Bombay HC Rules Officials Must Pay For Stalled Rs 122 Cr Mumbadevi Project
On Friday, July 17, the Bombay High Court ruled that government and civic officials, rather than taxpayers, must be held personally liable for damages when they abruptly cancel public projects midway. The ruling was made during a hearing concerning a stalled Rs 122 crore robotic parking facility project near the Mumbadevi Temple area in South Mumbai.
The division bench of Acting Chief Justice Ravindra V Ghuge and Justice Gautam A Ankhad observed that halting public projects midway often results in substantial losses to the public exchequer.
The case arose after the Brihanmumbai Municipal Corporation (BMC) stopped work last year on a planned 17-storey robotic parking facility in the Mumbadevi Temple area. The contractor, M/s SMS Limited, subsequently filed a petition in the High Court claiming "huge losses" due to the "abrupt" stoppage of ongoing work. The company has also initiated arbitration proceedings.
During the hearing, the bench noted that when government authorities or state instrumentalities cancel projects midway or issue stop-work notices, it causes tremendous loss to the state exchequer. This loss is compounded when the affected party seeks damages or arbitration.
The court emphasized that such compensation is currently paid using taxpayers' money. To address this, the bench stated that in situations where certain officers are responsible for decisions of illegal cancellation of projects midway, the time has come to hold those officers personally liable to pay such damages from their salary accounts because the taxpayers are not at fault.
Representing the BMC, Advocate Madhuri Nalluri stated that SMS Limited had "already made headway into the project" and completed construction up to the plinth level before the work was paused. The BMC further argued that it had written to the state government multiple times to seek permission to proceed with the project.
The High Court has sought a response from the respondent authority on the matter. The next hearing for the case has been scheduled for August 18.
