Post-DLF: Developers and competition law in India

In an unprecedented order, the Competition Commission of India (CCI) in August 2011, in the case of Belaire Owners’ Association v DLF Limited and Huda, imposed a penalty of ₹6.3 billion (US$115 million) on DLF on the ground that DLF had abused its dominant position by requiring flat owners to comply with onerous and unfair terms in its apartment buyer’s agreement.

Whilst DLF was directed to suitably modify the unfair conditions itself, DLF petitioned the Competition Appellate Tribunal (COMPAT) to direct the CCI to provide specific direction as to the extent and the manner of modification required. On being so directed by COMPAT, the CCI passed a detailed supplemental order on 3 January 2013, laying down a general framework for the agreement to be executed by a real estate developer with the buyers of flats.

First order’s impact

The impact of the 2011 DLF order was immediately felt when the CCI was flooded with accusations against various real estate developers alleging anti-competitive practice based on clauses in the flat buyer’s agreement similar to the ones held to be onerous in the DLF order.

Udwadia Udeshi & Argus Partners is a full-service law firm with offices in Mumbai, Delhi, Bangalore, Kolkata and Chennai. Ramya Hariharan is a partner and Arka Majumdar is a senior associate at the firm.