Competition Commission of India
Kolkata West International City Buyers ... vs Kolkata West International City Pvt. ... on 24 January, 2012
CGMPENTEON CGMMESSEON GF iNQIA Daisd: 24"' Jam,:__agr\ .?;¢.?»'a2?_ Case W3. 55 0'' "DH }<:»§.ka'ta West internationai City Eauyuaws' Wsifars Assc3ciatic::n, Howrah infer;-mam Vs. {_§) Kakkaia Wk-ssfi iniernatiimai City Pvt Lid, %ia§§»:a'aa {ii)}*f;o1kat:a Mei:'opc:¥iian Davesopmsnt ,<"--\.utmr':ty ifiidhan nagar, E«<.cs1ksata Opposéts Parties R. Frassd {dissenting} The informam in ':his case is an association of buyers (3% row musssf bungaiows in s praise': of ificsikaia West imsrnationsj City Pvt. Ltd. (KWR3) which was is be devsiopsci in Dist. Hewrah, West Bengat. The psraiect was me first Fm progsct, Em integraaicad iownship is be c.c:nstmcte<:§ on Band of 390 acres 'aes.ss~d am by Kmkata Mstropoiitan Essvsiopmsnt fixuthority (%<;i\/{DA}. Fer Phase i «:3? the progsct 80 acres were handsd ever by §<;fv§¥:3A to E<W1C. Thsvinifial banking sf the praise: siartsd in 2{)£3€~, wathout sbiaining the necessary psrmisséan and sis:-3r€:.nc-:~:s mm the relevant statutsry autharities. The ;3z'0}e<::c was is be ::<:_>m;>i:~3':x:~.~ci by 2008 but fit} today the prmect is me': yet <30nwp'1ets and the facéims-as and the G0t"ar1€3C:'{E\.«'fi§,! tr: the mxrvnship has met been pmvided mg date. After »::s§is<:t'=.ng 80%;; cm' the cost of the propsrfies from the praspsctive buyers, K\'\?iG gave agresmsms, \zvhic;h 'were <:om:'sc'£s of acihssien, to be signed by the p:'os;3e«::':ive buyers. The buyers, sensing that may wcsuid 'mess large sums of msney if 'they did sign me agrssmenis, agreed it) the tsrms of he agrssmems which were (me sided and signed the agreements. $1': 'ms irfiorm;-1i:i0n5 the informams had stated that 'r<\/\!£C had abused his dom3n§;:¥r%-':p'i3'S3§'ij<$3-myndez' Section 4 of ihe Ccnmpstétion Act and p:'a_\;ed fer the 'fo'i¥Dwing3" Q': t<)V_t3's;"'3§~§;;ey-; the C3c:m'm'17:S€3i<fm:
e 3 g', X (ea) Ir:itia.'r.e appr'opriate inquiry against EWS rioikata, 'W'e3«:~;t Enrerrrsrtionat Cir Ltd. Endtzdirrrg but not iimired to the err «$.-
3; Pvi.
