SC reserves verdict in Royal Palm Golf club case

SC reserves verdict in Royal Palm Golf club case

ISLAMABAD: The Supreme Court reserved its verdict in a case regarding lease of Railway land to M/s Mainland Husnain relating to Royal Palm Golf & Country Club, Lahore.

A three-member bench of the court headed by Justice Sheikh Azmat Saeed and comprising Justice Faisal Arab and Justice Ijaz Ul Ahsan heard the case filed by former Minister Ishaq Khan Khakwani challenging the validity of the land lease contract between Pakistan Railways and Mainland Husnain. During the course of proceedings, Barrister Syed Ali Zafar counsel for Mainland Husnain submitted that firstly each and every allegation made in the petition is mirrored in a reference filed by NAB in this very case in the Accountability Court.

He said that any finding on any of the issues, whether in favour of or against Mainland Husnain, will prejudice the criminal trial and, therefore, either the Court should dispose of the petition and wait for the final outcome of the trial in the Accountability Court or quash the reference and decide the matter itself. Upon this Justice Azmat Saeed remarked that how many accused were nominated in NAB reference.

The counsel for NAB appraised the court that NAB had nominated 14 accused in the case. The counsel for the petitioner said that the accountability watchdog did nothing during last eight years.

He pleaded the court to decide the case instead of the NAB. Justice Azmat Saeed remarked that whether it would be appropriate that the court hold proceedings after filing of reference by NAB. Justice Ijaz Ul Ahsan remarked that if the court announced any finding in the case it could affect the NAB reference.

The accused would get free if the top court termed the contract valid and if the court cancelled the contract then there would be difficulties for the accused, he added. The counsel for the petitioner said that precious land of the Railway was given in throwaway price. He said marriage halls were constructed after demolition of poor employees houses.

He said that people sitting in the Parliament House were not representing the people.

Ali Zaffar said that whether the Supreme Court could proceed in the matter under Article 184(3) without a trial. He said that under Article 10-A of the Constitution, the civil and criminal liabilities of any person have to be decided by fair trial and therefore Article 184(3) is not the appropriate remedy.

He said that the contract between the parties contained an arbitration clause which provided that all disputes must be settled through arbitration,and accordingly this dispute between Pakistan Railways and Mainland Husnain has to be decided by arbitration.

Barrister Zafar submitted that Pakistan Railways has kept changing its stance with the change of Government which is unfair. A businessman does the business with a government not with any political party and once an agreement is executed with the government, it is against all norms of justice to deny its validity, he added.

He said that Pakistan Railways entered into the contract and now once the project has been built, it is claiming that the original contract is wrong and trying to benefit from their own faults by claiming that the fully built project be given back to them.

As regards the allegation regarding land, Barrister Zafar submitted that the advertisement and bidding documents clearly specified that Pakistan Railways has the site of 162 acres which also contained golf course of 103 acres and that proposals were invited from parties for the best possible design to build a golf course and other facilities along with club house, tennis court, swimming pools, restaurants etc.

He submitted that it was a built, operate and manage project in which all the investment was to be made by the investor who was then to manage the project and at the end of the lease, the entire beautiful project along with all its buildings and facilities etc. were to be given back to Pakistan Railways.

As part of the contract, Pakistan Railways was also entitled to share in the revenues apart from land usage charge and commitment fee etc. Hence the project was a win win situation for Pakistan Railways, he added. Barrister Zafar explained that the golf course cannot be equated with a commercial land value and hence the argument of Pakistan Railways that the rates of land usage could have been better is absurd.

Barrister Zafar further argued that the taste in the pudding is in eating it and in this case the fact is that the investors have not run away but rather developed an excellent project which is an icon of Lahore and fulfilled all their obligations.

As regards the allegation that in the bidding documents the lease period was 33 years while in the contract the lease period was increased to 49 years, Barrister Zafar submitted that the bid contained an offer of 66 years but the same was reduced by Pakistan Railways after negotiation for 49 years.

He submitted that if the Court feels that the lease period should be 33 years then the Court may reduce the period to which the Petitioner has no objection.However he argued that the approach of the Court should be constructive rather than punishing and if after 20 years the contract is being called in question due to procedural technicalities, this will totally erode all confidence in the investment climate.

Why would somebody invest in Pakistan or in a project with the Government after all that has been done and when small issues and procedural errors of the Government could lead to cancellation of the project? Barrister Zafar said that the Petitioner has spent billions of rupees, built up the name and reputation of the club with more than 3000 members and employed thousands of families and has paid crores of rupees in taxes and huge amounts to PR.

He submitted that before the contract Pakistan Railway was running the Railways Club and had given it to someone for Rs.12/- per annum.

Now that a great project has been set up, PR has become greedy and wants to take it over which cannot be allowed.

PR or the Government of Pakistan cannot be given any advantage beyond what is used for a normal otherwise it will lead to discrimination under Article 25.