ISLAMABAD:The Islamabad High Court (IHC) now will decide over Rs17 billion default issue involving a private firm that bought 13.5 acres for construction of Grand Hyatt Hotel but instead built luxury flats as the Capital Development Authority (CDA) had requested the court to resolve the issue rather than referring it back to the authority.

The Acting Chief Justice of IHC Sardar Mohammad Sarfaraz Dogar was hearing petitions filed by BNP (Private) Limited and affected apartment buyers, challenging the Capital Development Authority’s (CDA) decision to terminate the lease of the said plot.

The court, after hearing CDA’s arguments, has decided to adjudicate the matter itself rather than referring it back to the CDA.

During the latest proceedings, CDA’s counsel Advocate Kashif Ali Malik contended that the petitions were inadmissible and should be dismissed outright.

Petitioner lawyers opposed this view, urging the court to proceed under judicial supervision or consider independent mediation.

However, the CDA strongly objected to mediation, maintaining its position that the matter should be dismissed.

Justice Dogar concluded the hearing by stating that the court would make a decision after hearing all parties and adjourned the case.

The plot was auctioned in 2005, with BNP (Private) Limited emerging as the highest bidder. The lease allowed for flexible construction parameters, including a 47-storey tower. However, construction was derailed in 2008 when the Civil Aviation Authority (CAA) unexpectedly restricted the building height to 330 feet.

BNP subsequently filed a Rs6.23 billion suit against CDA, but a settlement was reached under NAB supervision in 2012, allowing for revised payment terms.

The Public Accounts Committee (PAC) later raised objections, prompting renewed NAB and FIA inquiries. Legal challenges escalated, and in 2016, CDA cancelled the lease over the default payment, which BNP and over 200 investors challenged in the court.

In 2019, the Supreme Court allowed BNP’s appeal and permitted the lease to be reinstated upon payment of Rs17.5 billion.

However, the lease was again terminated in 2023 over default.

The matter remains under review in the Islamabad High Court, where BNP is also seeking enforcement of the Supreme Court’s 2019 ruling.

BNP has proposed resolving the matter through an alternative dispute resolution mechanism and has nominated former Supreme Court justices to mediate the dispute. The CDA on the other hand rejected the said proposal saying that instead of mediation, the private firm was required to clear the outstanding dues forthwith.

Published in Dawn, April 30th, 2025