Construction firm requests setting aside of lease cancellation
Islamabad—The Islamabad High Court (IHC) on Wednesday directed the Capital Development Authority (CDA) to submit a reply in a petition filed by an international construction firm BNP against the “unilateral decision” of the authority regarding cancellation of lease for construction of multi-storey tower (Grand Hyatt) along Constitution Avenue.
Justice Athar Minallah of the IHC gave these orders after hearing the counsels of both the parties. BNP’s counsel Barrister Gauhar Khan who is from Aitezaz Ahsan’s Chamber submitted before the court that already lot of time has wasted and the construction firm is suffering from huge losses due to stoppage of work. “Our construction material at the site is rusting and the passive manpower is inflicting huge losses,” said the counsel. He requested the court to set aside CDA’s arbitrary decision of lease cancellation and allow the firm to continue work. CDA’s counsel however, Kashif Malik instead of arguing sought two weeks time for submission of a written reply.
The court however after hearing the two sides directed the authority to submit its reply within one week time. It may be mentioned here that on July 1, CDA had sealed the area where a five star hotel Grand Hyatt and around 240 apartments were under construction. After BNP challenged sealing of this area, CDA had alleged illegalities and violations in this project. The BNP moved IHC against this ‘arbitrary’ decision and on August 1, CDA told the court that its governing board on July 29 had cancelled lease of land (13.45 acres) to the BNP. The IHC bench hearing in the petition of BNP then dismissed the case with observations that the petition has become infructuous in the changed circumstances.
BNP while challenging lease cancellation notification claimed that it did not violate any law but it was inefficiency of the CDA officials instead, that caused the petitioner huge financial losses.
Giving a detailed account of the events, the petitioner said that CDA on September 28, 2004 advertised in national press auction of land for constructing of the five-star hotel, Service Apartments and other allied facilities. The earlier bidding process for the plot was scrapped by CDA due to insufficient response from prospective bidders. Only two companies participated, both owned by the same group.
As per the new advertisement the lease was for a period of ninety nine (99) years and 15pc of the bid amount was to be submitted within 45 days of acceptance of bid. The remaining 85pc of the bid amount was to be paid over a period of 15 years.
In an open auction on March 09, 2005 BNP Group was the highest bidder at Rs- 75,000/- per square yard and thus the successful bidder. Less than a month before the land for Serena Hotel was sold on February 12, 2005 at a price of Rs-14,500/- per square yard petitioner told the court. The total lease price of the land was Rs. 4.882 billion. The lease deed for the plot was signed between CDA and BNP (Private) Limited on July 28, 2005 while possession of the plot was not handed over to the BNP till October 04, 2006, which is the date of commencement of lease. The petitioner was not only given possession of the plot quite late but it was also asked to revise building plan due to the earthquake of October 2005 when CDA had revised building codes in Islamabad. Petitioner then submitted revised building plans that were approved on March 29, 2008. On May 5, 2006 the petitioner submitted an application with CDA for rescheduling of payments due to the reason that CDA had delayed in handing over possession of the plot and the revision of building plans, which had earlier been submitted to CDA.
The petitioner has claimed that it has been targeted by the whims of influential persons. The unilateral cancellation of the lease deed by CDA Board is illegal, unlawful and contrary to the fundamental rights of BNP (Private) Limited. Petitioner has prayed that its lease may be restored.