CCI: No Abuse of Competition Act if Dominance Under Section 4 Not Established

CCI: No Abuse of Competition Act if Dominance Under Section 4 Not Established

The Competition Commission of India (CCI) comprising of Ravneet Kaur (Chairperson), Sangeeta Verma (Member) and Bhagwant Singh Bishnoi (Member) has dismissed a plea alleging abuse of dominant position by DLF Gayatri Developers, a joint venture between Gurgaon-based DLF India Limited and Hyderabad-headquartered Gayatri Infra Private Limited (GIPL).

The Informant had filed a suit under Section 19(1)(a) of the Competition Act, 2002 against M/s DLF Gayatri Developers.

In 2012, the informant had booked a residential plot in the DLF Garden City Project developed by the JV in Mahbubnagar district.

Informant submitted that the project was given wide publicity on account of two big real-estate developers coming together to develop a high-end residential-cum-commercial project. Even though the plot was promised to be delivered in 2014, an offer of possession of the plot was made only in the year 2019, he claimed.

The Informant alleged that DLF Gayatri imposed unfair clauses in the agreement offering membership to a club to its homeowners. The membership conditions were unfair and discriminatory and urged CCI to direct DLF Gayatri to remove them.

The Informant argued that the absolute discretion of the club management to grant or curtail or terminate club membership should be done away with and it was alleged that charges, which included membership fees (for five years), annual subscription and a security deposit, were exorbitant.

Lastly, the Informant also questioned the club management’s right to rent out facilities to non-members and to restrict members from using the facilities.

The CCI examined the relevant market, dominant position, and abuse of dominance in its assessment. It determined the relevant product market as the provision of services for development and sale of residential plots and the relevant geographic market as Mahabubnagar district in the state of Telangana.

The bench remarked that at the outset, the Informant has not disclosed any kind of material to demonstrate that the OP is dominant in the relevant market.

The bench further observed. “there are a number of RERA-approved projects of realestate developers such as Girdhari Constructions, Ashoka Ventures, Siri Sampada Homes, Sri Rama Bhoomi Developers, Vardhan Developers, etc., having residential plots available for sale in various areas/localities in district Mahbubnagar of comparable size and similar amenities. Several of these real-estate developers have had presence in the sector for many years.”

Accordingly, the Commission was of the prima facie view that DLF Gayatri Developers does not enjoy a dominant position in the relevant market.

Based on the available information, the CCI closed the case and ordered the Informant to seek appropriate remedies through other legal avenues.