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Petitioner: BNP (Private) Limited & Another VS Respondent: Capital Development Authority etc
Court Name: Islamabad High Court Judge(s): Aamer Farooq, Mohsin Akhtar Kayani Title: BNP (Private) Limited & Another vs Capital Development Authority etc Case No.: ICA NO.109/2017 Date of Judgment:2018-09-03 Reported As: 2019 CLC 20, 2018 IHC 107 Result: accordingly disposed of
Judgment AAMER FAROOQ J. This judgment shall decide instant appeal as well as other Intra Court Appeals mentioned in Schedule-A attached herewith, as they assail judgment dated 03.03.2017 passed by the Judge-in-Chambers in W.P. No.3043-2016 filed by the appellan t, in the instant appeal, and as common questions of law and facts are involved. 2. The facts, leading to filing of above mentioned appeals, are that the controversy pertains to the cancellation of leasehold rights granted to the appellant by the Capital Development Authority (CDA). In this regard, the property in question is a Plot measuring 13.5 acres (650098 sq.yds.) situated at the end of the Constitution Avenue, Islamabad adjacent to the Convention Centre. In 1996, Federal Government granted approval for construction of Monument as well as Convention Centre, which was to be completed by 1997. Approval was also accorded by the Cabinet for amendment in the Master Plan for Islamabad for construction of the Monument and the Convention Centre, as the same, in its original form, did not permit any construction in the vicinity . After its construction, in 1997, the Cabinet decided to privatize Convention Centre and also decided to construct a Five Star Hotel at the given site. It is pertinent to mention that for the said purpose, neither the Master Plan was amended nor any scheme was sanctioned under Capital Development Ordinance, 1960. Pursuant to the decision of the Cabinet in 1996, Master Plan of Islamabad was amended on 06.05.1997 providing for construction of Convention Centre, as originally, the area was earmarked for Kashmir Highway and Murree Road, Islamabad. On 02.07.1997, a proposal was placed before the Cabinet for modification of the Master Plan of Islamabad by allowing construction of a Five Star Hotel, Shopping Mall etc. along with Convention Centre, but no approval was granted by the Cabinet. In May 1998, Cabinet Committee on Privatization, constituted a Sub-Committee to negotiate with M/s Daewoo Corporation for privatization of the Convention Centre; on 31.05.1999, Capital Development Authority, in its meeting held on 10.11.1997, approved byelaws for construction of Five Star Hotel to have 20-storeys. Subsequently, since there were issues regarding height of the Building in light of the Zoning
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Regulation of Capital Development Authority, therefore, height was decreased from 180-feet to 150-feet. On 18.02.2004, senior officials of the Capital Development Authority gave presentation to the Secretary, Ministry of Interior for construction of Six Star Hotel adjacent to the Convention Centre. On 12.04.2004, Ministry of Interior granted approval for advertising the aforementioned Plot for construction of Five Star Hotel; pursuant to the same, Capital Development Authority published an advertisement inviting Requests for Pre-qualification from interested parties for construction of a Five Star Hotel. The advertisement specifically provided that the construction was for Five Star Hotel and according to the published byelaws, the construction was to include Five Star Hotel-cum- Convention Centre; maximum number of rooms mentioned in the byelaws was 500 including 20 VVIP Suites. The bidding took place, however , the appellant i.e. BNP Private Limited did not participate in the process and only two entities namely M/s Pakistan Services Limited and M/s Hashwani Hotels Limited qualified in the bidding process. The bidding could not materialize for administrative reasons and hence was cancelled. On 28.09.2004, a fresh advertisement was made inviting applications for Pre-qualification; again the invitation was to construct and operate a Five Star Hotel at the property/Plot. Through a separate advertisement, bidding was also