Hello Dilip,
Is it only the description field that causes this error? Is that the out-of-the-box description field? Can you modify other custom fields for that project and others?
There was a similar problem with the ootb description field in old versions of the Project server API that caused similar issues, however as long as you have a recently patched server (or project online) then that issue should not be the cause.
If it is a custom field and the issue only effects one project, then try editing the project normally, do you see any errors. For example if workflow is configured and fields are required in the current stage then it will be the same as having the field mandatory.
Regards,
Martin