2 CCI members want fine on Jaypee; Chairman Ashok Chawla & 2 others overrule

Raising serious concerns over unfair business practices in realty sector, two members of Competition Commission have ordered Rs 666 crore fine on JP Associates, but were overruled by the Chairman and other members of the regulatory body.

The proposed penalty was overruled by 3:2 majority vote by the Competition Commission of India (CCI), even as all the members pressed for immediate and urgent steps to strengthen the regulations to address the grievances of the purchasers. The Commission also asked the company and other players in the real estate sector to take appropriate voluntary measures to address the concerns of the flat buyers. CCI Chairman Ashok Chawla and two members -- Sudhir Mital and U C Nahta -- said that JP Associates and Jaypee Infratech Ltd -- did not "enjoy a position of dominance in the market for provision of services for the development and sale of residential apartments in Noida and Greater Noida". 

Dissenting with the majority order, two CCI members -- S L Bunker and Augustine Peter -- ruled that JP Group enjoyed dominant position in this case and directed it to "cease and desist" from indulging in anti-competitive practices. The complex order, running into 137 pages, follows CCI's probe into alleged abuse of dominant position with regard to development and sale of residential units in JP Group's Integrated Townships in Noida and Greater Noida.

As per the majority order, the investigation by CCI's Director General found that the market share of Jaypee Group was much less than the rival competitor and it did not have any commercial advantage over its competitors due to its economic strength or due to its size or resources. Quoting the DG's investigation, this order said Jaypee Group was behind Amrapali, its next rival competitor and "this clearly demonstrates that it (Jaypee) does not have the biggest market shares in the relevant market".