By way of a February 2 2017 order, the Competition Commission of India (CCI) initiated an investigation into the Ghaziabad Development Authority (GDA) for abuse of its dominant position in relation to arbitrarily increasing the price of residential flats in the lower economic area of Ghaziabad, Uttar Pradesh.(1)

Facts

Plaintiff Satyendra Singh alleged that the GDA allotted him a flat under the Pratap Vihar residential housing scheme for the lower economic area on May 4 2009 for a consideration price of Rs200,000. However, on November 27 2015 the GDA issued letters to all participants in the scheme asking them to pay a sales price of Rs700,000 for their allotted flats, failing which the allotment would be cancelled. The GDA was therefore accused of indulging in unfair and arbitrary practices, and abusing its dominant position in the market.

Decision

The CCI found that the GDA was dominant in the relevant market for the provision of services for the development and sale of low-cost residential flats under affordable housing schemes for lower economic areas in Ghaziabad on the grounds that few other competitors existed in the market. Further, buyers were dependent on the GDA as a result of its size, resources and status as a statutory authority under the Urban Planning and Development Act 1973.

The CCI held prima facie that the GDA's unilateral conduct in increasing the price of its flats from Rs200,000 to Rs700,000 was unfair on buyers and violated Section 4(2)(a)(ii) of the Competition Act. It therefore instructed the director general to conduct an investigation into the GDA and submit a report within 60 days of receipt of the order.

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For further information on this topic please contact MM Sharma at Vaish Associates by telephone (+91 11 4249 2525) or email (mmsharma@vaishlaw.com). The Vaish Associates website can be accessed at www.vaishlaw.com.

Endnotes

(1) CCI order, February 2 2017. For further details please see the CCI website.