ISLAMABAD: The Federal Cabinet has decided to allocate 23 Kanals of land at Nabha Road, Lahore for Registry of Supreme Court of Pakistan after turning down ownership rights of the Government of Punjab, well informed sources told Business Recorder.
Sharing the details, sources said, on October 11, 2022, Ministry of Housing and Works noted that the Governor General (lessor) of undivided India and the Reserve Bank of India (RBI) entered into an agreement on November 18, 1940 to lease a property on Nabha Road, Lahore. The RBI (Lessee) was required to pay Rs.2000/ per month as lease money.
On May 2, 1958, the State Bank of Pakistan (SBP) purchased this lease from RBI. The latter was named Vendor in the agreement while the name of President of Pakistan was substituted for the Governor General as Lessor, and State Bank of Pakistan was named as the purchaser.
As such the property belonged to the Federal Government and in terms of Rules of Business, 1973, Pakistan Public Works Department (Pak PWD), Ministry of Housing and Works was the custodian of the property. State Bank of Pakistan had regularly paid the lease amount to PWD till 2021. In the meanwhile, the SBP further rented out the property to Supreme Court of Pakistan in 1997.
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The Chief Justice of Pakistan chaired a meeting of the Building Committee of the Supreme Court of Pakistan on November 1, 2021.
During the meeting the representative of the Government of Punjab claimed ownership of the land and suggested that the issue of ownership dispute may be resolved through mutual consent/ mediation or binding arbitration between all the three parties, i.e., the Government of Punjab, Federal Government and State Bank of Pakistan.
The Chief Justice of Pakistan did not endorse the position taken by the Government of Punjab as the property had consistently remained in the name of the Federal Government. It was decided in the meeting that the Ministry of Housing and Works should initiate a summary for the Cabinet regarding allotment of land measuring 23 Kanals at Nabha Road, Lahore to Supreme Court Lahore Registry and that the whole process may be completed by March 31, 2022.
According to Ministry of Housing and Works, the Supreme Court of Pakistan is a constitutional body and it is the responsibility of the Federal Government to provide land for the Registry Building in Lahore. It was proposed that the land measuring 23 Kanals at Nabha Road, Lahore will remain under the ownership of the Government of Pakistan, and may be allotted to Supreme Court of Pakistan, Lahore Registry for its operations (after withdrawing lease agreement with the SBP); and the amounts received by SBP from Supreme Court of Pakistan may be returned to Government of Pakistan through Pak PWD.
The proposal was shared with the relevant stakeholders, i.e., Ministry of Law & Justice, Ministry of Interior, the Government of Punjab and State Bank of Pakistan for their views. Ministry of Law and Justice had endorsed the proposal. The Government of Punjab had reiterated its claim of ownership and suggested negotiated settlement.
The State Bank of Pakistan had conceded that the ownership remained in the name of the President of Pakistan and expressed its willingness to give up its leasehold rights upon payment of market-based compensation to be mutually agreed between SBP and the Federal Government. Ministry of Interior argued that the matter regarding allotment of land for Supreme Court, Lahore Registry did not pertain to CDA and the land in question was in Lahore, hence, it had no role.
The Ministry of Housing & Works maintained that the President/ Government of Pakistan was owner of the property, while the SBP only held the lease. Land and superstructure/ buildings (the property), before the Act of 1935, were owned by the Government of British India.
The ownership remained with the same owner even after the Act of 1935. At the time of signing the lease agreement of 1940, the property belonged to the Federation and was accordingly leased out to the RBI. In the light of Indian Independence Act 1947 the property rights and liabilities were passed on to the Dominion of Pakistan.
The RBI ceased its operations in 1948; however, its lease rights remained intact. In 1958, the RBI had only sold its lease rights against a consideration, with the permission of the owner of the property, i.e, President/ Government of Pakistan, to the SBP. The Ministry of Law and Justice has also expressed a similar opinion; therefore, the contention of the Government of Punjab was not tenable.
Moreover, as per Rule 18 of GFR, no contract could be entered into by any authority which had not been empowered to do so by or under the orders of the President. Therefore, the SBP was not authorized to sublet the Government property and the amount received by SBP had to be returned to Government of Pakistan through Pak PWD.
Demand of the SBP for market-based compensation for giving up its leasehold was also without any basis because no lease was valid for an indefinite period. The lease was already 82 years old and SBP was paying monthly rent for the lease. The owner could terminate the lease at any time without any compensation.
Copyright Business Recorder, 2022
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