ISLAMABAD: The Islamabad High Court (IHC) is examining a multi-billion rupee land dispute between the Capital Development Authority (CDA) and a private firm, focusing on the firm’s alleged default of Rs17 billion.

The private firm M/s BNP Private Limited has defaulted on a payment of Rs17 billion to the Capital Development Authority (CDA) for a 13.5-acre plot adjacent to the Jinnah Convention Center. This plot was originally allotted for the construction of a five-star hotel, Grand Hyatt.

The firm on the other hand constructed luxury flats “One Constitution Avenue” and sold out to different buyers including prominent politicians like former prime minister Imran Khan, Defence Minister Khawaja Asif and former ombudsperson for protection against harassment of Women at the Workplaces,Kashmala Tariq.

One Constitution Avenue has been mired in controversy since its inception. The 13.5-acre plot was auctioned in 2005 for Rs4.8 billion, and handed over to BNP (Pvt) Ltd after an initial payment of only Rs800 million.

Firm defaulted on payment of Rs17bn for land meant for five-star hotel

By 2016–17, a mere Rs1.02 billion of the remaining amount had been paid. Consequently, the CDA canceled the lease in 2016—a decision upheld by the then IHC Justice Athar Minallah, who also called on the National Accountability Bureau (NAB) to investigate.

However, the project was de-sealed in 2021, following a ruling led by the then Chief Justice of Pakistan, Saqib Nisar.

As per the 2019 Supreme Court verdict, BNP was required to pay Rs17.5 billion in eight years. After paying only one installment, the developer defaulted on the payment of remaining amount.

Amid this, the CDA passed the increased cost burden onto flat allottees, prompting them to approach the IHC. The civic body recently submitted in the court that these allottees had no legal right to independently challenge the authority’s decision.

The CDA cancelled the lease again upon default, which led the private firm to move the IHC again.

IHC acting Chief Justice Sardar Mohammad Sarfaraz Dogar resumed hearing of the petition on Wednesday.

At the outset, CDA’s counsel Kashif Ali Malik argued that the SC directed the builder to pay Rs17.5bn in 2019 but they did not comply with the apex court’s direction.

He said that the devaluation of rupee against dollar estimated the value of defaulted amount to over Rs50bn.

Malik argued that the case of the petitioner firm was not maintainable and stressed that the developers had failed to meet the financial conditions tied to a 2019 Supreme Court ruling, which restored the lease on the condition of Rs17.5 billion to be paid in installments.

He stated that only one installment had been made in six years, leading to the lease’s cancellation in 2023.

In contrast, the petitioners’ lawyer claimed that the CDA had not issued a proper payment schedule, and therefore, the blame for the default could not rest solely on the developer or the flat buyers.

Justice Dogar remarked that the case involved factual controversies and hinted at referring the matter back to the CDA for resolution.

As the counsel of the petitioner insisted for settlement of the dispute through mediation, Advocate Malik argued that the matter did not require such settlement as the allottee was required to pay the defaulted amount without any delay.

The judge then asked referring the matter to CDA, Malik replied that he was required to seek instructions from the competent authority.

The court adjourned the hearing until April 29.

Published in Dawn, April 24th, 2025