8e|a|re Assoc|at|on Vs DLI

Compet|t|on Act (2002)
Subm|tted byť
It| Chaudhary
MI8 SemŴIII
ko|| noŦ 19
Iacts
Informantť 8e|a|re
Cwners' Assoc|at|on
Cppos|te Þart|esť
W DLI L|m|ted (CÞŴ1)
W naryana Urban
Deve|opment
Author|ty (CÞŴ2)
W Department of 1own
and Country Þ|ann|ngţ
State of naryana (CÞŴ
3)
Informant
W 8e|a|re Cwners' Assoc|at|onŦ
W 1he assoclaLlon has been formed by Lhe
aparLmenL alloLLees of a 8ulldlng Complexţ
'8elalre' slLuaLed ln uLl ClLyţ ÞhaseŴvţ
Curgaonţ belng consLrucLed by CÞŴ1Ŧ
W 1he ÞresldenL of Lhe assoclaLlon ls San[ay
8haslnţ who hlmself ls one of Lhe alloLees ln
Lhe complexŦ
Cppos|te Þart|es] kespondents
1Ŧ DLI L|m|tedť (CÞŴ1)
Lhe maln respondenL
ls a Þubllc LlmlLed Company
1he company was llsLed on !uly 3ţ 2007 and ls aL
presenL llsLed on nSL and 8SLŦ
W 1he company has developed many well known
urban colonles ln uelhlţ lncludlng SouLh
LxLenslonţ CreaLer kallashţ kallash Colonyţ
Pauz khas and ln Lhls Caseţ ln CurgaonŦ
2Ŧ naryana Urban Deve|opment Author|ty
(nUDA) (CÞŴ2)
sLaLuLory body under Paryana urban uevelopmenL AuLhorlLy
AcLţ 1977Ŧ
Iunct|onsť
1o promoLe and secure developmenL of urban areas ln a
sysLemaLlc and planned way wlLh Lhe power Lo acqulre sell
and dlspose of properLyţ boLh movable and lmmovableŦ
use Lhls so acqulred land for resldenLlalţ lndusLrlalţ
recreaLlonal and commerclal purposeŦ
1o make avallable developed land Lo Paryana Pouslng
8oard and oLher bodles for provldlng houses Lo
economlcally weaker secLlons of Lhe socleLyţ and
1o underLake bulldlng worksŦ
3Ŧ 1he Department of 1own Ǝ Country
Þ|ann|ngţ naryana (CÞŴ3)
Lhe nodal deparLmenL Lo enable regulaLed urban
developmenL ln Lhe SLaLe of ParyanaŦ
1he ueparLmenL of 1own and CounLry Þlannlngţ
Paryana ls responslble Lo regulaLe Lhe
developmenL and also Lo check Lhe haphazard
developmenL ln and around LownsŦ
granLs llcenses Lo Lhe prlvaLe colonlzers for
developmenL of 8esldenLlalţ Commerclalţ
lndusLrlal and l1 Þark/Cyber Þark Colonles ln
accordance wlLh Lhe provlslons of Lhe Paryana
uevelopmenL and 8egulaLlon of urban Areas AcLţ
1973 and rules framed Lhere underŦ
Comp|a|nts Made
W lL has been alleged ln Lhe lnformaLlon LhaL by abuslng lLs
domlnanL poslLlonţ (CÞŴ1) has lmposed hlghly arblLraryţ
unfalr and unreasonable condlLlons on Lhe aparLmenL
alloLLees of Lhe Pouslng Complex 'Lhe 8elalre'ţ whlch has
serlous adverse effecLs and ramlflcaLlons on Lhe rlghLs of
Lhe alloLLeesŦ
W Cne of Lhe maln conLenLlons was LhaLţ LhaL ln place of 19
floors wlLh 368 aparLmenLsţ whlch was Lhe basls of Lhe
lnformanL booklng lLs respecLlve aparLmenLsţ now 29 floors
have been consLrucLed by uLlţ unllaLerallyŦ ConsequenLlyţ
noL only Lhe areas and faclllLles orlglnally earmarked for Lhe
aparLmenL alloLLees were subsLanLlally compressedţ buL Lhe
pro[ecL has also been abnormally delayed wlLhouL