use of dommram posiricsrwr by Ms Kolkata West inbarrrarrorwal Criy Pvt. Ltd. and ranch ether asgzregr as -this, Hc3n'§j';e Comnwésrsirm deems approprie.tr3~;
{:1} Direct the Re-.=4>0nder':ts tr: rrradrrce 'she re§eva.n'r r'eoc3r'r§.3 Erwoivmg 'rhea rziecision A r'r'raE<;irag process cuirrrinarirrg Emu the grarrt C»? s3.§rnctio:'rfa;npr'0*rai of the E3u;i§ciir'rg P%ar:sfLzay«out Prams;
{C} Discorztmue fc»r'rhwith aifi the unrair and rgiisc-r'rminaior'y cfiaussas irrrp»:3s3r-'grzi upon the buyers by the Respondent No. 1 by abusing his dominam r.:«:>:=.irior'r;
((1) Pass Carder wovirziing exit \:>;:rtEr:m ta an Aflofiee with fuié refund 9? rmney paid by the Arioriee, 'together wirh irrter'~e=,=sr @ 24% pa, rrrereon as weir as ,a;:>pro;:2ar§ate <:<3mperr3a'rian towards. oppcnricuraity' cost;
{es} fxféordiry the Agreerrrr-3nrr thereby doing away with the abusive arrd r:5'rs«::rErninarory rrrauises workéng to the rzieirimerrr and disadvantage of "fine; Aiiarreesg {'r') Paas rprdrsrr imprssing penaity on M,/5 Kori»-Lara wear Errrernarfionai Crry Pvt. Ltd; {g} Pass erder awarding the cost and expenses in raveur of the Patifiaraer Aasociariang W ' A {E1} F-'ass such omer rrr rurtrrer orrier[_s} as {his Hermie Cerrrrrrissioaz may dream fir "rd proper in the rams and circurnstar2cr~3ss of the present 5?' A---=I The Commissiurr grsnre a hearing to the 'irrfer'r'n.srrEorr providers and M. L. Lahcsry Adv. appear'-:-ad rand pireaded an behafi' of the infCrrma"iir:rn prenviders. He submitted an affidavit on behaif C33' ilhri Abhay Upadhyafg, President of rm- aSS(3Dic3fiDi'i which subrnirred the informatisan. rrr this affidavit Shri Lipartihyay has stated that the re§r3varvt geographir: market is the Wes:-:2rn §3H:-:r'ip%rer'y of Korkara nameiy Bigtt. Hcrwrarr 'and the reir-marrt p:'aduc*c mzarrkr-3-'r is 'bungaicrw' arrd 'raw houses consrrrzcted amiri 'the fa<:ii%ties and the a2.rr'rer'r§ties gtmvided in rhea n1a£§e~r'n érfiegrated Sateime "mwrzsshira. St was raise started that the reéevarrt precinct is r_.miqu«3 and rjistrincr vritrrout any substitute in the reievarxr gervgrarmic marker 5.62. is": "rhes-
Disrricr of Howrah. it was argur-3:2 that the is sirmaar is me case or' DLF whrare the Cormrrisesiorz had dir'ecred an irrves'rigar'r:3n Lsrrrtirzr SerCii§;3-i.f"1""7§E'a_f\ " ' E-ifld missed a mar c:~r«:5r.2r. True detairs car' sixrzémriries in the ur'rder:~ .. t 5 ".:;a':Eaci \.
.-,, Z/'n Cttart ehewtng etmitar unfair and abusive ctausee imposed by QLF in the case at Eetaire in Gut'ge<::en anfi Katkata West tnteme Pvt, met. in Howrah, West Benget.
I. Qtepertty in the rate at interest chergeabte tn the event cieteutt by the parties:
e'7§'{:Ft§t't Beietre Pmiect I Cteuse 35 of the I-tpartmem KWECPLT T ttenet City at Ftncttnfge by CCE in its Grater stated 't2.€}3..2Q't°% Esuyere' Agreetment. heaviiy tiflee, the sceie in favour of BL?
hereby the Aiiattee has been teiet with the Etabiiity to pay e>:orLtitant rate of interest in case the Aficzsttee tests is pay the irzetaurnent in due time ie. t5?'/5 for the first 90 days and 18% thereafter. The huge dispartty was tn tuti dismay under Cteuee M £1 whereby DLF woutct pay onity Fte.5/-- per sq. ft. to the Attottee for each month"; A detey, ie. t % per" annum.
EL consent of Attcatteee and abusive daminence :33' DLF t Vida Cteuee 3.2(pa<;;e ee of the petitien) the Aiiottee has been sacidted with the ttebility to pay interest. @ 18% per ennum in case of detayfdefauit in payment of instz.-fitment. On the other harm} underizteuee 5.1 {page 5'? of the petition) the t<IWtCPt_. has get away with the meager Eiebility to pay preveiting Saving Esank rate at interest at the State Bank of indie tar each month in case it fails ta thenfiover the possession after the expiry of the stiputated time treme. Net oniy this, what makes Steuee 5.1 exeeesivety unfair is the fact that the E<W£CF'L shat! pay even ttise negligibte interest. but eniy edguet it at the time at Erssuamze of Letter 0?
