The NCLAT set aside the order passed by the Fair Trade Competition Commission of India (CCI) on DLF and directed it to investigate the matter.


The case pertains to the CCI which, on the basis of the second/supplementary report of the DG, dismissed the complaint against DLF and its subsidiary for alleged abuse of dominant position.


The appellate tribunal said the CCI “is not empowered to order further investigation” if once its investigative unit – the director general (DG) has already “recorded the violation” in its first report and “the same cannot be justified”.


Based on the second/supplementary report of the DG, the CCI passed the order concluding that “violation of the provisions” of the Competition Act was not established against DLF and its wholly-owned subsidiary DLF Home Developers.


A two-judge bench of NCLAT said it “is of the view that without going into further details or delving into the merits of the case, the impugned order is liable to be set aside as the order is primarily passed on the basis of the supplementary inquiry report submitted by the DG which was made on the basis of the invalid CCI order .”


The matter pertains to Regal Garden in Sector 90, DLF Garden City, Gurugram, where a whistleblower complained to a real estate firm that the clauses in the buyer-seller agreement reflected abuse of dominance by DLF Home Developers.


The whistleblower complained to the CCI that the clauses were “grossly unfair and discriminatory”, however the fair trading regulator concluded on 31 August 2018 that no breach had occurred.


The CCI order was subsequently challenged before NCLAT, the appellate body of the fair trade regulator, which set aside the order after more than four years and remanded the matter to it for reconsideration.


The National Company Law Appellate Tribunal (NCLAT) “remitted the matter back” to the CCI to re-pass the order based on the first report filed by the DG’s office.


“The CCI is required to examine the entire matter and pass an appropriate order in accordance with law after giving an opportunity of hearing to all concerned within three months from the date of receipt/production of a copy of this order,” it said.


The NCLAT observed that the DG, in accordance with the order of the CCI, conducted an inquiry and in its report proved the violation of the provisions of Section 4 of the Act by DLF and its subsidiary.


“Although the DG in its investigation report dated March 2016 had noted the violation of the Respondents under Section 4 of the Act, the CCI by its order dated November 9, 2016 directed the DG to conduct further investigation,” he said.


And after receiving the second/supplementary report, DG CCI passed the order with the conclusion that the violation of the provisions of Section 4 of the Act is not proven in the matter.


NCLAT, asking CCI’s direction for second/supplementary investigation, said, “Further investigation under the Act is required in case of closure and not where the DG has submitted a report showing violation of the provisions of the Act by the party/parties.”