The Competition Commission of India (CCI) issued an order under Section 27 of the Competition Act, 2002 (“Act”) on 22.08.2023 holding Chandigarh Housing Board (CHB) to be in contravention of the provisions of Section 4(2)(a)(i) read with Section 4(1) of the Act.

The case was initiated on the basis of an Information filed by Mr. Ramesh Kumar, an allotee of a flat offered under a Self-Financing Housing Scheme (“Scheme”) floated by CHB in the year 2010.

It was alleged that CHB has abused its dominant position under Section 4 of the Act, inter alia, by imposing unfair terms and clauses on the allottees, failure on behalf of CHB to disclose the date of possession of the flats to the allotees in its Brochure and/or Acceptance- Cum- Demand Letter (ACDL), and levy of penal interest for full month even for delay of one day.

Having delineated the relevant market as the “market for the provision of services for development and sale of residential flats in the Union Territory of Chandigarh”, the Commission found CHB to be in a dominant position so as to operate independently of the competitive forces prevailing in the relevant market. The Commission also found non- disclosure of date of delivery of possession to applicants of the flats and levying penal interest for full month on account of delay of one day in credit of instalment to be an abuse of dominant position under section 4(2)(a)(i) of the Act.

Considering the fact that corrective measures have already been taken by CHB, the CCI refrained from imposing any monetary penalty upon CHB.

A copy of the order in Case No. 39 of 2021 is available on CCI website at www.cci.gov.in

Abuse of dominant position found in housing allotment practices; non disclosure and full month penal interest flagged, corrective measures noted. The Commission found a housing board in a defined residential flats market to be in a dominant position and held that specific conduct constituted abuse of dominant position: failure to disclose possession dates in promotional/acceptance materials and levying penal interest for a full month for a one day instalment delay. The order followed an Information by an allottee under a self financing housing scheme and notes corrective measures by the board, with no monetary penalty imposed in view of those measures.