Case No. Case: DLF Park Place Residents Welfare Association Vs DLF Limited Haryana Urban Development Authority Department of Town and Country Planning [Alongwith Case Nos. 24, 30, 31, 32, 33, 34 and 35 of 2010]. Competition Commision of India

Case NumberCase No
CounselFor Appellant: M.L. Lahoty, Adv. and For Respondents: Rajan Narain and Ashok Desai, Advs.
JudgesAshok Chawla (Chairperson), R. Prasad, Member, Geeta Gouri, Anurag Goel and M.L. Tayal, Members
IssueCompetition Act, 2002 - Sections 3(1), 3(2), 4, 4(2), 6, 13, 19, 19(4), 19(5), 19(6), 19(7), 27 and 26(1); Statutes including Haryana Apartment Ownership Act, 1983 - Sections 6(2) and 13; Punjab Scheduled Roads and Controlled Areas (Restriction of Unregulated Development) Act, 1963; Haryana Apartment Ownership Act, 1983 - Section 19; Indian ...
Judgement DateAugust 29, 2011
CourtCompetition Commision of India


  1. Introduction

    1.1. Information dated 5.5.2010 under Section 19 of the Competition Act, 2002 (the Act) was received by the Commission in case No. 18 of 2010 from Park Place Residents Welfare Association against DLF Home Developers Ltd. (DLFHDL or Opposite Party -1 or OP-1). Haryana Urban Development Authority (HUDA or Opposite Party -1 or OP-3) and Director Town and Country Planning, State of Haryana (DTCP or Opposite Party - 4 or OP-4) have also been named as Respondents.

    1.2. Information of similar nature was received by the Commission on different dates from Shri Pushkar Dutt Sharma and Smt. Kiran Sharma in case Nos. 24, 30, 31, 32, 33, 34 and 35 of 2010. Information in case Nos. 31 and 33 were in respect of the apartment complex, "Belaire" while the rest were in respect of "Park Place". In case Nos. 31 and 33 the Opposite Party was M/s DLF Ltd. (DLF or Opposite Party - 2 or OP-2).

    1.3. The Commission is of the opinion that the subject matter of all the above information received is substantially the same and several essential aspects have also been covered in its previous order in case No. 19 of 2010. Therefore, the Commission is disposing off the instant cases through a common order.

  2. Gist of Allegations in case No. 18

    2.1. The information contains facts and allegations as under:

    2.1.1. M/s DLF Home Developers Ltd. (OP-1) has abused its dominant position and has imposed highly arbitrary, unfair and unreasonable conditions on the apartment allottees of the Housing Complex 'the Park Place'.

    2.1.2. The action of OP-1 has serious adverse effects and ramifications on the rights of the allottees.

    2.1.3. Various Government and statutory authorities have allotted land and given licenses, permissions and clearances to OP-1 when it is ex-facie clear that the DLF has violated the provisions of various Statutes including Haryana Apartment Ownership Act, 1983, the Punjab Scheduled Roads and Controlled Areas (Restriction of Unregulated Development) Act, 1963 and Haryana Development and Regulation of Urban Areas Rules, 1976.

    2.1.4. OP-1 has used its position of strength in dictating the terms by which on the one hand it has excluded its obligations and liabilities and on the other hand put the apartment allottees in extremely disadvantageous conditions.

    2.1.5. OP-1 announced a Group Housing Complex, named as 'The Park Place' consisting of multi-storeyed residential buildings to be constructed on the land measuring 12.67 acres (approx.) earmarked in Zone 11 and 12, Phase-V in DLF City, Gurgaon, Haryana. That as per the marketing and promotional brochure of DLF, there were to be 13 towers encompassing 19 floors with four Apartments in each floor and the total number of Apartments to be built therein was to be 950. The construction was to be completed within the stipulated period of 30 months and the physical possession as also the Completion Certificate was to be handed over to the apartment allottees. The facts, however, reveal that the original project of 19 floors with 950 apartments, which was the basis of the Apartment allottees booking their respective apartments was altogether scrapped by DLF and on the same very land of 12.67 acres, a new project of 29 floors with 1560 apartments was conceived by the DLF without informing the apartment allottees of the same. The consequence thereof is not only that the areas and facilities originally earmarked for the apartment allottees were substantially compressed/reduced, but the project was also abnormally delayed willfully and deliberately. The serious fall-out of the delay is that the hundreds of apartment allottees who had paid almost 80% - 85% of the total consideration amount have to bear huge financial losses as on the one hand, their hard-earned money was blocked on the other hand, they were to wait indefinitely for occupation of their respective Apartments. In fact, it is worse in case of those who have borrowed money from banks and other lenders and have to bear heavy pre-EMI and interest burden. The plight of the apartment allottees occupying the rented premises is even beyond comprehension.

