IHC seeks CDA reply in One Constitution Avenue lease row

ISLAMABAD: A division bench of the Islamabad High Court (IHC) on Tuesday issued notices to the Capital Development Authority (CDA) on intra-court appeals filed by apartment owners of One Constitution Avenue and the Bank of Punjab (BoP) in a case related to lease cancellation and third-party rights.

The bench, comprising Justice Muhammad Azam Khan and Justice Raja Inaam Amin Minhas, heard arguments from the appellants’ counsel, Advocate Taimur Aslam, who urged the court to restrain authorities from taking disciplinary or coercive action until a committee constituted by Prime Minister Shehbaz Sharif finalises its recommendations and the cabinet approves them.

On May 1, the prime minister formed a high-level committee to review the matter concerning One Constitution Avenue and directed authorities to refrain from taking action until further orders.

The court adjourned the hearing, observing that its decision on the stay application would be announced later.

The matter arose from an April 30 judgment by a single-member IHC bench headed by Chief Justice Mohammad Sarfraz Dogar, which dismissed a petition filed by builder M/s BNP (Private) Limited and upheld the CDA’s decision to cancel the lease of the 13.5-acre commercial-residential project over alleged multi-billion-rupee payment defaults.

The single bench had also ruled that third-party sub-lessees and purchasers would “sink or sail” with BNP, effectively tying their rights to those of the original lessee. The ruling was subsequently challenged by apartment owners and the BoP before the division bench.

According to the appeals, the BoP has a direct interest in the project as BNP had secured financing from the bank and made payments to the CDA. Court documents state that the bank had acquired approximately 25,420 square feet on sub-lease, including lower ground, upper ground and first-floor spaces, for establishing a branch at One Constitution Avenue.

However, the Registrar’s Office raised objections regarding the maintainability of the bank’s intra-court appeal.

During the proceedings, counsel for the appellants clarified that they were not challenging the court’s decision upholding the lease cancellation itself, but were contesting the observations affecting third-party rights.

The lawyer argued that the earlier judgment had expected the CDA and affected parties to reach an acceptable settlement, but alleged that the authority was now avoiding that path. He further claimed that CDA officials entered the building and broke locks even before a certified copy of the judgment had been received.

The counsel informed the court that since 2023, a residents’ committee had been managing the building’s affairs in coordination with the CDA. He said the project comprised two towers with around 240 apartments and noted that the CDA had not raised objections during construction.

He further stated that many overseas Pakistanis had invested their life savings in the project and maintained that apartment owners had no connection with BNP. Diplomats and their families were also residing in the building, he added.

The appellants requested the court to clarify that the earlier judgment did not authorise the CDA to dispossess or evict bona fide purchasers without due process. They also relied on Supreme Court orders issued in 2019 directing the CDA to formulate a fair and enforceable mechanism for settling third-party claims.

During the hearing, Justice Minhas observed that there appeared to have been a clear violation of the Supreme Court’s 2019 order and questioned the consequences of such a violation.

The counsel responded that the CDA had earlier been directed to devise a plan safeguarding third-party rights, but officials were reluctant to proceed further due to possible accountability proceedings involving NAB and FIA.

He also referred to the May 1 notification restraining coercive action pending the prime minister’s final decision on the issue.

The hearing was later adjourned, with the bench reserving its ruling on the stay application.