The Competition Commission of India (CCI) has passed an order on DLF’s Park Place, Gurgaon project asking DLF to desist from insisting on unfair conditions in buyer agreements. However, the silver lining is that CCI has not imposed any fresh penalty on DLF as it had already conferred a penalty of INR 6.3 bn earlier on the Belaire project at Gurgaon. Unlike CCI’s Belaire judgment which could result in material cash outflow for DLF, the Park Place order would not have any incremental cash flow impact, in our view.
CCI has asked DLF to desist from formulating and imposing unfair conditions in its agreements with buyers in Gurgaon and also to ‘suitably modify unfair conditions imposed on buyers’ within a period of three months from the receipt of the order. Although the CCI order is regarding another DLF project at Phase V – Gurgaon named the Park Place, breaches cited are similar to the order passed with regard to the Belaire project at the same location.
