No policy in place, Ladhar makes hay as arbitrator

Patiala divisional commissioner Sucha Ram Ladhar's money-minting practice of charging arbitration fee from landowners/farmers while deciding their land acquisition compensation disputes raises the "question of ethics", according to Punjab government's confidential records.

Ladhar, a 1991-batch Punjab-cadre IAS officer, was posted as Jalandhar divisional commissioner from August 2007 to July 2011; since then, he has been the divisional commissioner, Patiala (with additional charge of Jalandhar). In the absence of a state-level policy on arbitration fee, he has been allegedly making crores of rupees by charging Rs 12,000 each from thousands of landowners while deciding their land compensation disputes against the National Highway Authority of India (NHAI), according to official documents Hindustan Times has accessed.

As per conservative figures, Ladhar may have dealt with more than 2,000 arbitration cases of farmers of Jalandhar and Patiala divisions in the past five years.

"However, the question would arise that whether it would be morally or ethically correct on the part of an arbitrator-cum-commissioner to accept the entire fee from the parties whose interests are apparently in conflict with those of the government authorities concerned," reads a top-secret note of the Punjab government dealing with Ladhar's demand for fee from landowners and the NHAI.

At the core of the controversy is Ladhar's order seeking Rs 12,000 as "the cost of arbitration" to be shared 50:50 by the NHAI and landowners. As the NHAI refused to deposit its share of the fee, the IAS officer issued another order: "The arbitration costs for the respondent (NHAI) would be paid by the petitioner at the time of the award, which he would recover from the NHAI at the time of taking the award money."

In this connection, the public works department (PWD) has now held that the officer concerned could always be accused of awarding compensation in favour of the private party if the latter "bears the entire cost of honorarium and fee demanded by the arbitrator on account of both parties to the dispute."

Since June 2011, the PWD had been sitting tight over the matter after the NHAI had shot off a letter to then chief secretary, stating that Ladhar had suspended awards due to non-deposit of fee by the NHAI.

Punjab government records point out that due to non-release of awards by Ladhar as Jalandhar divisional commissioner, the work of widening the Panipat-Jalandhar and Pathankot-Jalandhar highways "is suffering badly."

The NHAI's stand is that Ladhar is claiming fee even as "there is no provision in the NH Act, 1956, for payment of any charges or honorarium to the competent authority."

Sources said the issue hotted up after IAS officer Paramjit Singh Aujla became the secretary, PWD, in March and mooted a proposal to newly-appointed chief secretary Rakesh Singh about the urgency of formulating a policy which would specify the circumstances under which honorarium and fee could be accepted by officers who conduct arbitration proceedings, besides the quantum of the fee.

The chief secretary had on April 10 directed to make a reference to the personnel department. Now, the file is before the latter, with the express request "to take an appropriate decision" on whether Ladhar can be allowed to accept fee as an arbitrator, government sources said.

The official document states that the PWD engineer-in-chief informed that "no officer", while exercising powers of an arbitrator under the Act, "has ever charged any fee or honorarium" in the past.

"I think in order to resolve this issue once and for all, it would be appropriate to formulate a broad policy at the state level wherein it should be provided under what circumstances honorarium or fee could be accepted by the officers who conduct arbitration proceedings and what should be the quantum of such fee," reads the confidential note sent to the chief secretary by the PWD secretary.