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Petitioner: Danish Akhtar & others VS Respondent: Directorate of Estate Projects & others
Court Name: Sindh High Court Judge(s): Zulfiqar Ahmad Khan Title: Danish Akhtar & others vs Directorate of Estate Projects & others Case No.: Suit No. 329 of 2020 Date of Judgment:2020-06-11 Reported As: 2020 SHC 390 Result: Accordingly disposed of
Judgment Applications listed at Sr. No. 5 to 7 & 9, made under Order I Rule 10 CPC by the respective interveners desirous of becoming party in the instant suit are allowed with mutual consent as the matter pertains to claims of thousands of individuals and these being only a handful. Mr. Azmat Tufail, Advocate files Vakalatnama as well as another application under Order I Rule 10 CPC, which is also allowed with consent. Office to assign appropriate number to the instant application. Let amended titles be filed by assigning appropriate numbers to the newly impleaded plaintiffs. It is clarified that no further similar Order I Rule 10 CPC applications are needed to be filed in the court for joining as claimant since claims of all affectees/allottees of general public quota are to be dealt with as per the mechanism laid down in the later part of this Order . 2. Before attending to the applications serialed as No.1-4 and 8, a brief background of the controversy at hand would be appropriate where a large number of individuals have approached this Court praying for a declaration that the Defendant No.1 in active connivance and collusion with Defendant No.2 and its partners has committed fraud, misrepresentation and breach of trust upon Plaintif fs; that the Defendants 1 to 2(b) (Maxim Properties and its partners namely Tanvir Ahmed and Bilal Tanvir) have abandoned the project named as Fazaia Housing Scheme, Karachi ("the Scheme or Project") thus committed fundamental breach of trust and confidence to the Plaintif fs and public at large towards the national institution; that the Defendants 1 to 2(b) are liable to refund all sums received from the Plaintif fs and other affectees/allo ttees alike, including but not limited to: Form Charges / Processing Fees / Booking Charges / Registration Fee / Installments / Certificates / Open Registration / Surcharges / Membership Dues etc. (as detailed in the plaint) at the prevailing rate of US$ along with markup at the rate of 22% per annum from the date of receipt of amount by them, till the date of final realization; Direc tions be given to the Defendant No.3 (Malir Development Authority), Defendant No.5 (Sindh Building Control Authority) and Defendant No.6 (Federation of Pakistan) and any other law enforcing authority to take appropriate legal actions against Defendants 1 to 2(b) and any other person involve d in the said Scheme for launching the project without approvals and
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permissions as required under the law and for the fraud perpetrated by them in collecting billion of rupees from the general public including the Plaintif fs for developing the subject Project and then abandoning it; directions that Defendant Nos.1 to 2(b) to submit before this Honourable Court all docume nts, plans, marketing material, information, dealing, details, strategies, correspondence and accounts of all payments received from public along with details of withdrawals, utilization, expenditure etc; directions that the Nazir of the Court to inspect the site and to record progress thereon; to sell the suit land on which the said Project was to be developed or the lands which were transferred in favour of Defendant No.1 by Defendant No.2 (a and b) as mentioned in the plaint and pay the amount due to the Plaintif fs and other affectees/allottees from the proceeds thereof; pass orders attaching the suit land on which the subject Project was to be developed or the lands which were transferred in favour of Defendant No.1 by Defendant No.2 as mentioned in the plaint pending decision of the title case and appoint Nazir of the Court as Receiver of the said land; award a sum of Rupees One Billion as Damages against the Defendants 1 to 2(b) jointly and severally , to be equally divided amongst the Plaintif fs and other affectees/allottees; permanently restrain Defendant Nos. 7 to 11 from releasing any money from the bank accounts of Fazaia Housing Scheme, Karachi operated jointly or severally by the Defendants 1 to 2(b) as listed at paragraph 14 of the plaint till final disposal of the suit or till final payment of claims of the Plaintif fs and other affectees/allottees ; grant injunction prohibiting the Defendants, their employees or any person acting under them or on their behalf from taking any action adverse to the rights and interests of the Plaintif fs including forfeiture of any amount paid by them to the Defendant No.1 or from developing or raising construction on the land or creating any third party rights or interest in the suit land or any part thereof, etc. 3. The story as to how general public ends up losing their hard earned