HC extends deadline for Admn’s response

In what comes as a sigh of relief for the Chandigarh Administration,the Punjab and Haryana High Court on Thursday allowed its plea seeking a deadline extension to submit its response filed before the Arbitration Tribunal...

Written by RAGHAV OHRI | Chandigarh | Published:August 20, 2010 2:01 am

In what comes as a sigh of relief for the Chandigarh Administration,the Punjab and Haryana High Court on Thursday allowed its plea seeking a deadline extension to submit its response filed before the Arbitration Tribunal in the ongoing dispute between realtor Parsvnath and the Administration for the Filmcity project. As against the deadline of July 12,set by the High Court,the Administration had filed its reply on August 10.

The Tribunal on August 11 had refused to accept the response as it had failed to meet the deadline. The Tribunal had asked the Administration to approach the High Court for extension of time which was finally allowed today by Chief Justice.

Moreover,Chief Justice Mukul Mudgal has made it clear that in future the Tribunal comprising three retired High Court judges will be empowered to extend deadlines set earlier by the High Court. Arguing on behalf of Chandigarh Administration,Advocate A R Takkar requested the court to permit the Administration to extend the deadline set by the chief justice for filing of response in the ongoing case before the Tribunal.

Takkar contended that the realtor had filed a voluminuous claim of Rs 52 crore owing to which the Administration took a little extra time for preparing its response. The reply filed by Administration before the Tribunal reads: “Perusal of terms and conditions as settled by both the parties would without any doubt bring out the fact that fulfilling the conditions precedent was a mandatory pre requisite for the realtor to be entitled to have any right whatsoever under this agreement.

The leasehold right of the developer was to be deemed to have begun only on fulfilling the conditions precedent and till then the developer at the most was deemed to be acting as a trustee and custodian of the leasehold land for and on behalf of the Chandigarh Administration. It is a matter of record and an admitted position that despite all efforts on the part of Administration,the developer failed to deposit and provide the bank guarantee which was a condition precedent and violation of this left no option with the Administration except to terminate the agreement.”

With High Court extending the time to submit response,the ongoing arbitration will continue. It is pertinent to mention that unlike before,the Tribunal will be at a liberty to set deadlines for proceedings of the arbitration. With an endeavour to find a solution for the tussle between the company and Administration,Chief Justice Mukul Mudgal had appointed Justice M R Agnihotri (Retd) as the second arbitrator. Justice D P Wadhwa (retd) was the arbitrator already appointed by Parsvnath. Both are retired High Court Judges.

The Chief Justice had made it clear that the two arbitrators will jointly appoint the third arbitrator within six weeks. Also,to ensure that no delay is caused,Justice Mudgal had directed that after the three arbitrators are appointed and after the two parties appear before the arbitrators on August 23,the arbitration award will be decided within a period of six months.

BACKGROUND

Filmcity was to come up in an area of about 30 acres in village Sarangpur. The project worth Rs 191 crore was allotted to Parsvnath,but was later scrapped. While Parsvnath had written to the UT Administration,intending to opt out of the project and had demanded Rs 47.75 crore back,the Administration had terminated the contract and forfeited the entire amount. Suspecting foul play in the dealings,negotiations,allotments and change of rules and provisions to get a Filmcity to Chandigarh,UT Advisor Pardip Mehra had recommended a CBI probe in the entire project. The company had moved the High Court demanding refund of the money spent by it on the project which was “denied” by the Administration.

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