The Competition Commission of India ruled that imposition of Pre-Payment of loan penalty on end-consumer by Finance Company doesn’t amount to Anti-Competitive Agreement.
The Commission perused the material available on record and information available in the public domain.
The Commission noted that the Informant is mainly aggrieved with the alleged unfair and discriminatory increase in the rate of interest charged by OP-1.
The Commission observed that in the past cases containing similar allegations were filed against OP-1 [(Case No. 06 of 2018 Mr. Chirag S. Shastri & Others Vs. Indiabulls Housing Finance Limited & others (decision on 02.01.2019) and Case No. 43 of 2016 Onicra Credit Rating Agency of India Limited Vs. Indiabulls Housing Finance Limited.
For the purpose of analysis of conduct of OP-1 under the ambit of Section 4 of the Act, the Commission deemed appropriate in the matter to delineate relevant market as ‘provision of loan against property in India’.
The Commission noted that the informant has suggested that OP-1 has the biggest share in the area of Delhi and NCR and therefore is dominant.
The Commission also noted from the information available in public domain that OP-1 is a housing finance company which is India’s third largest non-bank mortgage lender in the country and is regulated by the Reserve Bank of India (RBI).As per Annual Report 2022-23 of OP-1, besides providing home loans for Resident Indians and Non-Resident Indians, it also offer loans to small businesses and Micro, Small and Medium Enterprises (MSMEs), against their properties and home loan balance transfers.
Further, it is observed from the information in public domain that the relevant market appears to be competitive with the presence of large number of banks and Non-Bank Financial Companies (NBFCs) and housing finance companies and thus, dominance of OP-1 is not established in the aforesaid relevant market.
The Commission is of the view that there is no prima facie case made out under the provisions of Section 4 of the Act. As far as the provisions of Section 3 of the Act is concerned, the agreement with an end-consumer like in the present case is not envisaged as an anti-competitive agreement under Section 3 of the Act and therefore, no case is made out under the provisions of Section 3 of the Act.
The Commission was of the view that prima facie there is no competition concern arising in the matter under the provisions of Section 3 and Section 4 of the Act and therefore, the matter is directed to be closed forthwith under Section 26(2) of the Act.
Facts
The Information has been filed by Mr. Anil Bansal, director of M/s Karmyogi Hotels & Buildcon Ltd (‘Informant’) under Section 19(1)(a) of the Competition Act, 2002 (‘Act’) alleging contravention of the provisions of Section 3(1), 3(2), 4(2)(a)(ii) and 4(2)(c) of the Act by Indiabulls Housing Finance Limited (‘OP-1’) and its officers (OP-2 to OP-20), all collectively referred to as ‘other OPs’. OP-1 and other OPs are collectively referred to as ‘OPs’.
The Informant has alleged that it was induced to believe by the OPs through misleading and deceptive advertisements that they are a prominent entity offering loans against property at the most favorable interest rates.
Case Information
Case Name : Anil Bansal, Director of M/s Karmyogi Hotels & Buildcon Pvt. Ltd. v/s Indiabulls Housing Finance Limited
Judicial Level & Location : Competition Commission of India
Appeal Number :Case No. 34 of 2023
Date of Ruling : 2024-07-22
Ruling in favour of: Respondent
Judges: Ms. Ravneet Kaur Chairperson, Mr. Anil Agrawal Member, Ms. Sweta Kakkad Member, Mr. Deepak Anurag Member
