Bombay High Court fines State ₹5 lakh for arguing IIT Powai soil case on non-existent law

The Bombay High Court recently slapped the Maharashtra government with costs of ₹5 lakh for dragging contractor IVRCL through almost a decade of avoidable litigation over earth excavated within the IIT Bombay campus by invoking a non‑existent law and a misconceived penalty provision. [IVRCL Ltd v. State of Maharashtra & Ors]

Justice Kamal Khata held that the show‑cause notice itself suffered from a fundamental jurisdictional defect because it cited Section 29(4) of the Mumbai Minor Minerals Act, 1955, an enactment and provision that does not exist. 

During the hearing, the State conceded that there is no such Act or section; what exists are the Bombay Minor Mineral Extraction Rules, 1955, whose Rule 29 has no sub‑rule (4). 

“The impugned show‑cause notice was thus issued by invoking a non‑existing enactment and a non‑existent statutory provision,” Justice Khata observed, calling it a case of complete non‑application of mind.

The Court also castigated the State for not filing a reply for more than 8 years despite the writ petition having been admitted in 2015. 

“Having regard to the fact that IVRCL Ltd was compelled to pursue this litigation for nearly a decade, the substantial legal expenditure incurred in engaging attorneys and counsel and the need to address the continuing institutional indifference…costs quantified at ₹5 lakhs are imposed upon the State."

The issue arose from a work order which the Department of Atomic Energy awarded IVRCL to construct a computer centre complex at IIT Powai. The contract instructed surplus excavated material to be transported to dumping pits within the campus. Accordingly, the contractor kept all excavated earth inside IIT for levelling low‑lying areas, as certified by the senior project engineer.

Nevertheless, the sub‑divisional officer issued a show cause notice in 2010 and a month later, imposed  a penalty of ₹54.08 lakh under Section 48(7) MLRC. The notice was upheld by the Collector in appeal. IVRCL then moved the High Court to quash the notice in 2013. The Court ordered the additional commissioner to reconsider the issue, but he upheld the notice.

The notice demanded a penalty for 3,800 brass of allegedly unauthorised excavation of minor minerals, treating the movement of excavated earth between two survey numbers on the same IIT campus as if it were unlawful extraction or disposal. 

“The defect is not merely one of an incorrect citation or an erroneous description of the source of power,” the Court recorded, pointing out that the notice failed to disclose any actual statutory foundation or essential facts necessary to attract Section 48(7) of the Maharashtra Land Revenue Code. 

The Court warned that defending orders contrary to settled law only burdens courts and fuels a perception that authorities, shielded from accountability, ignore binding law with impunity. 

Justice Khata held that Section 48(7) was wholly misconceived because the earth was neither moved outside the campus nor commercially exploited. In view of this, it cannot become a “minor mineral” attracting royalty or penalty, he said.

Referring to Supreme Court decisions on unnecessary government litigation, the Court said,

"These decisions underscore that State litigation policy must be conciliatory rather than combative or adversarial, that wasteful litigative expenditure is itself a public wrong, and that governments and statutory authorities cannot raise frivolous or unjust objections, nor behave like private litigants driven by profit or hostility. When petition is well-founded in law, the State is duty-bound to concede or resolve it, rather than compelling persons to undergo avoidable litigation."

The notice was quashed and the State was directed to pay ₹5 lakh within four weeks. The judge also called for an affidavit on systemic corrective measures by August 24.

Advocates Shilpa Kapil and Shruti Bhatt appeared for IVRCL.

Additional government pleader Jyoti Chavan appeared for the State.

[Read order]