Builder L&T under the scanner

Since 2002, we – owners of L&T South City apartment – have been waging a long battle against our apartment’s builder L&T and land owner Dinesh Ranka. (Citizen Matters had reported on this here.)

We have been running from pillar to post – going to police stations, holding protest marches, filing cases in City Civil Courts, High Court and Consumer Courts. Now, a complaint filed by our association SUGRUHA (South City Group Housing Apartment Owners’ Association) at the Competition Commission of India (CCI) in August has made an impact.

CCI is a central government body to ensure fair play by businesses and protect consumers’ interests. The Commission gave us a hearing in October. On January 18th, CCI ordered an investigation on the issue. In the order, CCI says that prima facie L&T seems to have violated the Competition Act, 2002.

If found guilty, CCI can order L&T and Ranka to pay penalty. We have demanded penalty of Rs 4500 cr to be levied from L&T, and maximum penalty from Ranka too. The investigation report is expected to be out in March.

South City residents in a protest against L&T last April. Pic: Navya P K

In our complaint, we had pointed out violations committed under Sections 3 and 4 of the Competition Act. These relate to the company’s "abuse of dominant position" and "anti-competitive behavior" to financially exploit us in the garb of providing housing development and management.

The major issues we raised against L&T are:

  • Non-disclosure of the relinquishment of a park and two civic amenity sites to BDA in 1996 and thus selling us property that was no longer owned by them
  • Further illegal relinquishment of land in 2006 to BDA without informed consent from us co-owners
  • Illegal collection of money by granting parking rights on land already sold
  • Violating zoning regulations and fire safety requirements
  • Not returning excess amounts that were charged for power and water bills
  • Malpractices in accounting of maintenance amounts
  • Poor quality of maintenance services
  • Not forming an owners’ association within reasonable time and handing over maintenance, as required by law
  • Non-delivery of promised services and undue delay in project completion

In a landmark order last August, CCI had imposed a penalty of Rs 630 cr on builder DLF for abuse of dominant position. Since many developers in Bangalore are reportedly guilty of similar practices, we hope that this investigation and subsequent actions become a wake-up call for the real estate industry.

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  1. We purchased a flat in MS Garden Apartment, Bangalore from MS ARASU Builders & Developers back in 2012. Few months after the purchase we noticed that the walls had developed cracks due to poor quality of construction and after 1 rain season my room wall was completely ruined due to seepage. I tried contacting the Builder MD of MS Arasu Builders & Developers Mr. B. H. Mahalingappa but they are now not responded to my quires.

    I am now extremely worried that I just lost all my saving money which I had invested towards this Flat and the building might fall due to poor quality of construction.

    MS ARASU Builders & Developer
    No.67-68/51, SUDEV COMPLEX,
    III Floor,S.Kariappa Road,
    Basavanagudi, Bangalore 560004,
    Karnataka, India

    MS Royal is another project which belongs to them and I would strongly suggest that no one buys any apartments from MS Asasu Builders & Developers as you will just end up losing your hard earned money !

    Can someone tell us what we can do ?

  2. Any such course of action, seemingly a fast track one, may not be open in cases where the builder/seller is not a ‘corporate’ and / or is, in comparison, a small fry / more so, if a fly-by-night one.
    The last mentioned two irregularities complained of,namely,-
    Not forming an owners’ association within reasonable time and handing over maintenance, as required by law
    Non-delivery of promised services and undue delay in project completion –
    though, are not uncommon even among those not-so ‘popular'(‘notorious’!) names.
    In today’s scenario, because of largely obtaining irritants e.g. inordinate delays, inconclusive nature of litigation should reliefs be sought through consumer courts, or the like, the aggrieved customer/consumer remains pathetically left in the lurch, gruelingly now than ever before.

  3. It is really a surprising news though I am not among the affected co-owners. It is necessary CCI evolve a mechanism to audit during project execution itself to ensure similar complaints do not arise.

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