ISLAMABAD: The Islamabad High Court (IHC) on Monday issued its detailed verdict in the One Constitution Avenue case, upholding the cancellation of the project’s lease and directing investors to seek relief through appropriate legal channels.
In the written judgment, Chief Justice Sardar Muhammad Sarfraz Dogar dismissed petitions filed by the developer and disposed of those submitted by investors, ruling that the lease cancellation by the Capital Development Authority (CDA) was lawful.
The court observed that the developer failed to comply with financial conditions set by the Supreme Court of Pakistan, particularly defaulting on a Rs2.91 billion instalment due in 2022. It noted that despite paying the 2021 instalment, the company did not avail the “lifeline opportunity” granted by the apex court in 2019.
Declaring the CDA’s March 8, 2023 order valid, the court said repeated reminders had been issued, including a notice on February 7, 2023, before the lease was ultimately cancelled.
Addressing investors’ petitions, the court ruled that sub-lessees claiming to be bona fide purchasers could not be granted relief under Article 199, as such claims require detailed evidence. It stated that investors would have to “sink or sail” with the developer and may approach courts of competent jurisdiction for redress.
The court, however, expressed hope that the CDA and other stakeholders would make earnest efforts to reach a mutually agreeable resolution.
It also rejected the developer’s objection regarding the 30-day notice period, terming the argument legally flawed, and dismissed a Rs500 million cheque submitted by the company as insufficient.
The case stems from a long-running dispute dating back to 2005, when the CDA allotted 13.5 acres of land to a private developer for a five-star hotel project. In 2019, the Supreme Court allowed restoration of the lease subject to payment of Rs17.5 billion over eight years, but the developer has so far paid only Rs2.9 billion, leaving a substantial default that led to the lease cancellation.