Allotment of CDA plots on subsidised rates unconstitutional, says SC

ISLAMABAD: The Islamabad High Court (IHC) has observed that allotment of plots to the employees of the Capital Development Authority (CDA) and selected categories on subsidised rates was contradictory to the constitutional provisions and directed the cash-strapped federal government to ensure disposal of state land at competitive prices.

IHC Justice Miangul Hassan Aurangzeb on a petition of CDA employee Mohammad Iqbal seeking a subsidised plot in Sector D-12 observed that “any criteria made by the CDA board which is not designed to achieve the best possible price for the plots in other sectors would be prima facie repugnant to the Article 173 of the Constitution that empowered the government to acquire land as well as the law laid down by the superior courts.”

Section 49 of the Capital Development Authority Ordinance 1960 provides that the CDA may retain, or may lease, sell, exchange, rent or otherwise dispose of any land vested in it. It is implied in the said provision that the sale or disposal of CDA’s land has to be at the best possible rates which can only be realised through an auction or a competitive bidding process.

To dispose of land at a rate even slightly lower than the market rate that can be realised for it in a transparent auction or a competitive bidding process would be prima facie not just irrational but detrimental to the state, the court observed.

Justice Aurangzeb says disposal of land should be at best possible rates

The court order states, “Allotment of a plot worth millions of rupees is not part of the terms and conditions of service of any of the categories of employees/public functionaries mentioned in Regulation 5(1) of the 2005 Regulations. To provide them with a windfall in the form of the allotment of a plot at a rate which is not commensurate to the rate that can be realised for it in an open auction is a strain on the national exchequer…”

The legislature intended to give the federal government oversight over the affairs of the CDA through Section 48 of the CDA Ordinance. Upon the furnishing of returns and statements, it becomes the obligation of the federal government to ensure that the financial affairs of the civic agency are managed strictly in accordance with the law, observed the judge.

The CDA is a statutory body under the administrative control of the Ministry of Interior; therefore, the court directed the federal government to consider the adverse effect of Regulation 5 of the 2005 Regulations (to the extent whereby disposal of CDA’s land/plots through allotment to employees of the CDA at a rate other than the rate that can be realised at an auction or tender bidding process) on the revenue generation of the CDA.

The court further directed the additional attorney general to ensure compliance with the said order.

Further hearing in this matter has been adjourned till next month.

The court examined Regulation 5 of the Islamabad Land Disposal Regulations 2005 empowered the government to acquire land and sought a report from the CDA highlighting the total number of complaints of the affectees of land acquisition and the admitted number of plots that are yet to be allotted to the genuine affectees.

The petitioner asserted his right for the allotment of a plot on the basis of Regulation 5 which states, “All residential plots in developed sectors shall be allotted through open auction. The residential plots in other sectors shall be disposed of in the following (i) Through open balloting at prevalent market price 75pc (ii) federal government servants, including employees of federal autonomous, semi-autonomous bodies 10pc (iii) defence services personnel, including civilians, paid out of defence estimates 5pc; deprived groups, including, widows, orphans, destitute, handicapped persons, and persons needing compensation 5pc; CDA employees 5pc.

Besides, the authority may reserve any land for the residences of employees and affectees of Islamabad. As per the court observations, a sale by public auction secures the best price for the property sold. This purpose can be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer.

In that event, the other suitable mode for selling property can be by inviting tenders. In order to ensure that such a sale by calling tenders does not escape the attention of an intending participant, it is essential that every endeavor should be made to give wide publicity so as to get the maximum price, the court suggested.