KARACHI: A division bench of the Sindh High Court on Monday reversed the order of a single bench that had last week dismissed the applications of a private firm responsible for construction of the Creek Marina project in Defence Housing Authority (DHA) Phase VIII.

The multi-billion-rupee residential project was launched around 20 years ago and the Creek Marina Pvt Ltd, a subsidiary owned by Creek Marina Singapore Private limited & Meinhardt Singapore PTE Ltd (MSPL), was tasked with designing, constructing, marketing and developing the project consisting of eight high-raise residential towers.

The firm had last year filed a lawsuit and subsequent several applications, asking the SHC to restrain the DHA, its officers and others acting on its behalf from hindering/interfering in the construction activities or taking over the project from the plaintiff till the final disposal of the suit.

On July 12, Justice Kausar Sultana Hussain of the SHC had dismissed the applications of the plaintiff and observed that the general public (allottees) and DHA would be seriously prejudice if the injunctive relief was granted any further as the plaintiff had continuously failed to complete the project despite availing ample opportunities during the past 20 years.

Last week, a single bench of SHC dismissed pleas of private firm against DHA and appointment of commissioner to inspect project site

The single-judge bench in its order also noted that the lawyer for the developer firm had admitted failure to abide by the timeline of construction for which several reasons had been brought on record but he could not convince or satisfy the court with any cogent and logical reasons.

The bench had also dismissed other applications of the firm seeking appointment of a commissioner to inspect the project site and investigate the present status of the project and market value of the grey structure as well as approval of revised master plan.

On Monday, the firm filed an intra-court appeal against the order of the single bench of the SHC before a division bench comprising Justice Jawad Akbar Sarwana and Justice Mohammad Abdur Rahman.

The lawyer submitted that immediately after the impugned order was passed, the DHA had attempted to “illegally” take over the project site in breach of the contract and in violation of law as it had issued a “false and illegal public notice” on July 13, stating that it had taken over the project.

He sought suspension of the impugned order on the ground that the single bench had placed reliance on various materials that existed prior to the addendum ‘A’ to the main agreement inked in September 2004, which had redefined the obligations between the appellant and the respondent.

He also argued that as per Article 19 of the said addendum there was a specific mode prescribed for severance of the agreement which had not allegedly been complied with by the DHA.

The counsel relied on a submission in a para of the counter affidavit of the Pakistan Defence Officers Housing Authority (PDOHA) filed in the lawsuit proceedings which said that the plaintiff and its beneficial owner had failed to faithfully perform its obligation and the agreement was liable to be determined/repudiated/cancelled by the defendant (DHA) in terms of Clause 7 of the master agreement.

The appellant’s lawyer apprehended that the PDOHA might interfere and disturb the peaceful possession of the appellant and sought interim relief.

After a preliminary hearing, the division bench in its order said, “Issue notice to the PDOHA for 12.08.2024. In the meanwhile, until the next date of hearing PDOHA is restrained from interfering and disturbing the peaceful possession of the petitioner subject to the right of parties as envisaged in article 19 of the addendum”.

It is further submitted in the appeal that Meinhardt Singapore PTE Ltd, a company incorporated and existing under the laws of the Republic of Singapore, and the DHA entered into an agreement on Sept 27, 2004 (main agreement) in relation to the development of a high-end residential housing project which was being constructed on land belonging to the respondent and for which purpose, the respondent was to get certain consideration.

The appellant also stated that the main initial contractor for the Creek Marina project, Guangdong Overseas Construction Group Company Limited (GOCG), was appointed in 2007 with the contract to complete the entire project within four years, but due to the security situation in Pakistan, they were unable to bring their promised 500 workers from China and de-mobilised in 2008.

It further stated that GOCG then obtained an ad-interim order against encashment of their advance payment (made by the appellant) and performance guarantees and it took appellant three years to recover their bank guarantees (advance payment, etc.) due to being embroiled in the court process before the SHC and eventually, the order was vacated appellant succeeded in releasing the guarantees.

It maintained that due to the demobilisation of GOCG, and the subsequent delay in obtaining the release of the bank guarantees, the project was delayed beyond the control of the appellant and disputes between appellant and DHA ensued and thereafter both sides approached the SHC with lawsuits/appeals.

The appellant submitted that after settlement between appellant and respondent, a further addendum, namely addendum “A” was entered into between MSPL, appellant and DHA on June 18, 2019.

As per clause 19.1 of the Addendum “A”, it stated that the DHA was required to issue a 90-day notice of default if it was to take over the project and the default in this case was specifically defined in clause 19.1.2 of Addendum “A” and in 2021, the respondent had agreed to extend full support to the appellant in the implementation of the project.

However, it alleged that the DHA had categorically failed to support the appellant and continued to cause undue hardship and unnecessary hurdles.

Published in Dawn, July 16th, 2024