provldlng any reasons Lo Lhe lnformanLs whaLsoeverŦ
W lL has also been alleged LhaL (CÞŴ2) and u1CÞ
(CÞŴ3) have approved and permlLLed CÞŴ1 Lo
acL ln lllegalţ unfalr and lrraLlonal manner as
Lhey have alloLLed land and glven llcensesţ
permlsslons and clearances Lo CÞŴ1
Defense by DLI
W uLl conLended LhaL AgreemenL would noL fall under Lhe
[urlsdlcLlon of Lhe Commlsslon as Lhe AgreemenL enLered
lnLo beLween uLl and Lhe alloLLees was before seLLlng up of
Lhe Commlsslon and before secLlon 4 of Lhe AcL was
enacLedŦ
W uLl furLher conLended LhaL as sale of an aparLmenL can
nelLher be Lermed as sale of ºgoods" nor sale of ºservlce"
SecLlon 4(2) (a) (ll) of Lhe AcL ls noL relevanL and appllcable
ln Lhe presenL case as Lhe same can be lnvoked only when
Lhere ls purchase or sale of elLher goods or servlceŦ
(lurLherţ no aparLmenL owner can be descrlbed as
ºConsumer" under SecŦ 2(f)(ll) of Lhe AcL as Lhe presenL
agreemenL does noL relaLe Lo hlrlng or avalllng of any
servlceŦ)
W lL has been sLaLed by CÞŴ1 lL does noL en[oy
ºdomlnanL poslLlon" wlLhln Lhe meanlng of
explanaLlon (a) of secLlon 4Ŧ
W Accordlng Lo CÞŴ1ţ Lhere are many large 8eal
LsLaLe Companles and 8ullders ln lndlaţ
parLlcularly ln norLhern lndla as well as ln nC8
and Curgaon who offer sLlff compeLlLlon and
glve compeLlLlve offers ln Lhe relevanL markeL
of resldenLlal aparLmenLs Lo glve a wlde
cholce Lo Lhe consumersŦ
W Accordlng Lo CÞŴ1ţ Lhe condlLlons of offer of
each bullder are consldered by Lhe lnLendlng
lnvesLor and Lhen he makes up hls mlnd as Lo
whlch offer sulLs hlmŦ
W 1he cholce of resldenLlal properLy avallable ln
Lhe markeL has never been llmlLed and aparL
from Lhe 8esldenLlal properLles offered by lL
Lhere were a large number of resldenLlal
properLles avallable ln Lhe markeL for Lhe
lnvesLor Lo choose fromŦ
W CÞŴ1 has conLended LhaL lLs domlnance needs
Lo be looked lnLo Laklng lnLo accounL enLlre
norLhern lndla slnce Lhe lnformanL has sLaLed
LhaL lL ls a leadlng developer ln norLhern
lndlaŦ CÞŴ1 has also conLended LhaL ln any
case Lhe geographlcal markeL should be enLlre
nC8 and noL only CurgaonŦ
ke|evant Market
W 1he Commlsslon observed LhaL a relevanL
markeL ls dellneaLed on Lhe basls of a dlsLlncL
producL or servlce markeL and a dlsLlncL
geographlc markeLŦ 1hese Lerms have been
deflned ln SecLlon 2(r) of Lhe AcL read wlLh
SecLlon 2(s) and SecLlon 2(L)Ŧ
Þroduct Market
W Lhe uC has sLaLed ouL LhaL Lhe relevanL
producL markeL would be servlces provlded by
Lhe developers for provldlng hlgh end
aparLmenLs Lo Lhe cusLomersŦ
eograph|ca| Market
W 1he uC has submlLLed LhaL Lhe 8elevanL Ceographlc MarkeL
ln Lhe case ls Lhe LerrlLory of Curgaon of naLlonal CaplLal
1errlLory of uelhl ln whlch Lhe bullders/developers
lncludlng CÞŴ1 are developlng and selllng resldenLlal
housesŦ
