Mr. Jitendra Bathla Vs. M/s DLF Gayatri Developers

Case No. 07 of 2023 Page 1 of 7 COMPETITION COMMISSION OF INDIA Case No. 07 of 2023 In Re: Mr. Jitendra Bathla H. No. 133-134, 1st floor, Pocket 2, Sector-24 Rohini New Delhi-110085. Informant And M/s DLF Gayatri Developers 1. DLF Gateway Towers, 1st Floor, DLF City, Phase-III, Gurgaon, Haryana - 122 002. 2. 6-3-1090, Ground Floor, C-Block, TSR Towers, Rajbhavan Road, Somajiguda, Hyderabad -500082. Opposite Party CORAM Ms. Ravneet Kaur Chairperson Ms. Sangeeta Verma Member Mr. Bhagwant Singh Bishnoi Member Order under Section 26(2) of the Competition Act, 2002 1. The present information has been filed by Mr. Jitendra Bathla (the “Informant”) under Section 19(1) (a) of the Competition Act, 2002 (the “Act”) against M/s DLF Gayatri Case No. 07 of 2023 Page 2 of 7 Developers (“the Opposite Party”/“OP”) located at (a) DLF Gateway Towers, 1st Floor, DLF City, Phase-III, Gurgaon, Haryana-122 002, and (b) 6-3-1090, Ground Floor, C-Block, TSR Towers, Rajbhavan Road, Somajiguda, Hyderabad-500082, alleging contravention of provisions of Section 4 of the Act. 2. In 2012, the Informant is stated to have booked a residential plot measuring 222.97 sq. meter (approximately 267 sq. yards) in DLF Garden City Project developed by the OP in Nandigama Village, Kottur Mandal, District Mahbubnagar, Telangana (erstwhile Andhra Pradesh). The Informant was given assurance by the OP of handing over possession of the said plot in two years. 3. DLF Gayatri Developers is stated to be a joint venture between DLF India Ltd. and Gayatri Infra Private Limited. DLF India Ltd. (“DLF”) is a company engaged in the real estate sector, with a presence of more than sixty years. Gayatri Infra Private limited (“GIPL”) is also an infrastructure company, with projects stated to be all over the country. 4. As per the Information, the instant project is stated to have been given wide publicity on account of two big real-estate developers / builders coming together to develop a high-end residential / commercial project. It is averred that the project was promised to be delivered in year 2014 but was delayed, and an offer of possession of the plot was made in the year 2019. In this regard, the Informant received relevant documents, including a copy of the club agreement (CA) through email dated 09.05.2019 received from the OP. 5. The allegations in the Information relate to contravention of the Act with regard to certain clauses of the CA. According to the Informant, said clauses in the CA are unfair and discriminatory in nature and bind the plot owners of the DLF Garden City project, including the Informant. The alleged clauses of the CA are as under: Case No. 07 of 2023 Page 3 of 7 a) absolute discretion of the club management to grant or curtail or terminate club membership (clause 7.1) b) exorbitant club charges, which included club membership fees (for five years), annual subscription charges, and security deposit (clause 7.2) c) absolute right of the club management to hire club facilities to non-members and to restrict members from using club facilities or hired facilities (clause 14) d) absolute right to introduce multi-club membership at separate stipulated terms and conditions, additional security, membership/subscription charges (clause 18) and e) confirmation from the applicant that he/she has no objection to arbitration proceedings to be conducted at OPs’ premises by its employee(s), in English language only (clause 19). 6. As per the Informant, the OP has been advertising the club as a showcase to market the project at the cost of plot owners. 7. Apart from the above, the Informant is stated to have filed a consumer complaint in the district consumer forum in Hyderabad on 25.11.2020 regarding non-payment of compensation for delayed possession and other arbitrary charges which, according to him, was decided in his favour on 11.11.2022. As such, the Informant has stated that there is no case of res-judicata in the matter as relief sought under the instant matter was not raised before the district consumer forum. 8. Based on the afore stated facts and allegations, the Informant has alleged that the OP has abused its dominant position by imposing certain one-sided, unfair, and discriminatory conditions in the CA in contravention of provisions of Section 4 of the Act. 9. Based on the above averments and allegations, the present information has been filed by the Informant against the OP and has prayed that the Commission may: Case No. 07 of 2023 Page 4 of 7 (i) Direct the OP to remove/amend the unfair and discriminatory conditions contained in various clauses of CA; (ii) Revoke the club agreements signed earlier by the other owners who have completed the registration of the project and issue them new club agreements as per the amendments, as may be directed by the Commission; (iii) Impose penalty on the OP for imposing unfair and discriminatory conditions using its dominant position; (iv) Issue direction to the OP to include the members in the decision/rule-making authority; and (v) Pass any other order as it may deem fit and proper in the circumstances of the case. 10. The Commission has examined the Information and material available on record, and based on the allegations levelled in the Information, it is observed that the Informant is primarily aggrieved by the fact that the OP has imposed unfair terms and conditions in the CA. It is observed that the allegations in the Information relate to the violation of the provisions of Section 4 of the Act by the OP. 11. For examining the allegations under the provisions of Section 4 of the Act, it is necessary to first determine the relevant market. Thereafter, it is required to be assessed whether the OP enjoys a position of strength required to operate independently of the market forces in such relevant market. Only when such a position is established is it necessary to assess whether the impugned conduct amounts to abuse of dominance. 12. The delineation of relevant market is sine qua non for examining the allegedly abusive conduct of the OP. The delineation of the relevant market involves determining the relevant product and relevant geographic market in terms of Section 2(t) and 2(s) of the Act, respectively. The allegations of the Informant in the present matter relate to a residential plot in DLF Garden City Project, a project of OP located in Kottur Mandal, Case No. 07 of 2023 Page 5 of 7 Mahbubnagar District, Telangana. Thus, the relevant product in question is a residential plot. The Commission notes that the requirement, scope, and prospect of a residential plot are different from that of a residential apartment. Residential plots form a separate relevant market since the motive of buying and factors considered for buying a residential plot by consumers are different from that of a residential apartment/flat. In case of a residential plot, unlike a residential apartment, where the real-estate developer completes the construction of the apartment before possession is given to the allottee, the buyer of a plot has the freedom to decide the floor plan, the structure, and other specificities subject to applicable regulations. Thus, buyers wishing to purchase a residential plot may not prefer to substitute it with a residential apartment and vice versa. Accordingly, keeping in view the substitutability and characteristics of services, their prices, and intended use, the relevant product market in this case may be considered as the market for “the provision of services for development and sale of residential plots”.