IHC upholds lease cancellation in One Constitution Avenue case, buyers left in limbo

The Islamabad High Court upheld on Monday the Capital Development Authority's (CDA) cancellation of the lease for One Constitution Avenue - Islamabad's upscale mixed-use tower, ruling that developer BNP (Private) Limited failed to meet financial conditions set by the Supreme Court in 2019.

The 33-page judgment directly affects hundreds of apartment buyers and investors who purchased units from BNP.

What did the IHC rule on One Constitution Avenue?

The court ruled that BNP's lease cancellation was lawful due to repeated financial defaults, including non-payment of a PKR 2.916 billion installment due in December 2022. Buyers who filed separate petitions cannot claim independent rights against the CDA. Their investments, the court held, sink or sail with the developer's lease.

What does the ruling mean for apartment buyers and investors?

Chief Justice Sardar Muhammad Sarfraz Dogar ruled that third-party buyers and sub-lessees cannot separate their claims from the principal lease between BNP and the CDA. The court acknowledged genuine hardship faced by investors but directed them to seek remedies against BNP directly, rather than against the authority. The CDA bears no independent enforceable obligations to those buyers under the judgment.

The government has since moved to address the fallout. A high-level committee headed by Federal Law Minister Azam Nazeer Tarar, with State Minister for Interior Talal Chaudhry as a member, has been tasked with reviewing all legal and administrative matters related to the project, hearing residents' complaints, and recommending a way forward. The committee is due to submit its findings to Prime Minister Shehbaz Sharif by May 8.

How did the eviction at One Constitution Avenue unfold?

The verbal decision was announced in open court on Thursday, April 30. Late that same night, CDA teams accompanied by police and law enforcement raided the building in Islamabad's Red Zone and ordered residents to vacate within 24 hours. CDA officials said swift action was needed to prevent further appeals and stay orders that could extend the nearly two-decade dispute.

Following Prime Minister Shehbaz Sharif's intervention on Friday, the eviction was halted. CDA and police teams withdrew from the site, and One Constitution Avenue's own security personnel retook control of the building, restricting entry to unauthorised persons. The government confirmed that no coercive action will be taken against residents until the committee reports back.

What is the background to the One Constitution Avenue lease dispute?

The project was originally auctioned in 2005 for PKR 4.882 billion as a five-star hotel site. It was later converted into luxury residential apartments and commercial spaces without proper approvals, a point the court raised in its judgment. The company secured the lease for PKR 4.8 billion and was granted possession after paying an initial 15 per cent, but subsequently defaulted on payments, leaving PKR 14.5 billion unpaid.

The Supreme Court conditionally revived the lease in 2019, but BNP failed to meet the financial conditions attached to that revival. The IHC's Monday judgment found those failures were both clear and repeated.

What has Interior Minister Mohsin Naqvi said about One Constitution Avenue?

Interior Minister Mohsin Naqvi described the case as possibly the biggest scam in Pakistan's history, saying it implicated judges, bureaucrats, politicians, bankers, and others. Speaking to journalists in Lahore after the PSL final on Sunday night, Naqvi said: "It was illegal." He called for accountability against all those responsible for losses to the country, stressing that the law must apply equally to the wealthy and the poor.

The Prime Minister's intervention has prompted public debate about whether the same urgency is applied to evictions affecting low-income communities in areas such as Muslim Colony, Noor Pur Shahaan, and Said Pur.