ISLAMABAD, Nov 13: A big housing project that the cash-strapped Capital Development Authority (CDA) had hoped would bring it billions has brought it multiple legal claims instead on the booty.

Dawn has learned that the CDA may be trying to break the legal logjam by settling accounts with the biggest claimant, the Multi-Professionals Cooperative Housing Society (MPCHS), surreptitiously - allegedly the way its joint venture with the MPCHS had begun.

The CDA's troubles began on April 15, 2011 when the Supreme Court struck down its multi-billion Northern Strip joint venture with the MPCHS for the latter to develop 54 acres of land in Sector E-11 as a residential and commercial area.

Subsequently, the MPCHS, which entered the estate business in 1988 and has grown big since, claimed Rs2.03 billion from CDA as the sum it had spent in buying the land from original owners and developing it.

A committee formed by the CDA Board in June 2011, with its eight members equally drawn from insiders and outsiders, considered the demand and suggested the CDA pay Rs1.26 billion to the company.

In November 2011, the original owners went to the Islamabad High Court claiming that the MPCHS had paid them no money for their lands and that the CDA pay their dues directly.

CDA was supposed to pay them out of the money it would raise by selling the 58 residential plots developed in the Northern Strip. The price of each plot was set at Rs18 million, with a down payment of Rs7.4 million.

At this point the MPCHS joined the legal battle, arguing that the CDA cannot sell the plots it had developed without first settling its claim.

While the litigation was going on, the MPCHS bought, in May this year, Plot No. 56-D in a CDA auction of commercial plots in Blue Area by offering the highest bid of Rs1.33 billion for it, paying Rs20 million on the spot as token money. It was obliged to pay the first instalment of Rs313.66 million of the remaining on June 28, 2012.

However, the MPCHS instead told CDA to adjust the payable cost of the plot against their pending claim. It also demanded allotment letter for and possession of the plot, along with the payment of balance amount of Rs16.37 million due to it on the basis of the five per cent rebate allowed by CDA on lump sum payment.

Documents available with Dawn regarding the issue, show that a meeting of the CDA Board held in August 2012 agreed that the issue be resolved in a pleasant way and asked its Member Finance to seek the opinion of CDA Legal Adviser whether the request of MPCHS could be met.

An officer of the CDA, requesting anonymity, said that the practice in the past had been that plots sold through auction cannot be adjusted against pending amount.

In the opinion of the former General Secretary of Islamabad District Bar Association, Riasat Ali Azad, MPCHS is legally bound to pay the amount of the plot in accordance with the bond a bidder submits on winning an auction.

“If the court gives a verdict in its (MPCHS) favour, the CDA can return the amount to the society,” he said.

“Since the MPCHS has no claim against the plot in question, the CDA should cancel the deal and confiscate the advance money it paid. Simultaneously, the CDA should submit a bond/assurance in the court that if society wins its case in the court it will pay back the amount, and seek the vacation of the stay,” he added.

Anwar Khan, an affected person of the Northern Strip project and one of the petitioners in the case, lamented that the CDA appeared reluctant to pay compensation “just because we (the victims) are weak”.

“If the CDA settles the matter the way the society wants, we will get nothing,” he said.

Faisal Malik said his uncle had paid Rs7.2 million for a plot in Northern Strip that he won in a CDA ballot. “But the CDA cannot hand over the plots to buyers because of the court's stay order. We need a resolution of the issue,” he said.

But the only assurance the CDA spokesman Ramzan Sajid could offer to all litigants was that “the CDA will adopt lawful procedure to resolve the issue”.