CCI order sparks off debate over problems of property buyers as well as issues that affect developers
Property buyers will welcome the decision by the Competition Commission of India to (CCI) punish DLF, the country's leading realty firm, with a fine of Rs630 crore for abusing its dominant market position, to engage in unlawful activities in disregard of consumer interest.
If this order over the company's Belaire project in Gurgaon has surprised the market, there could be more shocks in store for the industry as the CCI is reported to be also investigating complaints with regard to at least three other projects by DLF, and if the company is found guilty it would have to pay further penalties amounting to Rs900 crore.
Some 10 other cases involving other real estate players are also pending before the CCI, and this highlights the need to correct the loopholes in the system. "The decision will act as a deterrent for developers, who usually have the upper hand in the bargain," said an analyst.
Echoing the sentiment, an industry representative said, "The decision implies that the builders can no longer take customers for granted."
However, some developers are already questioning the authority of the CCI in this matter. "I never knew such a body existed in the first place," said a Mumbai-based developer. "I am not sure what it has to do with the realty sector."
Former CCI chief Vinod Dhall's statement in a television interview also suggests that the CCI has acted as a proxy for a real estate regulator. "The absence of a regulator is a vacuum and you can say that the Competition Commission, sort of, has stepped in to fill an existing vacuum. It is possible that there may be more such applications filed in CCI, but it also has to be wary and should not allow itself to be converted or treated as a consumer court."
Other experts have raised doubts about the capability of a real estate regulator to be fair. One industry representative said there is no guarantee that the regulator will not abuse his position or succumb to industry pressure.
The issue of delays that developers have to face must also be carefully looked into, industry representatives say. Developers complain that getting approvals often takes years, which pushes up costs and consequently the prices.
"Sometimes, delays happen due to things that are beyond the developer's control, and he may also have to make some structural changes," says Pankaj Kapoor, managing director, Liases Foras. "In that case, he must be provided with guidelines. But if the developer starts selling before getting necessary approvals or sits on the project after getting all necessary clearances, he must be fined."
CCI found that DLF had registered bookings for flats between August and November 2006, whereas the application for approval was submitted in December, and the clearance was obtained only in April 2007.
Instances of violation of customer rights are rampant, and home buyers across the country will identify with the buyers in the DLF case. But while in the DLF case customers can approach the Competition Appellate Tribunal to seek compensation from the builder, in most such cases, customers usually have to pursue their complaints before consumer courts, where they have to go through a lengthy process and they may not always be successful.
"What we need is transparency," Mr Kapoor, says. "We already have laws, and if government makes all the records and documents-from land records to project completion certificates-available to the public to see, a lot of ills will disappear. But they don't want to, because the officials themselves benefit from the opaque mechanism."
In the absence of other methods of grievance redressal, the best and the most effective thing that a customer can do is to read the contract carefully before signing it. "It is a tiresome thing to do, but the contract tells you exactly what you have been handed over," a property lawyer pointed out. "Many future complications can be avoided, and one can challenge the developer if there is an unfair clause, and can even negotiate with him on the spot. Once the contract is signed, one can always approach the court, but it is a long and exhausting process."
The trading sentiment at home was bolstered by gold's ascent to a record level in overseas markets as mounting concerns over sovereign debt and slower growth spurred investors to seek the perceived safety of bullion as an investment haven
New Delhi: Gold climbed to an all-time high of Rs28,150 per 10 grams in the national capital on Friday, posting its biggest-ever single day gain of Rs1,310 amid frantic buying triggered by robust demand in global markets, reports PTI.
The trading sentiment at home was bolstered by gold's ascent to a record level in overseas markets as mounting concerns over sovereign debt and slower growth spurred investors to seek the perceived safety of bullion as an investment haven.
Gold rose to an all-time high of $1,867.95 an ounce in London, with investors preferring to hedge their funds amid melting global equity markets in the wake of worse-than-expected US economic data, coupled with growing concerns over Europe's debt crisis.
In addition, retail buying for the upcoming marriage season further boosted the market sentiment. Silver also jumped on rising demand from industries such as electroplating and other consuming units.
All-India Sarafa (bullion) Bazar Association president Sheel Chand Jain said the Rs1,310 per 10 gram jump in gold prices in a single day was the biggest in the metal's history, adding that a further rise is expected as investor buying picks up.
He said a steep fall in global equity markets and weakness of the Indian rupee against the US dollar left investors with no other avenue to park their funds than gold as a safe hedge.
The trend at home was more influenced by the international price of gold, though scattered local buying for the coming marriage season was an additional factor boosting demand for the shiny metal, he said.
On the domestic front, gold of 99.9% and 99.5% purity spurted by Rs1,310 each to Rs28,150 and Rs28,000 per ten grams, respectively. Sovereigns followed suit and surged by Rs1,100 to Rs22,400 per piece of eight grams.
In a similar fashion, silver ready surged by Rs1,500 to Rs62,800 per kg and weekly-based delivery by Rs1,920 to Rs62,690 per kg. Silver coins flared up by Rs1,000 to a fresh high of Rs69,500 for buying and Rs70,500 for selling of 100 pieces.
A 50cm tsunami advisory was issued for the coast of Miyagi and Fukushima that were severely damaged in the devastating earthquake and tsunami in March
Tokyo: A strong earthquake with a preliminary magnitude of 6.8 struck north-eastern Japan off Fukushima prefecture on Friday. Following the quake, a 50cm tsunami advisory was issued for the coast of Miyagi and Fukushima prefectures, according to the Japan Meteorological Agency.
The tsunami advisory was issued for the coastal areas that were severely damaged in the devastating earthquake and tsunami in March.
Tokyo Electric Power Company said no abnormalities had been found at radiation monitoring posts at the crippled Fukushima Daiichi nuclear power plant and that cooling operations at the damaged reactors were continuing.