COMPETITION ISSUES IN REAL ESTATE

-Submitted By

A.S.Kaushik Babu (12A001)

Basawa Prasad Kunale(12A032)

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 INDEX

1. Introduction………………………………………………………………………………..03

2. Competition Issues in Real Estate…………………………………………………………05

a. Dominance

b. Effect of Dominance on Real Estate

c. Brief case analysis of Belaire Owner’s Association v. DLF limited and Huda

3. Conclusion…………………………………………………………………………………17

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 INTRODUCTION

(“Real Estate is a high cost sector with natural entry barriers due to high cost of land and brand value of incumbent
market leaders…”1)

The Real Estate sector is very dynamic and currently there are no signs of abating. So investing in this
particular sector has been a real change due to lot of hassles and complications which are not simple. So
while completing a transaction successfully you need to handle those hassles. So we focus on Competition
issues of this sector. So we first start with the meaning of Real Estate and it ambit.

The term Real Estate refers to land as well as building includes in the air above and ground below and any
buildings or structure on it. It covers residential houses commercial offices trading spaces such as theatres,
hotels and restaurants, retail outlets, industrial buildings, factories and also government buildings.

The transaction includes:

1. Purchase

2. Sale and

3. Development of land (both residential and non residential buildings).

4. Lease/Rent

The main players in the real Estate market include the following:

1. The landlords.

2. The builders.

3. The developers

4. Real Estate Agent

5. Tenants

6. Buyers

Real estate is artificially delineated space referenced to fixed point on the surface of the earth with a fourth
dimension of time.

1
Para 12.74- main order- Belaire Owner's Association v. DLF Limited and HUDA Case No. 19 of 2010, Competition Commission
of India
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It is built to house an economic activity that is subject to cultural preferences and restricted by the public
infrastructure. Real Estate is space time product, that is, it generates income over time in exchange for the
use of space. Examples: apartments, stadiums, party halls, residential units, commercial complex etc. The
real estate connotes immovable property which can be either land or building or both.2

As per Section 2 (u) of the Competition Act, 2002

“service means service of any description which is made available to potential users and includes the
provision of services in connection with business of any industrial or commercial matters such as banking,
communication, education, financing, insurance, chit funds, real estate, transport, storage, material
treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement,
construction, repair, conveying of news or information and advertising;”

It includes real estate as a service within the meaning of this Act.

In the case of Shri Neeraj Malhotra v. North Delhi Power Limited, BSES Rajdhani Power Limited and BSES
Yamuna Power Limited,3installing meters which are costing 2.5 % more than the other BIS metres and the
consumers in Delhi were under compulsion to install such meters because of which dispute arose between
the special and regular law.

It has been held by the Commission that sectoral regulators focus on the dynamics of specific sectors,
whereas the CCI has a holistic approach and focuses on functioning of the markets through increasing
efficiency through competition. In fact their roles are complementary and to each other and share the
objective of obtaining maximum benefit for the consumers.

2
Adukia S. Rajkumar, Real Estate Law, Practice and Procedures, K.GMaheswari,ed. 2007,pg-11.
3
Competition Commission, Case No. 06/2009.
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 COMPETITION ISSUES IN REAL ESTATE

The criteria before determining competition is to determine “Relevant Market”

Relevant market' is an indelible ingredient in determining the abuse of dominant position by a market player
and thus every time CCI pronounces its order, it needs to interpret the concept 'relevant market'.

It’s a twofold thing:

1. Product Market &

2. Geographic Market

1. Product Market: Goods/services that purchasers consider to be substitutes are generally regarded to be
in the same product market a purchasers do not consider to be substitutes in separate product markets.

2. Geographic Market: The principle of geographic market is similar to that of product market. The
geographic market is defined by purchasers’ views of the substitutability or interchangeability of products
made or sold at various locations.

