ISLAMABAD - Federal Investigation Agency submitting its progress report on forensic audit of housing societies across the country revealed that Defence Housing Authorities did not cooperate in provision of record.

The data of private housing schemes registered in Pakistan does not reflect the numbers of DHAs, the 8th progress report of FIA submitted in the Supreme Court stated.

The forensic audit of housing schemes is being carried out by different joint investigation teams (JITs) coordinated by the FIA.

The FIA report states that JITs had so far been able to complete the forensic audit of 72% cooperative housing societies and 88% of the private housing schemes.

In its 14-page report, the FIA stated that a total of 631 cooperative housing societies were registered in Pakistan under the Cooperative Societies Act 1925.  Out of these 631 societies, 452 cooperative housing societies have been audited, the report stated.   

Out of 452, only 51 have been found law abiding. Whereas legal action has been recommended against rest of the societies by National Accountability Bureau (NAB), FIA and Anti-Corruption Establishment (ACE) according to the nature of the illegalities/irregularities determined during the audit.

The report states that most of cooperative housing societies had purchased disputed/controversial land without adopting the proper procedure and PPRA rules.

“Most of the land purchased by the societies is not in a compact block form and is scattered over a large area making it impossible to develop a housing project. Most of the societies have so far not been able to consolidate their land holdings despite the lapse of 10-15 years since their registration.”

It added that large sums have been misappropriated through over-invoicing and the hard-earned money of the members has been going into the pockets of the office bearers of these societies in collusion with the land-dealers/property mafia and revenue department.

The report added that huge amounts had been doled out to ‘qabza groups’ on account of compensation of possession charges without verifying their share in the land holdings as per revenue record.

“Such payments have been made in millions, without prior approval of concerned Registrar, Cooperative Societies, as required under Rules 27 and 54 of the Cooperative Societies Rules, 1927. Payments on the pretext of possession charges are the basic loophole where the managing committees of the different societies are able to embezzle/misappropriate large sums.”

Regarding development work, the report further states that contracts for the development of the land have been granted by different societies without adopting the proper procedure as envisaged in PPRA rules. “In collusion with such firms, the development work is carried out at a much higher rate than the market value. The quality of work carried out in different housing projects is substandard culminating in an early wear and tear of the infrastructure bears testimony to the low quality of work.” 

As per Section ‘12’ of the Cooperative Societies Act, 1925, all the managing committees of cooperative societies are required to hold ‘’Annual General Meeting (AGM)’’ comprising all their members, within a period of 3 months after getting their accounts audited.

“Nevertheless, most of the societies do not hold AGMs for several years consecutively and even if a meeting is called, affairs of the society, especially the accounts are never revealed,” the report stated.

It is moreover stated that in almost all cooperative housing societies, plot sizes have been considerably reduced without lawful authority and the members have been forced to pay extra amounts on account of development charges.

“The promises made by the societies at the time of launching housing projects have not been fulfilled and the prices of plots have kept increasing day by day.”

A large number of employees are unnecessarily hired by the societies on exorbitant salaries even when their services are not required and every society has fixed its own rates for the transfer of plots from one member to the other.

Several bank accounts are illegally opened and operated for routing the money received from members. “Subsequently these accounts are concealed from the auditors as well as the registrar offices.”

“Public utility sites are not transferred to the regulator, and even if transferred, it is built upon at will. Yearly audit of the society is not conducted. In some of the cases, a close interaction between the land mafia and the management of the society has been noticed,” the report stated.

According to the data in FIA report, a total number of 3,186 private housing schemes are registered across the country out of which 2,814 schemes have been audited. 

Out of 2814, only 248 have been found law abiding whereas legal action has been recommended against rest of the schemes.

Common illegalities and irregularities have been identified in the private registered housing schemes after scrutiny of the record of these schemes.

A huge number of SOCIETIES have extended their area, illegally, and are marketing and selling the said area as part of the Society, defrauding the general public.

“Booking and sale of plots is not regulated by any agency. As such, overbooking of plots is a common phenomenon, whereby ‘files’ for more plots are sold than the actual number of plots available with the society at low rates.”

Mortgaged plots are marketed and sold before being released from the regulator. While encroachment on park, mosque, graveyard and public sites is very common, it is observed.

“Layout plan is modified by the developers without approval from the regulator. Development reports are not provided to the regulator on-time, even after development work has been done.

Transfer deeds of mortgaged plots are not executed in favour the regulator. Revenue record is not updated when sale/purchase of property is made. Mutations in favour of new owners are not made and are sale is conducted on sale deed/sale of file alone.”

Furthermore, the Master Plan previously conceived is repeatedly revised, on the whims and wishes of the decision makers, without realising the actual situation on ground.

“It is need of the hour to review the Master Plan of the cities at once, keeping in view the topographical and geographical situation at site”, the report suggested.

It is recommended that a centralised agency, at provincial or federal level, with powers of investigation might be established to look after regulatory affairs of private and cooperative housing societies.

The report also stated that the number of unregistered housing schemes is 5,967 which are operative across the country.

The first category of these schemes includes the ones which had applied for NOC but matter is pending with development authorities for the fulfilment of formalities or due to bureaucratic hurdles.

The second category of these unregistered schemes included the ones who had never applied for the grant of NOC/Registration and have developed, sold out and presently the area has been colonised.

In the opinion of the JITs, first category of the unregistered housing schemes needs to be dealt with separately, as the schemes are in the process of approval.

As for as second category is concerned, it is stated that the offense of cheating public at large has only been introduced in National Accountability Ordinance, 1999 while other law enforcement agencies like FIA and ACE could not take actions against private cheatings.

It has been observed that in the outskirts of the city, the developers develop the land without observing the standards after purchasing small pieces of land in few acres and market the plots in the vicinity with the connivance of the concerned regulatory authorities. 

“The public plots i.e. parks, schools, play grounds and graveyard are first shown the in maps and after saturation of society, the allocated land is sold as the land was never transferred to the regulators.” 

“It is dire need of the day to initiate a strict immediate legal action/crackdown against this category of the schemes,” the report added.