The Supreme Court of India on Wednesday delivered a significant ruling by refusing to intervene in a Telangana High Court order that cancelled the allotment of 3.7 acres of prime land in Hyderabad's Raidurg area to the International Arbitration and Mediation Centre (IAMC). This decision marks a major setback for the institution, which was established with the backing of former Chief Justice of India NV Ramana.
Supreme Court Dismisses Special Leave Petition
A division bench of the Supreme Court, comprising Justices Dipankar Datta and SVN Bhatti, dismissed the special leave petition filed by the IAMC. The bench explicitly stated that it was not inclined to interfere with the high court's ruling, thereby upholding the cancellation of the land allotment. The IAMC had been allocated this valuable land free of cost by the then Telangana government in 2021, as part of efforts to promote institutional arbitration in the region.
High Court's Grounds for Cancellation
The Telangana High Court's order, passed in June 2025 by a division bench of Justices K Lakshman and K Sujana, came in response to two public interest litigations. These petitions challenged both the land allotment and the grant of Rs 3 crore as annual financial assistance by the previous BRS government to the IAMC. In its detailed judgment, the high court held that the state government had acted with undue haste in the matter.
The court found that the government violated key legal provisions, including the Telangana Land Revenue Act and the Andhra Pradesh Alienation of State Lands Rules, 1975. These regulations mandate that when land is allotted to private entities, it must be done at market value, a requirement that was not fulfilled in this case.
Concerns Over Performance and Sustainability
While acknowledging that governments should indeed promote institutional arbitration, the high court expressed serious concerns over the IAMC's performance and long-term viability. The bench noted that out of the 57 cases handled by the centre, 17 were taken up on a pro bono basis, indicating a limited revenue-generating capacity.
The court observed that while initial financial support to a new institution like the IAMC could be justified as a matter of policy, such assistance to a private arbitral body could not be perpetual. The abysmally low caseload raised serious questions about the centre's ability to sustain itself independently in the future, without ongoing government support.
Implications for Hyderabad's Legal Landscape
This ruling has broader implications for Hyderabad's development as a hub for alternative dispute resolution. The decision underscores the importance of transparency and adherence to legal procedures in government land allotments, even for institutions with high-profile backing. It also highlights the judiciary's role in ensuring that public resources are utilized effectively and in accordance with the law.
The Supreme Court's refusal to intervene reinforces the high court's stance on accountability and proper governance in the allocation of state assets. This case serves as a precedent for future land allotments to private entities, emphasizing the need for strict compliance with statutory requirements and market value considerations.