invited for construction of a Shopping Mall as well as a Five Star Hotel. The bidding documents provide d all the relevant details which included that the target date for opening of the Hotel was in 2008 and scope of construction was a Five Star Luxury Hotel. Subsequently , Federal Government turned down the proposal for construction of a Shopping Mall. It is pertinent to observe that only bidders, who were prequalified by CDA, made a bid. In this regard, BNP Private Limited did not participate in the process however four juridical persons i.e. Bismillah Textile Pvt. Ltd., Niagara Mills Pvt. Ltd., Paragon City Pvt. Ltd. & Belhas a International Company LLC, made a bid under the joint venture termed as 'BNP Group'. On 25.02.2005, in response to the query of one of the bidders namely M/s Hashwani Hotels Limited, CDA sent letters to all the bidders including BNP Group clarifying that 'Serviced Apartments' shall form integral part of the Hotel Property , which are to be operated by the Hotel Management and the same shall not be for sale. The same clarification also covered the shops which were again not to be for sale. On 07.02.2005, a document was issued again clarifying that construction on the Plot was for the purposes of a Five Star Hotel along with Serviced Apartments and related facilities. Meanwhile, one of the bidders namely Hashwani Hotel Limited filed a petition (W.P. No.586 of 2005) before Hon'ble Lahore High Court, Rawalpindi Bench Rawalpindi, which was dismissed on 27.04.2005. An Intra Court Appeal (ICA No.64 of 2005), assailing the judgment dated 27.04.2005, was filed but the same was dismissed for non-prosecution on 25.05.2005. On 09.03.2005, BNP Group made a bid of Rs.75000 per sq.yd., which was accepted hence it was the successful bidder. The successful bidder had to pay a sum of Rs.4,888,235 million in 15-years and was also required to furnish a Bank Guarantee and a Performance Guarantee. In this behalf, 15% of the total construction amount was to be paid within 45-days. On 28.07.2005, a lease deed was executed between BNP Pvt. Ltd./the appellant and the CDA. It is pertinent to mention that BNP Pvt. Ltd. was neither a Member of BNP Group nor it had made the bid in its individual capacity, but was allowed to execute lease deed by CDA. On 15.06.2005, since the appellant/BNP Pvt. Ltd. did not adhere to the terms of payment of installments and requested for rescheduling the same. On 26.02.2007, the matter was placed before the Economic Coordination Committee (ECC), which decided that CDA was competent to decide the issue regarding rescheduling of installments. Meanwhile, building plans were also submitted for approval and as those contained Luxury Apartments therefore the architects were informed accordingly that the same are in violation of terms of lease. On 16.08.2007, payment schedule of the installments was rescheduled and pursuant thereto, amended lease agreement was executed on 04.10.2007 modifying earlier payment schedule. On 29.03.2008, building plans were submitted which included Hotel Tower Apartments and Serviced Apartments. Meanwhile, the appellant requested for issuance of No Objection Certificate in favour of banks and prospective third party buyers pursuant to clause 2.6 of the lease deed which was turned down by CDA. On 26.08.2008, the appellant/BNP Pvt. Ltd. sent a letter denying that they are constructing and re-selling Residential Apartments and it was clarified that Serviced Apartments were being constructed as per the approved drawings. Meanwhile, the issue regarding height of the Building was again raised, as Civil Aviation Authority/Ministry of Defence raised an objection. On said issue, the appellant filed a Suit before the Civil Court at Islamabad. Meanwhile, explanation was sought from CDA regarding the appellant being a non-member of the Consortium
