IHC seeks CDA reply on One Constitution Avenue appeals as lease dispute widens over third-party rights

The Islamabad High Court on Tuesday moved to obtain a response from the Capital Development Authority after issuing notices on intra-court appeals filed by apartment owners of One Constitution Avenue and the Bank of Punjab.

A division bench comprising Justice Muhammad Azam Khan and Justice Raja Inaam Amin Minhas heard the petitions, which challenge aspects of an earlier ruling relating to lease cancellation and the treatment of third-party rights in the commercial-residential project.

The appeals stem from an April 30, 2026 judgment of a single-member bench of the Islamabad High Court, headed by Chief Justice Mohammad Sarfraz Dogar, which upheld CDA’s decision to cancel the 13.5-acre project lease of M/s BNP (Private) Limited over alleged multi-billion-rupee payment defaults.

That ruling also linked sub-lessees and purchasers to the fate of the main developer, stating they would “sink or sail” with BNP, a finding now under challenge.

During Tuesday’s proceedings, appellants’ counsel urged the court to halt any coercive or disciplinary action until recommendations of a prime minister-formed committee are finalised and approved by the cabinet.

The committee was constituted on May 1, 2026, by Prime Minister Shehbaz Sharif, who also directed that authorities pause action on the matter pending its review.

Counsel argued that CDA officials allegedly entered the site and broke locks even before the judgment copy was formally received, and submitted a CDA press release issued after the lease cancellation.

He further stated that a residents’ committee has been managing the building since 2023 in coordination with CDA, noting that the project includes two towers with around 240 apartments and had proceeded without objections during construction.

The Bank of Punjab’s appeal was linked to its financing exposure to BNP and a sub-lease covering approximately 25,420 square feet for branch operations within the development.

Appellants contended that apartment owners had no direct legal relationship with BNP and included overseas Pakistanis and diplomatic residents who had invested life savings in the project.

The court was also informed that previous Supreme Court orders dated January 9 and November 6, 2019 required CDA to formulate a “fair, transparent and enforceable” mechanism for third-party claims.

Justice Minhas observed during hearing that there appeared to be a violation of those Supreme Court directives.

The bench later adjourned proceedings while reserving its decision on the stay application, directing CDA to submit its response on the intra-court appeals.