In the case of DGCOM Buyers and Owners Association, Chennai Vs. M/s. DLF Ltd., New Delhi and M/s.
DLF Southern Homes Pvt. Ltd., Chennai4, It is alleged that after nearly 18 months booking of the flats,
when the allottees had already paid crores of rupees, DLF asked the allottees to sign an agreement which
contained highly abusive clauses, the buyers had no option to sign since they would lose hefty amount.It
was observed that

“Before considering abuse of dominance, the first issue is to identify the relevant market. Relevant market
under section 4 is different from the Market under section 3 of the Act. Market is a wider term where large
number of goods and services are transacted whereas relevant market is the market which has to be
determined by the Commission with reference to the relevant product market or the relevant geographic
market or with reference to both the markets. Relevant product market means a market comprising all those
products or services which are regarded as interchangeable or substitutable by the consumer, by reason of
the characteristics of the products or services, their prices and intended use.”

Since numerous cases coming at CCI one party defines relevant market in narrow sense and other party in
wider sense so it is to the CCI to decide the scope of relevant market. Because abuse of domination comes
into play when there is domination in relevant market. So there are various ways through which the
Commission decides as mentioned in 19(4) of Competition Act 2002.

4
[2013]117SCL79(NULL)
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In the above case it was also held that “The relevant market in this case, would be Provision of services for
the development and sale of residential flats in Old Mahabalipuram area near Chennai.” The entire
Chennai cannot be treated as relevant market because the characteristics of the products or services, their
prices and the intended use are not substitutable or interchangeable by the consumer not only in Old
Mahabalipuram Road but anywhere else.”5

Dominance

Dominant Position has been appropriately defined in the Competition Act, 2002 in terms of the ‘position of
strength enjoyed by an enterprise, in the relevant market, in India, which enables it to (i) operate
independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or
consumers or the relevant market, in its favor’6.

Abuse of Dominance in Real estate Sector

The Commission shall, while inquiring whether an enterprise enjoys a dominant position or not under
section 4, have due regard to all or any of the following factors, namely:—7

(a) market share of the enterprise;

(b) size and resources of the enterprise;

(c) size and importance of the competitors;

(d) economic power of the enterprise including commercial advantages over competitors;

(e) vertical integration of the enterprises or sale or service network of such enterprises;

(f) dependence of consumers on the enterprise;

(g) monopoly or dominant position whether acquired as a result of any statute or by virtue of being a
Government company or a public sector undertaking or otherwise;

(h) entry barriers including barriers such as regulatory barriers, financial risk, high capital cost of entry,
marketing entry barriers, technical entry barriers, economies of scale, high cost of substitutable goods or
service for consumers;

(i) countervailing buying power;

5
[2013]117SCL79(NULL)
6
Explanation to Section 4(2) of The Competition Act, 2002
7
Competition Act, 2002
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(j) market structure and size of market;

(k) social obligations and social costs;

(l) relative advantage, by way of the contribution to the economic development, by the enterprise enjoying a
dominant position having or likely to have appreciable adverse effect on competition;

(m) any other factor which the Commission may consider relevant for the inquiry.

In the case of Informant v. Cdr. Kuldeepak Mittal & Ors8, Payments received on misleading advertisements
Contravention of Section 4 of the Competition Act, 2002 - Mere presence in the market does not infer power
- Presence of the other builders - No prima facie evidence of dominance - Case was an individual consumer
dispute arising out of unfair trade practices - Hence, no further reference for investigation. it was held that
“the Government Officials Welfare Organisation (GOWO) (a Public Trust engaged in the business of
developing residential apartments for government officials in Noida and Gurgaon) did not have a dominant
position in the relevant market of Gurgaon since it was one of the builders operating in the relevant market
and had no definite advantage in terms of market knowledge, economies of scale and experience. It further
did not have any significant chunk of land holdings with it in that geographical area.”

The term ‘abuse of dominant position’ refers to anti-competitive business practices in which a dominant firm
may engage, in order to maintain or increase its position in the market. In the above the Court has pointed
out the instances where abuse of domination may be seen in Real Estate sector.

