One Constitution Avenue buyers have no ownership rights: IHC

ISLAMABAD: Buyers of apartments in the One Constitution Avenue project do not hold ownership rights following the cancellation of the development’s lease, the Islamabad High Court (IHC) ruled in a detailed judgment on Monday.

The court upheld the Capital Development Authority’s (CDA) decision to terminate the lease of the multi-billion-rupee project, dismissing petitions filed by the developer M/s BNP (Pvt) Ltd, investors and other stakeholders.

It ruled that apartment purchasers cannot claim independent ownership rights over the properties and may instead pursue recovery of their investments directly from the developer.

The judgment was issued by IHC Chief Justice Sardar Muhammad Sarfraz Dogar, who found that the developer had failed to comply with financial obligations set under a 2019 Supreme Court order that had previously restored the lease.

The dispute stems from a 2005 agreement between the CDA and BNP for a five-star hotel project that was later converted into a luxury residential and commercial development known as One Constitution Avenue.

The lease was first cancelled in 2016 but reinstated by the Supreme Court in 2019 subject to strict payment conditions, including the deposit of Rs17.5 billion over eight years backed by bank guarantees, and provisions allowing termination in case of default.

In its ruling, the IHC said the Supreme Court’s framework was binding and required strict compliance. It held that BNP repeatedly failed to meet instalment deadlines and did not provide acceptable bank guarantees.

The court rejected the developer’s argument that delays by the CDA contributed to non-compliance, saying such claims could not excuse failure to meet core financial obligations.

It also found that the CDA had followed due process, including issuing prior notices, and had granted sufficient opportunity to cure defaults before terminating the lease.

The court dismissed allegations of mala fide conduct by the CDA, stating that its actions were within statutory powers and consistent with earlier judicial directions.

On the rights of apartment buyers, the court said their claims were contingent on the validity of the developer’s lease. With the lease lawfully terminated, no ownership rights could arise in their favour.

Justice Dogar noted, however, that affected buyers could seek recovery of their investments through legal action against the developer.

The ruling also reaffirmed that CDA’s actions over public land must comply with legality, fairness and judicial directives.

The decision comes amid ongoing controversy over the project, with reports of eviction notices and police presence at the site last week, sparking public concern.

Apartments in the building are reportedly owned by several prominent figures, including politicians and former officials.

The case has been closely watched due to its implications for high-value real estate projects in the federal capital and the enforcement of development leases involving public land.

Meanwhile, a government committee reviewing the One Constitution Avenue housing project held its first meeting on Monday, the Cabinet Division said.

In a statement, the Cabinet Secretariat said the committee was briefed by the CDA on the matter during its inaugural session in Islamabad.

It said the committee would further examine the facts in another meeting scheduled for Tuesday, where additional details from the CDA would be sought.

The statement added that, after hearing from the CDA, residents of the project would also be given an opportunity to present their views through designated representatives.

The committee was formed following recent legal and administrative developments surrounding the high-profile residential project in the federal capital.