Handing Over ants' that toe witl be cetcuéated after months, enjoying a grace period of six :
This H«::m"bie Cczmmissien has treated eurzh disparity in Pare '£2.98 {xvi} (page
216) as punitive penalty for defeuit by attettees and insignificant ';:»eneE1:y for Dt_F's default. Further, in Pare "§2,'tG't {gage 223';
has taken a criticai View of sum: diegtarityé in pare 't3.3 {page 234} this Horfble Gonmtieeion has in cetegericeé terms. hetct such cendittcm to be zmte:-tie"
under Section »:t(2)(a){i; of the fixct.
x } Sate dtecrettmt at the deveteper to untieteratty alter the projest wittwut Under Cteuee 9.t the Aimttee has been made ta agree on dotted tine that the Ciempany wouid carry cut, on his.«*'he:' % behait, such arrtditions, atterettens, Cteietions and mediftcatitofié tn the buitdtng mans, ttcsort As per Ciause 2.2 {page 55 at the petition'; the KWICPL has reserved tc: itself the ctiscretion to atter the specification of the unit without irw«:)E'v§ng Attettee at am. F-at (icing;
neither the consent oft' Atiettee would be tekertwéiet would he be gtven any tier"
ft 'f-iceneideitieg this iltauee to be . -'heafxftiglyi This H<:::n'bie« {T-<.::mmisst0nt has in gzseree 't2.§8. {pare 22?), 12.13'? and 12,132 2234224') has _ '?.a@$d\ Pete "t2..'§€35 tee t page Efififigecarde the huge 'etsebxrasiiatggee suffered by ttai \\;f;\' ' ;;ttt:.:é'tteest Finatlv, in para §.
DJ 'this Horfbie Coznrttiseiotf 5}» plane, Apartment piens, change in specifications, etc, as the Cempany c.C2.nsé«:ier necessary.
Further the Company »hae~.ais0 kept is itseéf themight to increase the % number :3? féeers of the tsuiiding.
DLF eexpleiteci this abusive Clause much 'kc:
the detriment of fiche"
Aiiotieee by Encz'easing the number m' floors fmrn 19 EC: 9,9.
Tiniématien.
»».
Under fiiauee 'E12 (page 5% of the peetifion}, KW'§{3PL furiher fertifiee We posifien of dominance over the .i\iZcs"£eei3y asserting that the {3empany~- may dew so witheut' any prior permission of consent were any en' the Allottees.
it is noteworthy that the KWICPL has aiready imgaiemented ihese I abusive Cheeses, much to the heipieesness ef the Aiiottees, by ieunching "Ke§keia ' West Heights", e m:.§Bti~eieryee highriee in the same Phaee«, 1?
adverselsy impacting the integraieci Sateliite Township; Pr'Q}e<:::1: as eriginaiiy conceived.
13.3 (page 234} the Gemmiseien has heid such condifion to be umeir.
E33.
Time is ef essence ezfiy in ease eé' eaymefii by the Aiéetteee arse net in case ef the cempieiien ef the Wages: and hencéing ever the eeeeeeeien:
.U'n;;§TejrT Cfieuee 8 while time 'fi'e;Eij'been made essence when it comes its payment of e installments by the Amrgtees, DLF has cenvenientiy refieved itseif by net 'making time as essence fer compieticm in fueifiéiing its ebligaiicms, more paflicuieriy, handing ever the pfiysicai po3ees3e§on- Q? the apartrrweni and Compiefion _G'et'i§f}cete ':0 the Aflettees.
$i€+':fLE.;$;ef 3.1 (page 55 03" the Petitien) stigamates that the iimely payment of gzwayaisie amounts {mstafimentfbown Payment) in with the payment scheduie as stipuiaied in the Provisional Aiietment Letter sheii be me essence ef aflotment.
