Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
Invaluable Impact of Real Estate in every Person’s
Life
A Residential Property or an Office premises immensely affects us all
– It can make or break relationships. Its one of the major investments
in any ordinary person’s life. Sometimes, people spend all their life in
pursuit of owning a property. In India, marriage alliances are often
lured by showing ownership of a house in a particular location.
Traditionally, it was part of dowry. Marriages also break on property
related disputes
How is the Purchaser Prejudiced?
Millions of flat purchasers suffer the strong market power that a
Builder yields. Presently, unregulated by a sector regulator, they have
substantial freedom to operate in their market, gain control over the
entire process of development - from registration of real estate
projects to the delivery of possession to the purchaser. Typically,
promoters take bookings for apartments in an under-construction
project by taking an advance payment and executing an allotment
letter with the purchaser. The transaction is one –sided from the
word go. Promoters seldom adhere to approved plans and project
specifications. They change or amend plans without consent of
allottees. Infact, every change in plan is hidden as there are no
disclosures required by any authority. It’s all based on the standard
one-sided agreement signed between the buyer and seller.
asa@anupamsanghiassociate.in
Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
As Douglas Laycock once said “except where references to equity have
been codified, as in the constitutional guarantees of jury trial, we
should consider it wholly irrelevant whether a remedy, procedure, or
doctrine originated at law or in equity.”
The critical premise is that the surviving equitable remedies and
equitable doctrines should not be considered individually, in
isolation, for they work together as a system. The components of the
system can be put into three categories First, there are the equitable remedies themselves.
Second, there are equitable managerial devices, such as contempt
and the possibility of modifying or dissolving the remedy ex-post.
Third, there are special equitable constraints, such as equitable
defenses and equitable justiciability requirements. These three
categories are tightly and logically connected. It is necessary to have
some remedies that compel action or inaction.
How can Competition law be used as an
equitable remedy?
asa@anupamsanghiassociate.in
Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
An ‘Agreement’1 is very broadly construed as per the Competition Act
in India & other jurisdictions, to include – any arrangement or
understanding whether informal or in writing.
Competition Law is a beneficial legislation and aims to promote
efficiency in the market by creating a level playing field. The
violations are assessed on market behavior and not by strict legal
interpretation of the contractual terms.
Thus, fair-play & theory of harm based on effect in the market plays a
greater consideration to overcome the legal boundaries / obstacles of
a contract.
The first landmark decision2 of the Competition Commission of India
(CCI) was against the real estate giant, DLF – for abusing its
dominance by way of imposing one sided agreements. The Appellate
forum as well as Supreme Court upheld the decision. DLF was required
to pay Rs 630 crores (INR 6,300 million) of fine imposed by CCI.
In terms of the new law, its time for Real Estate Companies to change
terms of selling Flats, especially by imposing Standard Agreements
that are One Sided and Anti-Competitive.
How Did CCI Assess DLF’s Abusive Behaviour in
the Market?
1
2
Section 2 of the Indian Competition Act, 2002
Belaire Owners’ Association Vs. DLF Limited, HUDA & Ors. (Case No. 19/2010)
asa@anupamsanghiassociate.in
Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
Relevant Market
Gurgaon was seen as the relevant geographic market where
Apartments of the DLF projects had the same characteristics in terms
of value of land, rates being charged from Flat buyers – with similar
attributes such as proximity to Delhi, proximity to Airports and a
distinct brand image. Thus, the “product” or “Apartment” being sold
could not be compared to any other area as Apartments sold in these
projects had no substitutes or choices in adjoining areas if prices
increase / decrease.
Dominance
"Dominant Position" may be acquired due to several factors even
outside the "relevant market" but, "for the purpose of Abuse of
dominance (AOD) this "position of strength" must give the enterprise
an ability to operate independently of competitive forces. The CCI
referred to various factors that gave DLF market power, like –
 Entry barriers due to huge investments - DLF’s market share was
80% - in the real estate business based on - (a) sales figures
(value terms) and (b) active stock (volume terms).
 DLF’s turnover was 300% higher than that of Unitech and 700%
higher than that of Parshvanath; Position in Forbes List3.
3 In view of Forbes’ list of global 2000 companies (2010) DLF was the only
Indian real estate company at a significant position of 923.
asa@anupamsanghiassociate.in
Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
Abuse Of Dominance And Unfair Terms – Upheld
by Competition Appellate Tribunal (COMPAT) and
the Supreme Court
There were several clauses in the Apartment Buyer's Agreement
(ABA) which were unfair on the consumer and controlled the market
in many ways. Such clauses which favoured the Builder alone were Exploitative In Nature - Constructing additional floors without the
necessary approvals and remaining tight-lipped;
Total Discretion was that Of Builder - adding to the woes of the
trapped customer.
