District collector Rajendra Kumar issued the notice yesterday.
"We have asked the ashram management to pay Rs 17 crore as occupancy fee for encroaching on a piece of government land near the ashram," said Kumar.
The ashram had allegedly encroached on 34,400 sq meters of land. The government reclaimed its possession in 2010.
"The land remained in the possession of the ashram between 1996 to 2010. As per the rules, the occupant has to pay occupancy fee even after the land is freed. Normally, 15 per cent of the current market value of the land is charged as occupancy fee," an official in the Collector's office said.