Rs 14 Crore Fine Slapped on Jaiprakash Associates For Fleecing Homebuyers, Abusing Dominant Position

In a big relief to homebuyers, the Competition Commission of India (CCI) on Tuesday slapped a fine of Rs 13.82 crore on Jaiprakash Associates Limited (JAL) for abuse of its dominant position in the market and imposing unfair and discriminatory conditions on the allottees of its various housing projects.

This may open doors for buyers of other residential projects as well who are facing harassment at the hands of builders that use their dominant position and fleece buyers by imposing random charges on them at the time of possession.

The CCI said the Jaiprakash Associates Limited (JAL) was found to be in contravention of the provisions of Section 4 of the Competition Act, 2002 (Act) for abuse of dominant position in the market of independent residential units such as villas, estate homes in their integrated township projects including Wish Town and Jaypee Greens project, in Noida and Greater Noida.

Earlier, a buyer had alleged that conditions imposed by JAL were arbitrary and heavily tilted in favour of it. Based on his complaint, the CCI passed the order on Wednesday.

“Based on the investigation, the Commission found that the standard terms and conditions imposed by JAL were one-sided and couched in a manner so as to unilaterally favour itself and be unfavourable to the consumers. Moreover, terms were vague and did not confer any substantive rights on the buyers,” the panel said in its order.

It added that the conduct of JAL, such as collecting charges from the buyers without delivering the residential unit on time, adding additional construction and altering the layout plans, imposition of various charges, right to raise finance from any bank or financial institution without consulting buyers was held to be abusive.

“Therefore, the Commission concluded such conduct of JAL to be in violation of Section 4(2)(a)(i) of the Act. Resultantly, the Commission imposed a penalty of Rs 13.82 crore on JAL,” it said in its order. 

The penalty was calculated at 5per cent of the average revenue of JAL from sale of independent residential units. Besides, a cease and desist order has also been issued to the builder.