by S.M. Hali

The Supreme Court is in a furious mood and has frozen the bank accounts of Defence Housing Authority (DHA) in twin cities of Rawalpindi and Islamabad for its failure to deposit Rs 22 billion with the Registrar office in pursuance of the earlier court orders over alleged corruption of Rs 40 billion in the Employees’ Old-Age Benefit Institution (EOBI). In this particular case of DHA vs. EOBI, a 3-judge bench, headed by Chief Justice Iftikhar Muhammad Chaudhry taking suo moto notice of the alleged scam, had issued directives to the DHA on July 17 to submit bank accounts, statements, details of assets and balance sheet of its business with the Registrar’s office and barred the Authority from opening any new bank account until it deposited Rs 22 billion with the Registrar’s office, otherwise its accounts would be frozen.  

The defence counsel of the DHA apprised the bench that DHA had received Rs 12 billion from EOBI which were given to Bahria Private Limited for construction and development cost and about Rs 9 billion was given to bank to clear liabilities of DHA. The counsel further informed the bench that development work on 70 to 80 percent of plots had been completed in the DHA, stating that his client wrote a letter to EOBI during January 2013 to take possession of the plots.

During the proceedings, Additional Director General Immigration Azam Khan submitted a preliminary report in response to court’s orders, stating that on the request of EOBI in September 2011, DHA sold a number of commercial properties to EOBI, which comprise: 221 Kanal commercial land in business square. This area is adjacent to Islamabad Highway and carries good further prospects; 100 Kanal commercial land in Business Corridor, a commercial area astride 6 lane Highway road. This area is also very close to Islamabad Highway. 

DHA on the other hand, argues that the property was sold at the lower cost. In order to ascertain the exact price, sale of plots in the same area was advertised and within two days 19 plots were sold out @Rs. 2.55 million per marla, whereas the said land was sold to EOBI after 4 months @ Rs. 2.45 million per marla. In December 2012, plots in the said area were sold @ Rs. 3.3 million per marla through balloting. In open market these are fetching Rs. 4.00 million plus per marla; implying an increase of over 30 %.

Interestingly, FIA teams acknowledged and documented the development of infrastructure and utility services, during site visit on 15 July 2013, however, while still in the process of carrying out investigation, during hearing at Supreme Court on 17 July 2013, Additional DG FIA, Mr. Azam Khan stated that the complete title of land is not with DHA; Files have been issued to EOBI, while the land has not been mutated; that there is no development at the site and land is barren. 

When DHA was asked to provide its version, it reiterated that DHA has complete title of the said property while the entire land has been transferred / mutated in the name of DHA and allotment letters of sold property has been issued to EOBI as per procedure / established practice. It is worth mentioning that letters of allotment are considered a valid mode of transferring title in all land regularity bodies like CDA and LDA etc and also used as bankable security. 

They also apprised that the property is almost fully developed in (more than 90%) and is ready for handover. In fact, EOBI was requested to take possession of the property in January 2013. 

The Apex Court however, in its understanding of the case, while issuing its ruling, relied on the statement of additional DG FAI and the Chief Justice ordered DHA to deposit complete amount by 19 July 2013, citing reasons that there was no development on ground, only files were issued and PEPRA rule were violated.

Keeping in view the serious nature of the charges, perhaps it would be worthwhile that the Apex Court takes into consideration that the amount received from the sale of said property was utilized for procurement of land and development of infrastructure and service utilities; including development of roads and provision of underground utilities such as surface drainage, electricity, sewerage, water and gas etc. hence, DHA does not possess sufficient liquid assets in its accounts to deposit the required amount. Additionally in Sector F, Phase I, 574 Kanal land comprising residential, commercial plots and defence villas of varying sizes was sold to EOBI in December 2012. This property again was sold at lower cost at a location chosen by the EOBI. Current market value of the sold property has increased by about 20% in the last 4 months. i.e. ever since the sale agreement.  Complete land (including all residential, commercial plots and defence villas) has been transferred / mutated in the name of DHA and allotment letters have been issued to EOBI as per procedure / established practice. In line with the agreement, residential and commercial plots are 100% complete land and ready for possession, whereas, 45% defence villas have been constructed, which is way ahead of the scheduled progress. 

According to DHA officials, the rates for the two properties were ‘quite competitive’ and were established after the advertisement and sale of adjacent properties in the same time-frame. They maintained that DHA even offered EOBI a 5% discount on sale price.

The freezing of DHA accounts will have two possible negative effects. Firstly, the pay and allowances of the DHA employees will also not be disbursed, especially in the month of Ramadan and with Eid-ul-Fitr approaching. Secondly, undue panic may be created will crash the property market, adversely affecting the economy.

The Apex Court should in its infinite wisdom, consider all aspects of the case and issue a judgment based on merit, lest it is accused of judicial activism. Perhaps it would be worthwhile to direct an independent body like NEPRA to evaluate the status of the real estate and submit its report before a final judgment is issued.