"We don't have a slot and I am denying it," Venkat Reddy, Vice President (Operations) Deccan Chargers, said.
IPL commissioner Lalit Modi said DC just doesn't have any money left with them to rope in a new player.
"Currently, only Rajasthan Royals can have a slot. Deccan Chargers don't have any money. Only way to bring a new player is through injury replacement. But for that, the IPL governing has to be convinced that the injured player won't come back for even a single match," Modi said.
Earlier, sources close to Razzaq said the veteran all-rounder and Chargers had reached an agreement.
"The contract has been finalised and it should be announced soon," one source said.More in IPL
Flamboyant all-rounder Shahid Afridi had appeared for the Chargers in the first IPL season in 2008.
After being snubbed at the the auction, Pakistani cricketers had alleged that they were deliberately humiliated by the IPL franchises, a charge that later snowballed into a political controversy.
Pakistan's minister Ejaz Jakhrani even called on the Indian government to hold an inquiry into the IPL's conduct in the matter.
Indian sports minister MS Gill on Wednesday said the IPL had faulted and he would like to see Pakistani players in action in the coming season.
When contacted Razzaq refused to confirm the story but said he has got an offer to play in the IPL this year.
"At the moment I don't want to say anything but yes the Kolkata Knight Riders had given me a contract offer through which I got a visa and then they backed out insisting I would have to appear in the players auction list," Razzaq said.Sania calls off engagement, cites incompatibility
IPL commissioner Lalit Modi said after the players auction fiasco that franchises could play Pakistanis as substitutes in the coming season if they replaced a foreign signing.