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Group. The reminders were also issued time and again. A settlement was reached between CDA and appellant and consequently , the latter withdrew the Suit and a second amended lease deed was executed on 07.01.2013, by virtue of which, height of the Building was reduced from 45 to 23 storeys. An audit objection was also raised by the Public Accounts Committee regarding payment schedule of the installments on the ground that terms of the contract, once settled, could not be altered in light of Rule 19 (iv) of the General Financial Rules of the Federal Government. The Public Accounts Committee issued directions to CDA in light of Audit Para. A petition under Article 199 of the Constitution (W.P. No.3755-2014) was filed by the appellant, which was decided vide judgment dated 03.03.2016 and CDA was directed to grant opportunity of hearing to the appellant. Pursuant to the referred directions, opportunity of hearing was granted by the Board of CDA before the Committee constituted for the said purpose. The report of the Committee was placed before the Board of CDA and in light of which, respondent Authority decided to cancel the lease granted to the appellant. The referred decision was challenged by the appellant and others by way of a petition under Article 199 of the Constitution (W.P. No.3043-2016) before this Court, which was dismissed by the Judge-in Chambers vide the impugned judgment dated 03.03.2017. In ICA No.229/2016 CDA has challenged the decision by the Judge-in-Chambers to refer the matter to CDA Board for providing opportunity of hearing before taking any action against BNP (Pvt.) Limited. 3. There are two sets of appeals before this Court; one being filed by the appellant which is the lessee with respect to the Plot in question and the other filed by the third party interest holders, who claim to be the sub-lessees on the basis of sub-lease executed by the appellant with them. 4. Mr. Makhdoom Ali Khan, Senior Advocate Supreme Court of Pakistan, appearing on behalf of the appellant, inter alia, contended that the Judge-in Chambers has held that the appellant was unable to show a single document that the Plot in question was created, offered for sale or advertised for construction other than a Five Star Hotel let alone Residential Apartments. In this behalf, it was contended that bidding proces s expressly referred to Serviced Apartments and the said concept was also mentioned in the scope of the Project as well as byelaws of the Project; that CDA's letter dated 25.02.2005 addressed to Hashwani Hotels referred to Serviced Apartments as well as the judgment of the Hon'ble Lahore High Court dated 27.04.2005 in W.P. No.586-2005. It was further contended that lease deed dated 28.07.2005 also contains three recitals wherein reference to Serviced Apartments has been made and clause 2.6 permits sublease without prior notice to CDA; that clause 3.3 refers to Apartments. Moreover , approval of the Building Plans also refers to Serviced Apartments/T ower B&C. It was contended that if there is any ambiguity in the documents, the same has to be construed in favour of the appellant. The invitation to submit qualifications and lease deed was approved by CDA and they have to be interpreted contra proferentum . 5. Learned counsel for the appellant further contended that the Judge-in- Chambers did not take into account that no special favour was granted to the appellant; that there is no special relationship between appellant and CDA and lease was executed as was in other similar cases including Serena and Centaurus. It was also submitted that observation by the Judge-in-Chambers that CDA, being the Regulator, gave up its obligation, is totally uncalled for and there is no collusion and irregularity either on part of appellant or the respondent Authority. 6. Mr. Makhdoom Ali Khan, ASC also submitted that appellant had challenged letter dated 03.08.2016 issued by CDA, whereby it was informed that lease in favour of the appellant, with respect to the Plot in question, stands cancelled on the basis of the meeting of CDA Board held on 29.06.2016; the reasons provided therein were violation of CDA byelaws, violation of lease agreement as well as change in the entity . It was submitted that lease has been cancelled without assigning any reason, which is in violation of Section 24-A of General Clauses Act, 1897 inasmuch as no specific reason has been stated and the order is non-speaking. It was argued that the Judge- in-Chambers did not discuss the letter of cancellation in the impugned judgment and there is also no discussion on the decision by the CDA Board in the judgment. 