Administrative orders accepting an arbitral award cannot be recalled or reviewed absent proof of fraud or misrepresentation.

The petitioner was awarded a fisheries lease for the Dhandhraul Reservoir for 2014-15 for ₹60 lakhs, depositing ₹24.93 lakhs (including security).

Due to the sudden opening of the dam gates by the Irrigation Department, fishes escaped into the canal, resulting in a minimal catch (45.5 quintals vs. an expected 850 quintals).

A State-appointed three-member Arbitration Committee concluded the petitioner was not liable for the loss and recommended waiving the remaining dues.

The State initially accepted this via an order dated 16.03.2017.

However, on 30.06.2017, the State recalled the waiver without specific reasons.

Following a previous remand by the High Court for lack of hearing, the Secretary passed a fresh order on 09.01.2024, rejecting the petitioner’s representation and reinstating the recovery based on a new 2023 report.

Whether the State Government was bound by the Arbitration Committee’s report as an award and could only challenge it under Section 34 of the Arbitration and Conciliation Act, 1996.

Whether the State authority possessed the power to recall its earlier order accepting the arbitral recommendation in the absence of fraud or misrepresentation.

The court applied the Arbitration and Conciliation Act, 1996, specifically Section 34 regarding the setting aside of arbitral awards.

Administrative or quasi-judicial authorities possess the inherent power to recall orders only if obtained by fraud, misrepresentation, or if the order was a nullity.

Precedent: Indian Bank v. Satyam Fibres (India) Pvt. Ltd. (1996).

Precedent: Budhia Swain v. Gopinath Deb (1999).

The principle that "fraud unravels everything" but otherwise, an order passed with due application of mind cannot be arbitrarily reviewed/recalled without statutory power.

The Court observed that the three-member committee constituted a valid arbitral tribunal under the agreement.

Since the State did not challenge the award under Section 34 of the Arbitration Act and instead formally accepted it via the order dated 16.03.2017, the findings became final and binding.

The Court reasoned that the subsequent recall order was an impermissible exercise of "review" masked as a "recall".

The State failed to prove that the initial waiver was obtained through fraud or misrepresentation.

The Court rejected the State's reliance on a 2023 report to overturn 2015 findings, noting that an investigation eight years later could not displace contemporaneous evidence and that the report was never shared with the petitioner, violating principles of natural justice.

It held that the State was bound by the Arbitration Committee's findings and lacked the power to recall its acceptance order without evidence of fraud.

The High Court quashed the impugned order dated 09.01.2024 and the consequential recovery order dated 18.01.2024, effectively restoring the waiver of the ₹49,27,905 recovery.