ISLAMABAD: The Islamabad High Court (IHC) on Monday issued a detailed judgment in a case relating to a luxury apartment complex in the heart of Pakistan’s federal capital, ruling that those who bought flats in the tower had no ownership rights after cancelation of the building’s lease.
In its detailed judgment, the high court dismissed petitions filed by M/s BNP (Pvt) Limited, the developer of the project, along with investors and other stakeholders, that challenged the Capital Development Authority’s decision to terminate the lease.
The case relates to a 2005 lease agreement between CDA and BNP for the development of a five-star hotel. But the developer converted it into a residential project, One Constitution Avenue, a luxury high-rise residential and commercial project in a prime Islamabad area.
On Monday, the court issued its detailed judgment that upheld CDA’s cancelation of the building’s lease, observing that the rights of the apartment buyers and investors were contingent upon the validity of the lease held by the developer.
“So far as the writ petitions filed by the third parties, who claim to have acquired interest on the basis of sub lease(s) executed by the petitioner in their favor is concerned, it is reiterated that they have to sink or sail with the petitioner,” the detailed verdict said.
“The sub-lessees also have the remedy against the petitioner/BNP which they may agitate before the court of competent jurisdiction.”
The CDA initially terminated the One Constitution Avenue lease in 2016 but it was later restored by the Supreme Court (SC) in Jan. 2019, subject to payment of Rs17.5 billion ($62.7 million) within eight years through structured instalments backed by bank guarantees, and a stipulation that termination could only take place in case of default after issuance of a 30-day notice, according to local media reports.
The IHC said the SC judgment was binding and provided a framework governing the rights and obligations of the parties, observing that strict compliance with those directions was mandatory and that any deviation would have legal consequences. The court found that BNP failed to honor its financial commitments under the revised terms.
“For the reasons recorded above, Writ Petition No 2621 of 2023 is dismissed being meritless,” the verdict read.
“The CDA’s termination order dated 8.3.2023 is upheld as a lawful exercise of authority based on the petitioner’s default.”
The development comes days after authorities moved into the building in the capital’s high-security ‘Red Zone,’ which houses key government and diplomatic buildings, to vacate the luxury tower, prompting complaints from residents about a lack of notice and heavy police presence.
On May 1, Prime Minister Shehbaz Sharif ordered a halt to further action against residents of One Constitution Avenue and set up a high-level committee to review the contentious eviction of occupants.
The committee, which includes Information Minister Attaullah Tarar, State Minister for Interior Talal Chaudhary and other officials, has been tasked with presenting its recommendations to the premier by May 8.