7. The dispute between the parties namely appellant and CDA was contractual and a petition under Article 199 of the Constitution is maintainable in contractual disputes, it was argued by learned counsel for the appellant. Reliance was placed on cases reported as 'Deewan Petroleum Vs. GOP' (2010 CLD 988), 'Hazara Development Trust Vs. Qaisara Elahi' (2005 SCMR 687), 'Ramna Pipe Vs. SNGPL (2004 SCMR 1274 ), 'Daewoo Corporation Vs. National Highway Authority' (2000 MLD 1745 ), 'Airport Service Manager Vs. Quaid-e-Azam International Airport'
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(1998 SCMR 2268 ), 'M/s Wak Orient Power and Light Limited Vs. GOP' (1998 CLC 1178) & 'M/s Pacific Multinational Pvt. Ltd. Vs. IG Sindh Police' (PLD 1992 Karachi 283 ). 8. It was also contended on behalf of learned counsel for the appellant that appellant had challenged the cancellation of lease by CDA and the proceedings were adversarial in nature and not inquisitorial and the Judge-in- Chambers could not have looked beyond the reasons stated in the letter of cancellation; that the Judge-in- Chambers could not have examined the reasons stated in the Minutes of the Meeting of CDA Board and the impugned judgment is liable to be set aside on that score. Reliance was placed on case reported as 'Ministry of Inter Provincial Coordination Vs. Maj. (Retd.) Ahmad Nadeem Sadal' (2014 CLC 600). 9. Mr. Makhdoom Ali Khan, Senior Advocate Supreme Court of Pakistan submitted that the decision of CDA Board is on eight points. In this behalf, points No.1 to 3 pertains to JV participation in the bid and the appellant managed to sign the lease deed. It was argued that one of the participants of the bid was Elite Home Fashions Pvt. Ltd., the name of which was changed to BNP Pvt. Ltd. and where such is the case that name of the Company is changed, there are penal actions provided in the Companies Laws of Pakistan. It was submitted that the Judge-in-Chambers did not take into account the referred provisions of law and the Companies Law. It was highlighted that a Memorandum of Understanding was executed on 01.12.2004 between JV Partne rs constituting BNP Group and subsequently an agreement was executed by the referred Partners on 16.03. 2005; that clauses E&G of JV Agreement provide for utilization of existing company-Elite Home Fashions Pvt. Ltd. for the Project; that JV Agreement was shared with CDA and the lease deed was executed in favour of BNP Pvt. Ltd.; likewise, letters by CDA approving rescheduling for payment addressed to BNP Pvt. Ltd. and the amendment of the lease deed were executed in favour of the appellant; even, settlement between BNP Pvt. Ltd. and CDA and the Certificate for remortgage was issued in favour of the appellant. In the referred backdrop, it was contended that there is estopple by conduct against CDA. Reliance was placed on cases reported as 'Nazim-ud-D in Vs. Sheikh Zia ul-Haq Qamar ' (2015 SCMR 24), 'Dr. Muhammad Javaid Shafi Vs. Syed Rashid Arshad' (PLD 2015 SC 212), 'Mian Muhammad Saeed Vs. The Province of West Pakistan' (PLD 1964 SC 572), 'TATA Iron & Steel Co. Ltd. Vs. Union of India' [(2001) 2 SCC 41]. The appellant also placed reliance on the case law with respect to the agreement that CDA failed to give reasons and the decision of CDA Board is in violation of Section 24-A of General Clauses Act, 1897; 'Muhammad Majid Vs. Secretary, Ministry of Manpower' (PLD 2017 Islamabad 19), 'Muhammad Amin Muhammad Bashir Limited Vs. Government of Pakistan' (2015 SCMR 630), 'Airport Support Services Vs. Airport Manager' (1998 SCMR 2268), 'Federation of Pakistan Vs. Tahir Latif' (2007 SCMR 152), 'Secretary, Ministry of Health Vs. Dr. Rehana Hameed' (2010 SCMR 511) & 'United Bank Limited Vs. Federation of Pakistan' (2014 SCMR 856). Learned counsel further submitted that the Judge-in-Chambers erred in observing that possession has been handed over to the third party without completion certificate by CDA. In this behalf, it was contended that possession has not yet been handed over and the third party buyers/sub-lessees did not occupy the premises; that there is no finding on this issue and no transfer of occupation. 