    2.1.6. Since the Apartment Buyers' Agreements were signed months after the booking of the Apartment and by that time the allottees collectively had already paid crores (crore = 10 million) of rupees, they hardly had any option but to adhere to the dictates of DLF. Being a dominant undertaking, the DLF devised a standard form of printed "Apartment Buyer's Agreement" for public to book the apartment. A person desirous of booking the Apartment was required to accept and give his assent to the agreement by signing on the dotted line, howsoever onerous and one-sided the clauses of the agreement were. The buyer has no power to negotiate, but merely adheres to the dictated terms and consequently for all practical purposes there is hardly a relationship between the parties as one of the contract.

    2.1.7. A perusal of this standard form would reveal that due to disparity between the bargaining power and the status of the parties, DLF has imposed upon the buyers, the terms which on one hand unfairly exempt and wholly exclude DLF from any liability under the agreement, on the other hand fasten the liability of non-performance/delay in performance on the buyer alone.

    2.1.8. The very first page of the said agreement at the threshold stage altogether ousts the apartment allottees by stipulating that DLF has the absolute right to reject and refuse to execute any Apartment Buyer's Agreement without assigning any reason, cause or explanation to the intending allottee, however justified are the corrections/ alterations/modifications in the agreement. Thus, there is neither any scope of discussion, nor variation in the terms of the agreement. This provision makes it clear that it is rather a misnomer to call this document 'an agreement'.

    2.1.9. The Representations show that the DLF neither on the date of announcing the Scheme "The Park Place", nor while executing the Apartment Buyer's Agreement has got approved Layout Plan of Phase-V by the Director, Town & Country Planning, Haryana, Chandigarh although mandated by the statutory provisions of the Punjab Scheduled Roads and controlled Areas Restriction of unregulated Development Act, 1963. The DLF's decision to announce the Scheme, execute the agreement and carry out the construction without the approved Layout Plan has serious irretrievable fall-outs for which the entire liability in normal course would fall on DLF, but the disastrous consequences have manipulatively been shifted to the unassuming allottees. Further, the tentative/proposed Layout Plan which is annexed as Annexure-1 to the agreement on page 37, stifles the voice of the buyers by inserting the waiver clause that no consent of the apartment allottee is at all required, if any change or condition is imposed by the Director, Town and Country Planning, while approving the Layout Plan. This action of DLF in advertising the project and issuing Allotment Letter without even taking the very first step of preparing and submitting the building plans/lay-out plans of the project to the Town Planner is directly in defiance of the decision rendered in the case of Kamal Sood v. Universal Ltd. III (2007) CPJ 7 (NC) by the National Consumer Disputes Redressal Commission, New Delhi.

    2.1.10. The tone and tenor of the agreement suggest that DLF reserves to itself the exclusive and sole discretion not only to change the number of zones but also their earmarked uses from residential to commercial, etc. The land of 12.67 acres earmarked for the multi-storied apartments could even be reduced unilaterally by DLF pursuant to the approval/sanction of the Layout Plan by the Director, Town Planning although the size of the land is one of the focal points and the alluring feature of this high-end residential scheme. The reduction in the area of land also jeopardizes and affects the apartment allottees who possess the ownership right of the land in question, and not DLF.

    2.1.11. Vide Clause 1.1, the apartment allottee is to pay sale price for the Super Area of the Apartment and for undivided proportionate share in the land underneath the building on which the Apartment is located. Out of the total payment made by the apartment allottee, DLF has authorized itself vide Clauses 3 and 4 that it will retain 10% of the sale price as earnest money for the entire duration of the construction of the Apartment on the pretext that the apartment allottee complies with the terms of the agreement although the naked truth is that apart from making timely payment, the apartment allottee has no other obligation and it is DLF who is to carry out all the activities from approval of Layout Plan to sanction of the building Plan, to construct the Apartment by adhering to norms and guidelines laid down by the various statutory authorities and provide all the amenities and facilities, which DLF has committed and thereafter to obtain the Completion Certificate. The agreement hardly contains the proportionate liability clause which fastens considerable penalty/damages on DLF for breach in discharge of its obligations.

    2.1.12. Since the Apartments are sold without the approval of the Layout/Building Plan, DLF vide Clause 1.6 stipulated that due to the change in Layout/building Plan, if any amount was to be returned to the apartment allottee, DLF would not refund the said amount, but would retain and adjust this amount in the last installment payable by the apartment allottee. Further, the apartment allottee would not be entitled to any interest on the said amount either. Similarly, if there is a change in the super area at the time of completion of building and issuance of Occupation Certificate although the total price shall be recalculated but the amount, if any is required to be returned, the apartment allottee would not get the refund and rather DLF would retain this amount as well with the right to adjust...

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