Karachi Cotton Exchange building case sent to evacuee trust for decision in 90 days

• SHC allows KCA to continue its business activities on the premises till determination of property’s status
• Suspends Aug 9, 1963 notification

KARACHI: While settling the ownership controversy of the historical Karachi Cotton Exchange Building for now, the Sindh High Court on Thursday allowed the Karachi Cotton Association (KCA) to enjoy the possession of the property and continue its business activities without any disturbance.

The SHC also quashed a case, lodged against some officers of Karachi Metro­politan Corporation and others for allegedly relying on fake and forged documents to assert ownership of the building.

It noted that the FIR appeared to be a colourful exercise of powers as Evac­uee Trust Property Board (ETPB) was neither on the schedule of Federal Investigation Agency (FIA) nor any element of fraud was spelt out from the record produced and relied upon by the parties.

A two-judge constitutional bench of the SHC comprising Justice Muhammad Saleem Jessar and Justice Nisar Ahmed Bhanbhro referred the matter of the building to the chairman of the Evacuee Trust Property Board (ETPB) with the direction to decide it within 90 days after providing a fair opportunity of hearing to all interested parties.

It further directed the tenants of Cotton Exchange building to deposit the rent with nazir of the SHC till the determination of the status of the KCA as well as the building.

The FIA and ETPB in a joint raid had sealed the building on Dec 12, declaring it a federal trust property and subsequently, lodged an FIR against officers concerned of the KMC, members of KCA and others for allegedly relying on bogus and forged documents to claim ownership of the building.

Thereafter, the KMC, KCA, its many members and tenants of the subject building had filed around 10 petitions in the SHC impugning a 1963 notification, the sealing order and eviction notice as well as the FIR.

After hearing the parties concerned and going through the record, the bench observed that no material evidence was found from the record produced by the ETPB and the FIA to establish that the custodian of evacuee property has ever treated this property as evacuee property and took control of the same.

While suspending the impugned notification, the judgement, authored by Justice Bhanbhro, also noted that the ETPB and FIA have only relied upon the impugned notification, issued on Aug 9, 1963 about the subject property which was not a sufficient proof to treat it as an evacuee trust property.

About maintainability of these petitions questioned by a federal law officer as well as lawyers for the ETPB and the FIA, it further said that the petitioners have challenged three different actions of respondents, including impugned notification issued in 1963, as well as eviction notice and sealing order issued in December last year and therefore, these petitions did not suffer from laches and filed within time.

The bench stated that no material was made available to evince that the KCA was made part of trust pool under any of the evacuee law in force prior to the promulgation of the Evacuee Trust Properties (Management and Disposal) Act, 1975.

The respondents have not placed on record any material to elicit that any proceedings were conducted to declare the KCA as trust property or the KCA & Cotton Exchange Building was kept under trust pool while petitioners have placed on record registered lease deed of year 1933 to demonstrate that property was purchased by the KCA, it added.

In the given circumstances, the judgement also said that it was incumbent upon the ETPB to first decide the question as to whether the property subject matter of the present petitions was evacuee trust property or not as the counsel for main respondents, when confronted, frankly conceded to the fact that no proceedings under Section 8 of the 1975 Act ever took place after issuance of impugned notification issued in 1963 or if any proceedings had taken place the same were not in their knowledge.

It further noted that after the 18th Amendment, the management and control of evacuee trust property became a provincial subject and judges were also informed that a legislation was enacted by Sindh in this regard, but the federal government has not yet transferred the management and control of evacuee trust properties to provincial government.

“We will not render our findings on the issue, same being dispute between two governments falls outside the domain of this court and was under exclusive jurisdiction of Honorable Federal Constitutional Court to adjudicate. If the provincial government is aggrieved of the control of evacuee trust properties by federal government, it may approach the Honorable Federal Constitutional Court”, it added.

The bench observed that the evacuee trust properties included those properties which were attached to charitable, religious or educational trusts or institutions or any other properties which form part of the trust pool and were discernible from the evacuee properties.

It also said that the KCA was a limited company established for the purposes of cotton trade and it was not mentioned in memorandum and article of association that the KCA worked as a charitable organisation.

The bench further noted that no person or property before the Jan 1, 1957 must be treated as evacuee or evacuee property, on or after the said date, but it transpired from the impugned notification that the KCA was on the register of ETPB as public trust evacuee property, but when it was placed on said register and declared as an evacuee trust was not clear.

It stated that petitioners were not given an opportunity of hearing before placing the KCA on register of evacuee trust properties, issuance of eviction notices and sealing of the building whereas due process was prerequisite that needed to be respected at all strata.

The judgement also said that both parties have claimed ownership which may be adjudicated before the proper forum that disputed property either being evacuee property or evacuee trust property or a property owned by KCA needed fresh adjudication for which an exclusive jurisdiction has been vested with the chairman of ETPB.

The Advocate General Sindh Jawad Dero insisted to refer the case to provincial ETPB, but the bench noted that provincial ETPB has not appeared throughout proceedings before court to make such claim while federal ETPB has vociferously contested the case.

“By operation of law all the properties declared as evacuee trust property remained under management and control of federal government, therefore, powers of adjudication in our view shall vest with federal ETPB”, it added.

As far as allegations of malice and ulterior motives against FIA are concerned, the bench further observed that the FIA was acting in aid of the ETPB in compliance with an order of the Supreme Court and therefore, it cannot be said that FIA was acting beyond the bounds of law.

“However, from perusal of FIR No 37 of 2025 recorded by FIA it transpires that no case of fraud was made out and registration of FIR was a colourful exercise of powers by FIA, besides ETPB did not fall within the schedule under FIA Act 1974, therefore the FIA should not have recorded the FIR and this mistake stands admitted by FIA itself during proceedings of case”, it added.

While disposing of the petitions, the bench said, “The notification dated 9th August 1963 is suspended and the matter is referred to the chairman ETPB, Islamabad for fresh determination of status of KCA, whether it was an evacuee trust property or evacuee property. Since Cotton Exchange Building is owned by KCA, therefore, determination of status of KCA will automatically decide the fate of Cotton Exchange Building”.

It also ordered the chairman to decide the matter within 90 days and must also provide a fair opportunity of hearing to all the interested parties and if the need be, should summon and examine the witnesses and procure the record.

The bench further asked the federal government, Securities and Exchange Commission of Pakistan and Sindh government to assist the chairman of ETPB in procuring the record and attendance of any witness as and when required.

“Till the determination of the status of the property as Evacuee Trust Property or otherwise and due course of law follows pursuant to the outcome of proceedings by chairman ETPB, the KCA shall enjoy the possession of property and continue its business activities without any disturbance”, it concluded.

Published in Dawn, June 19th, 2026