3 §ep~e§g§'ed clause '§'1"€%'3§'\iii33' §E*i§?fi§'fi§ " in ' accordance %_um'eir by this Hon'§::'>§e"
faveur <3? >:he~--deve§eper has been heid to be Cernmission under para 13.3 (page 234;» read with pare 12.95 {page 2.28) W. e Highhr unfair ene ciieprepertienete ferfeiiure:
Viiée Ciauee 4., DLF has authmized iteefi to forfeit e of the total t.3es't) together' with any imerest paid, due or payabie eiongwith any othe: nan refundabie ameum in case can? failure by 'the Aliefiee to pedorm §**sis.«"her e§;s§Egetioa':s, ii' the earnest money ("R0/2' e Under Cieuee 3,2 {page 56 ' cf the pefitien) in case :2»?
delay the mmpeny bee the eption ta canoe: 'me Afietmem and forfeit/'deduct 5% of the price of the unit and refund the balance wfiheut any jmerest This c<3n::ii'ci<:m cf deeuciienf e xrfaiue finds meuee 3%.
reiteration in i in terms :33' para 13.3 (page 234) pare 12.95 {page 220) ' such ferfeitme has been heid to be um'eir by this Hcmfibie Cemmieeien.
ferieiiure «:3? 5% of fee unit A read with V'. Encumbranca at the pmperty it deveiopert 3; creation at thirst txarty right by the Linda: Stattse 23 {ELF used its daminanct-2 ever the Attotteaa ta agree tttat E:LF~' would raise firtstncet' isctancz from any financtat insttttztton or bank by way at mertgagedl charge."-.-, etc. and the DLF;'fina.nciat"
inst§tutit:>n,? bank shait atways h&3t\!{-3 the first tiemcharge of the said fiapzattntettt far at! dues and 'wide Cfiattse ?'.'t€.t' {pagt-.= 80 at the patittott} '»NlCF°L has re-zaewed to itaestf the mower to dz-ziegate att ' n'-agponsibiiéty to any third party a'!-'Ci also assign its itttenasta ta which aiiotteesi are neither patties mar have any in tact, KWiC:Pt._ has airtmdy its in 't'F_%F§'TtKSWW-"§3&§f&3t' {P3.ge:- 234'} read '»~'it'r para {page ssuch forfeiture has; t H<3n'b§e Q'Q:11miSS§D¥1V Lstiéized thks ;:»0w<-3-r by aéienattng some portion at the %-and of this tttteagrated Satettite Tcwvnshitn tea a third party.
Qther sums payabie by the Aiitcstteeg or in respect Qf any man granted in the Clomparty fer the purpose of the ce:tstm::ticm of the said Bttiidtrtg x" said Comtpiex.
3. The only issue in be decided here is whettter it is a Where Eswesttgation under Section 2t':'«(1.t) at the Act can bs:-3 disectergi. On simitar tatxts in the cease at D33' irtvesttgatian by the {J.(?a. was ditrected. There no i'eEtSC3e't tor the Cazzemtmisstcrm; ts take a different stand. The mtajmity W3-w tttougtt in this ca-1:=.e is that WC} case Es made cut and tt*aert-store the case has been ordaared tat be chased.
