The Bahria Town would have to pay billions of rupees as the Supreme Court has declared that the housing project had defaulted on instalments that were to be paid for the purchase of the land measuring 16,896 acres.
The realtor has to pay Rs460 billion for the lands it occupies in Karachi’s Malir district and Jamshoro district, and after failing to pay the instalments “the entire balance amount has become due and payable,” the court ruled.
The roughly £190 million – described in the court order as “about GB Pounds 136 million and about US Dollars 44 million which at the relevant time was converted to about 35 billion Pakistani rupees” – that were remitted from abroad were probably“proceeds of criminal activity which was detected by [the UK’s] NCA, seized and thenfrozen,” the court determined.
“Apparently, these monies were used to offset Bahria Town’s stated liability,bringing to mind the idiom – robbing Peter to pay Paul. Therefore, theamount received from abroad and the markup earned thereon be remittedto the Government of Pakistan,” the court ruled.
“The cost of the development work to be undertaken by Bahria Town and the cost of the land [Rs460 billion] is recovered by Bahria Town from its allottees, and a portion therefrom was to be paid towards the cost of the land,” the SC order said which was issued on Monday.
“The consent order had also stipulated that ‘two consecutive installments or three installments in toto, shall constitute a default resulting, inter alia, the whole balance amount shall become due and payable’ (clause (c) of the consent order). Admittedly, Bahria Town is in default, and consequently the entire balance amount has become due and payable,” it added.
The written order comes three days after a three-member bench comprising Chief Justice of Pakistan Qazi Faez Isa, Justice Aminuddin Khan, and Justice Athar Minallah ruled that Rs65 billion – which includes the amount remitted from the UK by the Bahria Town and money deposited by Bahria Town in a Supreme Court account locally — be transferred to the Central and the Sindh governments.
Around Rs35 billion would be given to the federal government and Rs30 billion to the Sindh government out of around Rs65 billion.
Malik Riaz, who owns the housing project, earlier this month rebuffed rumours of Bahria Town default and described them as a “lie”. The clarification had come against the backdrop of a Sindh Building Control Authority order that stopped the sale and purchase of plots in Bahria Town Karachi. The authority also halted its advertisement campaigns.
While mentioning the £190 million amount remitted from abroad, it said that the consent order did not permit payments to be made from abroad or from the accounts of eight individuals and entities.
The order, authored by the three judges, went on to add that only Mashreq Bank of United Arab Emirates – out of the people who remitted money – replied to the court notices.
In its reply on November 22, the bank said that the amount sent from the UK was not intended for the Government of Pakistan.
The SC lamented that the amounts were remitted into the apex court’s account without seeking its permission and it was “unnecessarily involved” with money detected by NCA, which probably were proceeds of criminal activity that was detected by NCA.
The 13-page order highlighted that the other persons/entities to whom notices were sent, except Mashreq Bank PSC, did not come forward to explain why monies were sent from their accounts to the account of the SC.
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The SC added that the National Bank of Pakistan should close the account in the name of the registrar of the SC maintained by it. “The NBP should submit a certified complete bank statement of the account and a separate certificate under the signature of the Bank Manager and co-signed by the President of the National Bank of Pakistan stating the amounts that were respectively remitted to the Government of Pakistan and the Government of Sindh and that the said account has been closed.”
In the eighth paragraph of the order, the court said: “The myth of the stated shortfall of land has been fully exposed by the report and Bahria Town’s own filings in the court.”
According to the survey, the housing scheme was in possession of 3,035.63 acres of excess land, since a total of 19,931.63 acres of land in Malir and Jamshoro was in its possession.
Moreover, the SC imposed Rs2 million worth of fine on the housing scheme that has to be paid to the SIUT and the Sindh government.
“Bahria Town filed frivolous applications and the civil review petition and wasted the time of this court, therefore, we impose costs of an amount of one million rupees which should be paid to the Sindh Institute of Urology and Transplantation, which is serving the people of Sindh. Bahria Town should in addition also reimburse to the Government of Sindh the amount of one million rupees regarding the amount spent on the survey conducted by the Survey of Pakistan.”
