DLF found guilty of unfair practices
The Monopolies and Restrictive Trade Practices Commission (MRTPC) has ruled that the country’s top realty firm DLF indulged in an unfair trade practice by not disclosing the basis of calculating the carpet area in a property to its client.
By TNN |
NEW DELHI: The Monopolies and Restrictive Trade Practices Commission (MRTPC) has ruled that the country’s top realty firm DLF indulged in an unfair trade practice by not disclosing the basis of calculating the carpet area in a property to its client.
Not disclosing the basis of carpet area calculations to the complainant prejudiced the interest of the consumer, the ministry of corporate affairs said in a statement quoting the MRTPC order. The Commission has also asked DLF to calculate the carpet area on the basis of Bureau of Indian Standards (BIS) norms.
When contacted, a DLF spokesperson told ET: “We have not received the judgement copy yet. We will certainly study it. We do make full and transparent disclosure on all our properties on sale to all prospective buyers. We respect the judgements of all judicial forums including the MRTPC. We will abide by the ruling.”
The commission held that suppression of norms in calculating carpet area has a flavour of misrepresentation. The complainant had entered into an agreement with DLF for purchase of office space. As per the agreement, the customer—Mr KP Jain—would have a ‘super area’ of about 101.46 sq mt, including a carpet area of 74.88 sq mt.
The complainant was under the impression that the carpet area would be equal to floor area without including the thickness of the bounding walls. DLF allegedly kept the view to itself without disclosing the same to the petitioner at the time of agreement, the statement said.
The petitioner expected the carpet area would be calculated as per the BIS norms. DLF rejected the idea of applying BIS norms as they are not statutory in nature. The Commission pointed out that in such a situation when norms are not defined statutory, it was all the more necessary for the company to define the carpet area in terms of the norms understood by it and not to keep it with itself to surprise the consumers, the statement added.
According to some industry watchers, on an average, carpet area of a property is 15-20% lesser than the super area. They said many developers present the super area, which includes space utilised for stair cases, lifts and walls as the space available for actual use by the consumer—referred to as the carpet area. Consumers are sometimes made to pay for the space they share with others by giving the impression that it would be exclusively made available to them.
The government is also in the process of introducing a new system of calculating value of properties on the basis of actual usable area.
Not disclosing the basis of carpet area calculations to the complainant prejudiced the interest of the consumer, the ministry of corporate affairs said in a statement quoting the MRTPC order. The Commission has also asked DLF to calculate the carpet area on the basis of Bureau of Indian Standards (BIS) norms.
When contacted, a DLF spokesperson told ET: “We have not received the judgement copy yet. We will certainly study it. We do make full and transparent disclosure on all our properties on sale to all prospective buyers. We respect the judgements of all judicial forums including the MRTPC. We will abide by the ruling.”
The commission held that suppression of norms in calculating carpet area has a flavour of misrepresentation. The complainant had entered into an agreement with DLF for purchase of office space. As per the agreement, the customer—Mr KP Jain—would have a ‘super area’ of about 101.46 sq mt, including a carpet area of 74.88 sq mt.
The complainant was under the impression that the carpet area would be equal to floor area without including the thickness of the bounding walls. DLF allegedly kept the view to itself without disclosing the same to the petitioner at the time of agreement, the statement said.
The petitioner expected the carpet area would be calculated as per the BIS norms. DLF rejected the idea of applying BIS norms as they are not statutory in nature. The Commission pointed out that in such a situation when norms are not defined statutory, it was all the more necessary for the company to define the carpet area in terms of the norms understood by it and not to keep it with itself to surprise the consumers, the statement added.
According to some industry watchers, on an average, carpet area of a property is 15-20% lesser than the super area. They said many developers present the super area, which includes space utilised for stair cases, lifts and walls as the space available for actual use by the consumer—referred to as the carpet area. Consumers are sometimes made to pay for the space they share with others by giving the impression that it would be exclusively made available to them.
The government is also in the process of introducing a new system of calculating value of properties on the basis of actual usable area.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
