On April 6, 2018, CCI directed an investigation into the complaint filed under Section 19(1)(a) of the Competition Act by Confederation of Real Estate Developers Association of India – NCR (‘CREDAI-NCR’) against Department of Town and Country Planning, Government of Haryana (‘DTCP’) and Haryana Urban Development Authority (‘HUDA’) alleging that DTCP and HUDA have imposed unfair and unilateral terms and conditions in the agreements relating to the development of Group Housing Colony in the revenue estate of Tehsil Sohna, Gurugram district in Haryana, and thereby contravened provisions of Section 4 of the Competition Act.[1]CREDAI-NCR is the National Capital Region chapter of Confederation of Real Estate Developers Association of India, which is an organisation representing around 12,000 real estate developers spread across 23 States. DTCP is a department of the Government of Haryana empowered to regulate urban development in the State of Haryana, while HUDA is an authority created under the Haryana Urban Development Authority Act, 1977 (‘HUDA Act’), which has been delegated the task of planned development of urban areas in Haryana.CCI defined the relevant product market as the ‘market for issue of licenses and development of infrastructure for residential plotted/ group housing/ commercial colonies’. With respect to the relevant geographic market, CCI opined that the jurisdiction of DTCP and HUDA covers all the urban areas of Haryana and, therefore, cannot be restricted to a particular tehsil, and thereby defined it as the State of Haryana. Having defined the relevant market, CCI noted that DTCP and HUDA, being the sole statutory authorities under the Haryana Development and Regulation of Urban Areas Development Act, 1976 and the HUDA Act for issue of licenses and development of infrastructure in the State of Haryana, are prima facie in a dominant position.CREDAI-NCR alleged that some of the terms and conditions of the licenses issued to the developers, letter of intent and agreements executed between the developers and DTCP are one-sided, unfair and discriminatory. For example: (i) External Development Charges (‘EDC’) are subject to revision as per the actual charges incurred, including any enhanced land acquisition charges, and are to be paid on demand; (ii) exorbitant interest rates are levied on delayed payment of EDC and Internal Development Charges (‘IDC’); (iii) and charges and interest continue to be imposed despite no activity being undertaken by DTCP and HUDA in relation to infrastructure development.DTCP and HUDA resisted the allegations both on preliminary grounds of jurisdiction regarding maintainability of the complaint as well as on substantive grounds. On the preliminary issue of jurisdiction, CCI rejected the assertion of DTCP and HUDA that they are not enterprises under Section 2(h) of the Competition Act and held that even if issuance of license were to be construed as exercise of sovereign power, the levy of EDC/IDC on developers and ultimately, consumers has a direct economic/ commercial impact and thus DTCP and HUDA are indeed enterprises. CCI further held that the developers fall within the ambit of Section 2(f) of the Competition Act since consumers not only include end consumers but also intermediate consumers. As far as maintainability of the complaint in view of Special Leave Petitions[2] (‘SLPs’) involving similar grounds pending before the SC was concerned, CCI noted that availability of remedies before any other forum or under any other law does not oust the jurisdiction of CCI. It relied on Sections 61 and 62 of the Competition Act to maintain that the proceedings before CCI can proceed simultaneously along with the proceedings before the SC. CCI also stated that the proceedings before the SC do not involve the issue of abuse of dominance under Section 4 of the Competition Act.CCI further noted the justifications enumerated by DTCP and HUDA, that: (i) the developers did not raise the plea that the EDC should be linked to the execution of the external development works by the Government at the time of entering into agreements; (ii) several developers have not paid the EDC dues, as a result of which external development works could not be taken up in parts nor funds from other projects be diverted to the concerned project; (iii) the developers have the option to pay the charges within 30 days of grant of license without interest; and (iv) the agreement clauses are part of Haryana Development and Regulation of Urban Areas Development Rules, 1976 itself. CCI however observed that: (i) even though the terms of the agreements emanate largely from the statutory provisions, the terms of the documents prima facie appear to be one-sided and in favour of DTPC and HUDA; (ii) the alleged failure of DTPC and HUDA to adhere to their obligations under the Sohna Master Plan, 2013 in a time-bound manner while imposing onerous obligations on the developers to pay EDC/ IDC is prima facie abusive and; (iii) not undertaking any external development works is ultimately affecting the consumers. Therefore, CCI concluded that the conduct of DTCP and HUDA prima facie contravenes Section 4(a)(i) of the Competition Act and directed the DG to investigate the matter.[1] Case No. 40 of 2017. [2] Main SLP being SLP No. 5459 of 2016 titled Magnolia Propbuild Private Limited v. State of Haryana.