IHC seeks CDA reply on appeals by One Constitution Avenue apartment sub-lessees

ISLAMABAD: The Islamabad High Court on Monday issued notices to the Capital Development Authority on intra-court appeals filed by 20 apartment sub-lessees of the One Constitution Avenue project, who have sought protection of their possession rights after the project’s lease was cancelled.

A division bench comprising Justice Muhammad Azam Khan and Justice Raja Inaam Ameen Minhas asked the CDA to submit its response by Wednesday while hearing the appeals filed by apartment owners, including former Pakistan Cricket Board chairman Ehsan Mani and former air chief Mujahid Anwar Khan.

During the hearing, counsel for the appellants argued that paragraph 30 of a recent single-bench judgement had adversely affected the rights of apartment owners, despite the fact that their possession and occupation of the apartments had been acknowledged.

The court was told that residential towers B and C had been built in line with the approved layout plan. Counsel further said that after the lease was cancelled in 2023, the CDA appointed its director of estates as administrator of the project. A residents’ management committee was also formed under the authority’s supervision to handle the day-to-day affairs of the residential towers, and the appellants had been living there lawfully under that arrangement, the court was informed.

The petitioners asked the court to declare their sub-lease rights lawful and enforceable, prevent the CDA from disturbing their peaceful possession, and strike down paragraph 30 of the single-bench verdict.

During the proceedings, Justice Azam Khan said notices were being issued to the CDA and directed the authority to appear before the court on Wednesday. Addressing counsel, the judge said:

“You also come prepared,”

Advocate Ali Raza, appearing for the apartment owners, requested interim protection for the residents. He told the bench that a committee constituted by the prime minister was also examining the matter.

Arguing for the residents, he said:

“The apartment owners have paid the money. Around 200 people living there have paid for these apartments and have rights,”

He also expressed concern that, without a protective order, residents could again face attempts to evict them after Eid.

At one stage, Justice Raja Inaam remarked:

“You want to spend Eid there,”

In response, counsel said the residents were only seeking protection for their homes and investments.

Background to the dispute

Earlier this month, IHC Chief Justice Sardar Muhammad Sarfraz Dogar issued a detailed judgement upholding the CDA’s cancellation of the lease of One Constitution Avenue. The court ruled that apartment buyers did not obtain independent ownership rights because the developer did not hold a valid lease.

The judgement dismissed petitions filed by M/s BNP (Pvt) Limited, the project developer, along with investors and other stakeholders who had challenged the CDA’s termination of the lease.

The dispute stems from a 2005 lease agreement between the CDA and BNP for the development of a five-star hotel project. The project was later turned into the luxury residential and commercial complex known as One Constitution Avenue in a prime area of Islamabad.

The lease was first terminated in 2016, but the Supreme Court restored it in 2019 subject to strict financial conditions, including payment of Rs17.5 billion in instalments backed by bank guarantees. However, the Islamabad High Court held that BNP had failed to meet the financial obligations set under the apex court’s framework, including timely payment of instalments and provision of acceptable bank guarantees.

The court ruled that the CDA had acted in accordance with the law and the Supreme Court’s directions when it terminated the lease after giving sufficient notices and an opportunity to remedy the default.

Rejecting the apartment buyers’ claims against the CDA, the single bench had observed that any rights claimed by purchasers depended on the validity of the developer’s lease and that they could pursue legal remedies against the builder to recover their investment.

On May 1, the Islamabad High Court upheld the CDA’s decision to cancel the lease of One Constitution Avenue over what was described as a multi-billion-rupee default. On the same day, residents began vacating their apartments voluntarily amid a heavy police presence. Residents were seen moving their belongings in mini trucks while the building remained under the control of the local administration and police, with police personnel also seen inside the towers.