In M/s Tulip Infratech Pvt. Ltd9, the Commission has held that

"certain practices carried on by real estate developers building residential apartment complexes, including
such practices as alleged in the information are being commonly carried on by many real estate developers
or builders of residential apartment complexes in India. It seems that in particular two broad practices viz.,
(a) the practice of having a potential buyer sign an agreement which is not the final agreement, however it
locks them and their initial investment with the builder without having been presented the complete terms
and conditions of sale of apartment in a fair and transparent manner; and (b) the practice of making
changes to the terms and conditions, facilities, structure of apartment/project after the customers are locked
in, are being carried on by most of such real estate developers and builders of residential apartment
complexes in India. Allegations of misrepresentation and consequential actions may relate to breach of
contract in individual cases, however, the manner in which such practices are carried on across the board,
is indicative of absence of independent actions of the developers. Hence it is necessary to consider whether

8
Case 62/2010
9
Case No 59/2011
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such practices would be subscribed to/ carried on by the real estate developers or builders of residential
apartment complexes, if they were in fact operating in a competitive manner. On a preliminary
consideration, it appears difficult that such practices could be present across the board and be carried on
commonly by the real estate developers in a competitive market. Prima facie it also appears that these
practices carried on by the real estate developers or builders of residential apartment complexes are
indirectly determining the sale prices in the market of the services relating to real estate providing by them
and also potentially limits the provision of such services. Thus, in view of the above and on a careful perusal
of the information's/ complaints, the various practices adopted by the builders as assailed in the
information's/ complaints prima facie appear to be anti-competitive.”

Generally Abuse of Domination in Real Estate Sector may be seen in

a. Unfair Contract Terms-

In the case Central Water transport Inland Corporation Limited v. Brojo Nath 10
Where the employees were terminated by giving 3 months notice and salary, held such clauses are
unreasonable and should be struck down, it was observed that “This principle is that the courts will
not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or
an unfair and unreasonable clause in a contract, entered into between parties who are not equal in
bargaining power.”

Because of the standard contract which the consumer/allotee has to sign is left with no option or else may
lose huge amount, initially an advance is paid to book the flat and a simple written agreement is generally
written between the allotee and developers having provisions as to time of delivery and amount to be paid
etc, But at the final allotment the builder comes up with unusual or one sided clauses so the consumer here is
the weaker party and both are at unequal bargaining power so such unreasonable clauses may be struck
down by Court.

In the case of DGCOM Buyers and Owners Association, Chennai Vs. M/s. DLF Ltd., New Delhi and M/s.
DLF Southern Homes Pvt. Ltd., Chennai11 it was held that,

“In my view, whenever there is an abuse of dominance due to unfair conditions in the agreements, it creates
an adverse effect on competition in India. Further in this case, the contracts entered into by the information
providers were contracts of adhesion and the agreements entered were between a very big economic player
and small time buyers. In fact the agreements were signed in the format given by the OP and the consumers
had paid substantial sums of money to the OP. Thus if a buyer wanted to shift to another builder, he would
have lost substantial amount of money. In such a case where the number of buyers was limited, a new
10
AIR 1986 SC 1571 at 1611
11
[2013]117SCL79(NULL)
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entrant in the building market would have got no buyer even if the new builder was more innovative or had
better products. Thus, the high switching cost would foreclose the market for a new builder.

The agreements entered into by the OP and the prospective buyers, therefore, created an adverse effect on
competition in India.”

b. Developers/Builders Delay-
As per a report by a property research firm Propequity, about 50% of the 9,30,000 under
development private units in India, booked to be conveyed between 2011 and 2013 are liable to be
postponed by up to year and a half. 12As per land research firm Liases Foras, about a large portion of
the 3,23,000 homes that were to be conveyed in 2013 will be deferred; and a third of these won't be
primed before 2015.13 Designers declared a great deal of tasks in the pre2008 emergency time yet
were unable to finish these because of a subsidizing crunch. The most exceedingly awful entertainer
was NCR with just something like 23% of the activities finished by January 2012. The explanation
behind this is said to be that the tasks were vast thus the engineers were not ready to finish them on
time14

Remedy recourse

Refunds can be claimed if a project is delayed beyond the period stipulated in the agreement parties may
approach various tribunals of consumer form.

