The Supreme Court on Wednesday rejected an application of Bahria Town (Pvt) Ltd Karachi (BTLK) seeking a three-year delay in the payments of the total Rs460 billion that it had agreed to pay for purchasing prime land in Karachi.
In its plea filed on Tuesday, BTLK had sought freezing of the payment plan issued by the SC in view of pandemic-related recession, requesting that the payment of Rs2.5bn monthly instalments be deferred for three years — till September 2023.
A three-judge bench headed by Justice Ijazul Ahsan heard the application filed by senior counsel Syed Ali Zafar on behalf of the BTLK and its owner Malik Riaz Hussain.
The BTLK counsel argued in the court today that businesses the world over had been devastated due to the coronavirus pandemic and according to economic reports, hundreds of thousands of people had been rendered jobless.
Justice Munib Akhtar asked the lawyer to explain what losses Bahria Town, and not other businesses, had suffered due to the pandemic.
Justice Ahsan too made a similar direction, telling the counsel: “The government is saying that the economy has come back on track. Bahria Town should show its own figures, not of the world.”
The judge noted that Bahria Town had already sold off its Karachi project.
The counsel suggested that BTLK’s operations had been badly harmed by the economic downturn as well. But the bench remained unconvinced, with Justice Akhtar remarking that the “Supreme Court is not a bank where concession can be obtained through negotiations.”
The court subsequently rejected BTLK’s application through a short order, saying the detailed verdict on the plea will be issued later.
The BTLK is supposed to furnish before the Supreme Court Rs2.5bn by the seventh of every month.
On March 21, 2019, the SC had accepted an offer made by real estate tycoon Hussain to pay Rs460bn for the purchase of 16,896 acres of land from the Malir Development Authority (MDA).
The court had accepted the offer to implement its May 4, 2018, judgement which held that the land granted to the MDA by the Sindh government and its exchange with the land of private land developers Bahria Town was illegal.
BTLK’s application detailed the Covid-19 pandemic’s major impact in Pakistan and on multinationals across the world.
It said that in compliance with the earlier court order, Bahria Town had already furnished Rs57bn, excluding Rs1.2bn mark-up earned on the advance amount deposited on a decreasing balance basis which was available for adjustment.
According to the application, to pay a monthly instalment of Rs2.5bn, the BTLK had to earn Rs100 million per day, based on an average 25 working days per month. Even in normal circumstances, this was a huge task and the BTLK was accomplishing the task. However, the business operations being run by the applicant had suffered due to the Covid-19 pandemic, which had taken and continued to take a heavy toll on Pakistan’s economy, including the real estate sector, due to associated shutdown of economic activity resulting in negative growth shock causing an unprecedented deep recession.
The application explained that the BTLK with about 600,000 members and 53,000 employees had also suffered in view of the massive drop in sale and price of plots/houses, elimination of purchasing power generally and halting of construction activities and related industries.
The developer, the application said, had to spend more than Rs1bn every month by making payments to the third parties, members, suppliers or contractors and employees of the BTLK as the upkeep and maintenance of these housing societies required fixed and variable expenditures.
Such payment also included expenses of utilities and site operational expenses, costs of oil, maintenance of a clean and hygienic environment in the residential project, provisions of security and development and welfare expenses.
In the interest of doing complete justice, more time (at least three years) be given to the developer to repay the instalments to enable it to get on its feet and not default, the application pleaded, adding that the developer was committed to pay the amount of Rs460bn.