IHC Declares Verdict in Favor of CDA Canceling Lease of One Constitution Avenue

The Islamabad High Court has issued its detailed written judgment on the cancellation of the lease for One Constitution Avenue, rejecting the appeal filed by BNP (Private) Limited against the termination.

The court upheld the Capital Development Authority’s (CDA) decision dated March 8, 2023, which annulled the lease.

Chief Justice of the Islamabad High Court, Muhammad Sarfraz Dogar, authored the judgment, which also dismissed BNP Limited’s execution petition. The court ruled that the CDA’s action was taken in accordance with the applicable legal framework and was therefore lawful. It further disposed of petitions filed by third-party investors, directing them to approach the relevant forums to protect their rights.

The court observed that the petitioner company had failed to comply with financial obligations set under the Supreme Court’s earlier directives. BNP Limited did not pay the Rs. 2.916 billion installment for the year 2022, which was a key condition of the agreement. The judgment noted that the CDA’s decision to cancel the lease was consistent with the rights granted by the Supreme Court, which had earlier directed the company to pay Rs. 17.5 billion in installments over eight years.

The court further stated that BNP Limited failed to fully benefit from the “lifeline” opportunity granted under the earlier Supreme Court ruling. Its objection regarding a technical issue in the 30-day notice period was also dismissed.

Earlier, the Supreme Court had reinstated the lease on January 9, 2019, subject to payment of outstanding dues within the stipulated timeframe.

Despite repeated reminders from the CDA, BNP Limited defaulted on the 2022 installment. The authority issued a notice on February 7, 2023, and subsequently cancelled the lease on March 8, 2023. The court also noted that a cheque of Rs. 50 crore submitted by the petitioner was insufficient to resolve the outstanding liabilities.