"Buyers in Maharashtra have recourse to Section 8 of the Maharashtra Ownership Flats Act, 1963, which
makes a developer liable to refund the money obtained from a customer with interest if he is unable to justify
non-completion or delaying possession of his project. Most states have similar regulations in place."15

The person apart from taking remedy from Consumer forum and various Relevant Sections of the State may
also take remedy from Competition Commission, if a person can establish that there is Abuse of Domination
in Relevant Market.

For effective understanding of the procedure of establishing the abuse of dominance the above case of
Belaire has been discussed.

12
http://beta.propequity.in/PressRoom/Sep13ET_Large.jpg
13
Ravi Teja Sharma & Vijaya Rathore, “Aggreived Buyers Speak Up Online ! Real estate firms resort to online reputation
managment on social media”, Economic Times, Nov 28, 2012
14
Varnika Kukreja, “When will I be delivered my house? A big question faced by most of the developing firms in India; which put
a full stop on the dreams and aspirations of an average common man”, Property Observer, June 22.
http://beta.propequity.in/PressRoom/June22PO_Large.jpg
15
http://businesstoday.intoday.in/story/delayed-real-estate-property-project-heres-what-to-do/1/186561.html date of access: 20th
May, 2014
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BREIF CASE ANALYSIS OF BELAIRE OWNER’S ASSOCIATION V. DLF LIMITED AND
HUDA16

DLF constructed the apartments for Residential purposes known as Belaire comprising of five storied
buildings in Gurgoan, Haryana. Consequently DLF imposed highly unreasonable, unfair and arbitrary
conditions in the agreements to be signed by consumers. Then these conditions were brought before CCI by
the Belaire Owners Association.

Since DLF immediately challenged the jurisdiction of CCI so, Director General was appointed to look
whether there is any abuse of domination if so then do does it fall in the Relevant market or not. So finally
the DG concluded that there is an abuse of domination in the real estate market by conducting investigation
which is indeed violation of Competition Act 2002.

Basis on which CCI framed issues as follows.

1) Issue of Jurisdiction?

DLF Arguments

(i) The Apartment Buyers' Agreement was executed in the year December 2006/2007. All these terms and
conditions were agreed to, prior to the coming in to force of Section 4 of the Competition Act
(20.05.2009). Thus, it cannot be suggested that any condition was "imposed" by the company after
20.05.2009, so as to attract Section 4 of the Act.

DG Arguments

(i)The agreements with some of the apartment-allottes of the Complex Belaire referred to in the context of
alleged imposition of conditions belong to period prior to May 20, 2009.

(ii) The DG stated that alleged imposition of unfair conditions have taken place in the year 2009-10 when
they were given effect to in terms of cancellation of apartment units and forfeiture of amounts by
invoking the terms of agreements and thus they can be examined under the provisions of the Section 4 of
the Competition Act, 2002. Relied on : Judgment of Hon'ble Mumbai High Court in case of Kingfisher
Airlines Limited.

16
Case No 19/2010.
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(iii) Further, DG has also brought out that even after May 20, 2009, apartment units have been sold and
agreements have been executed with apartment allottes and advertisements were still coming in the
newspapers and web site of the company that apartment units were up for sale as on date of investigation
and possession will be given within 12 months from September 2010 i.e. by September -October 2011.

Finally DG has established that the facts of the case are covered in the jurisdiction of the Competition Act,
2002.

1) Issue of Service and Consumer?

