Hyderabad: The Hyderabad high court last month struck down a series of government orders (G.O.s) that had granted land and financial largesse to the International Arbitration and Mediation Centre (IAMC), calling the allocations “arbitrary, ultra vires, and in violation of statutory norms.”A division bench comprising Justice K. Lakshman and Justice K. Sujana delivered the judgment on June 27 while hearing two public interest litigations (PILs) filed by Koti Raghunatha Rao and A. Venkatarami Reddy. The PILs challenged three G.O.s issued by the Telangana government allotting 3.7 acres of prime land in Raidurg to the IAMC free of cost, Rs 3 crore in financial aid and mandating all state departments to refer disputes above Rs 3 crore to IAMC for arbitration.The petitioners argued that IAMC, a private trust not registered under the Companies Act at the time of land allotment, was ineligible for such a grant under the Telangana Land Revenue Act, and the AP (Telangana Area) Alienation of State Lands and Land Revenue Rules, 1975. They further contended that IAMC charges exorbitant fees and functions as a profit-making institution, making the free land allotment and annual public funding unjustifiable.The court agreed, ruling that the land transfer violated both the 1975 Rules and the 2012 Government Land Allotment Policy. “There is no legal provision permitting free land allotment to a private body not registered under the Companies Act,” the court held. The judges noted the government not only failed to assess or recover market value for the land but also handed over possession to IAMC even before finalising the terms of allotment.What the court saidIn a detailed 50-page judgment, the bench cited a series of Supreme Court precedents to underline that while policy decisions are primarily the executive’s domain, they must be legally sound and transparently executed. “Even bona fide allotments must adhere to existing law. Public largesse cannot be distributed at will,” the court observed.IAMC’s board includes top judicial and executive officials such as Justice Hima Kohli and the recently retired Justice L. Nageswara Rao as the trustees of the board and the then Chief Justice of India N.V. Ramana as the author of the deed of public charitable trust of IAMC, along with a Telangana state minister. The court, however, noted that such “high-profile trusteeship cannot be a defence against illegality.”The court further struck down government orders which granted Rs 3 crore in financial assistance to IAMC, terming it “unsupported by any statutory framework.” Likewise, the directive that state departments refer disputes to IAMC was also quashed as being “non-consultative and fiscally burdensome.”‘State must not act like a feudal lord’Invoking the public trust doctrine, the bench said: “Governments are not feudal lords distributing land as patronage. They hold resources in trust for the people.”Sriram Panchu, a senior advocate at the Madras high court and president of the national association, Mediators India argued that the involvement of sitting judges in IAMC violates the Bangalore Principles of Judicial Conduct, especially the tenets of impartiality and independence. Panchu wrote that “serving judges, by associating with a private trust formed without institutional backing, steps into ethically ambiguous territory.” He warned that such actions risk undermining public confidence and creating a form of “institutional capture” of the dispute resolution space by judicial elites.His concerns were echoed in parts of the legal fraternity, with questions raised about the opacity of IAMC’S governance and whether its proximity to power undermines the very neutrality mediation is meant to uphold.IAMC’s trustees and supporters have come out in defence of the organisation. At a press conference in Hyderabad, IAMC trustee Justice B. Sudarshan Reddy (Retd.) clarified that former CJI Ramana merely authored the trust deed and had no operational role. Registrar A.J. Jawad asserted that IAMC is a not-for-profit charitable trust committed to affordable and accessible justice.In a strongly worded rebuttal, Justice (Retd.) K. Kannan argued that Panchu’s critique confused governance with misconduct. Justice Kanan defended IAMC as a public-spirited initiative modelled on similar global arbitration hubs.Broader questions remainWhile the legal challenge focuses on land laws and public policy, the deeper unease lies elsewhere: Should sitting judges, cloaked in state power, directly promote quasi-private institutions without formal court mandates or parliamentary oversight? If mediation is to be a people-centric mechanism, critics argue, it cannot be incubated behind closed judicial corridors.Although the IAMC has claimed that it will move to “challenge” the high court decision against them, this episode has exposed gaps in India’s judicial ethics framework and the urgent need for clear boundaries between public office, private trusts and state largesse. As the Supreme Court prepares to hear the appeal, what’s at stake is not just a land parcel in Hyderabad, but the credibility of judicial independence itself.Tamoghna Chakraborty is a reporting intern at The Wire.