of the considered opinion that this is a fit case to impose penalty under Section 27(b) of the Act”.

“Resultantly, a penalty of ₹1,00,60,794, calculated at the rate of 5% of the average turnover/ receipts of the GDA, generated from the provision of services for development and sale of low-cost residential flats under affordable housing schemes for the economically weaker sections for the preceding three financial years,
is hereby imposed,” the CCI order said.

Singh contended that the GDA allotted him a flat in May 2009 and at a price of ₹2 lakh. However, in November 2015, the authority intimated to all allottees that the price was revised to ₹7 lakh, based on the construction cost of the project.

It was further contended that the authority asked the allottees to give their consent for the same within 15 days, else their allotment would be cancelled.

The CCI in its order observed that it generally takes three years to complete the construction of a project but, in the present case, the authority was not able to provide possession even eight years after the announcement of the project.

Initially, flats were promised to be delivered around August 2009 which was postponed for March 2016. The CCI has directed the authority to deposit the penalty amount within 60 days of receipt of the order and also to file a compliance report.

“We will file an appeal with the appellate tribunal of the CCI,” Ritu Maheshwari, vice-chairperson, GDA, said.

On the matter of ascertaining liability of individual officials— former GDA vice-chairperson Vijay Yadav and former secretary Ravindra Godbole — the CCI has decided not to proceed against them.

First Published: Feb 28, 2018 23:24 IST