CHANDIGARH: Hearing a plea against Haryana Urban Development Authority (Huda) — now called Haryana Shehri Vikas Pradhikaran — on restricting right to transfer the title of plot and building constructed on it without its prior permission, the Competition Commission of India (CCI) has held that all functions of the authority are not of “sovereign” nature and the authority is undoubtedly “an enterprise.”
The order has been passed by Ashok Kumar Gupta, chairman and its members Sangeeta Verma and Bhagwati Singh Bishnoi of the CCI while hearing a plea filed by Gurugram Institutional Welfare Association, a registered group of allottees of institutional plots.
‘Huda right not to permit transfer of institutional plots’
CCI has rejected the objection of Huda to its jurisdiction in entertaining a matter against it. Huda had argued that while exercising its sovereign functions and administering the directions and policies of the state government, it cannot be held to be an ‘enterprise’ under the provisions of Section 2(h) of the Competition Act, 2002, and further that Huda being a statutory authority is not amenable to the jurisdiction of the commission.
“Having examined the objections raised by Huda on the touchstone of various pronouncements as above, the commission unhesitatingly holds that all statutory or regulatory functions performed by Huda, within the mandate of the Huda Act, cannot be classified as sovereign functions.
“The exception claimed by Huda is not ipse dixit, and requires a closer examination on a case-by-case basis. Given the facts and circumstances of the function of allotment of institutional plots as regards which the information has been filed before the commission, Huda is undoubtedly an enterprise,” the CCI has held.
The commission, however, has not found Huda guilty of abuse of dominance with regard to the allotment of industrial plots in urban estates in Haryana and has also upheld its powers to not permit transfer of the institutional plots in public interest and as a matter of policy to prevent unjust enrichment and profiteering by allottees.
The petitioner body had mainly argued that despite receiving the full consideration amount from the allottees, Huda illegally restricted their rights to sell, mortgage, transfer or lease out the plots and any buildings that they had constructed. It had submitted that the Huda had imposed an additional liability on the allottees to pay an undetermined consideration amount towards future additional costs in relation to the plots. The claimant also argued that Huda had created an artificial scarcity in the market by offering small numbers of plots at a time, thereby affecting supply. It was alleged that Huda had violated Section 4 of the Competition Act 2002.
Contesting the matter, Huda argued that the whole reason behind not allowing transfer of land allotted to an original allottee is to prevent investment in such lands to be used for commercial benefits and profit making. Huda submitted that if such policies are not framed, then the land being acquired for particular purpose by Huda will never be used for it, but rather as a tool for profit making by original allottees.
“Given the facts and circumstances of the function of allotment of institutional plots as regards which the information has been filed before the commission, Huda is undoubtedly an enterprise,” the CCI has held.