Coming hard on real estate players across-the-board for "exploitative conduct" and unfair trade practices, the Competition Commission on Wednesday asked them to mend their ways, but stopped short of penalising them due to lack of evidence.
The fair trade watchdog also said there is an urgent need for a strong regulatory mechanism and immediate legislative steps to safeguard the interest of buyers in this sector.
Disposing of a case against 21 realtors and their industry body CREDAI without any penal action, the fair trade regulator asked them, as also all the players in the sector, to "take appropriate voluntary measures to address the concerns".
Noting that the sector lacks "market pressure" to prod the players to improve their services, the CCI also called for "immediate and urgent" legislative steps to enact a law which will supplement the existing regulatory architecture to address the buyers' grievances through a mix of structural and behavioural remedies.
The observations have been made by CCI in its 127-page order following a probe against 24 entities, which included 21 real estate firms such as Amrapali, Ansal, BPTP, Omaxe, Oberoi Realty, Parsvnath Developers, Puravanakara, Supertech, Unitech and Tata Housing Development Company.
The Competition Commission of India (CCI) said it is not taking any penal action as the complaints against them related to abuse of dominant position and for anti-competitive arrangements, for which there were not sufficient evidences.
"Notwithstanding the findings recorded in this order, the Commission is of the firm opinion that issues raised by the Informant are not only pertinent but need to be addressed by the policy makers and regulators through appropriate legislative tools in tandem with the self-regulatory role played by CREDAI," it added.
In the present case, due to the nature of the market structure, sufficient evidence was not found to establish an arrangement spanning across the regions and players.
"Notwithstanding the findings of the Commission on this issue, it is nobody's case that the sector does not suffer from lack of competitiveness and consequent unfair conduct resorted to by the players," CCI said.
