ISLAMABAD: The Capital Development Authority (CDA) on Wednesday contended before the Islamabad High Court (IHC) that it was `unjustly penalised` in the Parliament Lodges extension project case.

During the hearing of a case related to an arbitration award that bound CDA to pay Rs640 million to private contractor Habib Rafiq (Private) Limited, CDA`s counsel Kashif Ali Malik questioned the legality of the arbitrator`s decision.

IHC Chief Justice Aamer Farooq heard the case.

The civic agency`s counsel contestedthat the award was unjust and placed an undue financial burden on the public exchequer.

The Parliament Lodges extension project originally launched to provide housing for lawmakers, has been plagued by multiple delays, cost escalations and contractual disputes.

Initially, the contractor was assigned to construct 104 family suites and 500 servant quarters by November 2013.

However, the civic agency extended the deadline to 2014.

In 2015, the CDA imposed a fine on the contractor for failing to meet the deadline. Instead of paying the fine, the contractor invoked the jurisdiction of an arbitration tribunal to settle the case.

After hearing the dispute, arbitrator retired Justice Nasir Aslam Zahid imposed a penalty of Rs640 million on CDA.

When CDA delayed the payment, the contractor approached a civil court through its lawyer and pressed the development authority to pay the penalty. The civic body, however, objected to the pro-ceedings, saying that under the law, the arbitrator was only empowered to submit the report.

The civil court ruled in favour of the CDA and the contractor went on to move the IHC where a single-member bench initially dismissed the plea but later ruled in favour of the contractor.

The contractor then filed a petition seeking execution of the award.

During Wednesday`s hearing, Justice Farooq sarcastically remarked that IHC`s building was also a classic example of the construction skills of the same builder.

Interestingly, the loopholes in the IHC building were revealed following the malfunctioning of an elevator that was carrying Sardar Latif Khan Khosa, the counsel for former prime minister Imran Khan. During the episode, the former premier`s lawyer was stranded along with 18 others for over 40 minutes inside the faulty elevator.

Following the incident, the court ordered an inquiry into the malfunctioning and sought a report.The construction of the IHC building started in November 2013 and it took about a decade to complete the project.

The building became operational in June 2023. However, when the high court was moved to the new building on Constitution Avenue, several loopholes emerged in the construction, it was reported.

The heating, ventilation and air conditioning system which had cost Rs550 million went out of order right from the beginning.

Other issues coupled with the elevator gaffe hinted that the building posed serious threats to the lives of litigants, lawyers, court staffers and even judges of the high court.

Moreover, the boundary wall of the IHC collapsed, prompting the Pakistan Public Works Department to write a letter to the housing ministry. In the letter, the department stated that the filtration plant of the newly constructed IHC building was also not functioning properly, reflecting subpar construction by the contractor.