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Film city project: UT Administration approaches High Court against payment of Rs 96 cr to Parsvnath Ltd

Taking up the petition, Justice Amit Rawal issued notice of motion to Parsvnath for filing its reply by September 28.

By: Express News Service | Chandigarh | Published: September 4, 2015 4:31:37 am

The Chandigarh Administration approached the Punjab and Haryana High Court on Thursday challenging orders of the Arbitration Tribunal and the Chandigarh district court wherein it was directed to pay Rs 96 crore (earnest money along with interest) to Delhi-based private developer Parsvnath Ltd in the controversial multimedia-and-film city project for termination of their contract.

Taking up the petition, Justice Amit Rawal issued notice of motion to Parsvnath for filing its reply by September 28. The Chandigarh Administration has challenged the Arbitration Tribunal’s orders, dated March 10, 2012, and the Chandigarh district court’s judgment dated April 8, 2015.

The Rs 191-crore project, which was to come up in an area of 30 acres at Sarangpur village, was allotted to Parsvnath in 2007 but in December 2009, the administration terminated the contract and forfeited the Rs 47.75-crore bid amount paid by the company. Thereafter, Parsvnath invoked the arbitration clause which led to the constitution of a three-member tribunal. The tribunal, in 2012, held termination of contract by the Chandigarh Administration to be invalid and directed the administration to pay Rs 49.18 crore to Parsvnath along with 12 per cent per annum interest with effect from January 2007.

Following this, the Chandigarh Administration went to the district court in appeal. However, the court upheld the Arbitration Tribunal’s decision and dismissed the objections filed by the administration on April 8.

Now the Chandigarh Administration has moved the high court against both these decisions and has made a prayer to uphold its decision to terminate the contract with Parsvnath. Appearing for the Chandigarh Administration, advocate Shekhar Verma submitted that it had been proved on record that Parsvnath was unable to discharge its obligations under the contract and despite written assurances, the builder failed to develop the project.

The court was informed that the Arbitration Tribunal as well as the Chandigarh district court erred in law while recording that the Chandigarh Administration delayed in discharge of its obligation to provide demarcation plan.

It was submitted that at the time of execution of the contract, the parties had consciously agreed to the quantum of compensation for the delayed period and in this regard, Parsvnath was given concession and its obligation to pay consideration amount was suspended till availability of demarcation plan.

After the UT Administration accepted Parsvnath’s request, an agreement was executed on March 2, 2007. The demarcation plan was handed over to the Parsvnath on July 17, 2008, but not even once during this intervening period, the Parsvnath indicated any inconvenience on account of change of circumstances and rather after obtaining the demarcation plan, it applied for environmental clearance on September 5, 2008, reads the petition.

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