Case over Imran Khan’s former luxury flat back in court

ISLAMABAD: The Islamabad High Court (IHC) on Tuesday took up appeals linked to the long-running dispute over One Constitution Avenue, including the case of an apartment that was once owned by former prime minister Imran Khan.

A division bench comprising Justice Mohammad Azam Khan and Justice Raja Inaam Ameen Minhas heard intra-court appeals filed by residents of the luxury residential and commercial project and directed the Capital Development Authority (CDA) not to take any coercive action against occupants until the next hearing. The matter returned to court after a single bench last month upheld the CDA’s cancellation of the project’s lease and ruled that third-party purchasers would "sink or sail" with the original lessee.

The flat formerly owned by Imran Khan was later sold to Shahid Naseer through the project builder, M/s BNP’s Farooq Ahmed Sheikh. Naseer entered into a serviced apartment booking agreement with BNP in July 2022 for a two-bedroom unit on the 11th floor of Tower C for Rs93.575 million. The agreement says he has so far paid Rs45.5 million, or nearly 48 per cent of the total amount, through wire transfer.

Project background

The dispute stems from a 2005 lease agreement between the CDA and BNP (Private) Limited for a five-star hotel scheme that was later turned into One Constitution Avenue. The lease was first terminated in 2016, then restored by the Supreme Court in 2019 subject to strict conditions, including payment of Rs17.5 billion in instalments backed by bank guarantees. It was cancelled again after BNP allegedly defaulted.

The apartment purchased by Naseer was described in the agreement as measuring around 1,970 square feet. Possession was to be given by Aug 31, 2022, though BNP retained the option to extend the deadline until Feb 28, 2023. That deadline has also passed. No completion certificate for the project has ever been issued by the CDA.

Terms faced by buyers

The agreement placed much of the risk on the purchaser. Under Clause 4, the risk of loss or damage shifts to the buyer on the completion date irrespective of whether physical possession has been taken. Clause 13 allows BNP to forfeit up to 25 per cent of the total consideration if the buyer defaults. Clause 12, dealing with default by BNP as sub-lessor, provides that the buyer’s only remedy is to terminate the agreement after Dec 31, 2023 and seek a refund of payments, after deducting any sums already paid to the buyer as a six per cent annual surcharge.

The single bench ruling had caused alarm among residents, with officials breaking down doors while serving eviction notices.

Allottees and court record

Court records show that 240 flats in the project were allotted to members of the country’s elite. The list included a former acting president who served two non-consecutive terms, a former Senate chairman, a former prime minister, a former chief of air staff, a former naval chief, two former chief justices of Pakistan, a former chief justice of the Lahore High Court, and a former defence minister.

The court record has also brought out additional details, including a 2012 interim arbitration award issued by current Defence Minister Khawaja Mohammad Asif, who was then a private citizen, along with a former chamber president, to settle disputes between the project’s two main partners.