DLF Submissions

 There can be abuse within the meaning of provisions of Section 4(2) (a) of the Act only when an
enterprise or group directly or indirectly imposes, unfair or discriminatory condition in purchase
or sale of goods or service.
 It has been contended that the present agreement relates to "sale of an apartment" and not for
"purchase of service".
 Moreover, No apartment owner can be described as "Consumer" under Section 2(f) (ii) of the Act
as the present agreement does not relate to hiring or availing of any service.
DG Submissions
 SERVICE CONTENTIONS
 ..."service" means service of any description which is made available to potential users and includes
the provision of services in connection with business of any industrial or commercial matters such as
banking, communication, education, financing, insurance, chit funds, real estate, transport, storage,
material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment,
amusement, construction, repair, conveying of news or information and advertising;
 Thus, according to DG, under the provisions of the Act, the service has been defined as service of
any description and it includes the provision of services in connection with business of any
industrial or commercial matters such as real estate. The intent of the legislature is therefore to
include service of any description including for real estate as clearly provided in the Section.
 RELEID ON: Finance Act, 2010, an Explanation has been added w.e.f. 1.7.2010, to the definition
of 'commercial or industrial construction' and 'construction of residential complex', as follows -
 Explanation.- For the purposes of this sub-clause, construction of a complex which is intended for
sale, wholly or partly, by a builder or any person authorised by the builder before, during or after
construction shall be deemed to be service provided by the builder to the buyer.

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  CONSUMER CONTENTIONS
 (f) "consumer" means any person who-
 (i) hires or avails of any services for a consideration which has been paid or promised or
partly paid and partly promised, or under any system of deferred payment and includes any
beneficiary of such services other than the person who hires or avails of the services for
consideration paid or promised, or partly paid and partly promised, or under any system of
deferred payment, when such services are availed of with the approval of the first-
mentioned person whether such hiring or availing of services is for any commercial
purpose or for personal use;
 Thus, according to DG, if any person avails of any services for a consideration which has been
paid or promised or partly paid and partly promised, or under any

system of deferred payment (like in this particular case), he is covered within the meaning of
Section 2(f) (ii) of the Act.

 REILED ON: Preamble the Act is to ensure that the interests of the consumers are protected and
there should be free and fair competition in the market.
 Considering all the above aspects DG established that Belaire are consumers and come under the
ambit of services.

Issue of Relevant Market?

DG Submissions

 On establishing that relevant product market for the purposes of Section 4 of the Act.
 Relied on: The industrial classification, 2008 prepared by Central Statistical Organisation,
Ministry of Statistical and Programme Implementation has classified the activity of construction of
buildings, therefore, falls under a separate head.
 On the basis on the price being very and slight increasing may cause heavy burden so they
comprise of distinct class.
 Relied on: case of Wanadoo17, in which the European Commission defined the relevant market as
the market for high speed internet access for residential customers. The European Commission in
that case examined the differences in performance between high and low speed internet access
and concluded that the differences were clearly perceived by the consumers and that an analysis of
price differences between them showed that consumers were prepared to pay a premium for the
extra performance and convenience of high speed.

17
COMP/38.223 [2005] 5CMLR 120
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  In the above case analysis of price so here high end buildings on the reliance should be considered
as relevant market.

Issue of Relevant Geographic market?

DLF Submissions

 Dominance needs to be looked into taking into account entire Northern India since the informant
has stated that it is a leading developer in Northern India. DLF on that basis argued that in any
case the geographical market should be entire NCR and not only Gurgaon.

DG Submissions

 The geographic limit of real estate is determined with reference to its locations. The geographic
market is defined in case of services towards real estate once the determination is being considered
of competition or lack of it in a particular area or place. Thus, the relevant geographic market in
this case, according to DG, has to be Gurgaon.

Issue of Dominance?

DLF Submissions

 RELEIED On: 83 members of CREDAI NCR obtained from their Website also indicates the
number of Developers who are their members and operate in NCR, which is indicative of the fact
that there are a large number of developers, who offer competition.
 With reference to Clauses (b) & (c) of Section 19(4), it has been stated that its total size and
turnover relates to commercial as well as retail business also, which is large. Moreover, it is not
confined only to the aforesaid markets under consideration as relevant market. It has other
businesses also. Moreover, there are several other large competitors in the relevant market. DLF
argued that so long as it has to face competition from other competitors having large size and
resources, it cannot be said to enjoy a "Dominant Position" in terms of Explanation
 With reference to Clause (f) of Section 19(4),it is said that the customers no way relied on them
because, In a case where alternative apartments are available from different sources to the
consumer, to choose from, it cannot be said that the consumer is dependent on the enterprise.