monies in the hands of property developers working as dream merchants are repeate d again and again under different names where individuals having been given hopes of providing their dream homes were lead to invest in fake, groundless ponzi-like schemes, but to be successful, such schemes have to have catchy names. In this case they used name of Fazaia (since Baharia, Army and Fauji, the most prestigious institutions' names were already taken up and there was no fourth force, except Airport Security Force, which isn't far behind). At the cost of repeating, the cause of action accrued to the Plaintiffs/Applicants in March, 2015 when the project Fazaia Housing Scheme, Karachi was advertised and launched, where after registration forms were being sold through Project Management Office of the Scheme through various branches of Habib Bank Limited (Defendant No.7) and other agents of Defendant No.1; thereafter in October, 2015 when balloting was conducted at Project Management Office in the presence of senior officials of Defendant No.1; thereafter on various dates when payments were made by the Plaintiffs and when the Plaintiffs were induced, coerced and defrauded (as alleged by the Plaintiffs/Applicants); thereafter when consolidation, amalgamation, exchange and adjustment of land was withdrawn by the Defendant No.3 (Malir Development Authority) on 07-07 2015; thereafter when the Defendant No.1 failed to develop the Project; thereafter on 07-02- 2019, 13-02-2019 and 14-02-2019 when the Defendant No.1 was served with Show Cause Notices by Defendant No.5 (Sindh Building Control Authority); thereafter on 17-02-2019 when the Project was listed amongst illegal housing schemes and societies; thereafter in April 2019 when the Plaintiffs and public at large made demonistrations with regards the Project and National Accountability Bureau ("NAB") initiated inquiry, and around November 2019 when plaintiffs approached NAB for the redressal of their grievances. 4. Now coming back to various applications being heard and decided by this Order, through CMA No. 2868/2020 dated 27.02.2020 the Applicants have prayed that the Defendant Nos. 1 to 2(b) be restrained from taking any adverse action to the rights of the Plaintiffs in respect of amounts paid by them to the said Defendants and not to permit these defendants to withdraw any amount from the bank accounts opened and operated in respect of the Project and that the corresponding Banks be restrained from releasing any amount from these accounts to any persons. Through CMA 2869/2020, a request has been made that the concerned Banks where accounts of the Project were opened and operated thereafter, be directed to provide complete details of these accounts including details of all signatories of the accounts and full statements be handed over to the court of these accounts from their respective account-opening date(s). It seems despite notice, only Defendant No. 7 (Habib Bank Limited) has submitted a statement dated 19.03.2020 listing all accounts pertaining to the Scheme; CMA 3781/2020 is
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made by another affectee of the Scheme to be joined as a Plaintiff; CMA 4615/20 is moved by the Advocate of the Defendant No.1 for recalling orders passed by this Court on 05.03.2020 attaching various bank accounts of the Scheme on the grounds that on 19.05.2020 a Divisional Bench of this Court while hearing CP Nos. D- 218/2019 and others has passed orders permitting refund of principal amount of the affectees within 6 months under the supervision of Chairman NAB. CMA 4818/2020 is moved by the Plaintiff for the production of bank account statements of the relevant accounts from the year 2015 or their respective date(s) of opening. However when pointed out that such prayer is already part of 2869/2020, Counsel chose to not to press this application if appropriate orders are passed in the aforementioned CMA. 5. Learned counsel for the Plaintif f drew courts attention to order dated 05.03.2020 where, to afford protection to affecte es' deposits with respective Banks under the title of (i) Fazaia Karachi Collection Account, (ii) Fazaia Karachi Overseas Account and (iii) Fazaia Karachi Bungalows Account, court ordered their attachments, which order has now been sought to be recalled through CMA 4615/20. Subsequent thereto, entire court proceedings were directed towards the order of the Divisional Bench dated 19.05.2020 in CP Nos. D-218/2019 and others which originated while Defendant Nos. 2(a) and 2(b) approached the Court under Article 199 of the Constitution for release, when they were taken into custody by NAB authorities as a part an Inquiry. A review of the said DB's Order shows that seemingly a settlement was reached between Defendant No.1 and 2 (including 2(a) and 2(b) and certain Affidavits were filed where Defendant Nos. 2(a) and (b) undertook to refund all the monies which the affectees had paid in respect of their bookings and allotments, as well as, these accused persons undertook to settle all other liabilities