KARACHI: The Sindh High Court on Friday ruled that the salaries of senior officers of the Karachi Development Authority would be stopped from Jan 1, 2021 if the dues of its retired employees were not settled by Dec 31.

A two-judge bench headed by Justice Nadeem Akhtar also expressed serious resentment over the KDA for not properly managing its financial affairs after it was informed that the KDA’s revenue had decreased by 38 per cent in the past three years.

The provincial local government and finance secretaries in their report further informed the bench that 19 out of 31 development projects of the KDA had zero financial/physical progress and the remaining were in the process of completion.

The bench also dismissed a KDA request seeking a six-month extension in the Dec 31 deadline to clear the dues of pensioners. It issued directive for liquidating all the investments made by KDA in the National Investment Trust (NIT) and National Savings Schemes as well as sale of its properties to settle the liability.

It also directed the provincial authorities to consider the proposal of KDA for a monthly grant, waiver or grant-in-aid and submit a report on Jan 19.

When the bench took up a set of petitions of former KDA employees for their post-retirement dues, both the LG and finance secretaries submitted a compliance report stating that they conducted a meeting on Dec 15 with the serving director general and two former DGs of KDA.

Rejects plea to extend Dec 31 deadline; bars transfer/posting of all employees without its permission

Out of total pension payment/other arrears of Rs2.496 billion, the Sindh government had provided Rs500 million and for utilisation of this amount it was recommended that the KDA might pay remittance category fully and other arrears, it added.

The report highlighted flaws in the financial affairs of KDA and said that it had kept receipts estimations in eight different heads in the last three years and not received any amount other than two heads while the pension payment increased by 59pc in the same period.

It recommended that KDA may be directed to stop all new development projects and only spend Rs100m to Rs150m in its annual development programme subject to the approval of competent authority and the saving of around Rs300m may be used to finance pension arrears, commutation and final payment.

The report further said that KDA may also be advised to pay fund liabilities arrears for Rs249.931m through pre-retirement of investment funds amounting to around Rs822m.

The financial assistance for Rs23.67m may only be provided if KDA can finance it through own sources after clearing all the pension-related liabilities and the provincial government would review the progress in May 2021 and then might consider an additional tranche up to Rs500m to clear all the liabilities before June 30, 2021.

The bench was informed that the official assignee had tested positive for Covid-19. It directed the member inspection team (MIT-II) of the SHC to continue this exercise in the absence of the official assignee till resumption of his duties.

It directed the MIT-II to liquidate all the attached investment of KDA amounting to around Rs822m and adjust it towards the subject liability of pensioners.

It further ruled that the sale/auction of KDA properties would now be conducted under the supervision of the official assignee or MIT-II.

The bench directed the official assignee/MIT-II to take over the salary accounts of KDA from Jan 1 and ensure that the amounts in such accounts be used only to settle the subject liability.

It ruled that the salaries of KDA officers in grade-17 and above would be stopped with effect from Jan 1, 2021 if the post-retirement benefit of retired employees were not settled by Dec 31.

The court said no posting or transfer of any officer/employees would be made by KDA without the permission of the bench.

Published in Dawn, December 19th, 2020