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C'garh Housing Board directed to repay Rs 568 cr to Parsvnath

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Press Trust of India New Delhi
Last Updated : Jan 19 2015 | 5:30 PM IST
Parsvnath Developers today said an arbitrator has directed the Chandigarh Housing Board to repay Rs 568 crore to the company in a dispute over development of a real estate project.
In October 2006, Parsvnath had entered into an agreement with CHB for the development of housing, commercial and other infrastructure facilities on 123.79 acre project located at Rajiv Gandhi Technology Park.
During October 2006 and April 2008 period, Parsvnath had paid Rs 516.53 crore to CHB as bid price towards the part consideration payable for the right to develop this project.
However, the agreement was later terminated due to dispute between the two parties.
In a filing to the BSE, Parsvnath said the sole arbitrator has passed an award on January 9 upholding the termination of development agreement on January 31, 2010.
The arbitrator has directed "CHB to repay to the company a sum of Rs 568 crore approx (after adjustment of compensation and interest payable to CHB) along with interest from January 9, 2015 till the date of payment and return the bank guarantees furnished aggregating to Rs 75 crore".

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At the same time, Parsvnath has been directed to hand over vacant possession of the project land to CHB within one month.
"The company is evaluating the award to decide the future course of action," the filing said.
Parsvnath said that disputes had arisen between the company and CHB due to various factors like "delay in handing over unencumbered land and consequent non-determination of start of development period, delay in approval of drawings etc and various other issues".
The company had invoked the arbitration clause in the development agreement.
The sole arbitrator, appointed by the Supreme Court in January 2013, and proceedings concluded on March 20, 2014.
In 2007, Parsvnath had announced an investment of Rs 2,600 crore to develop this project 'PrideAsia'. The company had to pay Rs 821 crore upfront and also share 30 per cent sales revenue with CHB.
Over 1,300 luxury flats were to be constructed in this project.

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First Published: Jan 19 2015 | 5:30 PM IST

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