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  With reference to the factor mentioned in Clause (h) of 19(4) since 2007 on wards new deleopers
are entering the market. Such new developers are also creating intense competition in the market
and the old existing developers have to meet this intense competition.
 With reference to Clause (j) of Section 19(4), the size of the market is very large new plan
indicates that the Gurgaon has been extended. People don’t buy mostly for residential they buy as
an investment for rental income and value appreciation and similar other apartments have
competition regarding value appreciation.

DG Submissions

 DLF is not only enjoying the highest market share, but is also enjoying clear advantage over other
players as far as size and resources and economic power is concerned. Its economies of scale,
resources, and the fact of it being in business since last sixty years in the relevant market is also
giving it a distinct advantage over the other players in the market.
 DG has brought out that dominance in law implies that a firm because of its position of economic
strength has a high degree of immunity from the normal disciplining forces of rivals' competitive
reactions and consumer behaviour.
 Relied on: Hoffmann-La Roche the Court of Justice defined dominance as “a position of economic
strength enjoyed by an undertaking, which enables it to behave to an appreciable extent
independently of its competitors, its customers and ultimately of consumers”. Thus, the argument
of DLF that there is large number of players in the market and therefore, DLF cannot enjoy a
position of dominance does not hold good.
 DLF has developed integrated townships in Gurgaon over huge piece of land acquired on early
occasion, if the consumers want to have residential units in Gurgaon or in the township developed
by OP-1, they have to largely be dependent upon it, more so when because of its superior size,
resources, market share, it has built a brand over the years, which affects the consumers in its
favour. OP-1 stands at a position No. 47 in a survey of 100 most valuable Brands of India
conducted by Indian Council of Market Research and 4Ps (Business and Marketing). There is no
other real estate player in the list of Top 100 Brands. The value of Brand of OP-1 makes it capable
of affecting the competitors in its favour and due to that OP-1 stands uniquely positioned to
operate independently without having disciplining forces of rivals' competitive reactions. Due to
its position of strength, it can operate independently of the other players in the relevant market.
The consumers would also be affected in its favour because of sheer size, sheer resources, its
economies of scale, its brand value, which is far superior to any other existing real estate
developer as on date and also due to its superior economic power over its competitors.

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  DG has established due to its sheer size and resources, market share and economic advantage over
its competitors that it holds dominance

Issue of abuse of dominance?

DLF Submissions

The conditions included in the agreement are "usual conditions' as per industry practice and thus cannot
be said to have been imposed by abuse of dominant position. Since the clauses of the agreement objected
to are usual clauses as per industry practice and adopted by other competitors also in their respective
agreements to meet competition it is necessary to incorporate such clauses in order to remain competitive.
Such agreement is fully protected under the explanation to Sub-Section 2(a) of Section 4 of the Act.

Relied on: Bangalore Development Authority v. Syndicate Bank18 (DLF has submitted that in contract
involving construction, time is not the essence of the contract unless specified. It has also been brought
out that in terms of judgment of Supreme Court in case of DLF Universal Limited v. Ekta Seth 19 ,
Bharathi Knitting v. DHL Courier World Wide Express Courier 20: 1996 4 SCC 704. Such terms of
agreement could not have been described as incorporated by "abuse of dominant position".

DG relied on above aspects for establishing dominance

 Commencement of project without Sanction/Approval of the projects

 Increase in number of floor mid way
 Issue of Floor Area Ratio and Density Per Acre
 Time Schedule of Completion
 Forfeiture of Amounts

The abuse is also established not requiring further determination of AAEC (appreciable adverse effect on
competition) in the market and the DLF has been penalised by 7 % of annual three turn over.

