Order under section 26(2) of Competition Act, 2002

1. The informant in this case is an association of buyers and flat owners in a housing project of OP2. This housing project is situated at Old Mahabalipuram Road, IT Express Corridor, Chennai. The contention of the informant is that OP2 was a group company of OP1 as OP1 was having 51% share in OP2 and OP2 had entered housing market on OMR IT Corridor in December, 2007/January, 2008 in the segment of 2/3 BHK with a basic price of Rs. 2800 per sq.ft. as against prevalent market rate of Rs. 3000-3300 per sq.ft. The project launched by OP2 was the first biggest project in the entire Chennai city as it offered approx. 3500 units in 42 towers of 19 floors each. It was proposed to be a gated township with an area of 58 acres.

2. It is alleged that after nearly 18 months booking of the flats, when the allottees had already paid crores of rupees, OP2 asked the allottees to sign an agreement which contained highly abusive clauses. The abusive sweep of agreement was so deeply entrenched that the buyers could not whisper a word proposing changes in the agreement and were forced to sign on the dotted lines or to lose hefty amount. OP2 rejected the representations against this one sided agreement and throttled the voice of the buyers by arrogating to itself unbridled discretion to change the lay out plan/building plan without consent of the allottees. Since the helpless alltotees were on the receiving end of the abusive docket of OP2, their association has filed this information about abuse of its dominant position by OP2.

3. The informant has given data of other developers and information about other projects in that corridor and had made an endeavour to show that the OPs as a group were in a dominant position in the relevant market. The informant was also heard through its counsel by the Commission before forming opinion.

4. In order to consider the dominance of an enterprise, it is essential to define the relevant market and see if the OPs were dominant in the relevant market.

5. The informant in its information has categorically stated that the residential apartments in the area of OMR IT corridor with a price of Rs.3000-3300 per sq.ft. is considered an exclusive geographic market on the OMR. (Para G, page 19). It is further stated that OMR IT Corridor constituted a distinct market for premier high rise building apartments in the form of gated township project (page 22).

6. A perusal of documents filed by the informant in respect of the project of OP2 would show that OP2 had launched flats in 4 categories with different super areas. The land of the project was stated to be 53.5 acres. The project was named as Garden City DLF OMR Chennai. Type I flats were 2 bed rooms and type II, III and IV category flats were 3 bed room flats of different super areas, some with servant quarters, some without servant quarters. The launching was done sometime in January, 2008; initial booking price was kept at Rs.2800 per sq.ft. At that time when project was launched by DLF, there were many other players in the geographic market who already had launched the project or were launching their projects. Some of the players named by informant are Olympia Opaline, L&T Eden Park, Mantri, Hiranandini Ambrosia A Square, Jain Housing - Inseli Park, Padur, Jain Housing - Spring Meadows, Thalmbur, TVH Quranyabay - Padur, Embassy Residency - Perumbakkam, Akshya Homes, Sabari Group Project, Isha Homes, Vasavi Housing, Vision spread, ETA Rosedale Padur, Arihant Frangipani Puravankara Swan Lake Bollineni Hill Side, TVH Swasti etc.etc.

7. The informant has submitted that projects launched by other builders could not be compared with the project of OP2 since OP2 project was unique in itself as in that price range no other project was providing the facilities which OP2 project had promised. The other projects like Hiranandini, Bollineni Hill Side, were luxury apartment projects and thus could not be compared with OP2 project,