CCI Rejects Informant’s Grievance With Service Conditions as OP Lacked Dominance in Real Estate Market

Case Details: Buchi Ramarao Valury v. Covai Property Centre (India) (P.) Ltd. - [2024] 161 taxmann.com 560 (CCI)

Judiciary and Counsel Details

• • Ms Ravneet Kaur, Chairperson, Anil Agrawal, Ms Sweta Kakkad & Deepak Anurag, Member

Facts of the Case

In the instant case, the Informant filed the present information alleging contravention of the provisions of sections 3 and 4 of the Competition Act, 2002 by the opposite parties (OPs).

OP-1 was engaged in providing consultancy services and care in terms of designing, building and operating retirement communities. OP-2 was a subsidiary of OP-1 and an authorized service provider for the residential project “Urbana Irene” and OP-3 was the developer of “Urbana Irene”.

The Informant purchased a two-bedroom apartment in “Urbana Irene” and signed an agreement for sale with OP-3 as the promoter and OP-1 as the confirming party.

As per the Information, due to the alleged tie-in arrangement between OP-1 and OP-3, the Informant had been forced to accept catering and housekeeping services provided by OP-2, with which the Informant had signed a service agreement on the same day of signing an agreement for sale.

It was noted that in the relevant market i.e. Bangalore Metropolitan Region, there were many other real estate developers apart from OP-3, such as TATA Housing Development Company Ltd., Sushruta Vishranthi Dhama Ltd., Columbia Pacific Communities, M/s Bahri Estates Pvt. Ltd., Sukhshanti Retirement Homes, Parkside Homes at Brigade Orchards, Vedaanta@ Godrej E-City etc., which pose competitive constraints to OP-3.

Accordingly, OP-3 does not appear to hold the position of strength to enable it to operate independently of competitive forces prevailing in the relevant market delineated supra. Thus, there was no need for further examination of the alleged abusive conduct of OP-3.

CCI Held

The CCI observed that for the applicability of Section 3(4) of the Act, the entities in question must operate at different stages or levels of the production chain in different markets in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provisions of services.

Further, the CCI observed that the agreement alleged to be in contravention of Section 3(4) of the Act was between an enterprise and an end consumer, and the same was not covered within the ambit of Section 3(4) of the Act.

The CCI held that there exists no prima facie case, and thus, the Information filed was to be closed forthwith under Section 26(2) of the Act. Consequently, no case for the grant of reliefs as sought under section 33 of the Act arose and the same was also rejected.

List of Cases Reviewed

• • ‘South City Group Housing Apartment Owners Association and Larsen & Toubro Ltd. & another’ (Case No. 49 of 2011) (para 20) followed.