NCLAT Delhi: Sets aside CCI orders giving clean chit to DLF, remanded matter to CCI for fresh consideration

The National Company Law Appellate Tribunal in the case Amit Mittal v DLF Ltd. & Ors, the Principal bench comprising of Judicial Member, Justice Rakesh Kumar and the Technical Member, Dr. Ashok Kumar Mishra observed while adjudicating an appeal and has set aside the order dated 31.08.2018 passed by the Competition Commission of India and giving a clean chit to DLF and its subsidiary wherein alleging of abuse of dominant position. The order of CCI was based on a supplementary report submitted by the Director General. It has been held by the bench that CCI can only direct further investigation in a case of closure and not where DG has submitted report showing contravention of Competition Act 2002 by party(s). Facts of the Case The Respondent No. 1 (DLF Ltd.) is a public limited company engaged in the business of residential, commercial and retail properties. The Respondent No. 2 (DLF Home Developers Ltd) is a wholly owned subsidiary of DLF Ltd. However, the DLF group launched a residential township in the name of Regal Garden (‘Project’) which is situated in Sector 90, DLF Garden City, Gurgaon. Thus, the project comprised of 3 and 4 BHK apartment units. Amit Mittal (‘Flat Buyer/Appellant’) was being allotted an apartment in the project and on September 1, 2012, an Apartment Buyer’s Agreement was executed. Thus, the agreement contained an arbitrary one sided clauses, reflecting abuse of dominance position by DLF. An application was filed by the Flat Buyer in 2014 before the CCI alleging abuse of dominant position by DLF which was unfair and discriminatory. Therefore, the CCI found prima facie case of abuse of dominance under Section 4(2)(a)(i) of the Competition Act, 2002, it has been directed by the CCI to the Director General to conduct an investigation. In its investigation report dated 18.03.2016, the DG concluded that DLF violated the Section 4(2)(a)(i) read with Section 19(4) of the Competition Act, 2002. An order was passed by the CCI dated 09.11.2016 directing the DG to conduct further investigation. It has been concluded by the DG in its supplementary investigation that the DLF as a group had higher financial strength and the same does not appear to bestow a position of strength to the DLF group. The court observed that after receipt of the second or supplementary DG report, an order dated 31.08.2018 was passed by CCI under Section 26(6) of the Act, 2002 concluding that “the contravention of the provisions as stated under Section 4 of the Act is not established in the instant matter. The court ordered to close the case under Section 26(6) of the Act. The order dated 31.08.2018 has been challenged by the Flat Buyer before NCLAT. Verdict of NCLAT: It has been opined by the bench that CCI has very limited jurisdiction to direct for further investigation under Section 26 of the Act, 2002. If it has been recommended by the DG that there being no contravention of the Act, 2002, then CCI shall invite objections or suggestions under Section 26(5). Therefore, it has been directed by the CCI for further investigation under Section 26(7) if deemed necessary. The order dated 31.08.2018 has been set aside by the bench since the same was primarily passed on the supplementary investigation report submitted by the DG, which was conducted on a void order of the CCI. It has been declared by the bench that all the subsequent proceeding after the submission of the 1st report by the DG dated 18.03.2016 as void. Accordingly, the matter was remitted back to the CCI to pass fresh order on the basis of the 1st DG Report dated 18.03.2016. It has been directed by the CCI to examine the entire issue and pass appropriate order in accordance with law, after giving opportunity of being heard to all concerned within a period of three months.

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