Unilateral Changes by Builder - The undivided proportionate share
in the common area was decreased to the disadvantage of the allottees
since the height of the towers were increased.
Control Over Other People’s Rights - Clauses relating to holding
charges - provided that if there was a delay on the part of the allottee
to take possession DLF would charge Rs.5 per sq. ft. per month for the
total period of delay occurring on the part of the allottee. However,
such allottee would also not be entitled to increased compensation for
delay in construction.
asa@anupamsanghiassociate.in
Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
Suppressing / Camouflaging of Terms - At least when the Act came
into force, DLF was bound to relook into its terms of ABA. The allottees
were constantly asking for the building and construction plans.
The COMPAT said that the unfairness lies in the sinister silence on
the part of DLF. The allottees should not have been kept on the
suspended animation on the spacious and broad plea that DLF
could add additional construction. This breach was possible only
on account of its dominance, as it was well aware that allottees
had no other choice.4 In view of the Court, such unilateral clauses
did amount to abuse of dominance and held they imposed unfair
conditions.
Issues on how to do business in this scenario?
Reflecting on cases of dominance and its possible abuse raises
several issues that need consideration 
Besides, Market share, When is it that a company is considered
dominant – what all is factored in to conclude that it is able to act
entirely
independently
of
its
competitors?
Is
size
the
determinative factor for ensuring abuse?

Concerns that emerge from actions where firms often eliminate
competitors, control the market - when do pricing strategies
signify anti-competitiveness?
4
M/s. DLF Limited vs. CCi & Ors., (Appeal No. 20 of 2011)
asa@anupamsanghiassociate.in
Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
The Real Estate Bill and its Impact
The Real Estate (Regulation & Development) Bill, 2013 (“Bill”), a
central legislation applicable to the whole country is on the cards. It
attempts to ensure a planned, efficient and transparent development
of the real estate sector. The bill has been positioned as a Central
initiative to protect the interests of consumers and to promote fair
play in real estate transactions. Now, under the Bill, a promoter can’t
accept more than ten percent of the cost of the flat, without first
entering into and registering a written agreement for sale with the
purchaser.
The bill also seeks to help speedy adjudication of disputes and
encourage domestic and foreign investment into the industry, in line
with the Government’s objective of “Housing for All by 2022”.
It regulates transactions between buyers and promoters of real
estate projects. It also establishes state level regulators called ‘Real
Estate Regulatory Authorities’ (RERAs) and Appellate Tribunals.
As Douglas Laycock has put it, “[e]xcept where references to equity
have been codified, as in the constitutional guarantees of jury trial,
we should consider it wholly irrelevant whether a remedy,
procedure, or doctrine originated at law or in equity.”
The critical premise is that the surviving equitable remedies and
equitable doctrines should not be considered individually, in
asa@anupamsanghiassociate.in
Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
isolation, for they work together as a system. The components of the
system can be put into three categories First, there are the equitable remedies themselves.
Second, there are equitable managerial devices, such as contempt
and the possibility of modifying or dissolving the remedy ex-post.
Third, there are special equitable constraints, such as equitable
defenses and equitable justiciability requirements. These three
categories are tightly and logically connected. It is necessary to have
some remedies that compel action or inaction.
LORD DENNING (FREEDOM UNDER THE LAW)
“….Just as the pick and shovel is no longer suitable for winning of coal,
so also the procedure of mandamus, certiorari and the actions on the
case are not suitable for the winning of freedom in the new age. They
must be replaced by, new and up-to-date machinery, by declarations,
injunctions and actions for negligence: and, in judicial matters, by
compulsory powers to order a case stated. This is not the task for
Parliament. Our representatives there cannot control the day to day
activities of the many who administer the many fold activities of the
State: nor can they award damages to those who are injured by any
abuses. The Courts must do it.”
The Courts have the obligations to satisfy the social aspirations of the
citizens because the Courts and the law are for the people and expected
asa@anupamsanghiassociate.in
Paper presented at the 28th LAWASIA conference, Sydney
ANUPAM SANGHI
to respond to their aspirations.
If the executive exercises its new powers properly, it will lead to a
welfare state. But if the powers are abused it will lead to a totalitarian
state….”
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