M/S Magnolia Flat Owners Association & ... vs M/S. Dlf Universal Limited & Ors. ... on 10 January, 2013

[Cites 5, Cited by 0]

Competition Commission of India

M/S Magnolia Flat Owners Association & ... vs M/S. Dlf Universal Limited & Ors. ... on 10 January, 2013

BEFQRE THE CQi'v'¥PETiT¥{3?\3 CQMM3SSiCJN OF iND!A Case No. 67/2010 Date afC}rder:«31.{)1.ZQ12

3.. N3/As fviagneiia Fla': Owners ,€3.5sociat':cm 2, Mt". KEN)! §<a;::0o;" --- infmrmantg

1. M/3 535.? Universal Limited - Bpgassite Partwl

2. Haryan.:a Urban Deveiapment r5W'§2hs':}rii';'}F {HUDA} -- Gppesite Pa:'tx:~2

3. The Diz'ec:'i€3r Town and Cauntry Péannirgg, Haryana ~C}g3:;zo:3ite Pari:\g--E-3 Qrder TN3 order re¥a*s:€-:5 ":0 an irwfermation ﬂied under section 19 (1) {a} cf the Competitisn Act, 2882 {The Act} by Magnum Fiat Owners ﬁass9»::%a'ci<>:"s and Mr. Rahui Kapmrsr {C-alias'-:ive§y referred 3:0 as the informan'ts} against D133 Universai Limited (Nova DLF Limited), Haryana Urban Dezveiopment ,!1mth:srity (HUD.£x} and The Eiéireiztor Tr.;~wn and Country P§aVrming;~, Haryana (DTCP) (ca?-iectixieiy referred is as the Opposite: Parties). it has been aiiegeci that {ELF Lirniteci {hereinafter r»a%'e1"red ta as EILF) has abused its dominant posiiiorw and im;:>oser;:§ um'air anti <£é3::r"::ninat0r3r ::.<:md§'ti0ns againzst the a.§>artmer13: aﬂottees m re:~:;§::h?.:*u".§;-22.'; yamieci: "W'sagm3Eia", b«e«ing develawed by it B§.F.mC§i;§{\ P§'135€"\-'.:

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e m;

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-"d".~'.\' Ex C-iurgaon, §*§arx,»'an;.=z. it has also beam 2-ziiegeci ma': Haryariaf-*?§»§{rg Es / .. 9"

', thgg 3;-

Au%;?mri't\,' and {3irec't:m'ate of 7,''own smci Country Plarhniﬁg \ ,\\ Qxiha-*1"

;,A twe Gppesite parties have favoured DLF Limited while sancitiening additional ___ﬂC)C3i'_S- ove_{__;3iid €~}b£'Z}\!E' the piain.s_§_a_ric*tione,c1 eariier.

The Commission, on eariiei' occasiens, in the cage 01' twe ether resicieniia-ii proiects cf DLF Limited, namely, Park Piece (in Case No. 18 of 2010) and Beiaire (in Case No. 3.9 :31" 2010}, had hate} it to be diciminant in the relevant mariieit of provision of services for delveiopment :3? higivemzi res.i(:ien'tia§ Lmits. and imposed peniaities besideg; directing the company ':0 "cease and desist' fram impcisingiinfaii" and C§§SCfi'i'ﬁ§Fia'£C3i",i coriditiens cm apartmem: aiiottees. 'Thié aides' wiii dispose cm' the instant inferiiiatiioii fiieci against DU' in respect of its pmjeizt, 'Magnoiia' simateti in the Same geagraphic area as that of 'Eieiaire' .-""

and 'Park Mace'.

3. The facts and aiiegationa as per infmrmationi, in brief, are as under; 3.3. The infmniatien brings out that sometime in August 2605, 95.? invited appiicaizions fer E::s;i::ii<ing cf apamrients in the Group Himsing Cempiex "'f\/iagine¥ia" consisting of N (Nineteen) muiti--smrieCi residemgiai iauiidings of 1? {Seventeen} ficiors each in Pha5e~\i' ii"! DLF Ciiity, Gurgaon, Haiwma with a representation that the coristruetiion of the cizmmiex shaii be compieted and possegsian wouid be handed over within a period of 36 (Thirty Six} months from the date cf the exeizutiijn of the apartment iauyeﬁs agreement with the aiiotiees sub§ec't 1:-:3 '£:imeii,i ;3ayment in accitmtiamze with the payment scheciuie as demanded by UL? and '§i,:i*t'nei' with e provisien, 'that if DLF fai.i5-~teicglistr'L:i:t >' and cmmpiete the i:i::»mg>iex within the said time, it shali §§°'€{'§,;§1I period of deiay. The payment pian was spread aver a period of 2.5 years with 90% {Ninety Percent) of amounttrgf sa1e4,_co21sici<--3ratiorn_r:a.y_a;t:j_§:_..tg,£i,__[;}§:g,:§g:3j;§::_r.V__,___U 2037 and the baiance 10% (Ten Percent} on the receipt or' caacugation certificate by DLF tram the au'th::;ré't§es. Acting an the representations and garomises by DLF, members of the irrformant aséociaticm started bookirrg their apartments in the compiex from Augustwﬁeptember 2005 anwards. 3.2 Accarding to irafarrmation, much befare the sarzcztiorz EIHCE3 approvai of the buitdérzg plans far the prqiect, DLLF amassed huge funcis from the arltottees as booizing amounts. The corzstructican at the praject afsso cmmmensed pending fiiing at appficatiorz and apprmfat at the bLa§k:£irzg gieians far the moject. Apartment Etaw/er'5 agreement was 333:3» executed by {ELF within a few mrzmths of the afiotment of the apartments. !f'£"E3£$pE:Ci'§\.»'e of the fact that several rziauses gave unbridied anti arbitrary gaowers to DLF, a persan desireus of hocking an apartment had no escape but ta accept alt ciauses and Sign cm the cfatted mes, 3.3 The informants have subrnittersﬁ that in accordartce with the appﬁcatian far aiirntrrzent, in case an aiiottee does {not execute, accept and return the standardized apartment t3uyer's agreement on the starrdzswd format prescribecf try DLF, wittrin a period of 38 (Thirty) days from the date of its dispatch, the aiiotment of the applicant, shail be treated as czarzceiied at the dEs3cret§r::an of [ELF and the earnest money depQsi*E:ed shaﬁ be t0rfei't:eci. THE the.t.de»t.e\r\Q\f>t}1e agreement twca instaiimerrts ramotmting to e3;3prox§mateI§r*'"' : "

»--~--ti'31£§\.,.p{7.O;ECt.,§t§IlICCILEgi1..:3.fTL-aQ§I.1i§§§23iIi.Q.¥'Jwfiiiﬁd....{}fL-23..Q5...?.ﬂQ.5.,VfQi.iQ&'§I.§3iCz:_.b§J,,.3..\.jﬂt:E5.§__.....o,..,_i.,..

3.5!» According to the informanits, DLF appiied for approvai of iauiiciing piansz for dated 13.13.2005. This was aimost 9 (Mime) znonths after the aliotment of the apartments begim anti by that time 5 (Five) iiwstaiirrients against azaie consideration in accordance with the paymont scheduie had already been coiiiocteci by DH? from the aiioicteez-is, arocaunting to approx Rs. 1 Ci"C3i'E3 per aiiotigees. EWCP, by its Memo dated 2'?IG2\2,ﬂO.?; almost 18 {EEghi;oeri) months after commencement of the constmction and 22 (Txiverity Two) morzths after start of aiiotmeni; of apartments to iauyisrs, samztioned the buiidings pians anti gave permission to mil to commence constiuc'i:ion subject to the provisions of Punjab Scheduled Road 8; conisroiied Area Restriction of iinreguiated Deveimment Act 1933., its rui:-as and zonin ians framed thereunder. 8 ii 3.5 According to the informants, in accordance with Ciause ;iO,2'o3° the agreement, the possession oi' the apartments was to be handed over to the buyers vsxithiii a period of 36 iiiwirty Six) months from the date of execution of we ageemerit, uniess there was' any delay or failure due to reasons mentioned in Clauses 11.1, 11.3 and 39 of the agreriernent or due to iaiiure of the eipaitmerit buyers to pay in time the price of the said apartment aiong with othor ciiaoges and does in acctordance with the schedule of payment as per demancis raised by ELF from time to time. in acctxrciance there to, tho possession of the apartments \NE'i'E3 to be handed over to the buyers iatesxc tn; February .2009. 'iiii cziate howevi3r', the i:om;::ie'>< has not been foiiy consstructez.-d W have aiiegeci that reason of cieiay cannot be atti'i§f}\§-i5'ELf'<':'ﬁ§'\' <.;

'.-

and the a;:2ar>:mei'i'i:s have not been iiziooed over to the bLiyg§;.F5'?Ii7TT5iii%éié?fifr§v\n':arats v?' V''\ -l",2;>i}> V\\ i -ii .

mentioned in Ciauszo 13.2, :ifi..3 or Ciause of the Agioezyengk }._ A Q?

outright abuse of the daminarit §}{}5i'ti€}£'i and misuse of the provisians of the __M_§'g_{§§__r_i}ue M by DLF.

