SC declares Royal Palm lease 'null and void'

Records, management of club be handed over to Pakistan Railways within seven days: SC

ISLAMABAD: The Supreme Court on Friday declared null and void the lease of railway-owned land used for developing the Royal Palm Golf and Country Club in Lahore.

The apex court, which had reserved its verdict on the matter in April this year, ordered the "handing over of all records and transfer management of the club within seven days" to Pakistan Railways (PR) and ruled that "PR shall be responsible for running the club."

The constitutional petition was filed in 2011 by former minister of state for railways and now Pakistan Tehreek-e-Insaf leader, Ishaq Khan Khakwani, and Dr Mobashir Hassan, a founding member of the Pakistan Peoples Party.

1/3 After 8.5 yrs of relentless effort and SC appearances, the SC has ordered cancellation of the Rly Golf Club lease, retrieving 141 acres of prime land in the heart of Lahore City given away for p-nuts

— Ishaq Khan Khakwani (@khakwan) June 28, 2019

2/3 SC holds contract illegal and orders NAB to finalise reference against the guilty officials.43-pg judgement highlights the illegality in award of the contract in 2000-01 to a single bidder in violation of rules. Present activity at the club will continue without any hindrance

— Ishaq Khan Khakwani (@khakwan) June 28, 2019

3/3 Rly’s outstanding dues in millions to be recovered from the contractor. The judgement will go a long way to stop any similar misadventure in the future

— Ishaq Khan Khakwani (@khakwan) June 28, 2019

"The Agreement with the Maxcorp consortium/MHPL is non est, null and void ab initio and of no legal effect. Possession of the land given to the lessee under the Agreement is to be handed over to Pakistan Railways (PR) forthwith along with all the assets and infrastructure thereupon," read the 42-page verdict authored by Justice Ijazul Ahsan.

It further states, "AF Ferguson shall complete handing over of all records and transfer management of the club within seven days hereof. Henceforth, PR shall be responsible for running the club. PR shall nominate its officer(s) or a team of independent professionals, if it deems appropriate to take over and run the club."

"AF Ferguson & Co was appointed as the receiver of the club vide order of this court dated December 27, 2018. AF Ferguson having been appointed by this Court with a specific mandate shall stand indemnified and held harmless against any claim, law suit or any other proceedings before any court, authority, tribunal or functionary that may be contemplated or initiated by any of the parties for any act or omission on its part in the course of performance of its function."

NAB files reference against officers involved in illegal land leasing

However it added "Notwithstanding anything stated herein above, any
dispute, claim or complaint by any of the parties against the receiver shall only be filed before this court. In that event, the matter shall be decided in accordance with law."

The court directed Pakistan's auditor general to conduct a detailed forensic audit of the club to determine the scope and extent of work undertaken as part of the agreement, and to also determine if any amount is unpaid between PR and Maxcorp consortium/MHPL.

Today the SC declared void the lease granted by the Musharraf govt for the Royal Palm Club in Lahore. 17 years of illegality & misuse of Railway property ended. I am happy to have pleaded the matter for Pakistan Railways as it's counsel.

— salman akram raja (@salmanAraja) June 28, 2019

"We are in no manner of doubt that the entire process was tainted with mala fide and nepotism and no feasible resolution of the disputes between the parties is possible in the foreseeable future. In order to prevent future loss, this court passed an order dated 27.12.2018 (reproduced earlier in this opinion) as a stop gap arrangement which is continuing but needs to be replaced by a more permanent arrangement," the order further read.

The apex court also held that accountability court proceedings on the National Accountability Bureau's (NAB) reference No. 9/2018 shall continue in accordance with the law.

The court directed NAB to submit monthly progress reports for the perusal of an implementation bench, comprising Justice Faisal Arab and Justice Ahsan.

"It is, however, made clear that the accountability court shall decide the matter(s) before it independently, transparently and strictly in accordance with law on the basis of the evidence before it," read the judgment.

"For the purpose of implementation of this judgment and its  continuous compliance, subject to approval of the HCJ we hereby constitute an Implementation Bench which shall comprise of  Justice Faisal Arab and Justice Ahsan, which shall meet as and when the need arises."

The verdict specified that in case both judges were not present at the principal seat of the court, the chief justice of Pakistan would be empowered to nominate another bench, provided that at least one of the original members is part of it.

Case background

In April 2018, NAB Rawalpindi filed a reference against army officers and officials involved in awarding the illegal lease.

One of the prime accused was Lt Gen (retd) Javed Ashraf Qazi, a former head of the Inter-Services Intelligence and the then senator.

Ohter accused were Lt Gen (retd) Saeed-uz-Zaman, Major General (retd) Hamid Hassan Butt, Brig (retd) Akhtar Ali Baig, Iqbal Samad Khan, Khurshid Ahmed Khan, Abdul Ghaffar, Ramzan Sheikh and Pervaiz Qureshi.

Around 17 years ago, during former military ruler General (retd) Pervez Musharraf's era, Pakistan Railways offered the lease of its golf club at Canal Bank, Lahore, for 33 years for which a number of firms submitted bids, including Maxcorp.

During the bidding process, the lease period was illegally extended from 33 years to 49 years. Moreover, the land offered also increased illegally from 103 acres to 140 acres by demolishing the Railway Officers Colony.

NAB argued that the "precious piece of Pakistan Railway land" was leased out illegally in order to grant illegal benefits to the leaseholder.

According to NAB, the accused caused a loss of approximately Rs2.2 billion to the national exchequer.