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SC strikes down CDA-MPCHS Joint Venture Agreement

ISLAMABAD, Apr 15 (APP): The Supreme Court on Friday declared a Joint Venture Agreement (JVA) between the Capital Development Authority (CDA) M/S Multi Professional Cooperative Housing Society (MPCHS) for the development of 54 acres of land located in northern strip of Sector E-11, Islamabad, as inoperative and ineffective.

The 39-page verdict, authored by Chief Justice Iftikhar Muhammad Chaudhry on a suo motu case of July 2009, says that under Clause (iv) of regulation 4(1)A of the Regulation 1992 is declared to be inconsistent with sections 12 and 13 read with Section 2(a) & (j) and consequently the JVA entered with MPCHS is rendered inoperative and ineffective qua CDA.

The CDA Board has been directed to takeover the project and complete the same in accordance with the provisions of the CDA Ordinance of 1960.

The Chairman CDA has been directed to ensure implementation of the above direction and submit compliance report within a period of one month from the date of this judgment.

However, the verdict gave MPCHS liberty to pursue the remedy for recovery of any amount spent on the project in accordance with law.
The Chief Justice in his detailed judgement observed “It is important to note that Islamabad being the Capital of the country,each inch of its land belongs to the entire public of Pakistan.”

“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 Committee,inter alia, to promote interests of different sections of the society including taxpayers, “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 verdict said 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,” it says.

About agreement, the Chief Justice said “Thus, looked at from any angle, the transaction appears to be a sham deal.The whole exercise appears to be an eyewash.”

He further wrote in his verdict that “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. 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. 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,” he observed.

Referring to a reason, the CJ noted according to the aforesaid 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 is not believable that such large sums of money were paid in cash, he adds.

He further says “Besides, the agreements in question were documents not registered in accordance with law. There was, so to say, no valid proof of payment furnished to our satisfaction. Further,no details of the land allegedly in the illegal possession of the land grabbers along with the names/number of encroachers were provided.”

The CJ says this also negates the claim of huge investment made by the MPCHS in this project.

He says 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.

It is to be seen 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, he adds.

The 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, he adds. “Transparency lies at the heart of every transaction entered into by, or on behalf of, a public body. To ensure transparency and fairness in contracts, inviting of open bids is a prerequisite. The reservations or restrictions, if any, in that behalf should not be arbitrary and must be justifiable on the basis of some policy or valid principles, which by themselves are reasonable and not discriminatory,” he says.

Having held that the 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. The decision also raises objection to bidding process by saying that there was complete absence of fair and open competition in the bidding process. Such a situation did call for making a fresh advertisement, which was not done.

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