3.6 The in'i0r'mah'ts have hraught out that it is apparent fmm the terms hi the agreement that DLF haci repress-zrrized that aii iavout arid agsartmeni: pians annexed ta the agreement were tentative and subject to approx/ai cf DTCP and any cariditicms, changes and directions impinged by the D'i"Ci3, whiira approvirig the pmposed tentative iaymzt pians wouid be binding on the apartment GWHEFS, Such a ciause as incorporated in the agreement comet (mix; mean that DLF had 'tiii the date of the execution mi' the ag:'eemeri't not appiied for necessary sanctions. Further {ELF reserveci its right to carry out such adciiticms, ai':ei"ati0hs, deietiahs and rnrndificatians in the tentative buiiciirig pihris, ficeor piaris as ELF might considc-.-r i'i£'Ci2SSai"y' or as directed by BTCP whiie sahcticshihg the plans. {ELF aim reserved the right in increase '£§'iE:.§3i'0§JOSE~Si number' of floors ii': the buiidings and tr: seei: necessary' apprrzsxrai for the same.

3.7 Or: the date of the executimh of the agreement, DLF had not even appiiezti far' the apprcivai of the huiiriing piarzs and that is the reason they wane addressed as "tentatiw-3". DLF misiiisizig the prawisiohs hi' the agreement wanted to r:<::ristmc:t :acidii:ir}ria¥ ﬂoors and apartments once the project took off at the cast cm' and expeahse cm' the apartmerit buyers sirme by that time the bu~,iers had paid 90% ihiiiwety Percent) of the sale c:onsiderati<:3ri and were ief":

with no option ti?» em whatsctsever having put in huge investments in the 'x The ihfarnwents have atse submitted that in totaE disregard to the rights at '_ the members of the associationt DLF after caEiecting_wf.§'QE~§m'_gfW_t*hemgstee,_"_A_e_V__V___§___W censideration from the buyers, and 'awe months after the pessessien deiivery date, by e fetter dated 08.04.2009 submitted revised huiiding plans for the project te DTCP for revision in the plans eenctieneci an 2','?.G2.Z2.0{)? seeking approvai for increase in the height of the towers and additiens at ﬂeets ta the existing 1? to 22 and 26 ﬂoors in different towers. This not only was en abseiute uniiatetrai decisieh but was highiy arbitrary affecting the proprietary rights and ewnershha interests of the apartment owners in the super area, common ereae and faciiéties besides detaying the time hound project and escaitating thekrests. DLF had me such right under the agreement te change the cempiete face of the project that too after the expiry of the possession date in terms of the agreement with the buyers,

3.?' Aceerdihg to the infermants, even hefere the revisersi buiieihg pians were sersctioned, eiiewing DLF ta inczreatse the number of ﬂeets , by a hatter dated Juaiy 1.6, 2009, EJLF wrote tea the aitottees that it had eriégmefiy conceptueiized the ptreject with taher heights, but some eppmveis reteted te tastier heights got deiayed. However, the censtructien ccammermed without wasting time.

Subsequently the desired approve? had been received for increase in height which had resuiteet in increase in area fer sate and as such some at the benefits of such increase were being passed on to the existing customers.

\ Accerdiraghg DU? ottetect a specie} "Timteiy Payment Rebate" :_t"_{{ ft. DLF admitted that there was a deﬁay in tsandihg over pf' : \ due in February H309 and a«:<:ordinghr tiit Juiy ZOGQ, the coztmtaezhse.

\.-_ :1-\\ « ' 1%' £3':

per sci? 'ft. was being paid. ELF further informed that yaermissive pessession Wsh-é3§i"'§38"f}ﬁ€i°€£§*'5i'i"5rE'i3'£&m*b&i'*-2E3~1v{3~-E':HBi--1°§»i'ia¥~§3tE)5vSt'3S5Vi{i>Pi~--viey---3uere~-2€}£i;&;--a-Atieiay ................... .. at 2; years and 4 fTi{)i'ii'i2§"1S'f£'€)i'i'1?Z§'.C} premised pcissession. Beygnd june 203,3, "rm; effered imtreaseci wmpensatien of Rs. 3323} per sq. it. it is apparent thfat tiii the date of this ietter MP did net have 'the sanction C3'? the revised plan fram the authoi'ities.

3.10 The irifczrmiantsa have further brought out that DTCP titrougit its Memo dated 2.3.'..£}§.20{i9 sarictiorxeci and apprstzsved the reviseci buiiding piens by aiiciwinig Di} ':9 inmease the number of timers in its buiiding in the compiex. DTCP was weii aware that the said pmjecti had been sanctioned miginaiiy with 19 towers at 1? timers each, was much delayed and any such addition wmiid vioiate the rights at the bus,/era in acidition tn further deiaying the éaid pmjeizt.

The revision at pi:-ms and the entire change in the compisexien at the ciompiex was undertaken with the assistance at DTCP and HUDA and without intimation es' siiow cause t0 the epartimei'st aiiettees wimaese gzampréetary rights aireedy Stood crystaiiizied in the Cempiex.

3,11 .€!xcc:o:'diri,g tn the infemiaants, the agreement executed with the buyers. by BL? is Em abscmte abuse of the detriment paisitior: sf DLF. The emvisions -«:2? .6:

said agreement impose direct and indirect unfair and discriminatory conditions in the purctiase at' the atieartmerit and other services frond DLF. There are mi:sreg3:'esentat.ions and pmvisivrms which give BL? urife'i:tei"§: '§§;§i~:§h'€}Fiiy and r" 'z ' W_.W_____.___,__.,_.__.§.Ef}.d.i£1Z:3.'Is:'3..,..'£ha3LDi.E...SQJ.CLi3'1Ev.ii$3.3tIi?C£T3.€2.I111S.._.KLIZEE:_..hLm3:"IS._'_am:L.t:Q.§_¥et:ied._._.iTu_zge ___________________ .. amounts of meney en tentative plans which were subject to change at any stage by DLF without seeking consent of the apartment buyers. This is against the previsiens ef"the~ Hatgiana Deveieement a-md Reguiatiorz ef Urban Are .5335 Act, 19??» and the cenditiens at iicence which restricts BL? to create any thircf party interests tiéi a;:»;:nr'eva!s are accorded.

3.12 Atctcerding to the informants, the tentative/prepesed Eeyout piatns which 35 annexed as Armexuret Hi. to the agreement stiftes the veice of the buyers by inserting the waiver clauée that no consent an' the apartment a-ﬂiettee is. at 3%?

required, if any change or mnciitien is imposed by DTCP white approving the iayeut plan. Further, in accerdanee with Ciause 1.1, the apartment aiiettee is required to pay the saﬁe Censideretien caicuiateci en the bazis of Super Area of the apartment and for uncﬁivided prepertionate share in the tend underneath the building on tsvhich the apartment is ¥c3c::--3ted. Hewever, in atzeereian-::e with Ciause F, the area of 223"?' HCFES earmarked for the preject ceuici be reduced uniiateretiiy by DLF. The informants have eiiegeti that such finai authority with DLF caem be abused any timedirezztiy etfec:'t§ng the ownership and use rights 01' the buyers at the cmirteiex.

3.13 it has further been aﬁeged by the informants that in Céeuse 3 and 5+ of the apartment' on the preie>it':i1at the apartment aiimtee Compiies with the t»:-arm; >>>>>>> _. of the agireemient, DLF has auihmised i'£S_e___i_iE_f§_{~3_.fC.F_i:iEE:'ii'? tine sgsid Eameisit i\/icrne__yA amount in the event «sf 'i'aiiu:'e :33' the apartment aiioti:ee ta per'Fm'm its cabiigations under the agapiicatim cf ai¥::»i::*w;-ant or the agreement mat Eimiteci to events of tie-fauit as described in Cfause 12 at" the agreement and further in the event that apartment ~aiio'ctee fails ta Sign and return the agmement in its originai farm within 30 days from the date ai dispzatch by 'the Company. The eventg iisted uimsier Ciause 13 are totaiiy Ciisc:riminamry and give DLF 3 isuperim"

position and ui'u'eti:er'ed right and authority to forfeit the Earnest ivianey even for irmaxtmus reasons. The agreement being mtaiiy biased in femur of DU? does not ccmtain any pitzportionaice iiabiiity ciausé 'ta fasten cemmensurate penaity/damages cm {ELF for breach in disc:i':a.rge of its obiigatistma. 3.14 Accerding to the informants, under Ciauses 1.?' and -1.9, the apar"i:men't owner i5 entitieai to ownershigs right of his apartmem: and §3€"U~i"23t8 awnersixip right of iamzi beneath the buiiciing. Apart from the said rights the apartment owner uncier iaw is entitied to pm~rata right cf common areas and facilities within the compiex and pn:=pori:ionate share oi' ciub m the {:c)mmLmi*t'y Lbuiiciing and oirizer common faciii'i;ieswi1:hin the CGﬁ}§}E€Ki' However, mntrary in this iegai parasitism, DLF has reserved to itseii the rigiii: U2» modify the ratio. 3.15 it has aisao been bmught out by the iniarmamrs thai under Ciause 8, time .1 has been made the essence with reapect t0 the apartment aii£_}fi:e'::"' to pay the price m' the said aparicmerit in accordance wi xii payment as given in Annexasre iii aicmg with other" ;3a'ymEe:1t{§s..,.;g{ch K ;' \'\._'i\'' i& '\ LC) stamp duty. However, DLF has reiieved itseif Ham making "time as the essence for the compietion of C{Ji"iS'U'LEC'£if)ﬁ and in fuifiiiing its abiigatinns in respect in handing over the physicai possession nf the apartments and cnmpietican certificate to the apairinient aiinttees.