related to the Project under the supervision of NAB. It's worth noting from paragraph 4 of the DB's Order that NAB dissented to this arrangement and it was also against release of Defendant Nos. 2(a) and 2(b). Nonetheless while releasing the said defendants and suspending the Inquiry, Court in paragraph 10 of the said Order directed as under:- (a) We direct the Chairman NAB to pend any inquiry/investigation into this matter whilst Maxim and the Directorate give effect to their obligations and responsibilities under their respective Affidavits/compromise agreements set out above whereby the allottees will be refunded their monies in full and all other liabilities of the Project are settled. (b) In the event that both the parties, Maxim and the Directorate comply with their obligations/responsibilities under their respective Affidavits/settlement agreements and all the allottees are refunded all the monies which they had paid in respect of being allotted land in the Fazaia Housing Scheme, Karachi and all other liabilities of the Project are settled to the satisfaction of the Chairman NAB the Chairman NAB shall close this matter . (c) In the event however that either Maxim or the Directorate fails to comply with their obligations/responsibilities under their respective Affidavits in respect of settlement referred to above and all the allottees are not repaid in full or all the other liabilities of the Project are not settled within 6 months of the date of this order, the Chairman NAB may revive the inquiry/investigation against the petitioners or any other persons involved in the Fazaia Housing Scheme, Karachi Project in connection with cheating the public at large or any other offence which they may have committed Under the NAO. (d) The Chairman NAB shall supervise and facilitate Maxim and the Directorate in giving effect to their respective Affidavits/settlement agreements with a view to safe guarding the interests of the allottees and ensuring that all the allottees are repaid in full and all other liabilities of the Project are repaid within the shortest period of time. (e) In order to facilitate Maxim in giving effect to its Affidavits/settlement agreement within the shortest possible time the Superintendent Central Prison, Karachi is hereby directed to immediately release Mr. Tanvir Ahmed and Mr. Bilal Tanvir from custody so that they may fulfill their obligations/responsibilities under the Affidavit/settlement agreements signed by Mr. Tanvir Ahmed. The names of Mr. Tanvir Ahmed and Mr. Bilal Ahmed shall be placed on the ECL by the Federal Ministry of Interio r with immediate effect until the Chairman NAB gives his certificate that Mr. Tanvir Ahmed and Mr. Bilal Ahmed have completed their obligations/responsibilities under Mr. Tanvir Ahmed' s Affidavit/settlement agreement and all the allottees have been repaid in full and all other liabilities of the Project have been settled. (f) In the event that further time is required to carry out the obligations/responsibilities contained in the Affidavits/settlement agreements of either Maxim or the Directorate either party or the NAB may approach this
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court seeking more time to complete its obligations on furnishing reasonable grounds". 6. Aforementioned paragraph appears to be an outcome of the undertaking given to the Court by Defendant Nos. 1 and 2 through the following af fidavits respectively:- "AFFIDA VIT IN SUPPOR T OF APPLICA TION FOR COMMENCEMENT OF REFUNDS AND FOR SETTLEMENT OF ALL LIABILITIES OF F AZAIA HOUSING SCHEME KARACHI PROJECT Flt Lt Numan Yousaf son of Tariq Javed, Muslim, adult, resident of Officer Mess, PAF Base Faisal, Shahre-e-Faisal, Karachi, duly authorized by Directorate of Estate Projects and empowered throu gh Authority Letter dated 4-04- 2020 to enter into and sign this Application and Affidavit, acting on behalf of Directorate of Estate Projects do hereby solemnly affirm, declare and undertake on oath as under: WHEREAS:- A. the Directorate of Estate Projects, AHQ, Islamabad (the "Directorate") entered into a Contract Agreement on 16 day of January 2015 ("Agreement") with M/s Maxim Properties ("Maxim") on basis the proposal in providing/securing lands free from any liens, encumbrances etc. for developing and establishing a housing scheme, comprising of apartments and housing units at Karachi by the name of Fazaia Housing Scheme, Karachi, (the "Project"); B. the Directorate being a welfare organization that provides housing faciliti es, plots etc. to its personnel (serving/retired), families of Shuhada, widows etc. on a non profit basis, pursued the Project for welfare of its personnel, whereas, Maxim enjoyed the rights under the Agreement for marketing of the Project and to offer/issue apartment and housing units to the general public; C. the Project was to be developed upon lands transferred/consolidated subject to the provisions of the Agreement (the "Project Lands" ); D. due to confirmation of state lands within the land parcel of 370 acres desig