BAHRIA TOWN KARACHI

(A DETAILED REPORT)

PRESENTED BY:

RAMEEN RAHEEL 899-2022

RUBA MASOOD 699-2022

ABEER FATIMA 774-2022

 TABLE OF CONTENTS

HISTORY
INTRODUCTION
BACKDROP
MDA SUPPORT
DATA COLLECTION
ANALYSIS
CASE HITORY
CASE
ROLE OF MDA AND NAB
LEGAL PROVISION
SIGNIFICANCE
CONCLUSION
 ACKNOWLEDGMENT

In the Name of Allah, the most merciful and beneficial, we are very thankful to Allah
Almighty, who strengthened us all to complete this report.

We are also thankful to our course instructor Ma’am Momiza Bawany who has given us
the opportunity to do research garding our case. Her dynamism, vision, sincerity, and motivation
have deeply inspired us. Whereas all our group members coordinated together in a very friendly
manner.

HISTORY

In Pakistan, especially in big cities like Karachi, urban problems are getting worse. Urbanization
in Pakistan, especially in major cities like Karachi, has brought about significant challenges such
as resource mismanagement, housing shortages, and conflicts over land acquisition and
ownership. Resources are being wasted, and there's not enough housing. Many people live in
makeshift settlements, and instead of improving their living conditions, they're often forced out
so that others can profit from their land. This happens a lot on the edges of Karachi, especially
along the Super Highway, where land is grabbed easily.

Big private companies like Bahria Town play a major role in land ownership. They often buy
land cheaply from the government and then develop it for profit. But their projects often lead to
ecological problems and harm to rural communities.

Bahria Town promised affordable housing for low-income families, but they often end up selling
the houses for much more than originally planned, making them unaffordable. This leads to
social injustice and conflicts over land.
This research looks at the challenges faced by Karachi, especially regarding land issues, and
focuses on Bahria Town as a case study. It also considers recent laws and how they affect
development, particularly in rural areas.

INTRODUCTION

Bahria Town Karachi, founded by Malik Riaz, is Asia's largest private real estate development
company. It initially focused on projects in Islamabad, Rawalpindi, and Lahore before expanding
to southeast Pakistan, including Karachi. The private real estate sector in Pakistan has
experienced significant growth since Bahria's projects began. Many developers are drawn to
Bahria's incentives, and despite official booking closures, properties are still sold through private
channels, generating substantial profits. Bahria Town Karachi, situated on the city's outskirts,
offers a wide range of amenities including residential and commercial spaces, healthcare
facilities, schools, a university, sports facilities, a cinema, and a theme park.

HIGHLIGHTING BACKDROP

Bahria Town Karachi (BTK) is being built on land in Malir district, but there's controversy over
how it was obtained. The project aims to cover 23,000 acres initially, but they want to expand to
43,000 acres, which could affect around 45 villages. Many villagers, who have owned the land
for generations, have been forced out by BTK with the help of the police.

Historic sites like shrines and temples have been destroyed, and there are concerns about water
supply and the environment. The Malir Development Authority (MDA) has been involved,
breaking its own rules. This project not only displaces people but also creates new housing and
environmental problems.
LAW ENFORCEMENT, AUTHORITIES AND REVENUE BOARD ROLE:

Law enforcement agencies, including the police, are accused of displacing indigenous
communities to make way for Bahria Town Karachi (BTK), with alleged collusion from the
Malir Development Authority (MDA) and the Board of Revenue (BoR). Historian Gul Hassan
suggests that political influence and bribes facilitated land acquisitions for Bahria Town. The
BoR and MDA, despite legal restrictions, have reportedly enabled the transfer and sale of
government land for BTK projects, often benefiting political parties. MDA's pre-existing support
for Bahria Town includes facilitating land sales through consolidation applications, exploiting
legal loopholes for development schemes under the Colonization of Government Lands Act
1912.

