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NOTABLE CASE LAWS

 
COMPETITION LAW
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  Complaints filed under the Competition Act-

Shivang Agarwal & Anr. v. Supertech Limited Noida (Case No. 28/ 2012)- In this case, the Informants had booked flats in the Supertech Capetown Project of the opposite party. At the time of booking, the Informants were informed that no preferential location charges (PLC) would be charged above 12th floor. Accordingly, the Informants booked their flats on the 16th floor. However, later on when demand letter was raised, PLC were also levied on the Informants and consequently on non- payment of charges the flats of the Informants were cancelled.

Aggrieved by the aforesaid, the Informants filed complaint under Section 4 of the Competition Act, alleging whimsical pricing and arbitrary cancellation of flat booking and infringement of contractual terms.

The Competition Commission of India (CCI) found a prima facie case of abuse of dominant position against the opposite party and made the following observations:
     
  1. That by entering into an agreement with the opposite party, the builder (OP) automatically acquires a dominant position and the customer becomes a ‘captured customer’ who can be discriminated and abused at the will of the builder;
  2. That agreement entered into between the OP and the prospective buyers created an adverse effect on competition in India;
  3. That in particular two broad practices are being carried by real estate developers in India (a) the practice of having a potential buyer sign an agreement which is not the final agreement, however it locks them and their initial investment with the builder without having been presented the complete terms and conditions of sale of apartment in a fair and transparent manner; and (b) the practice of making changes to the terms and conditions facilities, structure of apartment/project after the customers are locked in, are being carried on by most of such real estate developers and builders of residential apartment complexes in India.;

Section 4 of Competition Act

Pankaj Agarwal & Anr. v.DLF Gurgaon Home Developers- In this case, the Informants alleged contravention of Section 4 of the Competition Act, 2000 on the grounds of imposition of unfair and onerous terms and conditions and abuse of dominant position by the builder. The acts by which the Informants were aggrieved included allotment of back and back parking on additional payment of additional amount, non- transparent calculation of advance payment rebate, raising floors without any intimation, inordinate delay in possession and completion etc.

In view of the acts of the builder, the CCI was of the view that the builder (OP) held a position of dominance in the relevant market of services of developer/ builder and a cursory glance atthe terms and conditions of the Buyer's Agreement showed how heavily loaded the Buyers' Agreement was in favour of DLF Developers and against the buyer.

The Commission further held that under normal market scenario, a seller would be wary of including such one-sided and biased clauses in its agreements with consumers. The CCI regarded the agreement in total disregard to consumer right. With respect to the increase in floors, the Commission stated that it was the duty of DLF Developers to disclose that it proposed to increase the number of floors and apartments, so that the allottees could have taken valid objections to it. Thus, the Commission upheld the act of DLF Developers as abuse of dominant position under the Act.

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