KARACHI: Despite clear directives from the Sindh High Court (SHC), cotton traders were barred from entering the Karachi Cotton Exchange Building on Friday, raising questions over compliance with the court’s order.
Earlier on Thursday, the Sindh High Court (SHC) permitted the Karachi Cotton Association (KCA) to retain possession of its building and continue its business operations. However, the court directed all tenants to deposit their rent with the Nazir of the SHC until the legal status of both the KCA and the building is finally determined.
In a joint operation on December 12, the FIA and the Evacuee Trust Property Board (ETPB) sealed the building, declaring it a federal trust property. Later, they also registered an FIR against relevant officials of the KMC, members of the KCA, and others, alleging that forged and bogus documents were used to claim ownership of the building.
Following this, the KMC, KCA, along with several of its members and tenants of the building, filed around 10 petitions in the Sindh High Court (SHC). The petitions challenged a 1963 notification, the sealing order, the eviction notice, and the FIR.
SHC, its order, has also suspended the Evacuee Trust Property Board’s (ETPB) 1963 notification declaring the Karachi Cotton Exchange Building an evacuee trust property and directed the Chairman of the ETPB to undertake a fresh determination of the association’s legal status within three months.
The ruling has temporarily secured the Karachi Cotton Exchange’s possession and operational control of the historic Cotton Exchange Building, a landmark institution closely associated with Pakistan’s cotton trade and commodity markets.
A division bench comprising Justice Mohammad Saleem Jessar and Justice Nisar Ahmed Bhanbhro disposed of multiple petitions relating to ownership of the Cotton Exchange Building, eviction orders, and criminal proceedings initiated by the Federal Investigation Agency (FIA) against officials of the Karachi Metropolitan Corporation (KMC), Karachi Cotton Exchange (KCE), and the ETPB.
The court observed that since the Cotton Exchange Building is owned by the KCA, the determination of the association’s legal status would automatically decide the fate of the property. It therefore referred the matter to the Chairman ETPB, Islamabad, for fresh adjudication.
The court ordered that chairman ETPB shall decide whether KCA building was an evacuee trust property or evacuee property.
The court directed that the Chairman ETP shall decide the fate of the KCA within 90 days’ time and shall provide a fair opportunity of hearing to all the interested parties and if the need be, shall summon and examine the witnesses and procure the record.
The court also ordered that the federal government, Securities and Exchange Commission of Pakistan and Government of Sindh shall assist the Chairman ETPB in procuring the record and attendance of any witness as and when required.
The court also quashed the FIR recorded by FIA against KMC, KCA and ETPB officials observing that it appears to be a colorful exercise of powers, as ETPB was neither on the schedule of FIA nor any element of fraud was spelt out from the record produced and relied upon by the parties.
The court observed that the FIR was recorded in violation of FIA Rules 1975, hence the same stands quashed.
The court ordered that 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.
The court ordered that tenants of Cotton Exchange Building who deposited rent with KCA shall deposit the same with Nazir of the high court until the determination of the status of KCA and Cotton Exchange Building.
The court ordered that Nazir of the court shall invest the rent amount in profitable scheme and same shall be refundable subject to the outcome of the proceedings by Chairman ETPB.
Regarding the allegations of malice and ulterior motives against FIA, the court observed that it reflected from the record that FIA was acting in aid of ETPB in compliance of supreme court’s order therefore it cannot be said that FIA was acting beyond the bounds of law.
The court observed that from perusal of FIR recorded by FIA it transpires that no case of fraud was made out and registration of FIR was a colorful 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.
The court observed that both parties claimed ownership against the same property, without prejudice to the rights of parties, which may be got adjudicated before the proper forum that the disputed property either being evacuee property or evacuee trust property or a property owned by KCA needs fresh adjudication for which an exclusive jurisdiction has been vested with Chairman ETPB.
The court observed that advocate general Sindh has insisted to refer this case to provincial ETPB but throughout proceedings provincial ETPB has not appeared before the court to make such claim and federal ETPB has vociferously contested this case.
The court observed that 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.
According to Naseem Usman, Chairman of the Karachi Cotton Brokers Forum, after the SHC order in favour of tenant and KCA, a number of cotton brokers, tenants and traders arrived at the Karachi Cotton Exchange Building to take possession of their offices. However, Federal Investigation Agency (FIA) officials did not allow them to enter the premises, which, he said, was a clear violation of court orders.
He said that although traders and brokers have been out of their offices, they have continued paying all utility bills for the past six months.
Copyright Business Recorder, 2026
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