Shivang Agarwal & Anr. vs Supertech Ltd. Noida. (Part 3)
- Citation28/2012 (Shivang Agarwal & Anr. vs Supertech) [#109577]
Ratio decidendi
The rule this decision rests on
Section 4 of the Competition Act, 2002 is not engaged unless the opposite party is shown to hold a dominant position, meaning a position of strength in the relevant market enabling it to operate independently of competitive forces or to affect competitors or consumers in its favour. A informant alleging contravention of section 4 must establish that dominance, and a builder that is a leading developer in a fragmented market with many competing players does not hold such a position. Unfair trade practices, including charging a price in excess of that agreed in a contract and discriminatory pricing or conduct between buyers, are not per se matters under the Competition Act. Such grievances, though they may be genuine, fall within the remit of the Consumer Protection Act and are not competition concerns unless they amount to an abuse of dominance. Where the Commission, on the material before it, finds no prima facie case of contravention, it may refuse to direct investigation by the Director General and close the matter under section 26(2) of the Act.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
The present information was filed under section 19(1) of the Competition Act, 2002 (The Act') by Shivang Agarwal and Shubham Agarwal (together referred to as 'the informants') against Supertech Ltd., Noida (opposite party). The informants submit that they hooked one flat each measuring 930 sq. ft. @ Rs. 28901- per sq.ft, in Supertech Cape Town project in Sector 74, Noida on payment on Rs. 51,000!.. through cheques dated 22.11,2010, respectively. The informants were allotted fiat no. R026CV2 1604 and R026CV21605 respectively.
2. The informants further submitted that they were informed that no preferential location charges would be levied on flats on the 12th floor and above. The informants accordingly opted for the same. The informants had booked the fiats on the 16th floor of the project. The opposite party raised demand letters on various dates for payment which included preferential location charges © Rs. 50/.- per sq.tt. n Cdsa of flat no .O20C\/21604 and Rs. 150/- per sq. ft. in case of flat no. R026CV21605, contrary to the stipulated terms and conditions and canceled their bookings vide separate letter dated 20.10.2011 for non-payment.
3. The informants further submit that the demand letter tent by the opposite party was for Rs. 1413,747/- for flat no. R026CV21604 which is 50% of the total sale price (Rs. 14,00,947/ after deducting the amount already paid). According to the informants cost of the flat comes to Rs. 28,27,494/- and the price per sq.ft. would he Rs. 3040/- on the basis of the demand raised. Similarly, the demand letter for flat flO. R026CV2 1605 was sent for an amount of Rs. 1367249/- (Rs. 13,53,252/- after deducting the amount already paid) which is also 50% of the total sale price. The rate per sq.ft. of the flat comes out to Rs. 2940!- whereas the agreed rate was Rs. 2890/- per sq. ft in case of both the flats. Therefore, the opposite party is arbitrarily deciding the price and raising demand contrary to the agreed terms.
4. The informants further submitted that they wrote letters and brought the discrepancies to the notice of the opposite party on various dates. However, the opposite party instead of correcting the error went to raise fresh demand letters without incorporating the necessary changes. The informants allege inter a/ia contravention of section 4 of the Act by the opposite party for the charging PLC when the terms clearly provide the reverse, charging whimsical price and arbitrarily canceling the booking of the informants.
5. The informants submitted additional information to substantiate their allegation of discrimination and unfair pricing policy of the opposite party. The informants submitted some more documents to support their case of discriminatory practices adopted by OP. The informant gave the instance of one Abhishek Agarwal who booked a flat in the same project and was riot charged any PLC even though his flat was on the Floor. The instance of one Veerhala Gupta and Madhuleema Gupta was also been cited who had been charged Rs. 2800!- per sq.ft. (on 17.02.2011) and Rs. 2825/- per sq. ft. (on 05.01 .2011) respectively, whereas the informants were charged Rs. 2890/- per sq. ft, eventhough they booked flats much before them. . / V. VV' £. V. 2
6. The grievance of the informants apparently shows infringement of contractual terms ad idem. The informants allege contravention of section 4 of the Act without explaining whether the opposite party holds a dominant position in the relevant market. The informants were called on 1007.2012 by the Commission to present his case. The informants submitted that the opposite party has conducted in an unbecoming manner and discriminated against them. It seems that the opposite party cancelled the booking for non-payITent of the installments, whereas according to the informant, the Opposite party did not correct the demand letter (excluding PLC charges), and brought the informant before the Commission.
7. In order to attract provisions of the section 4 of the Act, the dominant position of the enterprise needs to be seen under explanation (a) to section 4 of the Act. Dominant position in explanation (a) to section 4 of the Act inter alia means enjoying position of strength in the relevant market in India enabling the enterprise to operate independent of the competitive forces prevailing in the relevant market or affect its competitors or consumers or the relevant market in its favour. Evanthough the opposite party is a leading real estate developer in Noida and Greater Noida, it does not hold dominance. The market is fragmented and many other players are present who can cater to the requirements of the customers like the informant in the present case. Therefore, the dominant position of the opposite party in the relevant market is not made out under section 4 of the Act. This Commission in Case No. 4/2012 and Case No. 5/2012 had considered the situation in respect of Noida and found that there were many builders constructing flats and shops/commercial space and the market was quite fragmented.
8. Unfair trade practices are adopted by many enterprises whether dominant or not. Every unfair trade practices or abuse done by an enterprise is not covered under Competition Act. Several aspects of the unfairness on part of service provider/goods provider are covered by the Consumer Protection Act. The two
/ CL - * aspects covered by the Consumer Protection Act are unTE1lI trade practice as we ll as charging of price in excess of the price agreed upon between the parties. The complaint of the informant about discriminatory conduct shown by opposite party may be true but it shall not be a matter under Competition Act, although it may be a good cause for consumer protection.
9. In the light of the above facts and situation, the Commission finds that no prima fade case was made out against the opposite party for referring the matter to DG for investigation. It is a fit case for closure under section 26(2) of the Act and is hereby closed. It is ordered accordingly.
Secretary is directed inform all concerned to accordingly.
S dJ-. Menthe (D)
New Delhi
4
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free