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CCI modifies model agreement in DLF case

Comments(2) Sub Category:Delhi-NCR,Real estate trends,Realty News Posted On: Jan 04, 2013

New Delhi- The Competition Commission of India has modified few clauses for commercial agreements between realty giant DLF and property buyers, in two projects by DLF in Gurgaon in the NCR.

In March 2012, the Competition Appellate Tribunal (COMPAT) had directed CCI to present a modified buyer-seller agreement and the fair trade regulator (CCI) is on a move to prepare a better framework for commercial agreements between buyers and builders following a high-profile market dominance case against DLF Group, which has challenged a Rs 630 crore penalty imposed on it by CCI.

COMPAT directed the Commission to decide on what constitutes a good, balanced and fair agreement between the buyer and the seller.

The realtor had challenged a CCI order imposing penalty of Rs 630 crore for abusing its dominant position in Gurgaon market. The order was passed following complaints filed by flat buyers’ association of two DLF projects, DLF Park Palace and The Belaire, located in Gurgaon.

It has to be noted that if realty biggies like DLF follow some pattern, then most of the builders start following the same.

Recently CCI has claimed that it has even considered the relevant provisions of the laws applicable to the development of group housing projects in Haryana, particularly the mandatory requirements that must be followed by every builder. But DLF had not followed these norms in these projects. The commission announced that changes have been made to agreement terms considering it fair and reasonable. In this regard, the fair trade regulator has taken into account the interest of both the parties.

Once the modified framework meets legal test and is passed, it is expected to take care of the most of the commercial aspects between the buyer and the seller, observes CCI Chairman Ashok Chawla.

Issues related to local laws and regulations are expected to arise often in the realty sector. If the model agreement is fair enough, then most of such issues would get resolved.

But the Commission’s jurisdiction was limited to the agreement between the buyer and the seller and whether any anti-competitive practices were being followed in that regard.

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