Telangana High Court Sets Aside BRS Govt’s Free Land Allotment to Arbitration Centre

Hyderabad:The Telangana High Court on Friday set aside the BRS government order allotting 3.7 acres of land in favour of the International Arbitration and Mediation Centre at Raidurg.

The division bench comprising Justice K. Lakshman and Justice K. Sujana upheld two other government orders, one granting `3 crore financial aid to the IAMC and another directing all departments to refer their disputes with financial implications over `3 crore to the new centre.

The court noted that the alienation of state land under Rule 3 of the Alienation of State Lands and Land Revenue Rules, 1975 in favour of a private body like the IAMC could only be done for a public purpose, after collecting the applicable market value. The Rules do not contemplate alienation of government land to a private body free of cost. The allotment in favour of a private body can only be made if such body was registered under the Companies Act.

The court said that the then government allotted land in favour of the IAMC without assessing, charging and collecting the market value. As on the date of allotment, the IAMC was not registered as a company. Therefore, the allotment of land in favour of the IAMC was vitiated on account of non-compliance of the applicable rules.

Justice Lakshman and Justice Sujana were pronouncing judgment in the PILs filed by Koti Raghunatha Rao and A. Venkatrami Reddy, who challenged the three GO for land allotment, financial aid and referring disputes to the IAMC for arbitration. They contended that IAMC was not a statutory body. According to them, it was a private body making profits and enjoying grant-in-aid from the government. Support for such private institutions was illegal and not supported by any law, according to the petitioners.

The BRS government by way of GO Ms No. 126 dated 26.12.2021 had allotted land in Plot No. 27 admeasuring 3 acres and 70 guntas in Survey No. 83/1, Raidurg village, Serilingampally mandal, Rangareddy district, in favour of the IAMC. By way of GOs 76 dated 12.11.2021 and GO 365 dated 16.07.2022, the BRS government had granted financial aid of `3 crore to the IAMC. Via GO 6 dated17.03.2022, the state government had directed all its departments and public sector undertakings to refer all its disputes above `3 crores to the IAMC for arbitration.

The government contended that institutional arbitration should be supported by the government. It was argued that government support to arbitral institutions was common across the globe and the well-known international arbitration centres were supported by their respective governments.

The IAMC argued that it was not a private body and that its board of trustees included the Chief Minister, Supreme Court judges and the law minister. The composition of the board involved elected public officials and judges. Further, the IAMC contended that the budgetary allotment by the state government was transparent.