Supreme Court directs DLF to submit penalty of Rs 630 crore; stock plunges

NEW DELHI: The Supreme Court ordered India’s biggest listed real estate developer DLF to pay a Rs 630 crore penalty imposed by the Competition Commission of India ( CCI) in three months, brushing aside arguments that the levy was excessive and sending the stock of the debt-laden developer down 4.44%.

CCI had imposed the penalty on DLF in August 2011 for using its dominant position in the market to engage in unfair trade practices such as making consumers sign inequitable agreements. The commission had faulted 16 clauses in the agreements as being unfair. The penalty was calculated at 7% of the average turnover of the company. The Belaire, Park Place and Magnolia apartment owners’ associations had moved the trust regulator, which found in their favour.

The Competition Appellate Tribunal or Compat had stayed the recovery of the amount subject to an undertaking by DLF to pay the amount with 9% interest. The company then approached the Supreme Court seeking a stay and was rebuffed on Wednesday.

Appearing for DLF, senior lawyer Harish Salve argued that the penalty was excessive. It could at the most be a percentage of the value of the three apartment complexes (Park Palace, Magnolia and Belaire), he said. The three, all located in Gurgaon, are worth a total Rs 1,100 crore, he said. But CCI took into account the average annual turnover throughout the country to impose the penalty, he said.