Raja Muhammad Haroon

Versus
 Province of Sindh through Board of Revenue and others
Bahria Town Karachi and others
Bahria Town (Pvt) Ltd through its Chairman Malik Riaz
Federation of Pakistan through the Secretary of the Ministry of Finance,
Islamabad and others
Government of Sindh through its Senior Member, Board of Revenue, Karachi
and others

HISTORY: BAHRIA TOWN’S LEGAL BATTLE IN COURT OF JUSTICE AZMAT

SAEED 2019

The land dispute involving Bahria Town Karachi (BTK) has attracted attention due to alleged
misappropriation of investments and land possession issues. This issue came to light when
individuals, after waiting for promised properties in Bahria Town Karachi, filed complaints with
the National Accountability Bureau (NAB). Despite the seriousness of the complaints, NAB only
recently acted after delays of up to two to three years from the initial complaints.

The legal backdrop of this dispute involves a Supreme Court ruling that limited Bahria Town
Karachi to 16,896 acres and mandated payments totaling Rs460 billion over seven years.
However, subsequent surveys by the Survey of Pakistan revealed discrepancies in Bahria's land
claims. They were found to possess 3,035 excess acres, with 2,222 acres in Jamshoro and 813
acres in Malir. Bahria defended its stance, arguing that utility areas and villages within the
designated land should not be accounted for in payments due to inability to develop or sell these
areas.

The discrepancies between Bahria's claims and actual land usage were significant, as identified
by GPS data and on-ground observations. These discrepancies primarily concerned areas
allocated for the K-IV project, high-tension line zones, and goths (villages) areas. Bahria's
claimed acreage for these zones far exceeded the actual measurements, suggesting a
misrepresentation of land use to avoid financial obligations.

The impact on local communities has been profound. Farmers like Qadir Baloch faced pressure
from influential figures to relinquish their lands to Bahria Town. Indigenous communities living
in goths experienced coercive tactics and land encroachments, leading to tensions and fears
among locals. Bahria's exclusion of roadways and infrastructure from land calculations further
complicated matters, contradicting court directives aimed at limiting Bahria's land claims.
Despite court rulings and legal limitations, Bahria's expansion continued through covert means in
Jamshoro. Changes in land records facilitated this expansion, often with political and local
support. Such actions highlight broader issues of corruption and mismanagement in Pakistan’s
administrative and legal systems, impacting not just land disputes but also public trust and
investor confidence in the country's institutions.

FACTS

Salman Aslam Butt, a notable legal representative, lodged a petition concerning a financial
dispute related to land acquisition practices in Bahria Town developments. The petition
highlighted discrepancies in the valuation of land, noting that while other societies were charged
1 lac per acre, Bahria Town was reportedly paying 2 crore for equivalent land areas.
Furthermore, the petition addressed concerns regarding the discrepancy between the promised
land area and the actual allocation, citing an apparent shortfall where Bahria Town was
providing 11,747 acres instead of the agreed-upon 16,896 acres. These discrepancies, as outlined
in the petition, underscored the need for transparency and fair valuation practices in real estate
transactions, urging judicial review and resolution of the financial and land allocation issues
raised. However, The Malir Development Authority (MDA), representing government interests,
contends that Bahria Town currently possesses 12,237.5 acres of land. They attribute the
shortfall in land delivery to the utilization of remaining land by utility providers. Therefore, since
16,896 acres of land were not delivered to Bahria Town it stopped making payment to which it
had consented. The court ordered a land survey, revealing Bahria Town's possession of
19,931.63 acres, including unauthorized possession of 3,035.63 acres.