3.16 According to the informants, unequai relationship and the piight of the apeintmeiit owners can weii be visuaiized in Ciauses 9.1 and 9.2 in the manner in which {ELF has abused its dm'nEnani: position. Since the agreement has been e>:ecui:<-3d vviﬁhnut apnmviais on the basis nf tentative specifications, DLF has reserved a: rigi1'i:i;o change at its soie opitinn and discretion any aiaartmient pian xzvithnut the cansent of the apartment aiiotteeis and witnnut any time nerimzi. Not only DLF can change the constmcticin Qf the building ihniciutiing giant and fi><tui'es to be instaiied therein but has aisa reserved rights in make any such additions, aiterations, dseietinnis and mmiiiiications in the buiiciing pians, ﬂonr pians inciuciing the number of apartment ﬂoors as {ELF may consider necessary or as is directed by any Comipetent At.;tnnrity whiie sancitiioning time buiiding and» iayout pians an at any time i;hes"ea'fier tiii the grant of an occupation certificate. DLF may also increase the pmpnsed niunrfner nif fionrs in the said bniiding without any objecttinns in be raised iziy the apartmerit aiiotteesi 3.17' The informants i*ia've submitteci that DLF has tntaiiy misused these provisions in the agreement inasmuch as DLF has gnne ahead tn appiy for additinnai ﬂnnrs much after izine cnznpietinn Liaise ins" i1ar,c:iing over possession some cases added 6 in Z' ﬂoors to various 'sewers. in e3<:cni'c\§.sé:; giise .\' \~. \ " '1 .~"'"' :3 '_ SE. '3 9.2, the only right given to the 8pa£'1Zm€§i'i1I aiin'ttees in casie sif 21 tongnig ..._eharages.__.there=:2Len;:1f_._th.ee.:e.s;J.te:;.t.._eh.a.hg.e.,_ie.._t_h.e\_.s£aeee:_..A.r:ee....:;i..:.h.e..,;a.id modifications is a right at receiving irztimation frem DLF in writing of the epertment. in the event that within a period of 30 days the apartment efiottees refuse to give cohserzt or object to such efteretiehs or mochfirzatiehs then DLF shah at its sote oprtirm and discretion have the right to cancei the agreement witheut further notice and in such an event DLF shah refrmd the emzire meney received hem the apartment aiiottee with interest at 9% per annum within 90 days hem the date of intimatmn received by DLF from the apartment afiettee and upon such refund, DLF shah he reieesed and discharged from its ehiigeticms and Iiahéiities under' this agreement and can proceed to reseh er deer? with the said agxartmentz in any manner whatseever at its state discretion. Aceerdéng to the ihfermehts, such restraining and zmequat previsions of the agreement flow out of the abuse of dominant positicm hy DLF.

3.18 The inferrrrahts have raise stated that as per §m'<::r'm:atior"z, rate of 9% payehie to the apartment aiicstees in case of defeuit is ahsoiuteiy arbitrary as the rate of interest or penal interest in hermai circumstances is as high as 18%, which is what DLF charges forde1a\,red payments in accordance with Ctause 35 m' the agreement. Further, Cieuse 10.3. prescribes 2-: period of 36 meraths from the date of exercutron of the agreement for handing aver rmssession to the apartment affottees. The emy exception to this period is deiay in possession for r'erasor25 me-mticmed 3r Ciauses 1.1.1, 11.2, 11.3 and in Ciause 39 which refer to deiays due to reasens beyond the ccmtr«:Jl of the compare white DLF V :

started cohectihg the safe cerzsideration tram the agreement daes not in any provision rrzake [ELF fiebrle fer z t-'\' >12' 'x commensurate with the stage wise cempietion 03' the praject prarate to .\_.-_._.__;______..._..__W_s£11513}.U.E"I1S3.iTll{;S;.JZ5Em.EE.D£3.E3£i.ily£..QLE...fEC.Q£'fLIh£3._,_al§_QI€3§§ia§LSUN'! a ciause has been H totaiiy misused by DLF as in spite ax' ccaiiecting 90% «sf T.§'}{--1* sate consideration fmm the aiiottees by Qlecember 2{){}7,, it faiied ta execute the project to be atria to comgsiete the constructisn besfore the passassicm date of February 2089. Ftzrther, without mmpietiing the faciiities and canstructisn, DLF has ' arbi's:rarEfy started writmg is the apartmem: aiimttees is 'take aver apartmerfz for finishing interior works in accordance with the pmvisions em" Clause 10.1. 3.19 Aizczording to the infarmants, even when proper safety procadures and faciiities are net in piece as most 0%' the towers are ands? ccmstmctien, {ELF is arbitrariiy handing ever the apartments for ::ar'r'ying 'aux: En'tseric:sr fit out by the aiiczttees within a psericsd af 9 months from the date of the offer faiiing which DLF can charge penaﬁy far namcompietiszsn or cancel the aiiotmemc and forfeit the earnest money with deiayed payment interest for rmrbcompieféan of intes"i(:»z's Qt' reseii or .re~a2¥r;}t the apartments and refund the baiants {mess paid by the aiiettees withaut any interest whatssaexnsr after rs-saie ear aéiotmerzt. 3.20 Further, Errespecﬁve cf the ccmditian sf the corxswucticsn in ac:c.<:ardance with Ciiause 10.4, the aiiottee is f<:>rc:<-2d in take over the possession sf the apartment {Jr face canceiiation er pay csnwpensation at Rs. S.OD (mxpees Five) per sq. feet of the Super Area of the said apartment per mzzmth far the entire period of such deiay at S£§§€;' discn-ztion of DLF, if it decides ta condone the deiay. DLF has aisa reserved with itseif rights to xmthhaid con~:g§2.y3a;;3x;,t;:;ga;~

-1.' r '."-F? "

, .

$1 ' '~~* Vii;

\ .\~ sxi the apartment 'til? the entire penaéty with overdue in't:arast is; apar't:men'z aiicttsza, BL? is aware that the construction is cm W 12 the site is next safe for the ailottees and is wﬁting tr} aiiottees tr: take ever possession to save ea_yJ.ege,.ga:..._.ag1:ee,d...,.,ee.aamze,Je..._.,.a\:;ee;:da.a.ee,.._..wi.th._,_:be ....... W ...... _. agreement for deiays on its per': in ha'nd,fmg ever pessession. 3,21 Accorciirng tn the inforrnants, Ciauee 11.1 is another exampie as to how DLF being in Va superier and deminem: pos?tie:': has biackmaiiecﬁ the apamment aﬂetees by 'i:a.l~:§ng their consent ta even aiiow it abanden the project. in accordance with this ciause, DLF has authorized itself to 'treat aiiotment of the apartment as caneeiﬂed in the event that it abancforas the project and farmer upcm such canceiiation shaii refund the amount received from the aﬁettees without any interest er eampensaticm that too after' deducting interest on aelagred payments, and interest paid, due or pa\gab3e_ 3.22 The inforrnasrts have brought out that as per Clauses 11.3 and 3.1%, if fen? any reasen ether than force majeu:'e_,' {ELF faﬂs to deiiver pessession be the apartment aiiottees within the garesrcrébed period an' 36 momzhs, or within any extended period thereto under the agreement, the oniy rig§wto%'1:he a¥30'ctee5 is to give DLF a notice wﬁizhm 90 days for terminating the agreement. Upen receipt G'? such a netice ELF has amgherised itself to seéi or dispose'of the apartment_ to any third party at a price in be determizwed by it without accomting for the saie preceeds to the apartment alietiee. It is omy upon reaiisation of the saie pro¢:.eec:is that DLF shaii within 90 days refund without interest the bafance amount after adyasting any interest due or payable and any amount of non~refundeb§e nature eayabie by the aiioteeav. ~ _ event that the apar'tmer's't aliottees do not give a netice af tef. .....,§?_%.\i@.§§?_§£i3§§L.i§!E£I€hf§?..,ET2.ii§?2_'el§§.QL1§..Qf_iLE§§.i§.i_..___..__._..ﬂ, shaii béé eniiigied to terminate the agreement and the apartment aiiottee shali 3.23 The im"orri*iari='is have further submitted ifiat under Ciaiise 11.4, in consequence :21' {)LF abandoning the scheme and not being abie to give passessimn within the prescribed 'tirﬁise, it shaii ia-3 emitieci to terminate the ag'reemei'it whereupon its iiabiiity shaii oriiy be fimited to the refiirid of tiie amount paid by the aiiottee with simpie interest at 9% per annum for the pericid such amount was fixing with it and it shafi not be iiabie to pay any other ccimpensation whatsoever. Ciause 22 deais with the rights of {ELF to make additionai ccxnsitructions or to put up additicmai striucture in ear iipcin the buiidings or caristmct adciitionai apai'tm£=.m: buiidings and/or .';truc'Eures anywhere in the said campieii or Eamti. Acccirdiiig to the agreement such additionai sirructiires shaii be the goie pmperty <3'? DLF and it shaii be entiiied ta cziispose it off in any way it chooses without any interference an the part :31' the aiiottees. Such ai ciause gives rights ti: ELF ta start: such eiciciitionai construction at any time wizatsaever witfiaut any right of the aiiottees to object.

