Self proclaimed godman Asaram Bapu sparked controversy after he and his followers were reportedly wasting drinking water for pre-holi celebrations on Sunday.
The celebrations were organised at the Kasturchand Park in Nagpur, Maharashtra.
Asaram Bapu's immature action comes at a time when the state is struck with the worst drought in the past four decades.
According to reports, about 50,000 litres of drinking water were used for the celebrations. Asaram Babu sprayed the coloured water over his followers using two different pipes.
Following the incident, Maharashtra Home Minister RR Patil expressed shock and said that Asaram Bapu will be penalised for the wastage of water.
"The drought situation in the state is worrying. We will define our policy and collect a fine at the earliest," RR Patil told CNN-IBN reported.
The Nagpur Municipal Corporation has already fined the Asaram Bapu Trust with ₹9,367."
"They (the trust) approached us with a request that hundreds of Asaram Bapu devotees are congregating for a discourse and demanded water. We provided them with 40,000 litres. But we found out that the water was used on Sunday for some other purpose. So, we have directed them to pay ₹9,367, as per commercial rate," Municipal Commissioner Shayam Wardhane told The Indian Express.
"We are also contemplating legal action and discussing with lawyers what action can be taken against the trust."
Asaram Bapu Trust's Nagpur unit chief denied the reports of the water wastage stating that the water used for the pre-holi celebrations was from the Ashram well.
Enraged by the accusations against their leader, Asaram Bapu's followers assaulted television reporters and pelted stones at their camera equipment.
Police are said to have arrested three of his followers and detained 15 others in connection to the attack on media personnel. A probe has been initiated into the incident.
Recently, the Serious Fraud Investigating Office (SFIO) of the Union Ministry of Corporate Affairs had demanded Asaram Bapu's prosecution in a ₹700-crore land grab case in Madhya Pradesh.