Syed Naqvi claims that he initially brought this matter to the attention of the court through his
complaint, leading to the court's involvement. He has filed CMA No. 339/2021 and another
unnumbered application, alleging that Bahria Town actually possesses 37,777 acres of land,
which contradicts the claims made by Bahria Town and MDA. He requests that the unnumbered
application be assigned a number, and notices be issued to Bahria Town, MDA, and the
Government of Sindh. This would allow them to dispute the allegations by providing relevant
proof in their concise statements. It also included clauses stating that failure to make two
consecutive installments or three installments in total would be considered a default. Importantly,
the past and present directors, shareholders, and promoters of Bahria Town guaranteed this
amount which include:

Malik Riaz Hussain son of Malik Aashiq Hussain

Ahmed Ali Riaz son of Malik Riaz Hussain

Mrs. Bina Riaz wife of Malik Riaz Hussain

Mr. Zain Malik is the son of Arshad Malik.

ISSUES:

What were the implications of Bahria Town's claim of a shortfall of 5,149 acres out of the agreed
16,896 acres of land in terms of the acquisition agreement and payment obligations?

How did Bahria Town's cessation of payments upon discovering the alleged land shortfall impact
on their contractual obligations involving the agreed Rs. 460 billion payments in installments for
the land?

How did concerns about remittances received from abroad without proper permissions
underscore the necessity of transparency in financial transactions related to the case?

What accountability issues were highlighted in the case concerning land ownership, payment
defaults, and financial transactions, emphasizing the importance of adhering to legal and
contractual obligations?

RUILING:

The court ruling decisively addresses multiple aspects of the case involving Bahria Town.
Firstly, it critiques the unauthorized nature of funds received from abroad, condemning the
Supreme Court's inadvertent involvement in such matters. It requires explanations from the fund
senders, with only Mashreq Bank providing a satisfactory response. The ruling additionally
declares Bahria Town insolvent due to defaulted installment payments, stressing the company's
breach of the consent agreement. Consequently, it orders the transfer of the remaining funds to
the government of Sindh, highlighting that these funds rightfully belong to the province's
populace. The court ruling addressed the land issue by thoroughly scrutinizing Bahria Town's
claims of a shortfall of 5,149 acres out of the agreed 16,896 acres. The judgment exposes Bahria
Town's lack of evidence to support this claim and deems their applications regarding the alleged
shortfall as pretextual to evade payment obligations.

CONCLUSION:

The applications filed by Bahria Town were dismissed by the court.

ROLE OF MDA AND NAB

Malir Development Authority (MDA) is a local government body in Pakistan tasked with
overseeing land development, urban planning, and infrastructure projects in the Malir district of
Karachi. MDA's responsibilities include granting approvals for development projects, ensuring
compliance with zoning regulations and environmental standards, and managing infrastructure
development. In the Bahria Town case, MDA's role came under scrutiny regarding its approvals
and oversight of Bahria Town Karachi's projects. Allegations of irregularities or improper
approvals in land transactions and development plans were subjects of investigation and legal
challenges, highlighting the need for robust regulatory oversight in real estate development.

National Accountability Bureau (NAB), on the other hand, is Pakistan's apex anti-corruption
agency responsible for investigating and prosecuting cases related to corruption and financial
misconduct. NAB's functions include conducting inquiries, collecting evidence, and pursuing
legal actions against individuals or entities involved in corrupt practices. In the Bahria Town
case, NAB's involvement stemmed from allegations of corruption, irregularities, or misconduct
concerning Bahria Town's land acquisitions, financial transactions, and regulatory compliance.
NAB's investigations aimed to uncover any wrongdoing and hold accountable those responsible
within the framework of anti-corruption laws and regulations, emphasizing the importance of
accountability and transparency in governance and business practices.

LEGAL PROVISONS IN PROPERTY

LAW OF LAND AQUISITION:

Land acquisition refers to the process by which the government or authorized entities acquire
private land for public purposes. This can include projects such as building infrastructure (roads,
bridges, railways), urban development (housing complexes, industrial zones), public utilities
(power plants, water treatment facilities), and other projects deemed to be in the public interest.
The Land Acquisition Act holds significant relevance in cases like Bahria Town's large-scale
land acquisitions, ensuring fair compensation (Sections 23 and 24) and rehabilitation support
(Section 27) for affected parties. Adherence to its procedures is crucial to avoid penalties
(Section 51) for violations, emphasizing legal compliance, fairness, and transparency throughout
such land acquisition processes.

