The Competition Commission of India has imposed a penalty of Rs 630 crore on DLF for “grossly abusing its dominant position”.

The aggrieved flat owners of Belaire housing complex in Gurgaon, Haryana, had complained that DLF had inordinately delayed the project and inserted one-sided contract clauses on apartment buyers.

For instance, allotees who failed to pay instalments on time were to cough up 15-18 per cent interest, whereas the builder would only have to shell out compensation at the rate of Rs 5 per square foot a month for delay beyond three years.

Buyers complained that they also had no exit option except when DLF failed to deliver possession within the agreed time.

Further, the money would be refunded without interest and that too only after DLF resold the apartments. DLF Belaire has 564 flats.

“The Commission has concluded that DLF Ltd is in contravention of Section 4 (2) (a) (i) by imposing unfair conditions on the sale of its services to consumers,” CCI said in its Tuesday order.

CCI's hefty penalty amounts to seven per cent of the company's average annual turnover over the past three years. It is the highest such penalty imposed by CCI so far, observed legal experts.

The Commission also directed DLF to modify “unfair conditions” within three months.

Adopting a harsh tone, the CCI said “….the brutal disregard to consumer right that has been displayed in its action of cancelling allotments and forfeiting deposits and…keeping buyers in the dark about the eventual shape, size, location etc of the apartment cannot be termed as fair.”

DLF can appeal against the order by approaching the Competition Appellate Tribunal, say experts. On the other hand, Belaire buyers, on the basis of the CCI order can now move the appellate tribunal seeking “compensation”.

Mr Rajeev Talwar, Group ED of DLF said, “We will examine the order with legal experts to explore all options…We believe we have a strong case.” The DLF shares fell 5.9 per cent on BSE to close at Rs 189 a share.

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