Fair Trade Regulator Orders Probe Against DDA

New Delhi: The Competition Commission of India (CCI) has ordered a detailed probe against Delhi Development Authority (DDA) for allegedly abusing its dominant position related to a residential plot scheme that was launched way back in 1981.

The detailed investigation has been ordered after finding that DDA prima facie violated competition norms.

To assess the complaint, CCI considered “market for provision of services of development and sale of residential plots in the National Capital Territory of Delhi” as the relevant one.

A statutory body engaged in the development and sale of land and residential units in Delhi, DDA was found to be dominant in the relevant market.

The regulator’s investigation arm – Director General (DG) – would conduct the detailed probe into the matter.

DG would also probe the role of officials/persons, who at the time of such contravention, were in-charge of and responsible for the conduct of DDA’s business.

During the course of investigation, if the involvement of any other party is found then those those entities would also be probed.

The complaint pertained to Rohini Residential Plot Scheme, 1981, under which the plots were to be allotted over a period of five years.

Following a court case, the draw of lots under the scheme happened in March 2012 and the allotment letter was issued to the complainant’s wife in November 2014.

CCI noted that the time period of five years mentioned for phased allotment of plots as promised in the scheme’s brochure being extended to 33 years cannot be considered as reasonable.

In a 20-page order, issued this month, the regulator said DDA is a public body that is also a revenue-producing monopoly but compliance with competition law should not materially impede public bodies’ efficient exercise of their functions.

“However, public bodies need to ensure that their conduct is compliant with competition law. Effective competition in such markets can benefit the wider economy by encouraging greater productivity and innovation and preserving long term growth, while continuing to provide greater value for money to the taxpayer,” CCI noted.

Ordering the probe, it also observed that “prima facie” it appears that such was not the conduct of DDA.

With the fear of their applications getting cancelled, CCI said the buyers would not have any choice but to abide by all the terms and conditions put forth by DDA such as making all payments beforehand as well as agreeing to pay huge penalty for any lapse on their part and receive no or little compensation for any misconduct on part of the Opposite Party.

Opposite Party (OP) refers to DDA in this case.

“Rendering the buyers in such helpless situation, causing such an exceptional delay, imposing one-sided conditions, OP’s overall behaviour in dealing with the buyers are all evidence of unfair conduct of the OP qua its customers,” the order said.

Among others, CCI said that asking buyers to pay up to 80 per cent of the consideration amount vide allotment letter and thereafter determining their eligibility also amounts to an unfair and one-sided conduct.

Details relating to the eligibility of the informant’s wife could have easily been asked for earlier, before issuing the allotment letter, it added.