Sector E-11 Islamabad development project: SC strikes down CDA & MPCHS joint venture

Court says from any angle the transaction appears to be a sham deal
CDA board directed to takeover the project and complete it in
accordance with CDA Ordinance, 1960
CDA chairman directed to submit compliance report within one month
MPCHS given liberty to pursue the remedy for recovery of any amount spent on the project

ISLAMABAD (Friday, April 15, 2011): The Supreme Court (SC) on Friday struck down a joint venture agreement between the Capital Development Authority (CDA) and Multi Professional Cooperative Housing Society (MPCHS) for the development of 54 acres of land in Sector E-11, Islamabad and it inoperative and ineffective.

“Any transaction, which is not transparent and goes against the interests of the general public constitutes violation of Article 9 of the Constitution, which guarantees right to life to all persons,” the court held in its detailed judgment. Chief Justice (CJ) Iftikhar Muhammad Chaudhry announced judgment on a suo moto case, taken on news report in July 2009. The court held that under Clause (iv) of regulation 4(1) A of the Regulation 1992, the agreement was inconsistent with sections 12 and 13 read with Section 2(a) & (j).
Compliance: The court directed the CDA board to takeover the project and complete it in accordance with the provisions of the CDA Ordinance, 1960. The CDA chairman has been directed to ensure implementation of the direction and submit compliance report within one month from the date of the judgment.
Remedy: However, the court has given MPCHS liberty to pursue the remedy for recovery of any amount spent on the project in accordance with the law. The verdict notes that Islamabad being the capital of the country, each inch of its land belongs to the entire public of Pakistan.”
It held that CDA was not competent to allow private societies to operate in Zone-1, even otherwise the transaction could, in no manner, be termed as transparent. It also raised objection to bidding process saying that there was complete absence of fair and open competition in the bidding process, thus such a situation did call for making a fresh advertisement, which was not done.
It said, “Admittedly, it is a prime land situated in Sector E-11, which is a most expensive location of the capital city. The CDA, which is a statutory body, established by law, is mandated not only to make arrangements for the planning and development of the capital city, but is to be authorized/ compelled to perform functions of a Municipal Commit-tee to promote interests of different sections of the society including taxpayers.
It says that right to life has been explained and interpreted by the superior courts in a large number of cases. It includes right to livelihood, right to acquire, hold and dispose of property, and right to acquire suitable accommodation, which could not hang on to fancies of individuals in authority, and includes all those aspects of life which go to make a man’s life meaningful, complete and worth living. “A fundamental right cannot be snatched away or waived off pursuant to any agreement,” the verdict held.
It said from any angle, the transaction appears to be a sham deal, adding that the whole exercise appeared to be eyewash”. “Though it was an open bid invited through advertisement in the press, but only three parties came forward out of which two did not submit the financial and technical proposals along with their applications, which depicted their non-seriousness in the matter,” the verdict notes, adding that only one firm, MPCHS submitted the application accompanied by the financial and technical proposals, which was accepted by the CDA authorities. Thus, with only one party left in the field, practically there was no competition”. “The non-submission of financial and technical proposals, in the circumstances, appeared to be collusive and mala fide”, it has been observed.
It said, in such a situation, the CDA, instead of going for further advertisement of the tender, chose to be content with the one and the only party in the field and thus deprived of the advantage of competitive bidding”.
“This action of the CDA functionaries contravened the provisions of Article 18 of the Constitution and caused a great detriment to the public exchequer as well,” the verdict noted. According to the agreements, huge sums of money running into millions of rupees were allegedly paid but, surprisingly, no details of payment, such as bank drafts, pay orders, cheques, etc. were given in the said agreements, it has been noted. It is not believable that such large sums of money were paid in cash, it said. It said, “Besides, the agreements in question, there were documents not registered in accordance with law. Besides, no details of the land allegedly in the illegal possession of the land grabbers along with the names/number of encroachers were provided to the court, which negates the claim of huge investment made by the MPCHS in the project.
It said whether the CDA Board could have, in all fairness, agreed to terms and conditions, which were totally different from those mentioned in the advertisement and render the transaction bereft of the essential attributes of transparency and fair play. “Governmental bodies are invested with powers to dispense and regulate special services by means of leases, licenses, contracts, quotas, etc., where they are expected to act fairly, justly and in a transparent manner and such powers cannot be exercised in an arbitrary or irrational manner”, the verdict noted.