prior sanction in arbitration cases in terms of provisions of Rule 13(4) of the All India Services (AIS) (Conduct) Rules, 1968, it stated that "the term government has been defined as state government for an officer who is working in the state cadre."
"Sanction would, therefore, mean sanction of the state government in the case of Ladhar," reads the reply dated February 22, submitted by the department of personnel and training (DoPT).
Rule 13(4) of the AIS (Conduct) Rules reads: "No member of the service shall accept any fee for any work done for any public body or for any private person without the sanction of the government."
The court was also told that the Punjab chief secretary had been informed about the Centre's stand vide a letter dated December 30, 2012.
However, the state government had in October 2012 directed Ladhar to return the entire arbitration fee of Rs. 1.58 crore with 12% interest after advocate general (AG) Ashok Aggarwal had given his opinion that, "… the fixing/charging and then retaining the arbitral fee by Ladhar has to be viewed as a misconduct on his part and against the provisions of Rule 13(4) of the 1968 rules." The AG had added, "It is my considered opinion… that a member of the IAS who is governed by the 1968 rules cannot fix, charge and accept any fee, honorarium/charges without the permission of the government."
Also, the DoPT, in its reply, had informed the court that five office memoranda (OM) issued by the department regulating acceptance of fee/honorarium are "applicable to central service officers only".
The high court had sought a clarification on OMs issued by the department on October 27, 2008; December 23, 1985; July 2, 1960; and July 17, 1998, which the intervener in the case and RTI activist Vivek Aditya had mentioned in his submissions. Aditya had informed the court that as per OMs, no officer could charge more than Rs. 10,000 as fee in a financial year on account of any arbitration work.
The submissions were made by the Centre's counsel before the division bench of the high court headed by chief justice Arjan Kumar Sikri on Wednesday during resumed hearing of a public interest litigation filed by advocate HC Arora seeking recovery of arbitration fee charged by Ladhar.
The case had come to light after Hindustan Times did a series of reports starting with 'IAS officer reaps a rich harvest' and 'No policy, Ladhar makes hay as arbitrator' (May 24-25, 2012) about the conduct of Ladhar (53), a 1991-batch IAS officer.
The case would now come up for hearing on March 1.
In the past five years, Ladhar earned Rs. 1.58 crore as arbitration fee, at least twice his salary (pay scale of Rs. 37,400-67,000 +10,000) by making hundreds of farmers of Jalandhar and Patiala divisions, whose land has been acquired by the National Highways Authority of India (NHAI), to pay him Rs. 4,100-12,000 as cost per case, even though the divisional commissioner functions as an ex officio arbitrator between the NHAI and private parties.