ISLAMABAD: A division bench of the Islamabad High Court (IHC) on Tuesday issued notices to the Capital Development Authority (CDA) on intra-court appeals filed by apartment owners of One Constitution Avenue and Bank of Punjab (BoP) and sought a response in the matter concerning lease cancellation and third-party rights.

The bench, comprising Justice Muhammad Azam Khan and Justice Raja Inaam Amin Minhas, heard arguments from appellants’ counsel, Advocate Taimur Aslam, who requested the court to restrain disciplinary or coercive action until the recommendations of a committee recently formed by Prime Minister Shehbaz Sharif are finalised and approved by the cabinet.

On May 1, the premier constituted a high-level committee to review the issue involving One Constitution Avenue and halted authorities from taking any action.

The court adjourned further hearing on the intra-court appeals, observing that the decision on the stay application would be issued later.

The case stems from an April 30, 2026, judgment of a single-member bench of the IHC, headed by the Chief Justice Mohammad Sarfraz Dogar, which dismissed a petition filed by builder M/s BNP (Private) Limited and upheld the CDA’s decision to cancel the lease of the 13.5-acre commercial-residential project over alleged multi-billion-rupee payment defaults.

The single bench had also ruled that third-party sub-lessees and purchasers would “sink or sail” with BNP, effectively linking their rights with those of the original lessee. The ruling has now been challenged before the divisional bench by several apartment owners as well as the BoP.

According to the appeals, the BoP has a direct stake in the matter as BNP had obtained financing from the bank and subsequently paid amounts to the CDA.

Court documents state that the bank had acquired around 25,420 square feet on sub-lease, including space on the lower ground, upper ground and first floors, for the establishment of a branch at One Constitution Avenue.

The Registrar’s Office, however, has raised objections regarding the maintainability of the bank’s intra-court appeal.

The proceedings

During Tuesday’s proceedings, counsel for the appellants stated that there was no objection to the court decision to the extent it declared the lease cancellation valid; however, the intra-court appeals challenged observations relating to third-party rights.

He argued that the earlier judgment itself had expressed the expectation that the CDA and affected third parties would arrive at an acceptable solution, but the CDA was now avoiding that course.

The lawyer informed the bench that before a certified copy of the judgment could even be received, CDA officials entered the building and allegedly broke locks. A press release issued by the CDA after the cancellation of the lease was also submitted before the court.

The counsel informed the bench that since 2023, a committee comprising residents had been managing the building’s daily affairs in coordination with the CDA. He said the project consisted of two towers with around 240 apartments and that the CDA had raised no objections during construction.

Counsel further submitted that many overseas Pakistanis had invested their life savings in the project and maintained that apartment owners had no connection with BNP. He added that diplomats and their families were also residing in the building.

The appellants requested the court to declare that the impugned judgment did not authorise the CDA to dispossess, evict or take coercive action against bona fide purchasers without due process.

They also relied heavily on orders passed by the Supreme Court of Pakistan on January 9 and November 6, 2019, directing the CDA to devise a “viable, fair, transparent, secure and enforceable arrangement” for settlement of third-party claims.

Justice Minhas observed during the hearing that there had been a clear violation of the SC’s 2019 order and questioned what the consequences of that violation would be.

The appellant’s lawyer responded that the CDA had previously been asked to devise a plan of action while safeguarding the rights of third parties. He argued that CDA officials were reluctant to intervene further due to potential accountability proceedings involving NAB and FIA.

Counsel also referred to a May 1, 2026, notification barring coercive action pending the prime minister’s final decision on the matter.

The hearing was later adjourned, with the bench reserving its decision on the stay application.