SC sends payment schedule decision in cabinet’s court

CDA defends its decision to cancel the lease of the tower

ISLAMABAD: After the builders of the multi-storey structure being constructed on One Constitution Avenue offered to pay Rs18 billion in dues on the building over a period of 20 years, the Supreme Court on Thursday decided to refer the matter to the federal government to take a decision.

Should the cabinet fail to decide the matter, the court said that it will do so.

This was stated as a three-member bench of the Supreme Court, led by Chief Justice of Pakistan Mian Saqib Nisar, heard an appeal filed by the builders of the structure. The company, BNP Pvt Ltd, had appealed against a verdict of the Islamabad High Court (IHC) which upheld the Capital Development Authority’s (CDA) decision to cancel the lease of the building for violating lease rules.



During Thursday’s hearing, CJP Nisar noted that the builders have presented a payment schedule spread over two decades, with payments to be completed in 2038.

We cannot sanction such a long time frame, clear all dues within three years, the CJP remarked.

Ali Zafar, the counsel for the builders, contended that per their existing agreement with the CDA, all dues were to be cleared by 2027. But on the SC’s directives, we can clear dues worth Rs18 billion by then.

A lawyer representing the CDA argued that they cannot decide such a matter on their own, rather, the agreement will have to be placed before the federal cabinet.

The CJP remarked that the tower’s builders have so far paid the CDA only Rs1.23 billion of the Rs4.8 billion cost of the plot. Despite that, they have already sold sections of the tower worth Rs8 – Rs10 billion.

He added that the money paid by the tower’s owners thus far came after extending immense concessions.

Work seems to have started on state land for free, remarked CJP Nisar and enthused whether this money and the money spent building the tower are returned to the building’s owners and CDA takes control of the building, completes it and auctions it anew.

Justice Ijazul Ahsan remarked that the tower’s owners have to cumulatively pay around Rs19.9 billion. Justice Faisal Arab pointed out that billions were collected during the booking phase of the project.

Zafar reiterated that the court grants them time to pay the dues and to submit a new schedule.

The top court directed that the CDA and the federal cabinet to review the payment schedule and adjourned the case until December 28.

CDA defends IHC judgement

Earlier, the CDA filed a written defence of its stance to cancel the lease of the tower and of the IHC upholding their decision.

The CDA stated that “the real market value of any plot could only be determined by market forces through open auction provided that the land use, purpose and planning parameters along with floor area ratio (FAR) are clearly defined in the auction brochure.”

The civic body added that this was not the case when the plot, located adjacent to the Jinnah Convention Centre, was first auctioned.

“Prior to auction the terms were left vague (‘flexible’), whereas post-bid these parameters were changed and massive relaxations were extended to the appellant and BNP to the detriment of CDA causing huge financial loss,” it said.

It further noted that CDA generally gives a lease for 33-years. This may be extended, subject to the policy of CDA in vogue, with the payment of renewal charges.

However, in the case of the tower, a lease for a period of 99-years was executed through an unregistered instrument.

“Possession was handed over on meagre 15 per cent payment. The payment plan was subsequently modified rescheduled and was extended to 21 years instead of the original period of 15 years,” the civic body noted.

Further, the plot had been auctioned to build a five-star hotel. However, the building plan passed was more or less for a ‘mixed-use commercial’ structure.



“This was done in sheer violation of the planning parameters and bye-laws earlier approved by the CDA Board on October 11, 1997,” it said, adding that no approval from the federal government was ever obtained in this regard.

It further said that the structure was to only allow shops “incidental to a hotel” and this was communicated to all bidders. However, when the building plan came for approval in 2008, a commercial space measuring approximately 29,8000  square foot (podium-commercial) was extended to BNP.

It explained that the lease was for the construction of a hotel with amenities such as serviced apartments, restaurants, and a business centre. But the owners instead built residential apartments which cannot be built in Zone-III of the Islamabad Capital Territory.

Published in The Express Tribune, December 14^th, 2018.