Resolution:
SWIFT Standards 2006 has dropped support for 70D_partynarrative tag under the C1_SettlementParties subsequence in the MT502 message. The schema generated by the SWIFT sender also doesn't contain this 70D_PartyNarrative under C1_SettlementParties subsequence.

SWIFT standards 2005 had support for the 70D_partynarrative tag under the C1_SettlementParties subsequence.

So, care should be taken such that the message being used and the schema generated in the designer are compliant to same SWIFT specification