Competition commission rejects abuse charge against Jaypee Group

New Delhi, Oct 28 (IANS) India’s fair trade watchdog, the Competition Commission of India (CCI), has dismissed five complaints against the Jaypee Group companies — Jaiprakash Associates (JAL) and Jaypee Infratech (JIT) — for alleged abuse of their dominant position in the real estate market of Noida and Greater Noida.

The Commission, in a majority verdict, said in its “considered opinion JAL/ JIL does 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 in accordance with the provisions of section 4 of the Act.”

“Since JAL/ JIL is not in a dominant position in the relevant market, the question of examining the alleged abusive conduct does not arise,” the order added.

Two CCI members ordered a Rs.666 crore fine on Jaypee associates, but were overruled by the chairman and other members.

The commission, however, 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.

The informants in the cases had alleged that Jaiprakash Associates, along with its group company Jaypee Infratech, abused its dominant position by imposing highly arbitrary, unfair and unreasonable conditions in the agreements for allotment of residential apartments which blatantly violated the principles of free and fair competition.

The two dissenting members disagreed with the majority verdict and found the Jaypee Group “clearly dominant in the relevant market”.

The investigation by CCI’s director general found the market share of the Jaypee Group to be much less than its 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 director general’s investigation, the majority verdict said the 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”.

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