The classical control techniques such as Proportional-Integral-Derivative (PID) deliver excellent quality in the system performances with healthy sensors and actuators. However when failures of sensors and actuators occur, the control over the system goes partially or completely astray. Hence, we explore a robust control technique for the standard laboratory setup of the Twin rotor MIMO System (TRMS) which is similar, up to some extent, to a helicopter in terms of the non-linearities as well as cross interactions. Control algorithms such as robust PID and Extended Kalman (EK) observer - based robust PID are simulated and the system performance is compared with and without sensor and actuator failures. The control efforts are also considered in the tuning process to make sure they fit within the motor capabilities. An observer incorporated along with robust control algorithm for smooth operation. The results show that the implemented robust control methods along with EK observer provide very good performance by offering graceful performance degradation when facing either actuator or sensor failures.