CCI paves the way for Real Estate Regulatory Authority, AShutosh Kumar, Deputy Director, CCI

Competition Commission of India (CCI) established in March, 2009 to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interest of consumers and to ensure freedom of trade carried on by other participants in markets in India.


Since its inception, CCI has been passing orders with far reaching implications in a number of cases encompassing a wide range of sectors. One of the important sector from which CCI receives most number of complaint is real estate. In year 2011, the CCI vide an order, in Belaire Owener’s Association v. DLF Limited and HUDA, imposed a penalty amounting to Rs. 630 Crores (INR 6.3 billion) on DLF Ltd. (DLF) for imposing unfair Condition in the agreements entered into by the company with flat buyers. The order also directed DLF to cease and desist from formulating and imposing such unfair conditions in its agreements with buyers in Gurgaon and to suitably modify such unfair conditions within three months of the date of receipt of this order. Apart from these penalties and remedies, CCI also advised Government of India as well as State Governments to come out with a regulatory framework for the real estate sector.


This order was unprecedented in India’s regulatory landscape through the sheer nature of the behavioural remedies ordered by CCI. After this order, CCI was flooded with complaints and information from a wide range of home buyers alleging similar or identical impositions by other builders across India. CCI again highlighted the dire need for immediate and urgent steps to enact a suitable law providing for sectoral regulator for housing sector.


All of these lead to introduction of the Real Estate (Regulation and Development) Bill, which inter alia, provides for the establishment of the Real Estate Regulatory Authority for regulation and promotion of real estate sector. This bill was proposed to ensure sale of plot, apartment or building, as the case may be, in an efficient and transparent manner and to protect the interest of consumers in real estate sector.

The Real Estate (Regulation and Development) Bill became an Act on May 1, 2016, kick-starting the process of making rules as well as putting in place institutional infrastructure to protect the interests of home buyers in India. The Act seeks to protect the rights of home buyers, mandates registration of projects, including those that have not got completion or occupancy certificates.

The Act mandate for setting up of Real Estate Regulatory Authorities in all states, which will require all projects to be registered, and the formation of Appellate Tribunals to adjudicate disputes. According to the act, state governments have to establish the regulatory authorities within one year of the law coming into force. These authorities will decide on the complaints of buyers and developers in 60 days.

Once the Real Estate Regulatory Authorities will be set up, it will work as sectoral regulators to regulate and promote real estate sector and to protect the interest of consumers in real estate sector. This will certainly help in curbing anti-competitive activities in the sector. However, once anti-competitive behavior contravenes the provisions of the Competition Act,CCI has the jurisdiction.