The Competition Commission of India (CCI) recently ruled that the fact that a real estate company is “one of the known builders in the relevant market” is not enough to establish its dominance.
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Dismissing a complaint of abuse of dominance in Mr Ajit Mishra v Supertech Limited, the CCI also held that the presence of other companies of repute negated the contention that the informant or any other consumer was dependent on one company, and showed the “prevalence of competition” in the relevant market.
Mishra booked an apartment in a residential building in Greater Noida outside Delhi that was to be constructed by Supertech. Agitation by farmers in the area forced Supertech to delay construction of the building. Subsequently, Supertech and other real estate companies increased the prices of the apartments, citing an “alarming increase” in construction costs.
This prompted Mishra to file a complaint to the CCI in which he alleged that Supertech had abused its dominant position by increasing the price of its apartments. Mishra said Supertech had deprived him of the apartment allotted to him at a pre-agreed price, by sending him a letter cancelling his allotment on account of non-payment of a petty sum of money, which he alleged was not due. He said that other real estate companies used the same tactic in their efforts to resell apartments at higher prices.
Mishra argued that by “arbitrarily, malafidely, mischievously, wrongly, deliberately and intentionally” cancelling the allotment of apartments, Supertech had contravened section 4 of the Competition Act, 2002.
Holding that dominance in a relevant market has to be established before a complaint of abuse of dominance could be examined, and using information available in the public domain, the CCI found that Supertech did not appear to be a dominant player.
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The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
