DLF pulled up for unfair Contract Clauses by CCI

[dheerajjain]

DLF was pulled up by CCI (Competition Commission of India). Flat owners had challenged contract clauses that favor the DLF.

Has anyone filed a complaint with CCI? We will also like to do that.

Article from TOI, 17th Feb

http://timesofindia.indiatimes.com/city ... 512579.cms

[dheerajjain]

My experienced friend informed me that CCI is a very powerful body but can be used only against dominant companies like DLF, BPTP etc.Its decisions can only be challenged in Supreme court.

So, BPTP apartment buyers, you can use but others can't. For others, Consumer Court/Economic Offence Wing (EOW) options appear good.

[BlessU]

Dear All

Really hot news for all who are conscious of excesses by builder community against common and vulnerable investors... DLF HAS BEEN SLAPPED WITH A FINE OF 630 CRORES FOR NOT FULFULLING PROMISES AND ABUSING POSITION BY THE COMPETITION COMMISSION OF INDIA.
http://www.cci.gov.in/May2011/OrderOfCo ... 110811.pdf
http://www.indianrealestateforum.com/gu ... 19993.html

it is right time for all aggreived and progressive associations/organisations to step in and write a proper memorandum to Honble Minister Urban Development AND THE Prime Ministers Office for setting up a Regulatory Authority.

A commentary on The Commissions findings be enclosed to atleast ensure that the Builder Buyer Aggreements are not absolutely derogatory to the interest of the investing public.. Penalties be defined for such erring builders big or small.. bans imposed on further licences pan India for serious, continuous defaults.. impose non access to funds for such organisations through any and every source like banks, FIs, FIIs, stock markets etc. Also would suggest that all projects be suitably underwritten with regards to their performance secured by bank guarantees as projects are long term and of capital nature..

Too many lacunae, loop holes and malifide intentions.. increase super area, change specifications, change floor plans, charge exhorbitant interest rates for delayed payments etc etc..


Take care

[dheerajjain]

BlessU, that is a great news !! Thanks for sharing!

[dheerajjain]

After CCI imposed a fine of more than Rs 600 crores on DLF, now CCI sources say that buyers can approach Competition Appellate Tribunal (CAT) for getting money. Please read this article carefully. MoneyControl.com reports:

http://www.moneycontrol.com/news/cnbc-t ... 77403.html

There seems to be no end to DLF 's woes. After the CCI slapped a fine of nearly Rs 600 crore on the realty major for abuse of market position and unfair trade practices yesterday, CCI sources now say that buyers can seek compensation from DLF via the Competition Appellate Tribunal (CAT).

CNBC-TV18 correspondent, Malvika Jain spoke to legal experts to find out what the CCI order means for the consumers and what the fine print in the order says.

Below is the edited transcript of Malvika’s report. Also watch the accompanying video

Q: The number of floors on a certain project of DLF was raised without consulting consumers and buyers, so what really is the way out for these people, what can they get out of this order?

A: This order says that because DLF is the market leader, it has set the trend for unfair agreements in the sector. If DLF is going to make changes to its agreements, it is something that will be followed by other players as well.

As for the order, it has been divided into four segments, and the fourth one deals with what DLF is expected to do. Basically, it has been asked to amend all its unfair trade practices. Some of the major ones are: DLF shall not have the right to unilaterally cancel a deal, it will have to consult the buyers in case they want to make some changes to the agreement or to the floor layout or to the carpet area, so on and so forth.

Also, it has come to light that there have been times when DLF abandons projects unilaterally and this is something that is just merely communicated to the buyers. The compensation which is provided to the buyer is minimalistic. So now, the agreement will have to be fair and consumers and buyers will have to be brought onto a level playing field according to the CCI order.

Additionally, there are times when DLF starts raising money on the basis of flats which have already been allocated to a party, and thereby, it creates a third party liability on these projects. This is something that will not be allowed.

Of course, DLF has three months to rework these contracts and discuss it with the buyers association, but from what I understand, the buyers as of now have an option to approach the Competition Appellate Tribunal under section 53 to seek compensation.

Q: With regard to the compensation, we believe that the project under the scanner, the Belaire project, one flat costs around Rs 2-3 crore, so what kind of compensation will be allowed to the consumers, any word on that?

