August 24, 2023: The Competition Commission of India (CCI) has held that the Chandigarh Housing Board (CHB) misused it dominant market position. The CCI also said the board imposed unfair conditions on buyers in the sale of homes in its 2010 housing scheme.
While issuing an order under Section 27 of the Competition Act, 2002 on August 22, the competition watchdog found the housing board in contravention of the provisions of Section 4(2)(a)(i) read with Section 4(1) of the law.
Section 4 of the Competition Act, 2002, deals with abuse of dominant position. Section 4(1) establishes that no enterprise should abuse its dominant position. Section 4(2) of the Act describes the conditions in which an enterprise will be found abusing its dominant position. These include directly or indirectly imposing unfair or discriminatory conditions or prices in the purchase or sale of goods or services {Section 4(2)(a)(i)}, restricting or limiting production of goods or services in the market. This also includes indulging in a practice resulting in the denial of market access in any manner.
The case was initiated based on the complaint of one Ramesh Kumar, a buyer who was allotted a flat under the CBB’s self-financing housing scheme. In his submission before the CCI, Kumar alleged that the CHB has abused its dominant position under Section 4 of the Act by imposing unfair terms and clauses failed to provide the date of possession of the flats in its brochure and acceptance-cum-demand letter and levied of penal interest for the full month for the delay of only one day.
The commission found the CHB to be in a dominant position to operate independently of the competitive forces prevailing in the relevant market. It also found non- disclosure of date of delivery of possession to applicants of the flats and levying penal interest for full month on account of delay of one day in credit of instalment to be an abuse of dominant position. However, the CCI did not impose any monetary penalty upon the housing board in view of the CHB having taken corrective measures already.
“The ultimate object of the Act is to correct market distortions and discipline the behaviour of the market participants. The commission is of the considered opinion that the objectives of the Act have already been met as the CHB after implementation of the RERA in 2016 has started indicating tentative dates of completion of its flats under construction in all the schemes, and discontinued charging interest on monthly basis and are charging on actual delay period. In view of the fact that corrective measures have already been taken by the CHB, the commission refrains from imposing monetary penalty,” the CCI said in its order.
“Now, that the CHB has ceased from such actions, the commission deems it fit to order the CHB to desist in future from indulging in practices which have been found in the present order to be in contravention of the provisions of Section 4 of the Act,” it added.
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An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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