at. Before anaiysirtgt the case, i t'ta\/«;:: ta constdet' the ntajosfiy vir-3w. tn the matoréty mcter there is El discussion of exptamttton to Settrticm at the (:»C}§'{7§.?t{%'it§'{iC}37 Act. There is also discuss':o;n of teievant marttet, :'etevant product market amt the reievant geogtmahitn market. it has been assttrted that in order to be in a tiammant pc::s3iti0n in the rerieeastt macéuct. marttet Qthes' ptayc-trs have to exist and titcamirtant piayer S?t()t.£§{§ t:c::»ntroi ttw * xv! Taarket. The ccmcept of snrvitchtng to c_w.the.z' §tous:<.e:ae3 amt btsmgatcxws in th«::
retevant gecngraptttc mam-:ett was atsa CDrt53id{~3i'ed, in the ma}{)i'ity..--§§.f§'t3'§'»?ffjQ.{{e ssmgte tcwmship cannot be considered as {-1 geographtc ms-mzet and tttaf fi'et;a,';:§§§§iC:a $1313 to identity the other s:_m'0Lt.r'2t.i'mg areas where ¥t<3t.tS3{~3:'S and t3ug§gatt%5\n.Js_ x-tregt-3 Clemmieeien is not able to examirie deman-gi subetituiabiiiiy, suppiy suieeiiruieisiii iiy and the rmieniiei <:iemen<:i, the Commission cermei determine meriaei" ;o<:>wer' Q? the 6fi?IBf§3i'i.S6. in the epiniori of majori'-:3; if the iewnehip had io be considered in ire reievent meri-::e'i in 'terms; ef i':er.ring eirrriiar features in the riearby <3 be eor'ieir.iered. A view has been taker'; that e singie iewnehip earirioi be the i'{~3'rE3-\1ar'r,i market. ii been eseumed tiiat other iewneriipss are coming up iii the virginity c-{ere iewr'rei':i;::» Lmcier eeneideraiien.
The mejirxiiy iheri considered the arguments of The informant and eensiciereci triai; a eemgsarmon had he be made wiih diifererrr iewrzehipe anywhere in ihe cQLmiry, it was aiee the View oi the meioriiy that if e prejeci iteei is correidereci es the reievam market then the provision of Seerien 4 wouid apply is: each and every iseuiidirig however erria-iii er big ii may be} it has been heici that Seciion Ii» 01' the Aer was 're C.urb eericerripeiiiive :erer:ti<;es~ by demirxeni pieyer when ihe ceneemer hzae no alternative. it was therefore iweid 'ihei the reievani precieci and geegraphie market cannot be defined in such 21 narrow manner. The case has been eieeezd can the ground that iniermant was Lmebie 're give infer'r'neiion regarciing eurreunciirrg townships and other gzirejecis es weii as the rnarket siiere er the ether eieyere in ihe rnEir'»:e'£.
8. Whiie anaiyzirig ihie ease, ii hes to ii-eid that We is 3. ceee of sewiee in aceezeence with Section 2{u) fire Aer. When consumer gzirepeses 're ;:>urehe.:~:~e 21 property enters inie 3. c:erripeiiti\»'e mariret wiiere he hes a, choice of going to any 'euiider. Bui once he makes a choice "and goes re a deveieper by peyirig iiie eerraesi rnoriey fer the purchase er' a property he becemee av Capiureari ceneumer because if he switches to any ether dexreieper, he iosses the eemeet money. Even the agreement is signed e.iier the censumer pays suizeieniiai em»::xun_'r.e of rergrievyi 'ihue, there are we Fi'iEii'§€£E3i;S -- the first meriiei is when iiie cerieumer wenie re purrriase the preperiy erici the second marker is the eitei'n":ei'i<ei ie. when he has made the crheiee.