3.251 As per infitirmation, Ci:-mses 23 and 24 deai with the rights 0:' DLF to raise finance from any financiai institutions Cir banks by way of mmtggage or' otherwise against the aiiottees' ape-irt.ment, in accmrdaiice with this ciause, the iinanciai institwiioiws and banks shaii aiways have the first iien/charge on the said apartiment and aii the dues and O?Zi'3E'i"Si.3m3 paiyable aiioittees in reiapecit in' any ioan granted ti) Di_F far THE' piigﬁ «*7 oi the compiex. in accordance with Clause 32, DLF has an ..

iii arnend the annexes attached 're the agreement and tar impese additionm terms .._s.a.a.ci.e:cmditie.::25...r3.t..tz:::.-madi'f.\g:,€arn.em:i,Zeh.a.:1gea:heaterms.aad.r;:;\m:iit,E.c:sn:a.as..eta.ted...... En ':':'he5e~ annexes. Further rt: gives EJLF a right ta change ali the annexes at'tach:ed to the agreement at any thee priar in the cenveyance deed of the apartment as deemed necessary by it at its seﬁe direction. This ciause ghres DLF an invincible position as it can abrc.1ga'£e aii that has been prdmised in the apartmeru: aiiottees by a singie stroke. The annexes appended to the agreement describe and define carpet area, super area, common areas and faciiities like dub and afso the nature of the equipment and fittings which BL? shaii previde t0 the apartmem: aliottees. The iafermants have aiéeged that if in exercise of tee {sewers under this ciause, [ELF is permitted to unifateraély amend er change these annexes; smthing wouhzi srL:srvive so far as the rights ef the apartment aifottees are concemeci, 3.25 Accarding tn' the informati«::n, in arscerdance with Ciause 35, the apartmem' elieiztee Es ﬁabie is pay in'cerest fer any breach in making payments in arccsorciarzce with the scheduie of payments at the rate of1S% per annum for the first BU days and thereafter for afi perieds of deiay exceeding the fire: 90 days after the due date, a penai interest at 18% per annum. in comparison, DU: is <:1n¥yiiabFet0'pa\_./penaitgi at Rs, 5.00 {Rumees Five) per square feet at' the super area of the a;:3ar*:mer':t per month for the period of any delay beyond 36 V months fer' {fseiivering passesa-Sen under the agreement which appreximateéy, is equiv;-3:§er'ﬁ{ is 1% g;-er asmum. Further UL? wiii net pay out :hi:5A~~A§3~e'._.1_\a§ty V5 .

but war: onw adjust the same at the time of execnsting the Con 'Eavaur of the apartment eiiettees and not ear§ie:*. The §nfor'm5an_7_;s h Ln __.ww.W...s...._.,€3.i;}i.i.gSii.OI15..3,iT1d»iyiﬂbii.i.iIi§35..£3f_.ti3.8I that this is anatiier glaring exampie «sf the arbitrary and uriequai rights, 326» Ac:c0i'ding to the im°ormam's, DLF has reserved unrestricted and uiiiettered aaztiimity in its favor' in various ci agreem"ent, tiisereby creating an absolute uriequai reiatiiznship in between the two contraicting parties in the sgreenierit. The standardized apartment iauyers' agreement ciireciiy and iridirectiy imposes unfair and iziiscriminaitory itontziiiicms which are detrimemtai tat: the iawfui interesi of the members of the informarat association. Such unfair and discriminatory provisions have created series of adverse effects and ramifications {iii the rights cf the apartmen': aiiattees, thus viaiiating the prcwisicms of section 4 oithe Act, 3.2? The inicermants have additicmaiiy submitted that QTC? and HUBA have favored DLF while sanctioning adciiticmai fiaors to the zaiready sarictiiorzeizi pizins, They have convisiwieniiy closed their eyes is the risk such aciditim wouici create to the structurai design and stabiiiiy of the buiiidings which were aireadgi Lmcier cons'z:ri.iction. Further, under the Hiaryana Lirtian D'€2\f£éiOf3ii"i63i"i'i' Authority {Execution of Buiiding) Reguiation 1979, maximum Fioor Area Ratia {FAR} E}iiDV\!{E'.'d is Ii";75E'/:5 of the site area and gmpaiiatiariidensitgr is 111.38 is 300 persons per acre at this rate of five persizms per diweiiing unit. On the basis of the piarmissibie FAi'%. 175 '.343, the gierrnissiisie FAR is 17,3535? sq. ft. for a 22.???' acre iand area. However, the texts! iTiii"iii'TR.ii'{'i constructed per i:iir3 revised plans) with a minimum aparﬁment size giii 27 S «.

34, S4, 225 sq. it. which is aimost daubie the perrnissibié /' w.o..::»:i.r.'i.t::a£:>ti.n.g.-pai:i:i.es-i.md,e:.i:i<i.e..agzei3mse.::x.t,s.... ._ auses (if the agiartment buyers'.

, _,'_____w_'_L.,_.,_._,_,_Erm:estm.en.t_ef_tbe..a.p.arftmem...aifQD:ees4_.....__.,.,,.._ thirs norm which can in fact put the whoie preject in jeopardy, thus risking the 3.28 Acconjing tea the infermants, revised height of the buriidings up to 22 ta 26 fioors eases grave threat to structurai safety of the tawers which have been structuralﬁy Ezruiht on the basis 0f 17 {seventeen} ffeers degign as initiafiy sam:t§0ned.' As per the nermal engineering ruies the fmmcﬁation of the buiiding is iaid out keeping in mind 25% safety norms which means if a building £5 to be censtructed up to .1? fieors the feundatiern work weuid be such that 25% more iczad can be susizeined thereon. This 25% extra mshéon is the eniy safety measure and is never utéiized in making extra constructiosw. ELF however, has iracreased the height up in 22 to 25 ﬂoors while the foundation raid amt underneath the buiiding £5 constructed to sustain the road of 1? ﬂoors csnﬁyr. The inferments have submitted that trzﬁs ﬂagrant vidation of safety measure brings the agreemem: within the mischief 0:' misrepreeemzatéen, inducement and abuse er' demirxarat positécm.

3.29 The Errferrrrarrt has aifeged that consequent 're the abuse of dominant position by DH? not only the areas and racilities ariginafw earmarked fer the apartment aiiottees have been sznbsrtarrtiaﬂy cempressed, but the prefect has aiso been abnormaiiy deieyed. The apartment aﬁiorttees have suffered financiai iosses vrith their hard-veerrxed money iaiecked and have ta wait indefimteiy for enccupatiorz of their respective apartments as 3 resu§t___._.e-f;:'3£ . . '7 and addition er fieerrs. Thsase who have Exorrowed mgr;

fenders have ta bear heavy EM! and intereet i3t,:rdé:n§.*'E"

.\''T .:

./"f 1 7 'a :;§-' V \ \ \ . ' cannot aiso deai with their apai"tments in the open rnarket but can oniv surrender it inaski to E7LE_.ajt,_Qif.iQ§3§;,L'i_i;2ILEi.?l§3$2i_.E23rf.Ifii3,m,.._o._s,ss......s_,__is , 3.3{} The informants have further aiieged that the mernbers of the association have made various representations to £31.? but to no effec't. The informants have brought aii vioiations and abuse to the notice oi' {DLF but have not been abie to rnaite i3i.i~' see reason and take corrective: measures and compensate them for aii the iosses suffered by them due to the actions by {ELF and its abuse ofciorninant positions.

3931 it has aiso ise-en aiieged that DLF has generated iiiegai profit at the expense of the members of informant association. DLF has iiiegaiiy in the agreement vested the ownership of the common areas and community buiidings in itseif which is against the provisions of the Haryana Apartment Ownership Act, 1983 wherein the percentage of uniciivided interest in the common areas and faciiities zsannot be separate from the apai°tment to wiiicii it pertains and is deemed to be conveyed or enciimbered with the anazirnent even though such interest is not e>i;3ressiy mentioneci; in the conveyancé or any owes" instrument or agreement with any bi.iy'er of the agaartinent

4. Prirna Facie ﬁpinion $1 The inforination was considered by this Commission in its various rneetings and having found that there exists as itmmojfocie case for causing investigation, the Commissirzm passed order under' section 26(1) General to cionduct investigation into the matter and submit a F ' \ 'IQ .L{J and buiﬁders far ccmstructior} of high end r'esidr=.ntia! units in _ . C

5. Findings m' 38 "'F3Tf£f'"'¥'ri"iT;'§"'EEiii'r'§"E"'5'1?"Tﬁir'E.="§$*E'i§é;"{f?5'*f£'"T?i'éT"§3'G'"EE2'c§iﬁéﬁA"?i:i?E§?333?3'Ei'tS?i'"'?FEa"Fn'"f;E'é'H'"W Opfjosite Parties and the informants and aisa carried out anafysia C»? data from variaus sources as regards reievant market amcf assessment cu' cicminancé in that market.

5.2 in order to inmsire Emir; afiegaticms :32' abuses: of dominance: in the case, D5 has fofiewed "the fofiowing steps:

i) Remvant Market with r'eferer1ce ta Relevant Pr'c2duct Marks': and Reievant Geographic Mariwt in terms of secrticm 19 (5) keeping in View the factor;

mentioned in secticm 319(6) and 19 (7) hr§.srbes:'1det:erzn§ned.

ii} For dﬁerminarion of daminance of DLF En terms :3'? expia-matron fa) ta section 4 of the Competition Act, factors iisted in secticzm 19(4) have been im::¥<.ec:f into. &

iii) The aifegatéorns against DLF as meni:ic>ned Jr: the information were Iooked into with reference to» the garovisiorzs of secitiorr 4 (2) of the Act.

