Surat Diamond Bourse Faces Setback, Court Orders Rs 125 Crore Bank Guarantee in Construction Dispute

Surat : The world’s largest office building, the Surat Diamond Bourse (SDB), has been dealt another blow. The Surat Commercial Court on Monday directed the SDB management to furnish an irrevocable bank guarantee of Rs 125 crore within four weeks. This order comes in connection with a petition filed under Section 9 of the Arbitration Act by Ahmedabad-based PSP Projects Limited, the construction company behind the SDB building.

Court Restrains SDB Activities Until Guarantee Furnished

Judge Ashish Malhotra of the Surat Commercial Court delivered the final order, mandating the SDB to provide the bank guarantee within a strict four-week timeframe. The court has imposed a critical restriction: the SDB is prohibited from auctioning, transferring, or creating third-party rights on the remaining portion of the building until the bank guarantee is furnished.

PSP Projects Seeks Unpaid Dues Through Legal Channels

PSP Projects Limited, represented by Supreme Court Senior Advocate Meenakshi Arora and High Court Advocate Bhagirath Patel, approached the Commercial Court to recover outstanding dues. Advocate Patel revealed that the SDB failed to settle a 2.5% retention deposit, amounting to Rs 42 crore, following the issuance of the project completion certificate. The total outstanding dues owed to PSP Projects stand at approximately Rs 538 crore. Notably, the construction liability period for the project is set to expire within six months of 2024.

PSP Projects Chairman Emphasizes Rightful Claim and Judicial Trust

PS Patel, Chairman and Managing Director of PSP Projects, asserted the company’s commitment to its reputation and accountability to shareholders. He underlined their pursuit of legitimate dues, emphasizing their reliance on strong evidence and unwavering trust in the judicial system to deliver a fair resolution.

This latest development adds to the ongoing financial troubles surrounding the SDB. The outcome of the arbitration proceedings and the fate of the bank guarantee will be closely monitored in the coming weeks.