7. The riexi issue io cieeided is iiee concept of doriiinar'ic:e and reieverii:
_ meriret. Markei is a wi«:ier' term where ierge number oi goed§V.:\ar3d.,,,\§er'»*isee _. ' T'i'~-" 'N, transacied wriereae reievant me.r'i<ei is the me.ri<ei wiiiczh has i«:i'iee;'..rtié2reirri_1 ._ Ci by me Cemmieeicm wiiii re'i'ererac:e 'E0 Erie i'eievani; product market :3: i'eievar:i g=e.og'»_raehiC '"
meikei: or with reference 10 ecaiii the m;+;r"i<r-ate. Pieieveni mgr mE1:Ii}<ei,i;~freeer':s \ ' if' \ ..__: _ n*gaf'§»;i-gt; i:_emprie'mg ail these ;£)tOCilJC'€S er services wtiicti are regerdee' interehengeiebie or SiJt3ST.iiLttEtbt8 by the consumer, by reason at ettereigteyggzicg at the ere-ducgt or eewices, their prices and interided use. service and net: of ;:»rodL:ct. Such <1-er ~..a«..a:
in this case, the issue is at vine is aveitabicza at tr.3.rioue Eoeetizaee in tnctie but it the Ct3t'1SLtiTre§' hate made his choice by setecting e buiider in one ioceetien then the chaise is made. in that casse either there is me ct~.r;sii3«e e_veiiet:rie to the ca: :$Uf':'i{'3¥' er in me opinierr there is nothing which is substitutable. There is rte deubt that 63 market means that rnany ptayere are eveiiatiiie in the merE~<et fer servi»:3e but eme a pervert has made his choice, he has ernty cane eiewirce provider fer a service whieh \NC§Li§'C§ be evaiiataie for 8. perted ea' time. in fact it t3ee::emes e. monopvo tstic market et eervicesi jLtS'¥Z titre an eEecttir:.ity ma.r§<et wttere enty me eervice pmvider is. evaiieate in me iecetiori. Further, as far the tztcmsurrrer ie cetncemed because of the higiw ewitchirtg eeste ta the eenetireer, there is no other sebetitirtettite or interehengeebie prcwieien at eervicest As fer as reievent geographic: market is concerned, it means at market corrrpristrtg the area in which the c~3ndi't§ens3 at cemeetition fer mevieion of servitsee er the services are r:tis3tiri<:tiy twemogeneus erect can be disttngutehee from the conditions prevaiiing in the neighbeuring areas. This ermrieten of the Act as defined in Seetion 2(3) at the Act iiatke of cempetitien fer services. or isewices which ere hemogeriouss from the neighbouring area. There is rtething in the Act which prohibits that the erojecrt itself cannot be taken ae the reievant :;;;e<zgrar:»hic: market. in fact the service being rendered in the said geegrephic area by «tree service mevitéer and this; provision of service is not eveitebte in the r'reigt'at>eurtrtg areas. Furttter, even it eervise is evaitebte in the rreirggtibeuring areas, it is mater of investigatien and eiee that the homogeneity in the area under censictera'tien may be etitferestt from the in the neigtrbou:'i'io<::ad. Thus, the retevem marttet in this case ehouid be the previston at eervmes fer the certsztructien at rows and btmga!~:)ws cm the target at 80 acres, is".
District i~t-:>wi'ah, West Benget.
8. 'The next issue its of «ztornirtarwce and the dorrtinemze arises eut et peeition of etirengtti in the geogrep'rii«:at area as diecmesed above and in this Kwifl is ebte to attest its eonisumes' in its favour. e This in accordance with r'eteren-tzie to tit iflx.
mg (;¢_3{';sL.1*.Tl~'3§' bomecl "ths;+. f1ats:'t:>unga$ov»*s in the 80 of and in Hmx='ra%1, \Nee;'t Eengai. Furmesr, the ~::«:ms.:_:mers icstaiiy dependem can we service; provider }<:\,f\j§{). Th~:=2refor<3 ciauses if} and {Q} of Seam:-n 19(4) are a.p;:,=§icabi¢= in t3"{s'~case. The e;~;bu.<s:-as i'*.:a.ve beer: men':icmed in the §r:f<:;.rn'aati-gxn. V Ei§3fZ=€5E1I'E ':9 be a CH' abuae ofrdomE:war2z:e. ':nves'%.':g:«:té<:n is raquiyed far both ma:'%»:e-:-*i amt afier rna.;rke.%. abuge. } a
9. The Diré:-:ctor General is therefore direcégd to invesiigate this s aae an-ti submit a report within s3i>:~:y days of receipt of this ci§2'e<:t'mn.
M u {genera}.
The§4S-emmary is directed to forward a copy' tr' the .93 , ,1 "\"" \_ ' %§:'~.§ E. \».-.
x \ \.
/3