10. Learned counsel further submitted that there are numerous findings by the Judge-in-Chambers in the impugned judgment which are against CDA and after doing so, the fate of third party purchas ers has been put in the hands of the respondents, which could not have been done. It was also argued that State Agencies stand in a fiduciary relationship to the people who are the beneficial owners of state owned assets. It was also submitted that it is an established principle that no one can benefit from his wrong. Reliance was placed on cases reported as 'Justice Hasnat Ahmad Khan Vs. Federation of Pakistan' (PLD 2011 SC 680), 'Union of India Vs. Major General Mada n Lal Yadav' (AIR 1996 SC 1340), 'Mian Allah Buksh Vs. Fazal Karim' (PLD 1969 Quetta 13) & 'Khairpur Textile Mills Ltd. Vs. Central Board of Revenue' (PLD 1969 Karachi 163). It was also argued that the Hotel was not constructed without any fault of the appellant. In this behalf, it was submitted that on 08.10.2005, due to earthquake, Margalla Towers collapsed and CDA revised the Building Codes and in this backdrop, on 23.02.2006, the appellant applied to the Prime Minister for rescheduling of payments and the matter was renegotiated and on 29.11.2006, the appellant submitted the building plans and on 16.08.2007, the appellant' s schedule was altered and first amendment to the lease deed was executed on 04.10.2007, whereupon the appellant paid a sum of Rs.120 millions and the remaining amount was to be paid in 12-equal yearly installments of Rs.334,833,125/-. It was
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contended that even the issue of height cropped up which delayed the Project and even NAB intervened and the settlement was reached between the parties on 07.12.2012, consequent whereupon, second amendment to the lease deed was executed; that on 14.02.2014, revised building plans were submitted which had not been approved by CDA till date. 11. Mr. Makhdoom Ali Khan, Senior Advocate Supreme Court of Pakistan argued next that power of CDA to cancel lease is not inherent and can only be done under Regulation 19 of the Islamabad Land Disposal Regulation, 2005, which include non-payment of dues, non-completion of building, violation of terms and conditions of allotment, violation of byelaws/regulations/instructions, whereas in the instant case, it was submitted, building was being constructed in accordance with lease deed and third part rights were created in accordance with clause 2.6 of the lease deed; that no byelaws/regulations/instructions were violated and Hotel construction was delayed due to CDA's failure to approve revised building plans, hence the reasons given by CDA for cancellation of the lease i.e. violation of byelaws of CDA as well as lease deed, are not tenable. It was contended next that there were findings of illegality in the impugned judgment to the effect that construction and sale of Residential Apartments is illegal however there is no finding to the effect that lease deed was void, therefore, section 65 of the Contract Act, 1872 applies, where agreement is declared void ab-initio and the person, who has received such advantage, is bound to restore it or to make compensation for it to the person, from whom, he received it. Reliance was placed on case reported as 'Lakhra Power Generation C. Ltd. Vs. Karadeniz Powership Kaya Bey' (2014 CLD 337 ). 12. Learned counsel further submitted that effect of non-registration of the lease deed dated 28.07.2017 is non- consequential, as it was not a reason given by CDA Board in its decision dated 29.07.2016, hence the terms and conditions contained therein are binding; that section 49 of the Registration Act, 1908 operates in a manner so as to invalidate transfer of property in question. Reliance was placed on section 53-A of the Transfer of Properties Act to argue that rights may not be enforced against an individual having taken possession in part performance of the agreement. In support of his contentions, learned counsel placed reliance on cases reported as 'Kalimuddin Ansari Vs. Director, Excise & Taxation, Karachi & Another' (PLD 1971 SC 114) & 'Mst. Ghulam Sakina Vs. Umar Bakhs & Another' (PLD 1964 SC 456). It was also argued that in light of Section 47 of the Registration Act, 1908, lease deed shall operate retrospectively. Reliance was placed on case reported as 'Ghulam Rasool & Others Vs. Akbar Ali & Others' (2011 SCMR 794). It was contended that lease deed was signed and executed between BNP and CDA on 28.07.2005 and in light of Section 47 of the Registration Act, 1908, if Sale Deed is registered with the Joint Sub-Registrar today i.e. 15.05.2008, the lease deed shall operate from the date of its execution. 