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DLF fined for Rs 650 crore by Competition Commission of India


DLF fined for Rs 650 crore by CCI
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The competition watchdog of the country, Competition Commission of India (CCI), has imposed a fine on the the biggest real estate developer of India i.e. DLF for Rs 630 crore. The CCI said that the company had misused its dominant market position in connivance with Haryana government agencies.

The informant for the case was Belaire"s Owners Association. The opponents in the case are DLF, Haryana Urban Development Authority (HUDA) along with Haryana town planning department. it is alleged that DLF has placed the buyers of the Gurgaon project at a disadvantage.

This project in Belaire was initially planned as five multi-storied residential buildings in Zone 8, Phase-V of DLF City, Gurgaon. And each of the five buildings were to have 19 floors, covering 368 apartments.

“However, in place of 19 floors with 368 apartments, which was the basis of the apartment allottees booking their respective apartments, now 29 floors have been constructed. Consequently, not only the areas and facilities originally earmarked for the apartment allottees are substantially compressed, but the project has also been abnormally delayed," the CCI noted in its order on the matter.

There was also a lag in the delivery of the apartment as the due date was 2009. However, with 564 apartments in each building instead of the earlier planned 368, it can only be completed by the end of current year stated the company.

The panel made a note that the amount collected from the allottees is not deposited in a designated escrow account and utilised only over the concerned project.

“Indeed, it appears that various deposits by allottees become part of a large pool of funds, which may be deployed for any purpose at the discretion of DLF, without necessarily having a linkage with the purpose for which the money was deposited."

Many experts feel that this can start a new trend where in all real estate companies are brought before the CCI. If the entire issue is taken to the court and the focus turns on how the money is utilized then it will definitely affect all the real estate companies.

Read more about: dlf real estate cci bse nse
Story first published: Wednesday, August 17, 2011, 12:54 [IST]
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