Parsvnath gets Rs 1200 cr from Indian railway unit; to use it to lower debt

Realty firm Parsvnath Ltd has received Rs 1,200 crore from Rail Land Development Authority (RLDA) as per a court order in a dispute related to a project in New Delhi, and said that the amount will be utilised to reduce debt.

Last month, the Supreme Court had dismissed the appeal of the RLDA challenging a Delhi High Court order directing it to pay Rs 1,034 crore to Parsvnath Ltd in a dispute over a project in the national capital.

"We have received Rs 1,200 crore from RLDA and the money is being utilised to clear debt of IL&FS and redemption of NCDs (non-convertible debentures) and OCDs (Optionally Convertible Debentures)," Parsvnath Chairman Pradeep Jain told PTI.

In 2010, Parsvnath through an auction had bought about 37 acre land located at Sarai Rohilla-Kishanganj area in the national capital from the RLDA for about Rs 1,650 crore.

Parsvnath had in 2011, formed a joint venture with Red Fort Capital to execute this project. The JV firm was named Parsvnath Rail Land Project Pvt Ltd (PRLPPL).

Later in May 2013, a development agreement was executed between the RLDA and the PRLPPL.

Parsvnath had paid over Rs 1,150 crore against the purchase of this land parcel, on which it proposed to develop luxury housing, commercial areas, railway housing, railway service building, hospital/school and other amenities in this project.

However, Parsvnath had in February 2016, terminated its development agreement with the RLDA due to a title dispute.

Then, PRLPPL went into arbitration process to settle the issue.

As per the arbitral award, the claim of Rs 1,034.53 crore made by the company and PRLPPL was upheld. Payment of this amount was directed to be made by the RLDA along with 4 per cent interest per annum from July 15, 2015 till the date of payment.

Later, a division bench of the Delhi High Court dismissed the RLDA plea, which had challenged a single judge bench order that upheld the arbitral award of Rs 1,034 crore in favour of the real estate major.

The RLDA then moved the apex court which also dismissed the appeal on July 8, this year.

"We see no reason to interfere with the impugned order of the High Court. The Special Leave Petition is, accordingly, dismissed," a bench of Justices L Nageswara Rao and Hemant Gupta had said last month.