On January 2, 2019, CCI dismissed information filed by four individual informants against the Mumbai and Ahmedabad branch of Indiabulls Housing Finance Limited (‘IHFL’) alleging violation of Section 3 and Section 4 of the CA02. [1]

In the context of a loan agreement between the informants and IHFL, the informants alleged that IHFL abused its dominant position by arbitrarily increasing the loan tenure, principal due amount and rate of interest during the pendency of the loan agreement. The informants further alleged that IHFL never revised the rate of interest as per the Reserve Bank of India’s repo rate and charged the informants the highest possible interest rate, which was at substantial variance to that charged to other consumers. When the informants tried to switch their loan to another financial institution, they were informed that they would be charged a switching fee and pre-payment and other charges which the informants could not afford to pay.

CCI defined the relevant market as that for ‘provision of loan against property in India’. It found that IHFL was not dominant in the relevant market given the presence of many strong players like banks, non-banking financial companies, housing finance companies and other financial institutions and therefore did not contravene Section 4 of the CA02. The Informants also failed to show existence of an ‘agreement’ as envisaged under Section 3 of the CA02 and therefore CCI found that there was no prima facie case of contravention of Section 3 of the CA02. Accordingly, the matter was closed by CCI.

[1] Case Number 6 of 2018.