The Telangana High Court has overturned a 2021 order by the previous BRS government, canceling the allocation of 3.7 acres of prime land in Hyderabad to the International Arbitration and Mediation Centre (IAMC). The court cited violations of land revenue laws and alienation rules, pointing out the undue haste in the allotment to a private entity.
A division bench comprising Justices K. Lakshman and K. Sujana was hearing two Public Interest Litigations (PILs) challenging the land allotment and the annual financial assistance of ₹3 crore to IAMC. Advocate K. Raghunath Rao, one of the petitioners, argued that the land allotment, valued at ₹350 crore in the IT corridor, violated Supreme Court judgments. The petitioners questioned the logic behind allotting land to a private trust and providing government financial support. The state government had defended the allotment, stating that IAMC would serve as a platform to resolve disputes between international companies.
The court noted that the state government had shown undue haste in the allotment, violating the Telangana Land Revenue Act and Andhra Pradesh Alienation of State Lands Rules, 1975, which mandate market-value payment for land given to private entities. The court also agreed that institutional arbitration must be promoted by governments and upheld the state's decision to provide annual financial assistance of ₹3 crore. The bench clarified that the Telangana government should have IAMC's accounts audited by the Principal Accountant General (Audit) or any other competent officer. Additionally, any release of funds after the initial five-year period mentioned in the MoU signed by IAMC and the state government in 2021 should be subject to IAMC's performance.
The court questioned why prime land was allocated instead of using vacant buildings in Hyderabad to establish the IAMC office. It was pointed out that the Additional Solicitor General of India's office was located in a small space within the Telangana High Court, while many government offices operate from leased or private lands.
The judges stated that the allotment of land falls under government policy but that GO Ms. no. 126, which allotted land to IAMC, contravened the Andhra Pradesh (Telangana Area) Alienation of State Lands and Land Revenue Rules-1975. The allotment also violated GO Ms. 571, which comprises uniform guidelines and constitutes the 'Government Land Allotment Policy'. The court observed that free land allotment could only be justified if the allotment's purpose was greater and given to a non-profit institution or person. The court struck down the Government Order that had allotted 3.5 acres of prime land in Raidurgam to IAMC.
The previous BRS government had allotted the land in Plot No. 27, measuring 3 acres and 70 guntas in Survey No. 83/1, Raidurg village, Serilingampally mandal, Rangareddy district, to IAMC via GO Ms No. 126 dated 26.12.2021. The BRS government had also granted financial aid of ₹3 crore to IAMC through GOs 76 dated 12.11.2021 and GO 365 dated 16.07.2022. Furthermore, GO 6 dated 17.03.2022 directed all state government departments and public sector undertakings to refer disputes above ₹3 crores to IAMC for arbitration. While setting aside the land allotment, the court upheld the government orders granting financial aid and directing departments to refer disputes to IAMC.
