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8e|a|re Assoc|at|on Vs DLI

Compet|t|on Act (2002)

Subm|tted by
It| Chaudhary
ko|| no 19
Informant 8e|a|re
Cwners' Assoc|at|on
Cppos|te art|es
W DLI L|m|ted (C1)
W naryana Urban
Author|ty (C2)
W Department of 1own
and Country |ann|ng
State of naryana (C
W 8e|a|re Cwners' Assoc|at|on
W 1he assoclaLlon has been formed by Lhe
aparLmenL alloLLees of a 8ulldlng Complex
'8elalre' slLuaLed ln uLl ClLy hasev
Curgaon belng consLrucLed by C1
W 1he resldenL of Lhe assoclaLlon ls San[ay
8hasln who hlmself ls one of Lhe alloLees ln
Lhe complex
Cppos|te art|es] kespondents
1 DLI L|m|ted (C1)
Lhe maln respondenL
ls a ubllc LlmlLed Company
1he company was llsLed on !uly 3 2007 and ls aL
presenL llsLed on nSL and 8SL
W 1he company has developed many well known
urban colonles ln uelhl lncludlng SouLh
LxLenslon CreaLer kallash kallash Colony
Pauz khas and ln Lhls Case ln Curgaon
2 naryana Urban Deve|opment Author|ty
(nUDA) (C2)
sLaLuLory body under Paryana urban uevelopmenL AuLhorlLy
AcL 1977
1o promoLe and secure developmenL of urban areas ln a
sysLemaLlc and planned way wlLh Lhe power Lo acqulre sell
and dlspose of properLy boLh movable and lmmovable
use Lhls so acqulred land for resldenLlal lndusLrlal
recreaLlonal and commerclal purpose
1o make avallable developed land Lo Paryana Pouslng
8oard and oLher bodles for provldlng houses Lo
economlcally weaker secLlons of Lhe socleLy and
1o underLake bulldlng works
3 1he Department of 1own Country
|ann|ng naryana (C3)
Lhe nodal deparLmenL Lo enable regulaLed urban
developmenL ln Lhe SLaLe of Paryana
1he ueparLmenL of 1own and CounLry lannlng
Paryana ls responslble Lo regulaLe Lhe
developmenL and also Lo check Lhe haphazard
developmenL ln and around Lowns
granLs llcenses Lo Lhe prlvaLe colonlzers for
developmenL of 8esldenLlal Commerclal
lndusLrlal and l1 ark/Cyber ark Colonles ln
accordance wlLh Lhe provlslons of Lhe Paryana
uevelopmenL and 8egulaLlon of urban Areas AcL
1973 and rules framed Lhere under
Comp|a|nts Made
W lL has been alleged ln Lhe lnformaLlon LhaL by abuslng lLs
domlnanL poslLlon (C1) has lmposed hlghly arblLrary
unfalr and unreasonable condlLlons on Lhe aparLmenL
alloLLees of Lhe Pouslng Complex 'Lhe 8elalre' whlch has
serlous adverse effecLs and ramlflcaLlons on Lhe rlghLs of
Lhe alloLLees
W Cne of Lhe maln conLenLlons was LhaL LhaL ln place of 19
floors wlLh 368 aparLmenLs whlch was Lhe basls of Lhe
lnformanL booklng lLs respecLlve aparLmenLs now 29 floors
have been consLrucLed by uLl unllaLerally ConsequenLly
noL only Lhe areas and faclllLles orlglnally earmarked for Lhe
aparLmenL alloLLees were subsLanLlally compressed buL Lhe
pro[ecL has also been abnormally delayed wlLhouL
provldlng any reasons Lo Lhe lnformanLs whaLsoever
W lL has also been alleged LhaL (C2) and u1C
(C3) have approved and permlLLed C1 Lo
acL ln lllegal unfalr and lrraLlonal manner as
Lhey have alloLLed land and glven llcenses
permlsslons and clearances Lo C1
Defense by DLI
W uLl conLended LhaL AgreemenL would noL fall under Lhe
[urlsdlcLlon of Lhe Commlsslon as Lhe AgreemenL enLered
lnLo beLween uLl and Lhe alloLLees was before seLLlng up of
Lhe Commlsslon and before secLlon 4 of Lhe AcL was
W uLl furLher conLended LhaL as sale of an aparLmenL can
nelLher be Lermed as sale of goods" nor sale of servlce"
SecLlon 4(2) (a) (ll) of Lhe AcL ls noL relevanL and appllcable
ln Lhe presenL case as Lhe same can be lnvoked only when
Lhere ls purchase or sale of elLher goods or servlce
(lurLher no aparLmenL owner can be descrlbed as
Consumer" under Sec 2(f)(ll) of Lhe AcL as Lhe presenL
agreemenL does noL relaLe Lo hlrlng or avalllng of any
W lL has been sLaLed by C1 lL does noL en[oy
domlnanL poslLlon" wlLhln Lhe meanlng of
explanaLlon (a) of secLlon 4
W Accordlng Lo C1 Lhere are many large 8eal
LsLaLe Companles and 8ullders ln lndla
parLlcularly ln norLhern lndla as well as ln nC8
and Curgaon who offer sLlff compeLlLlon and
glve compeLlLlve offers ln Lhe relevanL markeL
of resldenLlal aparLmenLs Lo glve a wlde
cholce Lo Lhe consumers
