FCC bars conversion of industrial land into housing schemes

Pakistan's Federal Constitutional Court has delivered a landmark ruling, stating that land acquired for specific public purposes, such as industrial development, cannot be subsequently converted into residential housing schemes. This decision, authored by Chief Justice Aminuddin Khan, upholds a prior judgment from the Peshawar High Court and is expected to establish a significant precedent for land use policies nationwide.

The court's judgment emphasized that companies cannot claim an absolute right to convert land acquired for a designated public purpose into housing projects. This ruling stems from an appeal by M/s Adil International (Pvt) Ltd, which had purchased the assets of Adamjee Papers and Board Mills. The company sought to convert the mill's land into a housing scheme after dismantling the unusable factory, but faced resistance from authorities.

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We… hold that since the land in question was acquired specifically for the establishment of Paper and Board Mills, the petitioner company cannot claim, as a vested, absolute or indefeasible right, its conversion into a housing scheme.

Legal experts note that the verdict carries substantial implications, as many land parcels initially acquired for industrial purposes have already been converted into housing schemes in various provinces, including Punjab, Khyber Pakhtunkhwa, and Sindh. The case involved land in Nowshera, KP, acquired in 1954 for paper mills. Adil International acquired the assets in 2000 and, after dismantling the factory, pursued the conversion, eventually obtaining approvals and developing a housing scheme.

However, subsequent directives from government authorities restricted the land's use and transfer, leading to issues with registering sale deeds. The Federal Constitutional Court's decision allows the KP government to exercise its powers according to the law and the original agreement if it determines that the land is surplus to the initial purpose or is being misused.

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The ruling will have significant implications since a number of lands initially acquired for industrial purposes have been converted into housing schemes in Punjab, Khyber Pakhtunkhwa and Sindh.