DLF once again in legal tangle by CCI

Stocks

oi-Monika Nihalani

By Monika Nihalani

Published: Wednesday, August 31, 2011, 13:13 [IST]

It's just a fortnight, realty developer DLF was penalized Rs 630 crore for misusing its dominant position in market, Competition Commission of India (CCI) caught the company in another similar tangle on Tuesday. CCI found DLF at fault for misusing its dominance at one more project, the Park Palace housing project in Gurgaon.

The Company and its subsidiary - DLF Home Developers Ltd. (DHDL) have received an order from Competition Commission of India (CCI) in connection with eight cases filed by DLF Park Place Residents Welfare Association, the company informed BSE.

However, realty major is in a sigh of relief because the commission has not imposed any further financial penalty after it imposed a fortnight ago. But this could hamper DLF's future undertakings and projects.

“The order says that, since a penalty has been imposed in the earlier case, it will not be appropriate to separately impose penalty again in the instant cases," company mentioned in BSE filing.
The residents of DLF Park Place complained that the developer constructed 1,560 apartments against the earlier promised 950. This reduced the area and facilities originally promised to the buyers and delayed the project, leading to financial losses to the allottees, the regulator said.

"We should get compensation at the same rate equal to what DLF charges for delayed payment," said Harsh Sehgal, president of the Park Place Residents Welfare Association. DLF charges 18% interest if buyers delay their payments. And company pays mere Rs 10 per sq ft to the buyers for delay on its part.

The commission appointed the investigator to investigate the Park Place issue, which found that the conditions imposed upon the applicants and allottees are "anti-consumer and anti-competitive".

The investigator also mentioned that there could be more violations in this case since the building has been constructed without taking prior permission.

CCI directed DLF to "cease and desist from formulating and imposing unfair conditions in its agreements" with the buyers and to "modify unfair conditions" within three months.

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