slamabad High Court upholds cancellation of One Constitution Avenue lease, denies ownership claims of buyers
By Shahazad Paracha :
The Islamabad High Court has upheld the cancellation of the lease for the multi-billion-rupee One Constitution Avenue project, ruling that apartment buyers in the development do not hold ownership rights and must instead seek legal recourse against the builder.
In a detailed judgment issued on Monday, Chief Justice Sardar Muhammad Sarfraz Dogar dismissed petitions filed by the project’s developer, M/s BNP (Pvt) Limited, along with investors and other stakeholders challenging the decision of the Capital Development Authority to terminate the lease.
The court found that the authority had acted within the law and in line with a framework earlier set by the Supreme Court of Pakistan. It emphasised that compliance with the apex court’s directions was mandatory and that failure to meet agreed obligations could not be overlooked.
The dispute dates back to a 2005 agreement under which BNP was granted a lease to develop a five-star hotel on public land. The developer later converted the project into a high-end residential and commercial complex, known as One Constitution Avenue, located in a prime area of Islamabad.
The lease had initially been terminated in 2016 but was restored by the Supreme Court in 2019, subject to strict financial conditions. These included payments totalling Rs17.5 billion over eight years, supported by bank guarantees, and provisions allowing termination only after notice in the event of default.
In its ruling, the high court observed that BNP had failed to meet these conditions, citing delays in instalment payments and the failure to provide acceptable bank guarantees. The bench rejected the developer’s argument that administrative delays by the CDA had hindered compliance, noting that such claims did not absolve the company of its contractual responsibilities.
The court also concluded that due process had been followed, stating that the CDA had issued the required notices and provided sufficient opportunity for the developer to remedy the default. As a result, the termination of the lease could not be considered arbitrary or unlawful.
Addressing the position of investors and apartment buyers, the court ruled that their rights were dependent on the validity of the developer’s lease. With the lease lawfully cancelled, no independent ownership rights could be established. However, the court noted that affected individuals could pursue legal action against the developer to recover their investments.
The judgment also highlighted the broader public interest involved, stressing that the case concerned the use of public land and the exercise of statutory authority. It said such matters must be assessed against standards of legality, fairness and adherence to judicial directives.
The ruling comes amid reports of enforcement action at the site, including eviction notices issued to residents, which have drawn public attention in recent days. Following these developments, Prime Minister Shehbaz Sharif has constituted a high-level committee to review the matter and temporarily halted further action.
With the petitions dismissed, the court’s decision reinforces the CDA’s position and leaves the future of the high-profile development uncertain, while shifting the burden of legal recourse onto investors and buyers.
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