Surat Diamond Bourse Hit With Court Order To Furnish ₹125 Crore Bank Guarantee In Construction Dispute

Surat Diamond Bourse Hit With Court Order To Furnish ₹125 Crore Bank Guarantee In Construction Dispute

The Commercial Court in Surat directed the SDB management to furnish an irrevocable bank guarantee of Rs 125 crore within a period of four weeks.

Melvyn ThomasUpdated: Monday, March 11, 2024, 10:01 PM IST
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Surat Diamond Bourse | FPJ

Surat: The world's largest office building, the Surat Diamond Bourse (SDB), has been dealt another blow in an ongoing legal dispute with its construction company, Ahmedabad-based PSP Projects Limited. On Monday, the Commercial Court in Surat directed the SDB management to furnish an irrevocable bank guarantee of Rs 125 crore within a period of four weeks.

This order comes in response to a petition filed by PSP Projects under Section 9 of the Arbitration Act. The petition alleges non-payment of dues by the SDB for the construction of the massive complex in Khajod, Surat.

Judge Ashish Malhotra of the Surat Commercial Court issued the final order, mandating the bank guarantee and restraining the SDB from auctioning, transferring, or creating third-party rights on the remaining portion of the building until the guarantee is furnished.

PSP Projects, represented by Supreme Court Senior Advocate Meenakshi Arora and High Court Advocate Bhagirath Patel, claims the SDB has not remitted a 2.5% retention deposit of Rs 42 crore after issuing the project completion certificate. The total outstanding dues owed to PSP Projects stand at approximately Rs 538 crore, with the construction liability period set to expire within the next six months.

Speaking on behalf of PSP Projects, Chairman and Managing Director (CMD) PS Patel asserted the company's commitment to its reputation and accountability to shareholders. He emphasized their pursuit of rightful dues based on evidence presented and their unwavering trust in the judicial system.

This latest development adds to the SDB's woes. The world's largest diamond trading center has faced criticism for its occupancy rate and financial struggles. The ongoing dispute with PSP Projects casts a further shadow on the prestigious project and its management.

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