Qeterminatﬁcan of Reﬁevarat fviarket 5.3 DE ha:-2 analyzed the reievam: market for the mrrrgmses of the case in detaif in his regmrt. Notirag that the value ca' a,r.=art:m°:nt Lmits in the case ranges f'r«:=m Rs. 2.?' crore to R514 crore, 136 has proceeded to deiirreate reievarat rraarket cm the same lines as has been done in the {me no. 18 and .19 of 2018. D6 has determined re-ievarrt market in this as services gzrrovided by dswelopers detaiis as regards manner of de'iermEnatir:m of re-zlevamt miss 5 3 " .

3 " "5:

\\ .

1 1 LC?

brcsugiit wt in detaii in girder in case no. 19 of 2810 and therefore the same _..i;a_e:s;__r2g>:_§i.§9g§i:s,§:£i..f3.? ¥f%..*:"~i8§§.i.i'1:.i.". __ S.-£1 D6 has aisa done a detailed anaiysis of cfaminanrze of {ELF and has came "is:

a conciusion that it enjoys position oi' dominance in the aforesaid relevant market in 'tE%§'iT'iS of expianatien (a) to -section 4 mad with section 19(4) of the Act. The anaiysis 0'? ciomiinance has been carrieizi Gut on the same iines as in case no. 19 of 2018 and has been eiaborateiy ciiscussesd in the oriier {sf Commission in the saici case. As regards dcamiinance 0?' Di? in the reievant market, D6 has' imew-aiia, czmciuded as under:

".i..Tf7e Cibﬂifﬁ anaiysis UffC?Ci'Of'S in .seci'i'on 19(4) e5tz:bii5h that DLF group is not om'_v enjoying the highest marksef shczre, but is csfso enjaying clear advantage over other players as far as size and resmurces and ecionamiz: gwwer is comrerneai its €CU."}Of?'1iE'§ of scale, :"esoim:es, and the fact of it being in business Since !c:25t sixiry years :1: {rise giving it :2 {:'i5'z"im:t advanrmge over the iofher player's in the market. "' S5 D6 has aiso brought out that anaiysis of dominamte in India «ﬂees mi: iay emphasis upan a structurai definition bui behaiviourai one? The iaw impiies that a firm because of its position of economic sztrengtii has a high degree of immui':ii'y froi"n= the normai ciiscipiiining forces of rivals' competitive reactions and corzsumer §Z}E!i'ia"v'iOLii'. 86 has aisa brought out that in H0fim""W 4}? lg; 3 z i the Couri'; ofjustice whiie defining a pasition of ecanczmic Stgéﬁ:-F§g;E'Hs under; '-9 .

..\..£1IZ2£2.'E'.{I.a'i£ZJ§(£'1f3,_{;4'_,¢..Qii10.t_ZC1..dé3}fEiEl?f2f!38,.(Zt..féi£?.51'iO-}fI.(3.L{E.JZ£L{Z;2,€1 "Such a _;3os;'tu="on does net ,0rez:!ude some r:ompe;.*i.tian..,, but enabies the the conditions under v;xm'r;'h 'Eh-::3'z' cmmaetitian Wis'! deveiop, and in any cage to cm' Iargefy in disregmd of it 5:: .»'::mg as such mrzdznrf does not operate ta 5:5 de i3**frme:72f.

5.5 Further, {)6 has aim relied upon mil:-ﬁg of The Eurcmean {hurt sf Justice in United Brands vs. Commissicm in which E1: has been stated that, "the dominant positicn relates to a position of ecmnonnicé st:'eng'th enjcyecj by an underimting which enabies it in prevent effective competition being maintained in the reievant market by affording It the power to behave tokan appreciabie extent independently inf its <:0mpeti'cc2z's, r:usi:om>:~2:'s and uitimateéy its: consumers,"

5.7 Accarding to D6, what £5 signiﬁlciamz in the mfings of European Cauris is that the positicm cf strength of presence :3'? dominance does not preciucfe any cmmpetiticm but enabies the Lzndertaécing, Ef' mat to c§eter%m§ne, at $2515: 3:0 have an appreiziabfe iriﬂuencE- on the conditions under which that competitian wiif deveiop, and in any cage to act éargeiy in disregard of it 5:: iong as such ctmduct dares not aperate ta its cfetiriment,

5..-8 Taking intc» account the aforesaid, D6 has stated that the arguments of DLF that there are a Earge number of piayers. in the rnark::*t and therefore, it cannot enjay a pmsition of dmmmance, does not hofd gcaod. According to D5, ~.,\ . . - . 345;» , ccmstdermg the fact that DLF commands substantuaiiy mare in;-s;:;l,<<{)t. . other players in the market, it is in 3 position to behave irfifégsae .

3 .:' 1 .

competitive forces.

3:13.'.Cfilffllﬂ'.f£?JﬂLsi€IlLZéi_C1£'2..*.....-\ 53 {EH3 has cmnciiided that it is due to its market share combined with its size and resources and 8:20HOin_i§12___E>,'i§.3ifa.i3i1agE_..§23£E3.iT,..ii§..£.Qﬂ3,§3.EfEiiiQ.ii5.;£.i}ai,..§lLE...§S...I1QI_....__.

siiificieritiy ccznstrained by other piayers cipeiaizing in the mar'i<et and has got a significant position 0'? strength by virtue of which it can e::i;;ii=2i'ai:e independeiitiy of mmpetitive forces (restraints) and can aisc» infiuamte consumers in its favcmr in the refevant mari<et in terms of expfaiiation (a) to secticin Ii of the Act. {JG he-is nateci tiiai' its superim firianciai strerigth and resoui"i:e5 are izmitribuizing factitirs to its izicimiriant market posiiien. i:L.ii"?.'h{:3i' the fact that ELF has dieveioped its integraiteicti tmiinships in Gurgaon over huge piece mi ianci acquired quite eariy, aiso gives ii: §f.'!£I3.'S§t§C3i'i of strength.

5.10 Taaking into acicouni: iii! the factms under section 1§{-4) of the Act, {)6 has ccmciucieci that {ELF Limited aiczarig with its subsidiaries ELF Home Deveicmers Limited and DLF New (Surgeon Hmme Deveiopers Private Limited is t"-3i'I_i0'y'ii'lg a pasition :31' dominance in terms Q1' section ii ef the Act.

Abuse of ﬁamiriaiice 5.3.: After iinciing that DU? enjciys a poaition of iioriiinamze, D5 has proceeded to inquire into abuze as has been aiieged in the infoimaiziitm. in the prscess cf inquiring inta various eiements iii' abugia, {)6 has discussed represemtatixre cases of some apartmeiit«aii0'ttees, nameiy, ivir. Sanjeev Mittai and Satish Ciiarider iviittai, Mr. Tarun Baizshi, Mr, Sanjay Kapoor and Seems iiapocsr, i\/ifs Cresrzeant Reai Estate Coiisai-i'iani5 iiiiiiaice Liiniteici, Ree: iviahiiiAgi_i=;f_\__Singih \_ Liﬁg'-§'<.,i'_i* Ahiuwaiia, Ajay Kiﬁiiii , iiaman ixsieiwta , M/5 i-iotei Hans Pvt from HUD/-\ and DTCP was aisci caiied an 'izhe infarmatii:m . i regarding the permi5sii:ms and SE-1!"iC'EiOi'i5 'fear the ;".}FO_§€CiC.

"E '3 »'...'.'v 5.12 Based upon the detaiis ga'theret:i in course 'of pmceedirzgs, D6 has reported that the anptitcattons were invited 'far aiiotrtwrentgjn the raroiect in the year 2005 and buyer's agreemerats were signed in the year 20% to the effect that pQsses5i0r': wouid be handed within 35 mtmthrsofthe agreement. 5.13 DG has atso tarraught nut that aiiotrrserzt Eetters were issued and apartment t:»u\,;ers' agreer*nent5 were signed even before the approval far the plan was accczrded by Tawn Pizsrzrterr. Tiét the date at the agreement, two instaiiments . amounting ta approxirnateiy Rs. 50 lac had already been pair} to 33%.? by afittrttees. By that time, DLF had stiii notmade the appticattcan to DTCF' for sancttorr at the Buiiding Piarz. Accarding tc::: D6, Répresentatians "B'" and "'«C"

Eat the apartment buyers agreement aiso bring out that neither on the date at announcing the scheme not white executing the apartment buyer's agreement, DLF hat! gent a;:sprr:3va§ for the Layout Plan from the office of ' Directcsr, Tswn 8: Caurztry Piannirag, Haryarza, Chandigarh.

5.14 DLF appiied for appmvai of buitdirrg piarrs. for the projerﬁ; through an ap;:3§ic::_ati:3n ﬂied on 29.06.2605 foiiowed by a §etter' dated 13.18.2085, This was atmost nine months after the atlotment of the apartrrtentg was startecf by DLF. By that time ﬁve instaifments against sate cansideratirm in accordance with the payment schedute had already been caitected, amounting to apprmc Rs. it crore per aliottee by DUE. EBTCP, by its tvterraa dated 2?.O2.2UO? almost after 2 years cf app¥ir:a"i:is::»n sam:'t§oned the buiidings piarzs and gave perrtté'§§§§§t'-t3 H'.-'1 ('$3, "V I _' r'.-' -'__ 'z.

.5, } , £1 controiieci Area Resicrictiori of Unreguiated Deveiogrzment Act 1963, its raises and zoning. nians framed there z.mc:ier,.

