Punjab and Haryana HC flags possible collusion by Haryana Govt in Rs 11-crore arbitration case, seeks chief secretary’s explanation

Taking up the appeal pursuant to an order passed on January 19, 2026, the bench recalled that it had already expressed displeasure over the repeated adjournments sought by the state counsel. On January 19, 2026, Naveen S Bhardwaj, Additional Advocate General, Haryana, appeared for the applicant-appellant, while Advocates Rajat Khanna and V P Singh represented the respondents.

At the outset, the court was informed that out of the total arbitral claim of around Rs 11 crore, about Rs 9 crore had already been released during the pendency of the appeal. The remaining Rs 2 crore, which had been deposited and made subject to the outcome of a revision petition, also became liable to be released after the revision was dismissed.

The bench pointedly noted that the appeal was filed in 2023, yet “almost the entire awarded amount virtually stands released” during its pendency. To underscore the manner in which the state pursued the matter, the Court reproduced a detailed chronology of orders passed over nearly three years. These revealed that the case was adjourned more than a dozen times, almost always at the request of the state counsel, on grounds ranging from non-receipt of files, personal difficulties, absence of the arguing counsel, to communication gaps.

Despite the court granting multiple “last opportunities” and warning that appropriate orders would follow if arguments were not advanced, adjournments continued unabated.

‘Matter is not being pursued in the right earnest’

On February 24, 2025, the court recorded that the matter had been adjourned consecutively on eight occasions at the state’s request and observed, “Prima facie, it appears that the matter is not being pursued in the right earnest.”

Even thereafter, the pattern continued, culminating in the court’s sharp remarks in the present order. In a stinging observation, the bench held that the appeal appeared to have been kept alive merely to create an impression that legal remedies were being exhausted.

“Prima facie, we find that the matter has been pursued by the State of Haryana with utmost disinterestedness and taking advantage of it, the substantial awarded amount has already been released to the respondents. The appeal appears to have been kept pending only to show that available legal remedies are being exhausted by the state,” the court said.

The court went a step further, flagging the “possibility of collusion on the part of the state authorities”.

“Considering the circumstances and the manner in which the entire awarded amount stands deposited and almost 90 per cent of it stands released to the respondents, the possibility of collusion on part of the State, in prosecuting the matter, cannot be ruled out,” the bench observed.

Before passing further orders, the High Court directed the chief secretary, Government of Haryana, to personally examine the matter and explain the circumstances under which the appeal was conducted in this manner. The court also ordered that any further disbursement of funds to the respondents remain on hold until further orders.

The chief secretary was asked to file an affidavit within two weeks, detailing the state’s position and the steps taken, so that appropriate orders can be passed. The matter will now come up for further hearing on February 17, 2026.