HC fines govt ₹5 lakh for ‘avoidable litigation’ against IIT contractor

The court also directed the state government to ensure that officials exercising statutory powers are made aware of applicable laws

MUMBAI: The Bombay High Court has imposed a cost of ₹5 lakh on the Maharashtra government for dragging infrastructure company IVRCL Limited into a decade-long “avoidable litigation” over excavated land in the Indian Institute of Technology Bombay (IIT-B) campus, holding that the proceedings were taken up based on a non-existent legal provision.

Mumbai, India - February 20, 2023: Posse of policemen deployed outside IIT Bombay after students protest seeking justice for 18-year-old Dalit student Darshan Solanki, who died by suicide on February 12 inside IIT Bombay, in Mumbai, India, on Monday, February 20, 2023. (Praful Gangurde / HT Photo) (HT PHOTO)

A single-judge bench of justice Kamal Khata on June 22 quashed an order passed by the revenue authorities in November 2014, directing IVRCL to make a payment of ₹54.08 lakh.

The bench also directed the state government to ensure that officials exercising statutory powers are made aware of applicable laws. It further asked the government to frame guidelines for officials to obtain legal advice whenever a genuine doubt arises concerning the interpretation or application of a statutory provision.

The dispute arose from a contract awarded by the Department of Atomic Energy to IVRCL in January 2010 for the construction of a computer centre and a computer science and engineering complex at the IIT-B campus. Under the contract, surplus excavated earth was to be dumped within the campus for levelling the low-lying areas.

After the government issued a demand notice directing IVRCL to pay the penalty, the company approached the high court. It argued that since the excavated material was dumped in the IIT campus itself, no permission was required from the competent authority for the excavation. It contended that the demand notice was arbitrary and legally unsustainable.

On the other hand, additional government pleader Jyoti Chavan submitted that the penalty was imposed because the excavated material was moved from one land parcel to another and the contractor had failed to obtain prior permission before carrying out the work.

The court, however, rejected the state’s argument, saying it was wholly untenable. It held that the 2010 show-cause notice, as well as the orders passed by the collector and the additional commissioner, were “wholly unsustainable and reflects a complete non-application of mind”. It said the invocation of MLRC for imposing the penalty was wholly misconceived, as the “mere transfer of excavated material from one survey number to another could not, by itself, furnish a ground for imposing a penalty”.

The court observed that all three authorities completely overlooked the fact that neither the excavation nor the movement of the excavated material extended beyond the IIT campus. It also pointed out that the provision cited in the show-cause notice—section 29(4) of the Mumbai Minor Minerals Act, 1955—did not exist.

“The notice is consequently vitiated by a fundamental jurisdictional defect and a complete non-application of mind and accordingly deserves to be set aside,” the bench said.

Remarking that the “case discloses a serious misuse of statutory power”, the court said that IVRCL was “compelled to pursue the litigation for nearly a decade”, which burdened it with substantial legal expenditure. It thereby imposed a cost of ₹5 lakh on the state government.

Corrections and clarifications: An earlier version of this report's headline incorrectly stated the fine amount as ₹54 lakh. This has been corrected. The error is regretted.