ISLAMABAD: The Bahria Town (Pvt) Ltd Karachi (BTLK) on Tuesday sought freezing of the payment plan issued by the Supreme Court in view of pandemic-related recession, requesting that the payment of Rs2.5 billion monthly instalments be deferred for three years — till September 2023.
A three-judge bench headed by Justice Ijaz-ul-Ahsan will commence hearing the BTLK application on Wednesday (today).
The BTLK is supposed to furnish before the Supreme Court Rs2.5bn by the seventh of every month.
The application has been filed by senior counsel Syed Ali Zafar on behalf of the BTLK and its owner Malik Riaz Hussain.
On March 21, 2019, the Supreme Court had accepted an offer made by the real estate tycoon to pay Rs460 billion for the purchase of 16,896 acres of land from the Malir Development Authority (MDA).
Cites pandemic-related recession as reason for its inability to continue payment
The court had accepted the offer to implement its May 4, 2018 judgement which held that the land grant to the MDA by the Sindh government and its exchange with the land of the private land developers, Bahria Town, was illegal.
The fresh application details the Covid-19 pandemic’s major impact in Pakistan and on the multinationals across the world.
It says that in compliance to the earlier court order, the Bahria Town had already furnished Rs57bn, excluding Rs1.2bn mark-up earned on the advance amount deposited on a decreasing balance basis which was available for adjustment.
According to the application, to pay a monthly instalment of Rs2.5bn, the BTLK has to earn Rs100 million per day, based on an average 25 working days per month. Even in normal circumstances, this is a huge task and the BTLK is accomplishing the task. However, the business operations being run by the applicant have suffered due to the Covid-19 pandemic, which has taken and continues to take a heavy toll on Pakistan’s economy, including the real estate sector, due to associated shutdown of economic activity resulting in negative growth shock causing unprecedented deep recession.
The application explains that the BTLK with about 600,000 members and 53,000 employees has also suffered in view of the massive drop in sale and price of plots/houses, elimination of purchasing power generally and halting of construction activities and related industries.
The developer, the application says, has to spend more than Rs1bn every month by making payments to the third parties, members, suppliers or contractors and employees of the BTLK as the upkeep and maintenance of these housing societies requires fixed and variable expenditures.
Such payment also includes expenses of utilities and site operational expenses, costs of oil, maintenance of a clean and hygienic environment in the residential project, provisions of security and development and welfare expenses.
In the interest of doing complete justice, more time (at least three years) be given to the developer to repay the instalments to enable it to get on its feet and not default, the application pleads, adding that the developer is committed to pay the amount of Rs460bn.
Published in Dawn, December 16th, 2020