5.15 has brought out that approvai ietter dated 2'?'.{}2i.2¢Ii{}7 by DTCP, which sanctioned buiidirig pian , int:-znaiia containeci as under;

"i\ia addition and aiteratiori in the buiiding plans / iaycsm: pians shaii be made without prim" approvai ax' DTCP. Fu;i'i:i":er cmiy figured ciimensizm shail be foiiowed and in case of any variaiziazan in the gzzians, prim' appmvai mi' STEP shaii be pres requisite. This sanction wiii be vciicz' airinitio, if any ofitjhe condition mentioned abcsve are net campiieci with".

5.15 Accordiné to BE, thus-:., no change in origmai sanctioned plan was possibie withcut obtaining approvai of DTCP far the project. Hmmever, after caiieitting 90% of the saies consideration frorn the buyers, and two mcmths after the originai date of possession and cieiivery premised by the {:om;3z-my, in: a letter dated 08.03.2009, DLF submiicteczi revised iauiiding pians for the project to DTCP. seeking aipgcsrovai for inazrease in the iieigiit of the 'i'«:wvers and adciiiiions of ﬂoors tn the existing 1? to 22 and 26 iioms in different mwers. Even bei'oi'e tiiei revised building pians wszere sanctioned on 22.i)'3.2i}{39., aiicawing DLF to increase the number of 'ﬂQOi"S , DLF by a fetter dated mix: 16, 2009 wmte to 'the aiiattees that it had originaiiy szenceptuaiized the project with taiier heights, but some approvais related to taiier iweights get deiayeci. Hciwever, it haii commenced the construction wiiiiout wastirig time. Thus, {defers 'the revised appfovai was obtained, DLF had aiready CC)i'§"Em€s"iCed. the <:0n§:.£ii..i_:;'§\i\;'3n 'far revised structure. Time ailcittees wha had appiied in the year 3-' V pl /3 _._' ..'.

revised, even when apprevai for the revised pien was given in Segzatember ?{'i(}C} 5.1? According» to Be, as per ag3a:rtment buyer's agreements in' 2005, the preject was 1:0 be cempieted and handed ever within 36 months'. en' the agreement ie. by the year 2009. Later on in 2309, {;}LF had informed the aiietees that ;::«e:'m§5s§ve pesseseien sheaﬁ be effered in September 2010 and finai possession by June 2011, a delay' :3'? 2 years and 4 months from the spromised ;:3essessio:n. Beyond June 2011, £223.? efferecﬁ increased compengatien ex' Rs. 10/» per sq. ft. Hewever, tiil ciate finaﬁ eessession has not been handed ever. Thus, there has been ineminate deiay in E':and§ng ever the possessien to the aiiottees.

5.18 The repert 0'? D6 has a¥se breought nut that due to change in number of ﬂours, there has been change in FAR and Density per Acre aviso for the pmjett. Once these have been viczieﬁens on accezmt ef MR and Density gzer acre, the buiidings complex is beund to suffer fmm sserne other inﬁrmitées, Enciucﬁng en accomnt of amenities, faciiivties and comrnen area than cenceived origineihg. According to E3, the whoie sequence ei' events gwes an impression of rnisrepresentetien and m§s-céeciaration, ea _ . . « . . £7 .~.. -ﬁr aforesasci ce.r':d:'i:u:ms made? which semces have §e3'§§_}17\: DLF are Lmfair. '~"*' 5.220 {X3 has aiso rs.=:ported that an anaiysis of terms and canditioras of agreementTTWith the 'buvezrsshows that the terms and conditions of provision of services are loaded heavilsg in favour m' DLF Limited. The cornpam: has been abie to impo5e~ the unfair conciitims by abusing its dominant pasitioxa thrtaugh the agreements which have been executed with the a-ziicmgees. DC}; has fmmd these agreements unfair on many (:()Unt$. Some of these unfair' ccm{:Eitions~ mention-mi in the buyer's agreement are as under:

i} Cr::smpany's Regtiresentatéons ~ Representations A, B, C, E}, E, F, 6.

ii) Apartment A¥Io'z:tee"s Representatiozws ~ Repzésentatézanj and K

iii) Cimsses 1.1., 1.5, 1.6,.'1.7, 1.8, 1.9 reiz-sting to determinaticm mi Carpet Area, Super Area ate.

Ev) Clauses 3 and 4 relating to amcmmt paid by apartment aiiottee with appfication ant} féarnest Money. ' V) Ciause Z? reiating ta adjustmentf agsapramiaticm :3?' payments

vi) Céause 8 reﬁating to payments in time

vii) Ciause 9.1 and Ciause 9.2 N313'-.:ingto majm ai'cerat%cm;'modification

viii) Ci-ause 3.0.3. relating to permission to enter far carrying nut intmior works.

ix) Ciause 3.0.2 retating to scheduie for pnssession cf the said apartment X) Gauge 10.3 reiafmg to p:'o<:.edure for taking possession xi} Clause 10.4 relating ts faiiure of apartment' a§Ec3ite«e ta take possessien

xii) Ciause 11.1 r:<:m~cem'mg deiay céue to tease; ' "

cczmpany ' 26 xiii} Clause 3.1.3 Failure ta cﬁeiiver passessien by the company: Remedy to epartmenrraiietree

xiv) Cieuse 11.4(FaiIure 'Ce deliver' pessession: Ferrredy tr: the cempany xv} Uause 12 (Events 01' defauhcs and cernsequemzes) 9 xvi) Cﬁause 20 (Arteratien ef unseid uniiis} xvii) Ciause 22. offhe ayeemenr reiating ten» the right to make additionai censtructéerr to the Company xvii?) Ciauses 23 and 24 remting to company's right to raise 'Fm:-zr':::e xix) Clause 32 of the agreement reiatirrg 're the right to correct, rrxedify, amend or charge aii the armexere attached to "the agreement at soée

- discretion of the Company, 5.21 D8 has in acidkion also mentioned other clauses. of the agreement Eike Ciause 11.2 reiating to faiiure to deiiver possessien due to Government 'Rules, Qrciers, Netifica'r:§0r2s, 'Gauge 35 (waiver not 2-}; Eimitarien ta enfarce} and ckause 51 reietérzg 're arbitration tea cenciude that the cenditiens in the agreements are unfair:

5.22 After examining the Clauses 01' the agreemem: in rietaii, D13 has concluded that the unfair cenditiem threugh apartment buyers agreements have been imposed on account of the marker power which DLF enjeys at present 3n the market. DG has also conciuded that as per scheme of the Cornpetitien Act, ZZOGZ, once determination of deminarrce in reievarrt: market is done, then the acts mentioned in section 4 {2} are to be looked into. in case the enterprises are founri to be acrting in vieiationsr er" the acts mentictmedjr?1;;;§ge;j;:;¥eQ\IE~ {Z}, the .A'.' J1':

. . . , abuse 02' dommerute is estabissheszti. Here, the actaorrs 3;: S5 ' £;,>\$*'.».ef_'d'§'=,z..:§*ad not r

-3,.

that the arstions arse caused AAEC {appreciabﬁe edversé: ef§f'ct» 1 Ir' ix.) .,__i

-yx_ since once v':o¥a*tions are estabiishedg the abuse is aim esta%:}iished, not _..J;€i§1§iiiEli':giLéi'iii1&{..ﬁ5T£§3.b.E.i§hI3f}_{iICL'£.Qi&£?xE§Z..i.t1_.i:he___m a rket. 5.23 Notwithstanding abeave, D8 has aéso braught am; that competition in the market has else; been adverseh} effected due to the abusive ccmduct ex" DUE According to D6, it cannot be said? that the exploitation of consumer biaseg, asymmetry of Enfermatien, easily exit optéons, {me sided 2-agreement or ecmditions impssed on consumers affect the consumers oniy and not the eompetiticm, since time to these, static and dynamic competitmn is alsu affected at the market place. Misieading statements can harm c0ns.ume:'s as we-IE as the market piece. m this regard, De? cm the ﬁnes of Envesxtigaticm report in case no. 19 of 2010, im:er'--a}§a, has submitted as under:

"The way the compeny has no: disclosed vim! mforma't;'or2 or has kept the same in the thick compiicated sets of doamvents fbuyefs agreement); it gives rise in significant asymmetry of information. The covert promise of handing over ,{.>G55€S5iC3ne w;'z'h.='n 3 given tirne which was: never aﬁhered to acted 05 :':>c7m'e:'.s" to the cuﬂomers ta Q0 '60 any other builder given the brand name and brand vaiue of DU-I Had the agzpiicantg known about me status of the clearances from the statutory aufhorifies in advance , had me appfztanis knmw about the future plane 0}' increase in number :;zffic»ors,. they nfzigmt not have appfied for purchase of a unit in the scheme. A costly exit' scheme as in this D358 ma:'<e5 cempetition in the mm"!<ef restricfeed since the cusfcmers wili net opt ta exit and go far sczvme othere schemes making at the costfy propogitian. 5: involves. 5z'gnif}'z:ani'!y, in case of the Mczgnoiio, the pmject we,-sf' 2?.Oe2.20C3? after five cigreeements: were executed. Therfe rzurmtver officers wifhout informing the aliofreeg. This mI'3~dec!arm"io.r': net onfy affected mnsumers in the favour of the gﬂroiecf but afso acted as impeciiment tezazerds free arm' ,_,:51:7:'r campetitiorz,' because threcxgh this statement many consumers M70 nmfgfvf have opted for o2"he;' prczsjeds uitimcsrefy awed fczr backing in "iVic:gna!ias'."' 5.2-<1 According to D6, not oniy market share, size, resources and its eecanomisr:

gtrength which gives {ELF superior power over aié its mmpetitars, but the practices of the company aisa have had to comméiting behaviourai biases by the consumers givmég it market {mwer and heiping it to act withouf being restrained or ccmstrameri by the behaviour of the competitors'.