A: Of course, the consumers can seek the amount which they have already deposited with the company, but the Competition Act provides that you can even seek for damages or claims or any kind of losses which they might have incurred during the course of these proceedings and even otherwise.


Tags: DLF, CCI, abuse of market position, unfair trade practices, competition appellate tribunal, floor layout, compensation, buyers association, Belaire project

[sendtomanish]

Thanks Dheeraj,
This is show case n learning for us too to have fight collectively.Specially BPTP Park floor guys should go to CCI/CAT asap.
Normally every builder in Neharpar unilaterally chaging the layout ,launching new towers,reducing park/common area,launching primary school w/o taking existing buyer consent falls into this category.

SRS is doing this kind of malpractise and DLF case is trend setter example.

[Tusharv]

Thanks its nice!! We should also approach CCI if it can help

[BlessU]

Thanks Dheeraj,
This is show case n learning for us too to have fight collectively.Specially BPTP Park floor guys should go to CCI/CAT asap.
Normally every builder in Neharpar unilaterally chaging the layout ,launching new towers,reducing park/common area,launching primary school w/o taking existing buyer consent falls into this category.

SRS is doing this kind of malpractise and DLF case is trend setter example.

Hi Greetings

I have been studying all the crooks of the trade and have come with a comprehensive list of wrong doings to milk gullible customers. All can have a look at the list"Homes from Hell" in the open link
https://docs.google.com/spreadsheet/ccc ... 6cD#gid=12

Now this judgement is an attempt to take the bull by the horns. This order can be quoted in similar instances of abuse and unfair agreements in other court cases to seek relief.

Also a second line of attack can be on DTCP for allowing renewal of licences where terms of first licence are altered by builders. Most of the builders exhaust their 2year term of licence and need to renew the same to the satisfaction of DTCP.

This order to sum is a big arsenal (brahm astra) for any sensible lawyer in active practive in conjunction with other sections of criminal and civil law..

Important thing in the order is that it mentions

"Housing is recognised as a basic necessity..

others that warrant serious consideration are
"builder Grossly abused its position against vulnerable sections of customers..."
"abuse of position for advantage to builder.."
"Imposing Unfair Conditions.."..now unfair is a big big word for a fair democratic society
"False representation.." ... false representation is like fooling people and make them believe what is wrong
"undue economic gains and business profit...".. undue is a like taking advantage as another is helpless
"Housing is recognised as a basic necessity..".. basic is the responsibility of the government to secure for all
"Grossly abused its position against vulnerable sections of customers...".... all applicants are vulnerable as in incapable to help themselves and harmless
"builder (DLF) is directed to cease and desist from using such unfair conditions in its agreement..".. such practice should be stopped with immediate effect and not to use them in future as the condition of the agreement cannot be unfair for the vulnerable customers

All the builders are now supposed to follow subject to aggreived people moving the court for relief..

Things will change if acted upon in right earnest and at the earliest. Do get all the advertisements/photos of hoardings of all builders, any share issue papers, annual reports, balance sheets, printed material/brochure of the company, any email, letter/fax, public notice, interview of director/employee of the company in newspaper/TV/Trade journal

TC

[ashutoshkoul]

Dear All,
Please check this link.
Post DLF penalty, Competition Commission of India to scrutinize other real estate firms of unfair practices

http://economictimes.indiatimes.com/mar ... 641368.cms

I think we should approach CCI with all documents so that they can include our builders as well in their action.

Your comments needed.

Regards,
Ashutosh Koul

[s1joshi]

Dear friends, pls take out some time to watch news

http://economictimes.indiatimes.com/et- ... 645977.cms

Courtesy Ashish

[AAN111]

CAN YOUR BUILDER GO THE DLF WAY ??

Please see this informative post. Can GFWA also pressurise the CCI to look into our case, apart from following up with the Hon'ble High Court. CCI took notice of lop sided clauses to act against DLF

http://economictimes.indiatimes.com/mar ... 641991.cms

Regards,

Aan111

[dheerajjain]

Hi All, GFWA has started working on this. But, it is too early to share any details on forum

[sgaur]

Please Go to this Link

http://economictimes.indiatimes.com/mar ... 647069.cms

Gaur

[siwachss]

Yes !!! BPTP customers can get benfited if they fight case , BPTP is Dominant in Faridabad similar to DLF in Gurgaon

[BlessU]

quiet possible as it is the biggest player in Faridabad