Cogen plant ‘compromise’ lands in court

A private bank went to court challenging the compromise over plant operation.

KARACHI:

The Sindh High Court has asked the management of DHA Cogen Plant Limited and the Pakistan Defence Officers Housing Authority to explain a compromise between them.

United Bank Limited went to court challenging the compromise between the two authorities over the operation of the water and electricity generation plant. The bank asked the court to prevent the two from finalising any compromise without consulting the bank first.

Earlier, the DHA Cogen Plant Limited has instituted a lawsuit alleging the Pakistan Defence Officers Housing Authority of breaching the agreement to establish the plant.

Under the agreement, the housing authority had leased 10 acres in DHA Phase-III for 30 years to the plant. The DHA sponsored the project so its resident could get water and electricity.



The plant management claimed, however, that DHA breached the agreement and wanted to evict it from the land. Disposing of the case on April 11, 2011, the high court had directed the housing authority not to dispossess or evict the management.

Rather the authority was told to come up with ways to revive the plant within six weeks.

As the parties are negotiating a compromise, the bank management moved the court, requesting to include it as intervener in the case.

In its application, the bank’s lawyer said his client had already filed suit for the recovery of Rs 2,052,672,157 from the plant’s management and the housing authority. Many other banks had also filed suits in courts to recover the money they had lent for the project.



“The housing authority may influence the plant’s management in the compromise that will adversely affect the bank,” the lawyer argued.

During the hearing, the lawyers for the plant and the DHA said that they were going for a compromise. The bank’s lawyer was, however, not present in court.

Justice Nisar Muhammad Shaikh has adjourned the hearing and directed the lawyers to file their written comments on the bank’s application.

Published in The Express Tribune, November 25^th, 2012.