The Competition Commission of India (CCI) has imposed a penalty of nearly Rs 14 crore on Jaiprakash Associates for abusing its dominant market position by imposing “unfair” and “discriminatory” conditions on home buyers.
“The Opposite Party (Jaiprakash Associates) perpetrated undesirable industry practices causing substantial harm to the competition and to consumers, ignoring its responsibility as a dominant player to set fair standards of industrial practices for other players in the market to emulate,” CCI said.
The ruling came on a complaint filed by one Naveen Kataria who had booked a villa at Jaypee Greens in Greater Noida, Uttar Pradesh, in 2011. In February 2019, the complainant informed the CCI that she did not wish to pursue the instant case, since all the pending disputes with the firm have been settled.
Under the Competition Act, complaints filed under a certain section cannot be withdrawn. It was alleged that conditions in Provisional Allotment Letter (PAL) were unfair, one-sided and loaded in the favour of the company.
In 2015, the regulator ordered the Director General (DG), its investigation arm, to conduct a detailed probe into the matter.
For the case, the CCI considered ‘the market for provision of services for development and sale of independent residential units such as villas, estate homes, town homes and row-houses in integrated townships in Noida and Greater Noida regions’ as the relevant one.
The regulator found Jaiprakash Associates to be in dominant position in the relevant market.
Based on the DG’s reports and regulator’s examination of the issues, CCI found clause pertaining to defaults in the PAL was heavily in favour of the Jaiprakash Associates. Under the pact, there was only a marginal penalty on the firm for any default while the allottees were to pay a huge fine.
Similarly, the fair trade regulator found that there were various clauses which were one-sided and tilted in favour of real estate firm.
By doing so, the real estate firm contravened Section 4 of Competition Act which pertains to abuse of dominant position.