ISLAMABAD: The Supreme Court has restored the lease of a plot meant for a luxury hotel that was cancelled after the lessee built and sold residential apartments.

The Capital Development Authority (CDA) had cancelled the lease of the 13.5 acre plot to M/s BNP in July 2016 due to a number of violations and irregularities.

The SC on Wednesday set aside an Islamabad High Court (IHC) order in this matter and restored the lease, directing the private firm to pay the CDA Rs17.5 billion over eight years.

Buyers of apartments built on land for luxury hotel include the prime minister

The IHC had upheld the cancellation of the lease and directed the Federal Investigation Agency (FIA) to proceed against the officials responsible for leasing the land and relaxing rules and extending favours to the company in post-bid changes.

The company had challenged the high court’s decision in the SC, before a bench led by Chief Justice Mian Saqib Nisar.

The CDA’s counsel had objected to one of the three members of the bench, pointing out that Justice Ijazul Ahsan had acted as counsel for the company.

The objection was overruled by the chief justice, who said it did not matter if Justice Ahsan was ever counsel for the private firm, and that the case was altogether different.

He also snubbed the CDA for ‘sleeping’ for more than a decade after leasing the land and waking up after people invested millions in the project.

“Why was the lease revoked unilaterally and without keeping in mind the buyers’ rights,” the bench asked.

The buyers of these apartments included Prime Minister Imran Khan, former chief justice of Pakistan Nasirul Mulk, Pakistan Cricket Board Chairman Ehsan Mani, Khawaja Mohammad Asif and Federal Ombudsperson for Protection of Women Against Sexual Harassment at the Workplace Kashmala Tariq.

The CDA leased the land to M/s BNP in 2005 to build a luxury hotel by Jinnah Convention Centre. The lessee instead built 240 luxury apartments.

In an earlier proposal submitted to the SC seeking the regularisation of the plot, M/s BNP had agreed to pay the CDA Rs15bn if it was allowed to use the land in question for commercial ventures and on the assurance that the company would be cleared in inquiries pending with the National Accountability Bureau and the Federal Investigation Agency.

According to the last auction, the cost of the aforementioned land if auctioned for commercial purposes and not for a hotel would be more than Rs58bn.

In its reply, the authority had maintained that the CDA was “empowered to cancel the lease and the appellants were provided opportunity of hearing before doing so. The action taken is within the parameters of law”.

The CDA added: “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 are clearly defined in the auction brochure which wasn’t the case at the time of disposal of the subject plot.”

Generally, the reply said, the CDA leases land for a 33-year period that can be extended subject to CDA policy in vogue with the payment of renewal charges. In this case, a 99-year lease was executed through an unregistered instrument, and possession was handed over on 15pc payment.

The plot was auctioned for the construction of a luxury hotel, but the building plan approved was more or less mixed-use commercial.

This violated the planning parameters and by-laws approved by the CDA board on Oct 11, 1997.

In the course of the arguments, the petitioner’s counsel adopted before the court that the auction of the plot was conducted in an open and transparent manner and there had been no objections from any quarters to date about corruption in the bidding process.

He defended the construction of served apartments on the land, saying the IHC has misconceived the concept and upheld the cancellation of the lease.

Published in Dawn, January 10th, 2019