ISLAMABAD: The Islamabad High Court has dismissed all the cases filed by the company and other parties, including the Bank of Punjab, in a major verdict in the Grand Hyatt Hotel and BNP lease case.
After this verdict was delivered on April 30, 2026, the CDA’s lease cancellation and possession proceedings received legal protection.
The government has clarified that this is not a matter of political vendetta but a pure legal and contractual default in which the national exchequer has been damaged to the tune of billions of rupees.
The background of this case dates back to 2005, when the CDA leased 13.5 acres of valuable land near Jinnah Convention Centre to M/S BNP for a five-star hotel at a bid of Rs 4.882 billion. The company was given possession of the land upon payment of just 15 per cent of the amount; however, since then, there has been a continuous series of payment defaults and frequent rescheduling. The company was given several concessions and new schedules, but failed to meet its financial obligations.
The legal complications further increased when BNP started selling and subleasing apartments and commercial units in the project, which gave rise to third-party rights and claims. Although the Supreme Court had reinstated the lease on condition of a total payment of Rs 17.5 billion on January 9, 2019, BNP has so far been able to deposit only Rs 2.916 billion, while Rs 14.583 billion is still due. In addition, the company’s bank guarantee of Rs 1.689 billion has also lapsed and has not been renewed.
The CDA started issuing notices in December 2022 to recover the dues and finally cancelled the lease on March 8, 2023, for continuous non-payment. BNP’s proposal to provide commercial space instead of dues was also rejected, as the CDA cannot make such “book adjustments” with private developers under the rules. Officials say any such concession could have set a bad precedent for other defaulting entities.
Following the directions of the Public Accounts Committee and keeping in mind the public interest, the CDA has now taken control of the building and appointed an administrator and an interim committee to manage its day-to-day affairs.
The government says it encourages investment but will not compromise on the misuse of government land and default on public money. The move was necessary to uphold the rule of law and safeguard government assets.