6. After the report of EEG: was received under section 26(3) of the .i's<:>:, the Commissicm farwarded it ':2 the parties inviting their repiies/objectiens.

Remy Q'? the Qgmusfite Fartﬁes and the Bnfmrmamfs 6.1 DLF in its repiy dated 2?'.i39.203_1 and 1S,11.'20l1 submitfgeci that the aiiegationa and concziusiens set cut in the E35.-§'s Envestigaticm repcart in the above matter are identicai ta thoae deait with in case nu. 19 and 13 cm' 2310 relating to "the E1efaire" and "ELF Park Piace"'., in which orders have aiready been passed by the Commission. it a§so requested. ta keep the ematters in abex/am:e *»:i¥l the Competition Appeélaete Tribunz-11 decides the Appeai Wed by DLF in the matter of "BeeIaire" and "DLF Park Piece, , _x'§'. A «,s_;,;§;f\§,.ase nu.

ta) LG 18 and 19 of 2010 be passed in 'the eresent case also. The infermants also ....v.»__.--..-M........-_..bFQ.Ugb1l.D.UL3Ib3i»thﬁ1¥~.d0.31QI.~§3»gii£iQ_.\'1fiﬁ'3».ifT1e...E£§£I§_U.eSf..'{)fgE1LEJ£?Z1ai..i;b&..V;:;1:ie;5;Q.gt}i_..._._,_.;._.._._._.

matter be kept in ebeyance mi the Comgyetitien Appeiiate Tzrébunai decides the Apnea? ﬂied by DLF in the matter' ex' "Beiaire" and "DLF Park Piece".

6.3 The inferments have brought eat that in acidition in the wservations and directions 3*? the Cemmission in the case of "Beiai:'e" and "DLF Perk Piece" in erders dated 12.38.2611 and 29.08.2813. respectiveiy, Ciause 11.2 reiafmg 'ta faiiure 'L0 deiiver pessessien due its Gevernment Ruies, Qrciers,' Notifications em, Cheese 1-4-.1 reiating to maintehence cf the saieﬁ buiiding / said cempiexl said agreement, Eieuse 2? reiating te Heryana Ap_ertmen't Cwnership Act, 1983, {Reuse 5'1 reietirig in dispute Reseiutier: by Arbitretien in the buyers agreement which have net been adcjressed previeuséy in the said Qrders and the DG'5 investigation Repert dated 25.05.3811 in the present case must aise be czcmsidered as abusive practice :1? the Company.

6.4 The infermemss have aim contested the cieime sf DLF that a number of advantages were given to the apartment eélettees and that the specification cm' these budding were upgraded without any extra charges inciuding but not Iimited to air Cenditiening t§*:rough Chilied water pipes which have been upgraded to air czcmditions through VRV system at :19 extra cost. in this regard, the Emhrmants have submitted that submissiens cf the company on the issue is incorrect as the cere;3any~has demanded hugee amounts; as :3. resutt {If such upgratiatiezw free': the eﬁiettees in spite of the "fem: t§}e§__§\{1e air conditionieng has 8 _\ ~«*.i3i:{ ; mount fer air '2._ *<»> I' ..._w eiready been paid far. The cempany has de;§§er:"~ .3 .<\ . . . . :"_='~;;-.'--' ., 5' . . .

condmonmg work on the piea ef the up graC§a'E;en, ? sepecsfuzatmon 30 cf semi 'furnished apartments cieariy states that the air conditioning system wilt be fitted by the rampant: H§1d...is..i.nc§.ux:ied,.in..th.e--e§.<;a.ia.t.i.c.«nmf4teew{3;€§{:--e»ef--t%?se«---m»«------~« apartment. Such demands are being made aniy because the company is in a superior and demiraant positiarz due to the terms at the egreemerat, Ev'.-3 DLF wide repiies dated 20.12.2011 and 28.ii_2.203.1 ciefencieci the ckauses of the agreement pointed out by the informants." it has aiso been stated that certain clauses which were not even stated in the infmmation tiiecj in the above case carmet be considereci at this stage. With reference to aiiegaticms by the informant with regard to demand for extra charges on 'air~ cenditienmg', DLF has suibmitted that the abeve aiiegaticm is trstaiiy misccm»::eived_, incarrect and against the recerd. The standard layout cansisits :33' a set at two AHLJS fer ﬂexibiiiity at usage aiang with aucted €3':5tr§buti0ns. Grilis and diffusers are subiect ta irztericsr design and faiae ceiiing piarzs arzdthe cast of the same is to the apartment awne-r's accaunt, Cost :3'? eier:.trica§ etc. is also tn the apartment owreefs account.

5.6 The package wtxich has now been csfferea is far an upgraded ciistributicrm system using individuai FCUS. The -optima atfereti inciudes aii associated eiezztricai mats as wet! as far the difttssers and griiisi. This upgraded aptien had severai advantages iike iindividuai temperature contrrai far at? rooms, better acoustic isaiatian between roams and indiepencient fresh air system etc. For the air cenditirg-tting system which was specified in the agreement, no extra ,'_\ marge Le being s;:e%te:ete'rt. (miy :55 an atiettee cheeses ta 3.3-'t'§r§e *t1§e}tg§gjrac§e:'i air conditioning system, the difference incest is being as 'rﬁgagiprt ii» 3 t :1 § .

given for the 'oeneftt of the aitottees and the aiiottees are 'free to decide __mggj3g'f;_g;;' thev desire to have the upgraded air conditioning system.

En? DLF has aiso pointed out that various other advantages and btanettts are being given voluntariiy to the aiiotter-3s of ag::sartmeots without any addition cost. {SELF had eariier communicated that possession for buiiding nos. it St 2 would be haraded over by June 2011 and for buiiding nos. 3, -it 8: S wouici be hanﬁed over by November 2013.. it was committeci that in case of any de¥ay in possession beyond such period, the Compensation woukﬁ be doubted for this cieiay from Rs. '5,'-- to Rs. 1G/- per sq. ft. per month. Further, a timely payment rebatet has aiso been offered on a voiontary basis so that the ailottees who made timeiy payments, oecome entitéed to e iump sum discount @ Rs. 506 to Rs. 1030/» per sqft. which is as substantiai rebate ranging between Rs.

29,12,500/~ to Rs. 98,0%3,00{},«"-- per unit.

5.8 An eeriy payment rebate is being given to the aitottees at appiicabie rates if payments are preponeo, at varying; rates from 8.5% to 11% depenomzg upon the time of remtttance. in addittion, certain specifications regarding the buildings have aiso been improved and upgraded For the project, "doubte giazing with thermaé break, in e:-(tern:-2}Va§umim_zm doors and windows" are being provided votuntariiy without any extra costs. These are being imootted from Europe at a very high price. in order to give such upgraded windows DLF wouid be incurring an aociitionai cost of about Rs. 211 crore, thus tproviding up gradation of the value of about £2265 per unit, on an axrxeﬁ;-'-?' ~.~x ¥:<5_ o origitog-zilgz s. 'x _f W,' planned ciub house of 37,000 sq: ft. On account of this aciditicmai benefit, the _€;Q_[i']_§31:3..[1¥...3£\£Q1.§i§.d....bE_..§.f}.§ZU.iI§.EiE....t3J3....3Cidjfti.C}I§ﬁg_"C.Q.SfHQ,i,,ﬁQQ}:Q.K..mB.S,._,3_Gﬂ_£E:QjCEL_§.L§Z'.,t",,_',_'___\,___e,_,__,_,_\ .

abciut Rs. 5 iar; per unit cm prizsgaartienate basis}.

6.9 The contention of DLF as regards reievant market, dominance, and abuse therein'? with i'e'fei*eru:e to the aeartmeiit bLiyer"s agreement being same as in case he. 19 at 2613 and since they have been deait with in detaii in erder passed in the efciresaid ease, the Cemmissicm ifeeis 'ttiat there is no need to discuss them again in this e>rt:iei'.

1?, issues; fer Seterminetieti '$7.1 The Comrtiissioii has given due mnsideration U} the eiiegaticiris made in the informatien, the investigeticm repert at the DE, submissions made by the parties CC3i'2{3E'£"i'iEd in the instam': ease airing with submissiens and epinions anti anaiysis of experta reiied upon by the GP in course of ;"I)i"QCeE{3imgS in case tic}. 19 of 2019 {as hes been requested by the GP to consider tiiem-in this case as weii). The Commissicm has aiso taken note at requests of BL? Limiteci that the matter be kept pending tiii the appeais in case of 'E3ei;--:iire' and 'Park Piece' are decided. HO'WE'\!Eti', the Cemmissien observes that ttiere is no stay an the inquiry i:>i'«:meedings in the case either by Tritiunai Oi' by any COLii"'C and thetefisre issues amid be decided on merits.