13. Mr. Babar Sattar , Advocate Supreme Court of Pakistan, appearing on behalf of appellants in ICA No.102-2017, inter alia, contended that stranger to the lis is not prohibited to file an appeal. Relia nce was placed on case reported as 'H.M. Saya & Com. Karachi Vs. Wazir Ali Industries Limited, Karachi and others' (PLD 1969 Supreme Court 65) and it was also contended that sub-lessees have vested right therefore have locus standi to file the instant appeal. 13. Learned counsel, on facts, adopted the arguments by the learned counsel for the appellant in ICA No.109- 2017. 14. It was argued that CDA, being the state functionary and the Regulator , performs obligatory duty to the public which is a sacred trust and so is the exercise of statutory functions; that the impugned judgment disregarded the settled principle that right of innocent third party ought to be protected and no person should be made to suffer on account of acts of public functionary . Reliance was placed on cases reported as 'The Montgomery Flour and General Mills Ltd. Montgomery Vs. The Director Food Purchases West Pakistan, Lahore and others' [(PLD 1957 (W.P.) Lahore 914)], 'Ikram Bus Service and others Vs. Board of Revenue, West Pakistan and others' (PLD 1963 Supreme Court 564), 'Habib Ullah Energy Limited and another Vs. WAPDA through Chairman and others' (PLD 2014 Supreme Court 47) & 'Owaisco Vs. Federation of Pakistan' (PLD 1999 Karachi 472 ). 15. Mr. Babar Sattar, ASC further argued that court can look into the contractual matters in its jurisdiction under Article 199 ibid. It was also argued that rights of third party have been ignored and disregarded. In this behalf, the distinction between occupation and possession was ignored; that the Judge-in Chambers decided the issues
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beyond the subject matter and pleadings of the parties and failed to draw a distinction between void and voidable orders. It was contended that writ petition ought not to be exercised in aid of injustice; that the conduct of CDA attracts estopple against it and it cannot approbate and reprobate and the doctrine of substantial compliance has been ignored. Learned counsel took the Court through various doctrines including legitimate expectation and locus poenitentiae and contended that same are attracted in the facts and circumstances of the case in favour of the appellant. Reliance was placed on cases reported as 'Federal Government Employees Housing Foundation Vs. Muhammad Akram Alizai, Deputy Controller, PBC, Islamabad' (PLD 2002 Supreme Court 1079), 'Munir Ahmad Ghulam Muhammad Akhtar Vs. Pakistan Defence Housing Authority (DHA)' (2004 YLR 2047 Karachi), 'Pakistan through the Secretary, Ministry of Finance Vs. Muhammad Himayatullah Faruki' (PLD 1969 Supreme Court 407), 'Council of Civil Services Union Vs. Minister for the Civil Services' [(1985) A.C. 374)], 'National Buildings Construction Corporation Vs. S. Raghunath' [(1988) 7 SCC 66) & 'Food Corporation of India Vs. Kamdhenu Cattle Feed Industries' [(19930 1 SCC 71]. 16. Learned counsel further contended that in case of immovable properties, the monetary compensation is not an adequate remedy and the specific performance is. Reliance was placed on case reported as 'Province of Punjab through District Coordination Officer, Okara and others Vs. Market Committee, Okara through Chairman/Secretary' (2011 SCMR 1856). Learned counsel took the Court through the provisions of Registration Act, 1908 as well as Transfer of Property Act, 1882 to argue that documents in question are enforceable and do not suffer from any illegality.…
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