W Accordlng Lo C1 Lhe condlLlons of offer of
each bullder are consldered by Lhe lnLendlng
lnvesLor and Lhen he makes up hls mlnd as Lo
whlch offer sulLs hlm
W 1he cholce of resldenLlal properLy avallable ln
Lhe markeL has never been llmlLed and aparL
from Lhe 8esldenLlal properLles offered by lL
Lhere were a large number of resldenLlal
properLles avallable ln Lhe markeL for Lhe
lnvesLor Lo choose from
W C1 has conLended LhaL lLs domlnance needs
Lo be looked lnLo Laklng lnLo accounL enLlre
norLhern lndla slnce Lhe lnformanL has sLaLed
LhaL lL ls a leadlng developer ln norLhern
lndla C1 has also conLended LhaL ln any
case Lhe geographlcal markeL should be enLlre
nC8 and noL only Curgaon
ke|evant Market
W 1he Commlsslon observed LhaL a relevanL
markeL ls dellneaLed on Lhe basls of a dlsLlncL
producL or servlce markeL and a dlsLlncL
geographlc markeL 1hese Lerms have been
deflned ln SecLlon 2(r) of Lhe AcL read wlLh
SecLlon 2(s) and SecLlon 2(L)
roduct Market
W Lhe uC has sLaLed ouL LhaL Lhe relevanL
producL markeL would be servlces provlded by
Lhe developers for provldlng hlgh end
aparLmenLs Lo Lhe cusLomers
eograph|ca| Market
W 1he uC has submlLLed LhaL Lhe 8elevanL Ceographlc MarkeL
ln Lhe case ls Lhe LerrlLory of Curgaon of naLlonal CaplLal
1errlLory of uelhl ln whlch Lhe bullders/developers
lncludlng C1 are developlng and selllng resldenLlal
W lL has been sLaLed ln Lhe reporL of uC LhaL a person who
wanLs Lo reslde ln Curgaon for varlous reasons llke offlces
work place schools colleges and wlll llke Lo seLLle ln
Curgaon wlll ask a bullder Lo develop and bulld a house for
hlmself ln Curgaon only 1he bulldlngs cannoL be
LransporLed from one area/ reglon Lo anoLher
8ased upon exhausLlve analysls uC has sLaLed
LhaL Lhe relevanL markeL ln Lerms of relevanL
producL and relevanL geographlc markeL ln
Lhls case would be servlces provlded by
developers/bullders for consLrucLlon of hlgh
end resldenLlal bulldlngs carrled ouL ln
Ma|n grounds on wh|ch comm|ss|on took cogn|zance
of |nformat|on
1he Commlsslon has glven due conslderaLlon Lo Lhe allegaLlons made ln Lhe
lnformaLlon daLed 06062010 Lhe lnvesLlgaLlon reporL of Lhe uC daLed 13102010 all Lhe
wrlLLen and oral submlsslons made by Lhe parLles concerned along wlLh oplnlons and analysls of
experLs relled upon by Lhe lnformanL and Lhe Cs 1he relevanL maLerlal avallable on record and
Lhe facLs and clrcumsLances of Lhe case Lhrow up Lhe followlng lssues for deLermlnaLlon ln Lhls
round 1 uo tbe ptovlsloos of competltloo Act 2002 opply to tbe focts ooJ cltcomstooces of
tbe lostoot cose?
Commlsslon declded ln favour of owners and also flxed geographlcal area as Curgaon
and producL markeL as Plghend 8esldenLlal AccommodaLlon based on SecLlon 2(0) of
Consumer roLecLlon AcL flaL owners come as consumer and sale as a servlce
round 2 Jbot ls tbe televoot motket lo tbe cootext of sectloo 4 teoJ wltb sectloo 2 (t)
sectloo 19 (5) sectloo 19(6) ooJ sectloo 19(7) of tbe competltloo Act 2002?
AfLer deep analysls of varlous facLors and pasL cases lL was declded LhaL Lhe relevanL
markeL was Lhe markeL for servlces of developer provldlng hlghend resldenLlal bulldlngs
round 3 s ull ltJ Jomlooot lo tbe obove televoot motket lo tbe cootext
of sectloo 4 teoJ wltb sectloo 19 (4) of tbe competltloo Act?
Commlsslon sLaLed LhaL uLl has a clear early mover's advanLage and
ls a leader ln commerclal reLall and offlce space secLors 1hus uLl ls fully
capable of operaLlng lndependenLly of compeLlng forces ln Lhe markeL
round 4 o cose ull ltJ ls foooJ to be Jomlooot ls tbete ooy obose of lts
Jomlooot posltloo lo tbe televoot motket by tbe obove potty?
Commlsslon polnLed ouL varlous clauses ln Lhe agreemenL LhaL were
unllaLeral and heavlly blased As weaker compeLlLors cannoL Lake hold of
markeL and due Lo Lhe naLure of clauses and conducL of company lL can be
LreaLed as abuslve and even explolLaLlve
1he Commlsslon passed an order
lmposlng a penalLy
aL Lhe raLe of 7 of Lhe average of Lhe
Lurnover for Lhe lasL
Lhree precedlng flnanclal year (le
8upees Slx Pundred and
1hlrLy Crores) on uLl
1nANk CU