IHC issues notices to CDA in appeals by flat owners, BoP over One Constitution Avenue lease

Lead

The Islamabad High Court (IHC) on Monday issued a stay order restraining the Capital Development Authority (CDA) from dispossessing residents of the One Constitution Avenue project, according to reports from Dawn. The order came during hearings on intra-court appeals filed by apartment owners and the Bank of Punjab against a single-bench judgment that upheld the CDA's decision to cancel the project's lease over alleged payment defaults by the builder, M/s BNP (Private) Limited.

A division bench comprising Justice Muhammad Azam Khan and Justice Raja Inaam Ameen Minhas heard the appeals and directed the CDA not to take any coercive action against the occupants until the next hearing, as reported by multiple accounts of the proceedings. The court also issued notices to the CDA, seeking its response by Wednesday in a related matter concerning the lease cancellation and third-party rights.

The case stems from an April 30, 2026, judgment by a single-member bench of the IHC, headed by Chief Justice Mohammad Sarfraz Dogar, which dismissed BNP's writ petition and upheld the CDA's decision to terminate the lease of the 13.5-acre commercial-residential project. The single bench also ruled that third-party sub-lessees and purchasers would "sink or sail" with BNP, effectively linking their rights to those of the original lessee—a ruling that has now been challenged by several apartment owners and the Bank of Punjab, according to Dawn.

Coverage Comparison

Reports from Dawn, which provided the only coverage of this story, converge on the key developments: the IHC's restraint order, the issuance of notices to CDA, and the arguments presented by both sides. All accounts describe the division bench's composition and the stay order barring coercive action against residents. However, individual reports offer varying levels of detail. One account focuses on the appeals filed by the Bank of Punjab and flat owners, highlighting the bank's direct stake in the project, while another emphasizes the apartment owners' request for protection of their possession rights, noting that they had been residing legally under an arrangement approved by the CDA. A third report mentions that the court heard arguments from residents' counsel, who requested the CDA board to allow them to prove their innocence. These variations reflect different editorial angles rather than factual disagreements; all sources are consistent on the essential facts.

Key Claims

• Stay Order and Notices: The IHC restrained CDA from dispossessing residents and issued notices to the authority, seeking its response by Wednesday, as reported by multiple accounts in Dawn.
• Lease Termination and Restoration: The lease agreement between CDA and BNP for developing a five-star hotel project was initially terminated in 2016 but was restored by the Supreme Court in 2019, subject to stringent financial conditions, including payment of Rs17.5 billion in installments backed by bank guarantees, according to Dawn.
• Residents' Rights: Residents' counsel argued that the CDA had leased out the land and subleases were executed while the original lease was intact, and that CDA had received partial payment sufficient to cover the space where residential towers were built. However, CDA's counsel stated that no completion certificate had been issued and that residents possessed no document issued by the CDA, as reported in Dawn.
• Bank of Punjab's Stake: The Bank of Punjab filed an intra-court appeal, requesting the court to declare the single bench's decision illegal and contrary to facts. The bank had acquired three floors on sub-lease to establish a branch, according to Dawn.
• Prime Minister's Committee: Prime Minister Shehbaz Sharif constituted a high-level committee to review the issue and halted authorities from taking any action, as reported by Dawn.
• Notable Buyers: The list of buyers included a former acting president of Pakistan, a former Senate chairman, a former prime minister, and other notable ex-public office holders, as mentioned in one Dawn report.

Perspectives

• Apartment Owners and Bank of Punjab: They argue that they are bona fide purchasers and sub-lessees who should not be penalized for the builder's defaults. They contend that the CDA was aware of their occupancy and had received payments covering the residential towers. They seek protection from dispossession and want the single bench's ruling that links their rights to the lessee to be declared null and void, according to Dawn's reports.
• Capital Development Authority (CDA): CDA's counsel maintained that the authority is the custodian of the land and that the Supreme Court's 2019 order directing the builder to pay Rs17 billion was public. The CDA argued that residents had no document issued by the authority and questioned why people invested in risky properties, as reported in Dawn.
• Court's Observations: During the hearings, judges observed that the CDA had issued letters to the builder and was aware of residents' occupancy. One judge noted that in the National Police Foundation case, the entire housing scheme was declared illegal, yet residents were not dispossessed, seemingly indicating a judicial inclination to protect bona fide occupants, as per Dawn's reports.

Conclusion

The IHC's stay order offers temporary relief to residents of One Constitution Avenue, but the broader legal dispute over the lease cancellation and third-party rights remains unresolved. The court has sought responses from the CDA and will continue hearings, while a government committee reviews the matter. The outcome will likely hinge on balancing the CDA's contractual rights against the interests of innocent purchasers—a delicate issue that the court is now tasked with navigating.