nated for the Project and other issues, the Project could not proceed ahead. E. under the Agreement, Maxim was responsible for the liabilities of the general public including provisions for their refund, whereas, Directorate was responsible for its personnel only . F. Maxim has earlier withdrawn certain amounts as advances/profit from the Proje ct, whereas, the Directorate has so far contributed funds to the tune of Rs. 1.298 Billion as were collected from its personnel, whereas the funds to the tune of Rs. 2.1 1 Billion were spend on development from the collection account of General Public; G. due to various grounds, a complaint was filed by the Directorate against Maxim before NAB, wherein proceedings are presently ongoing and an application was given to NAB by the Directorate to freeze, sell, auction and distribute the assets of the Project among the affectees and for settlement of all liabilities of the Project; H. without going into the merits of the case, the sole intention of the Directorate at this stage is to ensure the expeditious refund of the affectees alongwith settlement of all liabilities of the Project; I. recently , the Directorate received representations from Maxim about its willingness to also ensure the expeditious refund of the affectees and for settlement of all liabilities of the Project. NOW THEREFORE , the Undersigned individually and on behalf of Directorate of Estate Projects, unconditionally agrees as follows: 1. That I am the duly authorized officer of Directorate of Estate Projects and am well conversant with the facts of the case and the accompanying application is being moved under my signatures. 2. That the Directorate having already handed over rights of Project Lands, Project Assets and Bank Accounts to NAB for commencement of refund of the affectees and for settlement of all liabilities of the Project shall sign any documents, letters or statements to give effect to the refund process and settlement of liabilities of the Project and in furtherance the Directorate unconditionally and unequivocally agrees, acknowledges, understands and undertakes the following:- a) Any and all rights respecting, relating to or existing over the Project Funds to the tune of approx. Rs. 13,624/- only (Rupees Thirteen Thousand Six Hundred and Twenty Four Million) maintained at the joint bank accounts, described in this Affidavit, balance of which is described in Annexure-A (the "Project Funds") in favour of the Directorate as a signatory shall stand cancelled and relinquished unconditionally .th
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b) Any and all rights respecting, relating to or existing over the Project Assets, described in Annexure-B (the "Project Assets") in favour of the Directorate shall stand cancelled and relinquish ed unconditionally and that the Directorate unequivocally agrees, acknow ledges and understands that it shall have no right, claim or interest over the Project Assets on any ground or condition whatsoever . c) That the Directorate unconditionally agrees for the expeditious refund of the deposited amounts in the Project Funds and shall have no objection or claim against the expeditious refund of the Project Funds to the affectees and for settlement of liabilities of the Project, carried out by NAB. d) That the Directorate shall sign documents and/or fulfill any formalities of government agencies, NAB and banks for initiation and execution of the refund process of the Project Funds and shall sign any documents, if any, for sale / auction of Project Assets and Project Lands for settlement of all liabilities of the Project. e) That Maxim unequivocally agrees, understands and acknowledges that the refund process shall be carried out by NAB and that the Directorate shall assist, cooperate and provide all the requisite data, record and information as required for the refund process and shall not interfere or object in the refund process. f) That the Directorate shall not object to any verification/audit process undertaken by NAB or any other body under its supervision, if any , in identifying the scale of liabilities, manner of distribution of funds etc, if required. g) That the Directorate shall within 30 days from the date of this Affidavit withdra w all legal action, applications, arbitration(s), writ petitions, suits and civil & criminal proceedings or any legal proceedings arising under the Agreement or related to the Agreement filed against Maxim, if any, which shall be dismissed as withdrawn. In any pending arbitrations, the Directorate will move applications to withdraw their counter claims. In all other cases in which the Directorate or Fazaia Housing Scheme Karachi is a party along with Maxim, the Directorate shall withdraw from all such cases and that Maxim shall give its consent to the Directorate of Fazaia Housing Scheme Karachi for withdrawing from any such case, provided that Maxim shall be entitled to continue such proceedings on its own. h) Upon completion of the refund(s) and settlement(s) set out above, the agreement