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June 29, 2019

SC hands over Royal Palm Club to railways

Top Story

June 29, 2019

LAHORE: A three-judge Supreme Court (SC) bench on Friday issued orders of handing over the Royal Palm Golf and Country Club to Pakistan Railways after declaring the lease of the club as void ab initio, earlier granted to Mainland Husnain Pakistan Limited (MHPL) and Husnain Construction Company.

The apex court directed the Pakistan Railways to run the club through a team of its officers or independent professionals. The bench comprising Justice Sheikh Azmat Saeed, Justice Faisal Arab and Justice Ijazul Ahsan had reserved the verdict in this case in April 2018. A detailed judgment announced at the Lahore Registry on Friday directed a chartered accountancy firm, already looking after the affairs of the club as the court-receiver, to complete handing over of all records and transfer of the club’s management within seven days to the railways. The judgment, authored by Justice Ahsan, directed the Auditor General of Pakistan to conduct a detailed forensic audit of the club to determine the scope and extent of the work done under the agreement.

A former parliamentarian, Ishaq Khan Khakwani, was one of the main petitioners against the lease awarded in a controversial manner to Mainland Husnain Pakistan Limited/Husnain Construction Company. The petitioners contended that the land belonging to the railways was leased out in a highly non-transparent manner without following the settled procedure in vogue in the country for such purposes. The petitioners said in pursuance of some negotiations, when the final agreement was executed, the area was raised from 103 acres to 141 acres and the period of lease of 33 years, too, was converted into 49 years. The agreement was executed on July 26, 2001 to a consortium namely “Maxcorp-Husnain (Pvt) Ltd. However,

Maxcorp had left the consortium through a shareholder buyout by Husnain Construction Company in 2003 after building the first nine holes of the golf course, although subsequently it was given a subcontract by the latter to build the remaining nine holes. Thereafter, the name of “Maxcorp Husnain Pakistan Limited” was changed to “Mainland Husnain Pakistan Limited.”

The railways in 2016 terminated the lease agreement as the MHPL defaulted on timely payments, failed to send audited statements, failed to construct a five-star hotel and carried out unauthorised construction. This led to a fresh round of litigation between the railways and the management of the club. To the effect of the lease agreement’s legality, the judges ruled, “We are in no manner of doubt that the entire process was tainted with mala fide and nepotism and no feasible resolution of the disputes between the parties is possible in the foreseeable future.” The ruling says the procedure adopted for the award of agreement was tainted with mala fide and nepotism in order to award the project to a pre-determined party to the exclusion of others and was, therefore, devoid of transparency, fairness and openness. It requires the federal minister for railways, to float an international tender in accordance with the laws pertaining to public procurement for a fresh lease of the club. “Such process including the final award of the new lease shall be completed within three months or such further time as may be allowed by this court, the ministry is required to submit weekly progress reports in this regard before an implementation bench,” the judgment says.

Agencies add: A National Accountability Bureau (NAB) reference is also pending before an Islamabad accountability court against illegal lease of the railway’s prime land to the Royal Palm Club management. According to the anti-corruption watchdog, the authorities were involved in corruption by illegally allotting 141 acres of railways land to Mainland Husnain Pakistan Limited for business purpose, and the national exchequer suffered loss of around Rs2.20 billion.

Meanwhile, Minister for Railways Sheikh Rasheed Ahmed has welcomed the judgment of the Supreme Court. He said the tender for Royal Palm Club would be issued in three months, as per the decision of the court. He renewed the pledge to steer the railways out of deficit within five years.

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