IHC Upholds One Constitution Avenue Lease Cancellation

ISLAMABAD: The Islamabad High Court on Friday upheld the Capital Development Authority’s decision to cancel the lease of One Constitution Avenue, a high-profile Red Zone development long associated with legal disputes, financial default and questions over the use of prime state land.

The verdict was announced by IHC Chief Justice Sardar Mohammad Sarfraz Dogar while deciding appeals filed by BNP Private Limited and occupants of apartments in the building. The dispute relates to the Grand Hyatt project, which was originally conceived as a five-star hotel but later became a mix of residential apartments and commercial spaces.

According to the Capital Development Authority’s position before the court, the developer failed to meet its financial commitments despite the passage of more than two decades. The civic body argued that ownership rights under the auction arrangement depended on full payment of the land cost, while only a fraction of the assessed liability had been paid.

During proceedings, CDA counsel Kashif Ali Malik maintained that the authority’s cancellation decision was rooted in contractual default and previous judicial findings. The civic agency also relied on earlier Supreme Court proceedings, arguing that subsequent developments had revived the legal effect of the 2018 Islamabad High Court judgment in favour of CDA.

The case has remained under close public attention because apartments in the building were reportedly linked to several prominent political, legal and public figures. The project’s location near Constitution Avenue further raised the stakes, as the site lies within one of Islamabad’s most sensitive and valuable zones.

CDA told the court that the developer had acknowledged difficulty in continuing the project and paying instalments amid adverse economic conditions. The authority contended that such admissions strengthened its case that the company could not continue to challenge the lease cancellation after failing to meet payment obligations.

The broader controversy dates back nearly 20 years, when the project was awarded with the expectation that Islamabad would receive a luxury hotel facility. Instead, the development became the centre of repeated litigation, regulatory action and public scrutiny over whether the original purpose of the land had been altered.

The court was also informed that the matter had previously drawn the attention of federal investigative and accountability institutions. Proceedings linked to the project have been examined by the Federal Investigation Agency, the National Accountability Bureau and parliamentary forums, reflecting the scale and sensitivity of the dispute.

For Islamabad, the ruling carries significance beyond a single commercial project. The decision reinforces the authority of public institutions to act on major defaults involving state land, while also raising questions about the fate of third-party purchasers who invested in apartments inside the development.

The immediate next phase may involve further legal action by affected parties, particularly apartment occupants and the developer. However, the IHC ruling has placed the CDA in a stronger position as it seeks to regain control over the project and determine the future use of one of the capital’s most prominent real estate sites.