dated 16-01-2015 between the Directorate and Maxim shall stand extinguished and thereafter, neither Directorate nor Maxim shall have any claim, complaint or right against each other or any right to institute any proceedings against the other directly or indirectly in relation to the Project. i) That the refund process and settlement of liabilities of the Project shall include payments due to contractors, consultants and to third parties for any works done as per satisfaction of NAB and in covering any expenses relating to utilities bills, Government taxes, fees or other legitimate payments and dues outstanding as may be incurred for closure of the Project. j) That the Directorate understands and acknowledges that it has so far contributed Rs. 1.298 billion, which was collected from its personnel for the Project and that the refund process shall also include refund to the affectees of the Directorate only to the extent of Rs. 0.75 billion by Maxim and if in case of non-payment, such amounts shall be refunded from sale/auction of Project Lands or through its own personnel sources of Maxim and that such amounts shall constitute as part of the liabilities of the Project. k) That the Directorate agrees, understands and acknowledges that any shortfall in ensuring the complete refunds and meeting the liabilities of the Project would be realized from sale/auction of Project Assets and any shortfall remaining thereafter from the advance/profit or any other kind of payment earlier withdrawn by Maxim from the Project and that such amounts shall no longer be considered or deemed as earned by Maxim and if any shortfall remains thereafter, such remaining liability shall be covered from sale/auction of any part or all of Project Lands without any objection (described in Annexure-C) of this Affidavit. 3. In case, the amounts deposited by the affectees are fully refunded and other project liabilities mentioned above are settled without any need for sale of Project Lands being kept as collateral, then the Directorate shall transfer the Project Lands to Maxim' s name subject to fulfillment of all of its obligations under this Affidavit, including but not limited to payment of Rs. 750 Million in favour of Directorate, returning/utilizing the advance/profit or any other kind of payment earlier withdrawn by Maxim from the Project to cover shortfall/remaining liabilities of the Project, etc, or file any claim against the aforesaid undertaking.
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4. That the Directorate agrees and understands that this Affidavit has been executed keeping in view the best interest of the public and henceforth, the Directorate shall not challenge this Affidavit or the Application for commencement of refund or any of its part in any court or forum or move to suspend or seek any form of stay order against the refund process of public affectees and/or in settlement of all liabilities of the Project. 5. That the Directorate agrees that it shall not file any new suit, petition, claim, action, law suit or any kind of legal proceeding against Maxim in any court or forum, if the actions concerned relate to the Agreement of the Project or with respect to refund process of affectees and/or settlement of liabilities of Project. 6. That in case, any law suit, petition or legal proceeding is filed against the Project, the Directorate shall abide by the terms of this Affidavit and defend such suits and actions on basis of the provisions of this Affidavit. 7. That from the date of this Affidavit, the Directorate agrees and understands that Maxim shall no longer have any rights relating to the Project inclusive of any marketing rights and that the Maxim shall not be allowed to issue any advertisements, engage in any correspondence/communication with the affectees or market any information out in the public relating to the Project or about the contents of this Affidavit or Application. 8. That the Directorate agrees, understands and acknowledges that if for any reason, Maxim objects to the stated terms of this Affidavit and/or interferes the refund process in any way, shape or manner at any stage, then Maxim shall forfeit all and any rights/claims against the Project Lands and any works/assets over the same. 9. That the Directorate agrees and understands that Maxim shall not claim any damages, claim for lost profits or damages or reimbursements of any money on any account whatsoever from the Directorate. 10. That the Directorate agrees, understa nds and acknowledges that all the liabilities for purposes for refund of the general public and for settlement of all liabilities of the Project shall remain the responsibility , liability and obligation of Maxim. 11. That unless and until this Application is granted, grave prejudice and irreparable harm shall be caused. 12. That whatever has been stated above is correct and true to the best of my knowledge and belief." "AFFIDA VIT IN SUPPOR T OF APPLICA TION FOR COMMENCEMENT OF REFUNDS AND FOR…
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