Real estate giant Jaiprakash Associates Limited and its
associate, Jaypee Infratech Limited (collectively "Jaypee
Group") narrowly escaped a ₹ 6,659,400,000 (Indian Rupees Six
billion six hundred fifty nine million four hundred thousand)
penalty. The dissenting members of the bench of the Competition
Commission of India ("CCI") presiding over the matter
suggested the penalty while the majority of the members of the
bench concluded that Jaypee Group is not in a dominant position in
the relevant market and therefore the question of examining the
alleged abusive conduct did not arise.
The order passed by the CCI on October 26, 2015
("Order"), was in relation to various complaints filed
against Jaypee Group, by allottees of residential units in Jaypee
Group's residential projects. The allottees had alleged that
Jaypee Group had abused its dominant position by imposing arbitrary
and unfair conditions in their allotment agreements, thereby
contravening Section 4 the Competition Act, 2002.
It was alleged by the allottees that agreements relating to the
allotment were one sided and onerous, wherein certain clauses were
not adequately disclosed at the time of booking. It was further
alleged that there was a delay in handing over possession and no
compensation was paid for the delay by Jaypee Group. Moreover,
shoddily constructed apartments were handed over to the
Since complaints were filed by different allottees on similar
grounds, CCI clubbed the investigations to be conducted by the
Director General ("DG"). The initial DG report concluded
that Jaypee Group was not abusing/ exercising dominant position.
However, the CCI was of the view that further investigation was
required into the matter and a subsequent investigation was
ordered, which concluded that Jaypee Group was in fact abusing its
After hearing the submissions from both parties, 3 (three) out
of the 5 (five) members, including the chairperson presiding over
the case, were of the opinion that Jaypee Group was not abusing/
exercising dominant position. The majority members strongly
recommended that not only Jaypee Group but also all the players in
the sector should take appropriate voluntary measures to address
the concerns of the allottees. However, 2 (two) members of the
bench passed a dissenting order, imposing a penalty on Jaypee Group
stating that Jaypee Group had in fact abused their dominant
position and should immediately cease and desist from indulging in
Although the order was in favour of the real estate entities,
the dissenting members submitted a detailed order with reasons,
which included statistics and thorough observations. The Order
illustrates the immediate need for more stringent laws regulating
the real estate market, which even the CCI in its Order has
observed, leaves a regulatory vacuum in the real estate sector and
consequent need for its regulation through the Real Estate
(Regulation and Development) Bill. Further, the CCI also noted that
there is lack of adequate consumer protection against unfair
practices in real estate sector.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On March 10, 2015, the controversial amendments to the land acquisition law were finally passed by the Lok Sabha after facing severe criticism both from the opposition parties as well as from the government's own allies.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).