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Case Study on DLF

Case Study on DLF

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Published by Sagar Parekh

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Published by: Sagar Parekh on Sep 22, 2013
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09/22/2013

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Competition Commission of India (CCI) has modified the agreement between DLF group and apartment buyers in two

of its projects , wherein the realty major was found to have abused its dominant position. CCI had passed its original order on August 12, 2011 wherein it had held that DLF Ltd was a dominant enterprise and violated the provisions of the Competition Act “by entering into an agreement with apartment allottees that was one sided, abusive and unfair to the allottees.” The terms of the Apartment Buyers Agreement have been modified in a manner which it considers fair and reasonable and takes into account the interest of both parties, the Ministry of Corporate Affairs said. The move is expected to make agreements more equitable to buyers, a major change from the builder-centric pact so far. At least 16 sub-clauses, found abusive and unfair have been deleted. DLF fell as much as 2.3 percent in early trade on Friday after the fair play watchdog passed the order. The apartment buyer agreement has been modified after a direction from the Competition Appellate Tribunal (COMPAT), where DLF had challenged a penalty of Rs 630 crore imposed on it by CCI. The order came after complaints filed by flat buyers’ association of two DLF projects – DLF Park Palace and The Belaire. CCI said in a statement that “the apartment buyers agreement has been amended such that the abusive and unfair conditions present in the original one-sided agreement have been removed. The agreement between DLF and apartment allottees has been modified through a supplementary order passed by CCI, The COMPAT had asked CCI in March, 2012 to pass an order specifying the extent and manner in which terms and conditions of the Apartment Buyer’s Agreement need to be modified. CCI also said it has considered the relevant provisions of the laws applicable to the development of group housing projects in Haryana, particularly the mandatory requirements that must be followed by every developer/builder, but were not followed by DLF in this instance. CCI has disallowed any additional construction beyond the approved building plan. Group housing projects must be constructed in line with the layout plans, floor plans and specifications. Builders will also have to adhere to the compensation promised to the buyers in case of delay in construction or delivery of flats.

DLF was found to be dominant because it was big. DLF Park Palace and The Belaire.It also said the builder will no longer have sole ownership of open spaces within the residential project area not sold to the allottee and has suggested a joint ownership mechanism among the owners.” As per Mr Ashok Chawla (CCI chairman) The CCI had passed its order against DLF following its inquiries into complaints filed by flat buyer associations of two DLF projects in Gurgaon. most of them follow the same format pattern that flows from big players in the market. “Whether a real estate company is dominant or not. among other things. . alleging delays in the project and increase in the number of floors than planned earlier.

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