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SC throws out Bahria Town’s appeal to postpone payment of land price

SC throws out Bahria Town’s appeal to postpone payment of land price

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Bahria Town Karachi’s (BTLK) appeal to postpone paying its instalments of the total amount of Rs. 460 billion for purchasing prime land in Karachi, has been rejected by the Supreme Court.

In its plea, the developer asked the court to defer, for a period of three years, the monthly sum of Rs. 2.5 billion that it is required to pay. Bahria Town Karachi asked for a three year extension, starting from the 7th of September 2020 — September 2023, while citing the economic recession occurring due to the coronavirus pandemic.

The developer’s legal counsel, Salman Aslam Butt, told the court that due to the bleak economic situation around the world it was also facing difficulties in paying a large sum of money in installments every month. He argued that there is a “superior force beyond their control” affecting their ability to make the payments.

However, Justice Muneeb Akhtar stated that the court was well aware of the global economic situation but it is only interested in in specific details as to what losses the pandemic had posed to the developer. “We are not a bank where you can come to negotiate for resettlement,” Justice Akhtar observed. “We have given a judgement and it is the problem of the developer if they are facing difficulties.”.

Barrister Syed Ali Zafar, also a part of Bahria Town Karachi’s legal team, informed the court that to pay a monthly instalment of Rs2.5bn, Bahria Town Karachi had to earn a net income of Rs100m per day, based on average 25 working days as per month. He added, that the developer had to generate Rs1.2bn to pay as compensation to the people who were allotted plots outside the 16,896-acre land, besides another Rs1.2bn to pay salaries, etc. And, NAB case was also pending against the developer. All this has seriously reduced the inflow of the developer, significantly, when compared with the outflow, Barrister Zafar explained.

Justice Ijaz-ul-Ahsan, however, stated that the court needed hardcore data of the difficulties like audited accounts, etc in order to substantiate these claims. He said, “What the court understands is that the entire land of the Karachi project has already been sold by the developer,”, adding that the fact remained that the developer was in possession of an asset which they had developed and used, then why could they not pay. “You have got seven years and the present economic situation will not remain constant in these years,” he said.

The court rejected BTLK’s application through a short order. And, a detailed verdict from the three judge bench is forthcoming.

The background:

The Supreme Court, on March 21, 2019, accepted an offer made by BTLK to pay Rs. 460 billion for 16,896 acres of land the developer had purchased from the Malir Development Authority (MDA). This amount is to be paid in monthly installments of Rs. 2.5 billion by Bahria Town Karachi.

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