Supreme Court upholds Telangana High Court quashing of free land allotment to IAMC Hyderabad

The Supreme Court on Wednesday upheld a judgment of the Telangana High Court which had set aside the State government’s decision to allot prime government land free of cost to the International Arbitration and Mediation Centre (IAMC). [IAMC v. Koti Raghunatha Rao]

A Bench of Justices Dipankar Datta and SVN Bhatti dismissed the special leave petitions filed by IAMC, observing that it was “not inclined to interfere” with the High Court’s June 27, 2025 judgment.

The case arose from two public interest litigation (PILs) challenging a series of government orders issued by the State of Telangana between 2021 and 2022. These included the allotment of 3.70 acres of land at Raidurg village in Hyderabad to IAMC without charging market value, the grant of ₹3 crore as financial assistance and a direction mandating that government departments refer disputes above ₹3 crore to IAMC for arbitration.

The petitioners contended that the decisions amounted to arbitrary distribution of State largesse, violated statutory land-alienation rules and caused loss to the public exchequer.

In a detailed judgment, the High Court Division Bench of Justices K Lakshman and K Sujana held that while promotion of institutional arbitration may constitute a legitimate public objective, the State cannot pursue such objectives by bypassing mandatory statutory requirements.

The Court quashed the government order (GO), by which the land was allotted to IAMC free of cost. It held that the allotment violated the Andhra Pradesh (Telangana Area) Alienation of State Lands and Land Revenue Rules, 1975, which mandate that government land allotted to a private body must be for a recognised public purpose and only after assessment and collection of market value.

The Bench noted that IAMC was a private trust and not registered as a company at the time of allotment. Further, no material was placed on record to show compliance with the statutory procedure governing alienation of government land. It held that the Rules were mandatory in nature and intended to restrain executive discretion.

Importantly, the High Court did not interfere with the government orders granting ₹3 crore in financial assistance to IAMC or with the policy decision directing government departments and public sector undertakings to designate IAMC as the arbitral institution for disputes above ₹3 crore.

On these aspects, the Court held that they fell within the realm of government policy and that no statutory violation had been demonstrated. It reiterated that courts cannot examine the wisdom of executive policy choices unless they are manifestly arbitrary or contrary to law.

While declining to strike down the financial assistance and dispute-referral policy, the High Court underscored the need for institutional accountability and transparency. It directed the State government to ensure periodic review of IAMC’s activities, including the manner in which public funds are utilised and whether the institution continues to serve the stated public purpose of promoting institutional arbitration and mediation.

Aggrieved by the quashing of the land allotment, IAMC approached the Supreme Court. After condoning the delay in filing, the Court declined to interfere with the High Court’s reasoning and dismissed the special leave petitions.

Before the apex court, IAMC was represented by Senior Advocates Gopal Sankaranarayanan and Vikram Pooserla, with Advocates D Bharat Kumar, PDV Srikar, Rahul G Tanwani, Jeevan Kumar, Abhinay Reddy M, Madhav Gupta, Tushar Shrivastava, Vishal Sinha, Siddharth Venugopal, Manasvi Reddy Jakka, Siva Praneetha Sreeramula, M Chandrakanth Reddy and Gopal Jha.

The State of Telangana was represented by Senior Advocate Abhishek Manu Singhvi with Advocates Devina Sehgal, Yatharth Kansal and Priyansha Sharma.

[Read Order]