DLF challenges CCI order; tribunal to hear appeal next month

Case pertains to CCI's imposition of hefty penalty on DLF on August 12 for abusing its dominant position.

Written by Agencies | New Delhi | Published:October 10, 2011 7:04 pm

Realty giant DLF has approached the Competition Appellate Tribunal (COMPAT) seeking stay against fair trade watchdog CCI’s order which has asked the company to pay a penalty of Rs 630 crore for abusing its dominant position.

DLF began the process of submitting its appeal on Friday and its petition was registered today by COMPAT,sources said,adding the matter has been posted for hearing on November 9.

When contacted,the DLF spokesperson confirmed the development and said: “We have filed the appeal with COMPAT for stay of CCI full order. COMPAT has fixed the hearing for November 9. We do not wish to comment further as matter is sub-judice”.

According to sources,DLF has challenged the CCI orders on various grounds,including jurisdiction,the basis on which relevant market and dominant position have been determined and company not being served with show-cause notice before the order was passed.

The case pertains to the CCI’s imposition of a hefty penalty on DLF on August 12 for abusing its dominant position and also issued a ‘cease and desist’ order against unfair conditions on the buyers of its flats.

Later in the same month,CCI also passed another order in a separate case,wherein it asked DLF to ‘cease and desist’ from misuse of dominant position,but did not impose any penalty.

The orders followed inquiries into complaints filed by two associations of flat buyers of two DLF projects in Gurgaon.

In its appeal,DLF is believed to have termed the orders as “patently erroneous,illegal and without jurisdiction”.

It has questioned the CCI’s jurisdiction to look into flat-buyers complaints,pointing out that the matter relate to ‘sale of immovable property’ and not ‘sale of service’.

DLF has argued that its market share in Gurgaon cannot be determined on the basis of all-India sales figures. It was found to be the market leader based on a third-party analysis of the overall country-wide turnover of companies present in the Gurgaon real estate market.

DLF has contended that different kinds of properties,such as secondary or re-sale markets and investment markets,have to be considered for arriving at the relevant market but the same has not been followed by the CCI order.

Sources said DLF has also argued that CCI did not serve a show-cause notice before passing the order. In another high-profile order passed by the CCI recently,it had issued notices to the National Stock Exchange (NSE) before the final directive,they added.

On the terms and conditions imposed on the flat-buyers,it has said that this is as per industry practice,followed by even government’s development authorities.

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