7.2 The Ceimmissicm finds tin-at 'the issues arising frizim the facts of the instant cases are icientisrai to those in me. 19 as ur:-i:.iei*:

iesue 1: {.39 the pmvisions of Compe-titmn ,1-ict, 2802 app CffCUi??Sf{3i?C83 of the instant Case?

v4.

issue 2: 'A/hat is the refevcznf m::::*i<e'f, in the cc:Jn'i'&':«:i' of sec'£'ir3n 4 read with section 2 {r}. section 153? {'5}. section 29%} and 5ec:'tir3n 19{?} of 'the Com;3eIit1'on Act, 3003?

issue 3: is BLF LiI'?'ﬁ'E'e:Tf o'»:3rm':'2:;'mt in the above refevant !??Qi'k€i', in the amtext ofsection 4 read with section 19 (4) of the Corﬁpetifion Act? issue ﬁz :ff[)LF Limitecf is abmfncxnt in the reievam' mm'i<et, is 2Yhe:'e any af:su5:5= of its abmincmt posman in the refevarnf m<::r!<e*2f'?

13 The determénation of the above issues by the Cammission in case number 19 of 2010 (case of Behaire) appiies squareiy m the facts and c§rc.L:mstances :31' the instant cases. The Commission hcaktis that detaﬁied reasaning and discussian on the above issaues given in order dated E~2r8\2{}j..3.. in case M). 19 of ' 23.010 appiy 1:53 the cases under catwsideration in this order mumtis mumnaﬁs and are acwrciingfy foﬁowed herein as weii.

Easue 1 Do the provisions af Ccmpefition Act, 209.2' appiy to the facts and circumstances of the instcmf case?

7.4 Faiiavuing order dated i§.2..S.2.013. in case no. 19 of 2919, the Commissicm 'news that the pmvisiang of the Act appéy squareiy to the facts of the case.

Essue 2 section .359 (5), se-ction 19(5) and section 19:37') of the Co.rr;g3§t:t:

»\ 2 7-\' 'Z'':

.,.>\ 361 ,.

7.:> On the ﬁnes of its Qrder dated 12.8.2013. in case no. 3.9 of 2010, the Commission hoids that the reievam: pmduct market in this case to be provisinn of services for "high--end" apartment units e:onsidering the cast of the» agzartmemts and a campiex mix sf factors for the reasxzms specified in the said order. Further, thxe reéevant geographic market is aiso determimed as Gurgaon, Haryana.

issue 3 is {ELF Limited d<::m:'nc*m'" in the above refevant market, in the centers" ofsection 4 read with seczfian 19 (4) cf the Cczmpetition Acf?

?'.6 The Camsmission has Eiiscussed this aspect én detai¥ in the order in case no. 19 of 2810 Gates? 12.8.2011 and has h§2¥d {ELF Limited aicmg with its subsidiaries, as dominant in the reievant market in the context of section 4 read with section 19(4) of the Act. Since the reievant market remains the same, the Commissicm ﬁnds nsa reason ta depart from its previous determinaticm in case rm. 19 :32' 201E}.

issue 4 if DLF Limited is d£;rr"ni%m:1m:' in the relevant rm:zr!<et,. is there any abuse {sf ifs ::2'c:v.rm'r;»:mt pcnsifion in the reievani: m<::m'<et an its part?

?.7 The terms of agresment mentioned in agcsartment buyers agreement, acts and Camus': of £31.? i.imited have been fcmrad to be abusive by the . . T _.\.A~.-~=:::f:';"'{T',."'"'?\_V Commzsszrsm m tts mciezr H1 case rm. 3.9 m' 2919. A detauied reasaw&jﬁ§§?§l«a*s;a;§{;0 ...~j':.-\ <30" ' 'M' ' 'T3-' been gavera in the order on thss SSSUE. Emcee the terms and cg; as 5' ccvndust Qf' {ELF Limited in this case an: akin to case 0 Commission hoéds that the ciauses, conaiitiona 0f the agreemr-znts as indicated

- .................................... 2.4':3....g;»a;fag~S..2I3'am:LE>.£§§LwQf..i:.h.i5..s::x::de,1Lr:.Qniai.n.ing...tba_.ﬁnrﬁimgr; nf HG: ammmf fn abuse of stricxminance in the reievant market in the instant matter as weii.

7.8 in View of foregming, the Cmnmissian finds {ELF Limited in contraventian of section 4 (2) (21) (i) m' the Act.

'}'.'3 AS regarcis ciauss-23 11.2, 14.3., 2"? and S1 referred to %by the inferman': as not mentianed in the repart of D3, the Cqmmission E'}£';T§:€3S that the report % ccmtains references to and discusses ciauase 3.1.2 and ciause 51 as aisa mentmrweci in para 5.21 of this order to be abusive, Ciause 11.2 stipuﬁates that as a resuit of any £aw that may be pegged by any Legisiature C3?' Rule, Reguiatinn or Qrder or Notiﬁcaticxn that may ﬁe made: and/at issued by the {3ovemment or any other Authority inciucling a Municipal Autherity, if the OP is unabée to r:<:>m;3§Ei:e the canstructian 0*'? the graject and does mt succeed against such Rule, Reguiation or Order at §\§c:>tificatE0n, than the mm ~« refunczéabie money of the appiicamts shaii mt he paid bask, 7.3.0 This ciause when seen in the camcext that the instant pmject had zzommencezﬁ without aii prim' sanctians makes it dear that the GP had 'ii:-2§<en . ﬂue precautions that in case cf any adverse orders by the G0vemm%em: or any other authmity, nest the GP but the agapiicantsfaﬁottees wcmid Ease money in fcermof their non~s"efundabEe deposits, even if the onus of taking a?! due amnrmvesis and £msu,r§ng iegaiéw of the project was that Furthm, z-=a.«-"3=¢=.:'\'"?\ ciause S1 reiating to dispute re5o§ui:i{:»n by arbit:'atiq:§g$t§pg§gatg§§?a,}§;at such \*'\ \.'\'~ *-,r,'.*'¢-'-;

3 \ \.;   -"' 

pmezeedmgs shail only be mid at DLF City,    S038
 ::; W535

Az"bhtratc:»z" who shaii be appointed by the GP and whdaseiié T ﬁzz; ﬁnai .-33. . , F' . v.'. '3' and binciing upon the parties. it has aiscs been stipulated that the arbitrator A__f3j_a5'g__jjs@ .=li'L_£5=i't'i§"§i(')\'_iP€-'< nr aiivnraie nr nfhearwiqp COT}hi;'-'f"'§'{-'d to the DP and Tim .='3\i:2:«1i"t::'n:--:n't Aiioiztees shall iiave HQ dDLi§Z)'CS as t0 the independence car imgzartiaiity of the said mbitrator. The Cwmmiissicm holds that both these ciauses are unfair and abusive.

?.3.1 As 'far as ciause 14.1 is ccmcemecri, the Cammiasian absewsas tiiai: it reiates to maintenance of the. buiiding compiex wherein ii: is meni;.ioned that the DP may hand ever the compiex to the associaticm of the agiartmémi aiiuttees for maintenance. Thus, the 0? has kept the Qption on the issue of maintenance Qpizm. Further, Ciause 2?,' reiateg to need far' adherence to the provisiszms of Haryana Aparicment Ciwnership Act, 1983 by the aiiattees. The Ccimmissien abserves that these ciauses per Se may not be said ta be abusive.

8. in the facts and circumstances of the <:ases,_the Commission has aism examined the i"i:>i:.=2 of Qpimsite Parties 33 and 3, viz. HUBA and GT0?' 03"

Government cit' Harigana. On the iines of case no. 19 {if 2010, the Commissiczm notes izhai; izhese are agericies or authorities of the Siam Governmmt whcise not praviding any s.ewi«::«5,-is cf 21 C¢;1i'}'ii'Yi€';'E"i";ia§ nature 0'? the kinci. DLF group or its competitcirs. Thus their conduct does '€:@?m"

E > .1?' ambit mi section 4 of the Act. if 9; Greer under sectien 2? mi the Cemgieiiiien mi, 2352 9.1 The Commission has ieimd DLF Limited to be in cmntraxientien cf seetiinn xi {2} (a) (i) of the Act. Para 5.26 and S.2fi. tn' this erder indicates various ciauses of Buyers' Agreement impciseczi by Di? Limited an c0nsumei's/ buyers which have been iieid :0 be unfair by the DE and hence in contraventicm of section ii.

9.2 in \fi€3'W of the above and in €-Z'X8i'Ci5e mi powers uricieri section 2? {ii the Act?

the Commission directs {ELF Limited Qffering services of building,' devieio;:3ing:~ a} to cease and desist {mm farmuiatirig and imposing such Lmfaia' canciitions in its agreements with i3u\,iei's in Gurgaon and;

is} its suitabiy modify unfair CiC§i"1(3ii'LiOi"§S impinged an its buyers, within 3 mcmths of the date {sf reszeipt of this order.

18, The Commiissicm has aiready imposed penaity on [ELF Lirnited in case me. 19 its? 2010. Since the nature' of contraveintimn 01' §3I"OV§SiC}i"iS of 5es.:i;iz:m 4 iciemticai and its object and effect in the instant case emerge_§_" 3:

position of strength mi' BL? Limited in the same i'EiEVa.i""'f§:"

\ ).

\ \ fa} Commissien feeis that ii: wiii net be apprepriaie ta separaiei

-

u again in the instant case.

11. The Commission decides aizcordingiy.

,. \x.

3. ﬁes as"

is afder to the concerned part irected to convey it":

12. The Secretary is 5! per s'eguiat§«:3ns.

._ J

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Competition Commission of India

M/S Magnolia Flat Owners Association & ... vs M/S. Dlf Universal Limited & Ors. ... on 10 January, 2013