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Prideasia Project: CHB rejects ‘unjustified’ additional claim of Rs 146 crore by Parsvnath

Company says points raised by board are ‘baseless’, there’s indeed an error in award.

By: Vivek Gupta

The Chandigarh Housing Board has rejected the additional claim of Rs 146 crore, made by New Delhi-based private realtor Parsvnath Developers Limited, saying that both parties had accepted the arbitrator’s award after properly examining it.

In an eight-page note to the arbitrator, the board has said that any additional claim at this stage was unreasonable and unjustified.

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On the other hand, Parsvnath has said that the board’s stand lacked substance. The company was rightful claimant of an additional liability of Rs 146 crore since there was a computation error in awarding the interest compensation to the company in the arbitration judgment delivered on January 9.

The matter pertains to the dispute over the housing project, Prideasia in IT park, which was settled on February 4 when Parsvnath surrendered 123 acre land after receiving approximately Rs 572 crore from the CHB on the basis of the arbitration judgment of Justice (retired) R V Raveendran.

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However, two days after the settlement, Parsvnath moved an application before the arbitrator, claiming that there had been a computational error in the award, following which the arbitrator issued notice to the CHB to seek its response.

Replying to the arbitrator, the CHB declined the company’s claim and submitted details of date-wise proceedings in the case to show how both parties had met several times in the months of January and February and mutually agreed to accept the arbitrator’s award.

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It further stated that the finance team of both sides duly checked the award before making the final settlement, so there was no reason on the part of the company to raise any liability after the matter was over. It sought from the arbitrator a special hearing in Chandigarh before any final decision.

Company head Pardeep Jain told Newsline that nowhere had the board disputed the factum of such computation error as raised by the company. “All points raised by the CHB are baseless and there is indeed an error in award announced in judgment which both the parties are bound to accept,” he said.

Sources said that it was the second reply filed by the housing board to the arbitrator. On February 18, the CHB had written to the arbitrator that the administration required three more weeks to file its reply since recently joined incumbents in the board required more time to prepare a reply against Parsvnath’s fresh claim.

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This was strongly opposed by the company which pleaded with the arbitrator that the CHB could not be granted more time since it was trying to delay the matter. Following this, the CHB on Thursday evening filed its reply.

WAY AHEAD

Sources said that since both sides had clarified their stand, the arbitrator would now take a final call on the matter. Parsvnath, sources said, has been trying its level best to convince the arbitrator that there was a computation error in the judgment and hence, it was rightly seeking fresh claims under Section 33 (1A) of the Arbitration and Concilliation Act, 1996. Pardeep Jain said this was not the first time that such a problem had been detected in an arbitration judgment and that was the reason there was a provision of review in the Arbitration Act even after the final settlement.

First published on: 21-02-2015 at 05:03:04 am
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