NEW DELHI: Realty firm Parsvnath Developers today said it has received Rs 572 crore from the Chandigarh Housing Board after both parties agreed to accept arbitration award in a dispute over development of a real estate project.
Last month, a sole arbitrator had directed the Chandigarh Housing Board (CHB) to repay the amount to Parsvnath, while the realty firm was asked to surrender 124 acres land.
In a filing to the BSE, Parsvnath Developers said that the "company and Chandigarh Housing Board both have mutually agreed to accept the Award and accordingly the company has received a sum of approximately Rs 572 crore towards the Award from Chandigarh Housing Board, upon surrendering of the project land by the company to Chandigarh Housing Board."
The CHB has also released the Rs 75 crore bank guarantees furnished by Parsvnath, the filing added.
However, Parsvnath noted that "due to a computational error in the Award, the awarded amount is deficient by about Rs 146 crore. Consequently, the company has already made an application to the sole arbitrator for correction of computational error".
The company would be entitled to receive a further amount of about Rs 146 crore from the CHB.
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. Parsvnath had invoked the arbitration clause in the development agreement.
The arbitrator has passed an award on January 9 this year upholding the termination of development agreement on January 31, 2010.
The arbitrator had directed "CHB to repay to the company a sum of Rs 568 crore approximately (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".
Parsvnath had 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".
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 flats were to be constructed in this project.