18
2007) 6 SC 711
19
MANU/SC/7830/2008
20
MANU/SC/0628/1996
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The Order further brings out certain market practices which are followed by other service providers also,
namely

 “Advertisements for project launch without the land being actually purchased and without taking
prior approval of competent authorities
 No specification of the total area of the plot/flat/house indicating clearly the carpet area and utility
area
 No specification of the date of delivery
 Amounts collected not deposited in a designated escrow account and utilized only for the
construction of the concerned building
 Information relating to the progress of works and status of account of each allottee not made
available to buyers in a transparent manner
 Relevant information not posted on internet and made available in public domain, and no
transparent and participatory mechanism put in place to deal with escalation in price
 Inordinate delay in execution of the project and if the project is delayed without previously agreed
valid reasons, no provision that would entail pre-determined amount of penalties on total project to
be paid to the consumers
 No fair, participatory and transparent mechanism to tackle any substantive and major changes in the
project mid-way.”

All the above specified practices in the sector are intended to be addressed by the Draft Real Estate
(Regulation & Development) Bill, 2011.

The CCI order was challenged by DLF on several grounds by filing appeals before the Competition
Appellate Tribunal (COMPAT). In November, 2011 the COMPAT granted DLF a stay on the CCI’s order
(except the cease and desist order) till the appeal was decided by them. In March 2012, the COMPAT
remanded the matter to the CCI to suggest suitable amendments to the agreements concerned as per Sect
27(d) of the Competition Act, after considering the drafts modified Agreements submitted by both parties.

Accordingly, in January 2013, the CCI modified the standard terms and conditions of the flat buyers
agreement in a detailed order which raised a number of legitimate concerns in the real estate sector as to
whether the terms and conditions suggested by the CCI would apply to all builders’ flats with regard to the
respective flat buyer agreements.21

21
Pratik Ranjan Das And Yamini Kumar, Decoding The DLF Case: DLF Ltd. V. Belaire Owners Association –
Part II,http://nujssitc.wordpress.com/2014/01/06/decoding-the-dlf-case-dlf-ltd-v-belaire-owners-association-part-ii/
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 CONCLUSION

“Determination of correct relevant market is the sine qua non for finding the market position of an
enterprise or group. Significantly, the order against Jaypee Group aptly underscores the importance of
relevant market towards the outcome of any antitrust litigation”

Competition law certainly holds the key to stimulating and protecting competition in the market, but may not
always hold the answer to a failure of the disciplining mechanism presumed to be inherent in a competitive
market. Therefore, it is important to be circumspect in the application of the Act to situations where the
exploitative, abusive practices depict a problem other than that of dominance. This is illustrated by the real
estate market, where the underlying problem of information asymmetry in the market continues unaddressed,
despite the intervention of the CCI in the DLF Case. That many consumers have been left without remedy
highlights the limitations of competition law, while also stressing the need for ex ante regulation, and a
sector regulator who can regulate across the board. That apart, if we are to follow the DLF Case to its logical
end, one likely result is that the remaining players desist from competing effectively in order to be able to
exploit the consumers without consequence under the Act. This undermines the very purpose of competition
law, while severely compromising consumer welfare, both directly and indirectly. Therefore, this should
serve as a warning against aggressive application of Section 4(2) to exploitative practices. While it is
certainly hard to take exception to the well-intentioned efforts of the CCI to protect the consumer, one must
consider the full implications of such a decision and Section 4(2) of the Act for the future, before rushing
forward to laud their efforts.

Because of the standard contract which the consumer/allotee has to sign is left with no option or else may
lose huge amount, initially an advance is paid to book the flat and a simple written agreement is generally
written between the allotee and developers having provisions as to time of delivery and amount to be paid
etc, But at the final allotment the builder comes up with unusual or one sided clauses so the consumer here is
the weaker party and both are at unequal bargaining power so such unreasonable clauses may be struck
down by Court.

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