W lL has been sLaLed ln Lhe reporL of uC LhaL a person who
wanLs Lo reslde ln Curgaon for varlous reasons llke offlcesţ
work placeţ schoolsţ colleges and wlll llke Lo seLLle ln
Curgaon wlll ask a bullder Lo develop and bulld a house for
hlmself ln Curgaon onlyŦ 1he bulldlngs cannoL be
LransporLed from one area/ reglon Lo anoLherŦ
8ased upon exhausLlve analyslsţ uC has sLaLed
LhaL Lhe relevanL markeL ln Lerms of relevanL
producL and relevanL geographlc markeL ln
Lhls case would be servlces provlded by
developers/bullders for consLrucLlon of hlgh
end resldenLlal bulldlngs carrled ouL ln
CurgaonŦ
Ma|n grounds on wh|ch comm|ss|on took cogn|zance
of |nformat|on Ŵ
1he Commlsslon has glven due conslderaLlon Lo Lhe allegaLlons made ln Lhe
lnformaLlon daLed 06Ŧ06Ŧ2010ţ Lhe lnvesLlgaLlon reporL of Lhe uC daLed 13Ŧ10Ŧ2010ţ all Lhe
wrlLLen and oral submlsslons made by Lhe parLles concerned along wlLh oplnlons and analysls of
experLs relled upon by Lhe lnformanL and Lhe CÞsŦ 1he relevanL maLerlal avallable on record and
Lhe facLs and clrcumsLances of Lhe case Lhrow up Lhe followlng lssues for deLermlnaLlon ln Lhls
caseť
round 1ť uo tbe ptovlsloos of competltloo Actţ 2002 opply to tbe focts ooJ cltcomstooces of
tbe lostoot cose?
Commlsslon declded ln favour of owners and also flxed geographlcal area as Curgaon
and producL markeL as PlghŴend 8esldenLlal AccommodaLlon based on SecLlon 2(0) of
Consumer ÞroLecLlon AcLţ flaL owners come as consumer and sale as a servlceŦ
round 2ť Jbot ls tbe televoot motketţ lo tbe cootext of sectloo 4 teoJ wltb sectloo 2 (t)ţ
sectloo 19 (5)ţ sectloo 19(6) ooJ sectloo 19(7) of tbe competltloo Actţ 2002?
AfLer deep analysls of varlous facLors and pasL casesţ lL was declded LhaL Lhe relevanL
markeL was Lhe markeL for servlces of developer provldlng hlghŴend resldenLlal bulldlngsŦ
round 3ť s ull ltJŦ Jomlooot lo tbe obove televoot motketţ lo tbe cootext
of sectloo 4 teoJ wltb sectloo 19 (4) of tbe competltloo Act?
Commlsslon sLaLed LhaL uLl has a clear early mover's advanLage and
ls a leader ln commerclalţ reLall and offlce space secLorsŦ 1hus uLl ls fully
capable of operaLlng lndependenLly of compeLlng forces ln Lhe markeLŦ
round 4ť o cose ull ltJŦ ls foooJ to be Jomloootţ ls tbete ooy obose of lts
Jomlooot posltloo lo tbe televoot motket by tbe obove potty?
Commlsslon polnLed ouL varlous clauses ln Lhe agreemenL LhaL were
unllaLeral and heavlly blasedŦ As weaker compeLlLors cannoL Lake hold of
markeL and due Lo Lhe naLure of clauses and conducL of companyţ lL can be
LreaLed as abuslve and even explolLaLlveŦ
Verd|ct
1he Commlsslon passed an order
lmposlng a penalLy
aL Lhe raLe of 7Ʒ of Lhe average of Lhe
Lurnover for Lhe lasL
Lhree precedlng flnanclal year (lŦeŦ
8upees Slx Pundred and
1hlrLy Crores) on uLl
1nANk ¥CU

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