Ghaziabad Development Authority fined Rs 1 crore for raising EWS flat price ‘unilaterally’

GHAZIABAD: Fair trade regulator Competition Commission of India (CCI) on Wednesday imposed a fine of over Rs 1 crore on Ghaziabad Development Authority (GDA) for abuse of its dominant position by unilaterally raising the prices of dwelling units under the economically weaker section (EWS) category in Pratap Vihar housing scheme.
The matter dates back to 2008 when GDA floated its Pratap Vihar EWS scheme. The price of each dwelling unit under the said scheme was initially fixed at Rs 2 lakh, but in 2015 on completion of the project, the price of each unit was raised to Rs 7 lakh. A beneficiary of the scheme, Satyender Singh, moved the CCI, alleging that GDA acted in “an arbitrary and unilateral manner” in raising the price.

In its order, the CCI held that GDA acted in contravention of Section 4(2)(a)(i) of the Competition Act, 2002, which says ‘there shall be an abuse of dominant position if an enterprise, directly or indirectly, imposes unfair or discriminatory condition in purchase or sale of goods or services’.

The CCI, in its order, said the GDA under the said scheme acted arbitrarily and unilaterally “without any enabling provision either in the brochure of the scheme or allotment letter”, and hence a penalty of Rs 1,00,60,794 was imposed. The CCI also handed out a cease-and-desist order against GDA, which means it wants the development authority to immediately stop indulging in such activities.

The GDA, on its part, said there was indeed “a costing error” committed by then GDA executive engineer, but insisted it was not intentional. “We will appeal against the order in higher appellate authority,” SS Verma, superintending engineer, GDA, told TOI.

While explaining GDA’s position, Verma said when the EWS scheme for 348 flats in Pratap Vihar was conceived in 2008, there were many factors which had not been taken into account while fixing the price to Rs 2 lakh.

“Price was fixed under the tenure of RL Saroj, who was the then executive engineer of GDA, and when the matter came to light, an departmental inquiry was initiated against him. When the project was competed in 2015, it was realised that costing norms were not followed in deciding the price like contingency and overhead charges were not included. So, the prices were revisited and then hiked to Rs 7 lakh,” he added.

“However, we had then informed all 348 beneficiaries, including the complainant Satyender Singh, and we have documents signed by ll of them,” he added.