Arbitration row: HC asks Centre to clarify rules

The Punjab and Haryana high court, on Wednesday, directed the secretary, union ministry of road transport and highways to submit a detailed reply in consultation with the ministry of personnel on the rules relating to the honorarium or fee payable to IAS officers in arbitration cases.

The directions came from a division bench headed by acting chief justice Jasbir Singh during the resumed hearing of a public interest litigation claiming that former Jalandhar divisional commissioner Sucha Ram Ladhar had illegally charged Rs 1.58 crore as arbitration fee from Jalandhar and Patiala farmers while deciding their land acquisition cases for compensation in the past five years.

Observing that the union ministry of personnel was dragging its feet on filing a proper affidavit in this regard, the court made it clear that if the affidavit is not filed now, secretaries of both the ministries would have to appear in court on the next date of hearing on July 17.

The court also asked the ministries to clarify "whether the arbitrators, who are government officials, are entitled to fix the fee on their own and what is the procedure adopted for honorarium or fee to the arbitrators in other states" as national highways are being constructed all over the country.

The court further directed that in case there are no rules on charging of fee in arbitration cases, an attempt should be made to frame the rules before the next date of hearing for future arbitration cases, or else the court would have to intervene.

The court was taken aback when the petitioner, advocate HC Arora, submitted, "He (Ladhar) has charged Rs 26 lakh for one common order passed in an arbitration case of 629 land owners." It said, "If it is so, every officer would like to be appointed as arbitrator."

The court also suggested that Ladhar "should deposit the entire amount in arbitration cases and let the state sanction whatever amount he is entitled to." But when Ladhar's counsel tried to counter the suggestion, the bench said, "When any government servant is appointed as arbitrator, some proper rules should be laid down."

However, the Punjab government's counsel argued, "The Centre was passing the buck to the state government, but rules say that he (Ladhar) can't charge arbitration fee. We asked him to deposit the entire amount, but he hasn't."

On the contrary, Ladhar said through his counsel ML Sareen, "Under the arbitration Act, arbitrator can fix the fee and I have deposited one-third fee with the state government, as per court order."
At the same time, the intervener in the case, Vivek Aditya, told the court that as per rules, "one officer can charge only Rs 10,000 in a year for various arbitration cases."

But when Sareen objected to the objectionable remarks made against him in the intervener's application, Aditya expressing his regret and requested the court to treat any such remarks as deemed to be withdrawn.

The case had come to light after Hindustan Times carried a series of reports on the issue involving Ladhar (53), a 1991-batch IAS officer, including "IAS officer reaps a rich harvest" and 'No policy, Ladhar makes hay as arbitrator" (May 24 and 25, 2012).


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