Development of E-11: Supreme Court slams ‘sham deal’

Declares Rs1.8 billion joint venture agreement between CDA and private housing society inoperative and ineffective.

ISLAMABAD:

Declaring a multi-billion-rupee venture inoperative and ineffective, the Supreme Court on Friday directed the capital city’s managers to take back possession of a 54-acre land at the northern strip of Sector E-11 from a private housing society.

The apex court announced its judgment in a suo motu case regarding joint venture agreement (JVA) between the Capital Development Authority (CDA) and the Multi-Professional Cooperative Housing Society (MPCHS) for development of land in E-11. The court observed that CDA’s Enforcement Directorate has the responsibility and powers to evict encroachers with the assistance of local police. CDA rules forbid the civic body from delegating its powers to others, the court observed.

The apex court, however, allowed the housing society to pursue the recovery of costs incurred on the project from negligent officials of the civic agency, who are responsible for this foul play. Last month, a two-member bench of the apex court comprising Chief Justice Iftikhar Muhammad Chaudhry and Justice Ghulam Rabbani, reserved the judgement of the opaque deal.

According to the joint venture agreement that was signed during the tenure of former CDA chairman Kamran Lashari, the housing society was to clear the land from adverse possessors and develop it. It was to retain 43 per cent of the land while the remaining 57 per cent of developed land was to be handed over to CDA. However, the deal was widely criticised in the media, following which the CJP took suo motu notice of the matter.

The apex court in its verdict states, “Thus, looked at from any angle, the transaction appears to be a sham deal. The whole exercise appears to be eyewash. This also negates the claim of huge investment made by the MPCHS in this project.”

The court also questioned the civic agency’s role and said, “In the concise statement, the CDA functionaries have not provided exact khasra numbers of the 54 acres land in question and have also not provided names of the occupants at the time of acquisition of the land in the years 1968-69 and have also not provided the names of the occupants of the land at the time of entering into the JVA.”

The apex court  observed that “Illegal occupants cannot be allowed to take advantage of their illegal acts and wrongful gains. Instead of allowing the law to take its course, the approach and the conduct of the CDA appear to be aimed at encouraging illegal encroachments upon the state lands. In the[se] circumstances, the act of payment to illegal occupants was not warranted by law. The much-trumpeted card is not available to the CDA functionaries and no support at all could be drawn from it.”

The court declared the JVA inoperative and ineffective.

The SC bench directed the CDA Board to take over the project and complete the same. The apex court directed the CDA chairman to ensure implementation of the direction and submit compliance report within a month from the date of the judgment.

Zulfiqar Maluka, the housing society’s counsel, had earlier defended the agreement and contended that three CDA chairmen could not find anything wrong with it. “The society had invested Rs1.8 billion in the venture,” he added.

In its order, the chief justice Chaudhry observed that MPCHS will, however, be at liberty to pursue the recovery of any amount spent on the project, in accordance with law.

Akram Sheikh, who appeared as amicus curiae, contended that the agreement was ultra vires of the CDA Ordinance and its rules and regulations. He argued that there was no provision in the ordinance authorising a private party to undertake a sector’s development. Terming it a bigger scam, he said trillions of rupees were involved.

Published in The Express Tribune, April 16^th, 2011.