CAT backs CCP action against Kingdom Valley, upholds Rs35m penalty over misleading project claims

The Competition Appellate Tribunal (CAT) has upheld a penalty of Rs35 million imposed on Kingdom Valley (Pvt.) Limited by the Competition Commission of Pakistan, reaffirming findings of misleading advertising in the company’s real estate marketing campaign.

The ruling validates the Commission’s order issued on 27 May 2025, which concluded that the developer misrepresented its housing project’s location by promoting it as “Kingdom Valley Islamabad” despite its actual placement in Mouza Choora, Rawalpindi.

Tribunal records show that the project was aggressively marketed through billboards, social media, and other promotional channels using Islamabad branding, a practice the regulator said created a false perception of location and value among buyers.

The Commission also noted that the project was publicly described as “NOC approved” before receiving formal approvals, reinforcing its finding of a structured pattern of deceptive marketing.

In its detailed judgment, the CAT agreed that the conduct fell under Section 10(2)(b) of the competition law, which prohibits the dissemination of false or misleading information to consumers.

The tribunal rejected the developer’s defence that similar advertising practices exist across the real estate sector, stating that industry prevalence does not justify violations of law. It further observed that “the deception angle becomes insurmountable when violation occurs in broad daylight,” and emphasised that “two wrongs never make one right.”

The bench maintained the Rs35 million penalty, describing the misrepresentation of the project’s location as a “grave default,” particularly significant in the property sector where consumers are highly exposed to misleading claims that can result in financial loss.

It further directed that the penalty must be deposited within 20 days, warning that failure to comply would result in reinstatement of the original Commission order in full, increasing the company’s potential liability.

The decision reinforces the regulator’s tightening scrutiny of deceptive marketing practices in Pakistan’s real estate industry, where concerns over exaggerated claims regarding location, approvals, and investment returns have remained persistent.