DLF falls 5%, SC asks co to submit Rs 630 cr penalty

Moneycontrol Bureau

Shares of DLF fell more than 5 percent on Wednesday on Supreme Court order asking company to pay Rs 630 crore fine within three months.

It is a huge win for customers, the realty major will be submitting undertaking of interest of 9 percent on Rs 630 crore fine and will pay Rs 50 crore of penalty within 3 weeks, says the apex court.

Most realty analysts were expecting this decision by the apex court. Quantum wise, the amount of Rs 630 crore is nearly 7.5 percent of DLF's FY14 revenue of Rs 8,298 crore.

On July 11, 2014, DLF moved the apex court against the the Competition Appellate Tribunal (COMPAT) order announced in May that upheld competition regulator Competition Commission of India's (CCI) ruling, which imposed Rs 630 crore penalty with 9 percent interest alleging abuse of dominant position in Gurgaon.

In 2011, CCI had found DLF violating fair trade norms and abusing its dominant position and imposed a penalty of Rs 630 crore. This as a complaint was filed by Belaire Owners Association, Gurgaon - the owners’ association of a DLF project. The association alleged that DLF imposed highly arbitrary, unfair and unreasonable conditions on allottees of apartments and these conditions had serious adverse effects and ramifications on the rights of the buyers.

This tribunal then dismissed DLF's plea against the fine imposed by the CCI. The tribunal had given the company 60 days to pay the penalty or approach the Supreme Court. DLF had then said that it would move the Supreme Court on the matter. At 14:40 hours IST, the stock was quoting at Rs 181.80, down Rs 9.75, or 5.09 percent on the BSE.