OWNERSHIP DISPUTE:

Ownership disputes involve conflicts regarding property rights and can arise due to unclear titles
or conflicting claims. In the Bahria Town case, such disputes arose concerning land ownership
claims between Bahria Town and local residents, leading to legal battles and court interventions.
The Transfer of Property Act, specifically Sections 5 and 6, deals with transfer and creation of
ownership rights, while the Land Acquisition Act addresses compensation and resettlement
matters in land disputes.
FINANCIAL TRANSACTION:

In property law, financial transactions involve buying, selling, leasing, or mortgaging real estate.
Section 54 of the Transfer of Property Act, 1882, ensures the validity of property sales, while
Section 123 determines priority in competing property claims. These sections are crucial for
establishing legal ownership, protecting parties' rights, and resolving disputes in property
transactions.

LAND VALUATION:

Land valuation refers to the process of determining the monetary value of land, considering
factors like location, size, and potential use. Statutes and provisions, found in sections of land
and property laws, regulate this process. These laws cover appraisal methods, tax assessments,
property rights, and valuation standards. Sections such as Section 27A of the Income Tax
Ordinance, 2001, outline procedures for determining fair market value for tax purposes.
Additionally, sections within the Transfer of Property Act, 1882, and Land Acquisition Act,
1894, provide guidelines for property transfers, compensation assessments, and land acquisition
processes.

SIGNIFICANCE

Salman Aslam Butt's petition regarding financial and land allocation discrepancies in Bahria
Town carried substantial significance within Pakistan's real estate and legal landscapes. The
petition shed light on apparent inconsistencies in land valuation, with Bahria Town reportedly
paying significantly higher rates per acre compared to other societies. This highlighted broader
concerns about transparency and fairness in real estate transactions, emphasizing the need for
equitable pricing practices across the industry.

Moreover, the discrepancy between the promised land area and actual allocation—where Bahria
Town provided 11,700 acres instead of the agreed-upon 16,896 acres—underscored issues of
contractual obligations and accountability in large-scale development projects. The case served
as a catalyst for discussions on corporate governance, legal oversight, and the protection of
consumer rights within the real estate sector.

The outcome of this case carried implications beyond Bahria Town, potentially setting legal
precedents and influencing industry practices regarding land valuation, contractual agreements,
and regulatory compliance. By addressing these fundamental issues, the case aimed to promote
fair business practices, uphold legal standards, and safeguard the interests of stakeholders
involved in real estate transactions.
 CONCLUSION

The Bahria Town Karachi (BTK) project exemplifies a concerning departure from ethical, legal,
and environmental considerations. Despite its touted master-planned infrastructure, the project
has overlooked critical impacts on ecosystems, agriculture, and local communities. The lack of
comprehensive environmental studies has led to irreversible harm such as the depletion of
groundwater levels and destruction of vital rainwater channels.

Furthermore, the indiscriminate extraction of resources like sandstone has escalated

environmental degradation, posing drought risks to surrounding rural areas. BTK's expansion
strains Karachi's limited resources and infrastructure, potentially exacerbating challenges for
marginalized communities. The suppression of indigenous rights and displacement risks through
gentrification underscore broader socio-economic concerns.

Moving forward, development criteria must prioritize sustainability, community needs, and
cultural heritage preservation. Authorities like the Land Acquisition Act, Board of Revenue Act,
MDA, SBCA, law enforcement, and NAB must ensure transparent land use strategies and robust
oversight. Mandating longer leases and upholding regulatory standards can promote fairness and
accountability, fostering sustainable urban development in Karachi.