Wednesday, Oct 22, 2014

Supreme Court refuses DLF relief, asks to pay R630 crore CCI penalty

Written by Utkarsh Anand | New Delhi | Posted: August 28, 2014 12:50 am

In a setback to real estate major DLF, the Supreme Court on Wednesday refused to hand out any interim relief to the company and ordered it to deposit Rs 630 crore penalty slapped by the Competition Commission of India (CCI) for allegedly resorting to unfair business practices.

A bench led by Justice Ranjana P Desai asked DLF to deposit the amount within three months with its Registry, pending the outcome of the appeal filed by the company against the 2011 order of the Competition Commission of India, which was upheld by the Competition Appellate Tribunal in May.

On the issue of the interest on the penalty amount, the bench said it had to be determined as per order of the Competition Commission of India, which had fixed it at 9 per cent. Out of Rs 630 crore, the real estate major has to deposit Rs 50 crore in three weeks.

It also directed DLF to file a fresh undertaking that in the event of dismissal of the appeal, it will pay such amount as directed by the court.

DLF pleaded that it should be granted at least six months’ time to deposit the amount. However, the bench said it was inclined to grant only three months’ time.

Meanwhile, the court adjourned the hearing by admitting DLF’s appeal in which Haryana government, Haryana Urban Development Authority (HUDA) are parties along with the residents’ association.

The Competition Commission of India had in 2011 found DLF violating fair trade norms and imposed on it a fine of Rs 630 crore after allowing a complaint by flat owners’ groups of Belaire and Magnolia Housing Complex in Gurgaon.

It was in May 2010 that the buyer’s association had complained against DLF.

DLF was penalised by the competition regulator for abusing its dominant position by imposing “unfair and discriminatory” terms on its buyers through apartment buyers agreements. The Commission said that the conduct relating to construction of additional floors without intimating the buyers regarding approvals was abusive of its dominant position and needed to be curbed.

DLF, in its official statement, after the order, said that it will take all steps to comply with the directions of the Supreme Court and that it remains confident of the merits of its case.

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