Updated Sep 04, 2018 09:42am

IHC dismisses plea against termination of agreement with Grand Hyatt builder

Malik Asad

ISLAMABAD: The Islamabad High Court (IHC) on Monday dismissed appeals filed against a decision that declared the construction of apartments in the Grand Hyatt hotel as illegal.

The appeals had been filed by buyers of apartments in the skyscrapers meant for Grand Hyatt hotel. They included Prime Minister Imran Khan, former caretaker prime minister retired Justice Nasirul Mulk, chairman [designated] Pakistan Cricket Board (PCB) Ehsan Mani, ex-ministers and several other high profile personalities.

A division bench, comprising Justice Aamer Farooq and Justice Mohsin Akhtar Kayani, announced the verdict on the appeals filed against the order of a single-member bench that had endorsed the Capital Development Authority (CDA)’s decision of terminating the lease agreement with BNP (Private) Limited, the builder of the skyscrapers.

Imran Khan, ex-caretaker prime minister Nasirul Mulk, former ministers and others were among affected buyers

The CDA in 2005 leased out the 13.5 acres to the BNP for construction of the Grand Hyatt hotel adjacent to the Convention Centre. The leaseholder, however, constructed 240 luxury apartments on the land. In July 2016, the CDA Board cancelled the lease.

The IHC single-member bench in March last year held that the “construction of the residential apartments on the plot and the purported sale thereof was illegal, void and in flagrant abuse and violation of CDA Ordinance 1960 read with the Zoning Regulations, Building Regulations and the Building Control Regulations.”

As per the list submitted by the BNP to the IHC, the 240 buyers of the apartments also included Federal Ombudsperson for Protection against Harassment of Women at the Workplace Kashmala Tariq, ex-ministers Khawaja Asif, Jam Kamal Khan, former naval chief Mohammad Asif Sandila, former foreign secretary Salman Bashir and retired Lt Gen Ahsan Azhar Hayat.

The court had noted: “Authority placed on record copies of the internal official notes relating to the plot. It is a reflection of how the officials have been bending over backwards by extending undue benefits to the petitioner/company in complete disregard of the mandatory regulations, thus causing loss to the exchequer on the one hand and enabling the petitioner/company to defraud and deceive members of the general public on the other.”

The judgment said the case had brought to surface the most conspicuous example of undermining the rule of law by one of the most important regulatory authorities established under the 1960 ordinance.

The federal government also cannot ignore its statutory duty mandated under section 5 of the ordinance.

In response to the petitions of the buyers, the bench observed: “This court definitely sympathises with the victims who have been made to suffer either because of complicity or regulatory capture of the authority as a regulator. Rights cannot be claimed on the basis of an illegality. No right had accrued in favour of the purchasers since the title of the petitioner/company was contingent upon obtaining a completion certificate under the provisions of the ordinance read with the Building Regulations and the Building Control Regulations.”

CDA counsel Kashif Ali Malik told the court that the builder neither deposited the Rs4.1 billion bank guarantee nor performance guarantee to the CDA. It had also not paid the annual ground rent. On account of the principal amount, the builder was yet to pay Rs3.6 billion despite the fact it had earned around Rs6 billion from the sale of the apartments.

The affected buyers filed the appeals in the IHC against the termination of the lease agreement and sealing of the premises.

They adopted before the court that they were unaware of any irregularities in the project and were bona fide buyers of the apartments.

They criticised the CDA for leniency towards Centaurus and Safa Gold shopping malls as well as the Marriott and Serena hotels and the Silver Oaks building with regards to the enforcement of its bylaws.

The appeals stated that the CDA had allowed several relaxations by way of post-bid changes, including giving the builders of Centaurus – Pak Gulf Construction – an additional 3,000 square yards and allowing 42 storeys to be built instead of the originally proposed 20 storeys.

The scope of the project originally included 200 apartments, a shopping mall and the hotel. However, the project today includes a shopping mall, an office tower, two towers of 400 units of serviced apartments that have been constructed and are occupied by buyers, the appeal said.

It also alleged that the Centaurus project was permitted in absence of transparency and in violation of mandatory provisions of the law.

The appeals also claimed that last year the CDA had sealed the Safa Gold Mall after various violations in the construction of the building such as the addition of storeys that had not been approved. It said the CDA unsealed the premises upon a court order even though the mall’s management had not obtained a completion certificate.

The affected buyers asked the court to direct the CDA to take action against other buildings as it did in the case of the Grand Hyatt towers, and set aside the single-member bench’s judgment because it would cause an irreparable loss to the buyers.

Published in Dawn, September 4th, 2018

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