Islamabad (Web Desk): The Islamabad High Court (IHC) on Monday released its detailed judgment in the One Constitution Avenue case, directing investors to pursue their claims before the appropriate legal forums.
The verdict was issued after hearings held on April 30, in which the court upheld the Capital Development Authority’s (CDA) decision to cancel the lease of the multi-storey project. Chief Justice Sardar Muhammad Sarfraz Dogar dismissed multiple petitions submitted by the project developer and also disposed of separate petitions filed by investors.
In its ruling, the court observed that the developer had failed to meet the financial commitments laid down by the Supreme Court (SC), particularly the non-payment of the 2022 instalment. It maintained that the CDA’s decision dated March 8, 2023, to terminate the lease was lawful and justified, noting that the developer had not taken advantage of the “lifeline opportunity” granted by the apex court in 2019.
The judgment further recorded that while the company had paid the 2021 instalment, it defaulted on approximately Rs2.91 billion due for 2022, which remained unpaid.
Regarding investors, the court held that sub-lessees claiming to be bona fide purchasers could not be granted relief under Article 199 without proper evidence supporting their claims. It remarked that such investors essentially had to “sink or sail” with the main petitioner, adding that they were free to pursue remedies against the developer before a competent court
At the same time, the court expressed hope that the CDA and other concerned parties would make sincere efforts to reach a mutually acceptable settlement.
The bench also dismissed the developer’s objection concerning the 30-day notice period issued before cancellation, describing the argument as legally unfounded and weak in terms of equitable principles.
The petitioner had argued that February’s shorter duration invalidated the notice period, a claim the court rejected.
Additionally, the court found the Rs500 million cheque submitted by the private company insufficient and dismissed its execution petition.
The judgment recalled that the SC, in its 2019 order, had allowed restoration of the lease on the condition that the developer would pay Rs17.5 billion over eight years. Despite repeated reminders, the CDA issued a formal notice on February 7, 2023, before ultimately cancelling the lease a month later.
According to background details, the dispute originated in 2005 when the CDA allotted 13.5 acres of land to a private developer for the construction of a five-star hotel.
The lease was secured for Rs4.8 billion, and possession was handed over after an initial 15 percent payment. However, the developer later defaulted on payments, triggering prolonged extensions and legal proceedings.
In 2019, the top court ordered that the lease could be restored if Rs17.5 billion was paid within eight years. So far, the company has only deposited around Rs2.9 billion and remains in default of roughly Rs14.5 billion, which ultimately led to the lease cancellation in 2023.