Bombay HC Lifts Decade-Old Stay On Kalu Dam, Allows KIDC To Float Fresh Tender For ₹4,900-Crore Project

Mumbai, October 14, 2026: The Bombay High Court has lifted a nearly 10-year-old interim stay that stalled work on the Kalu Dam project, allowing the Konkan Irrigation Development Corporation (KIDC) to float a fresh tender. The project's estimated cost has escalated from Rs 657 crore in 2016 to around Rs 4,900 crore.

Project Delay Affects Regional Water Supply

Proposed on the Kalu River in Murbad taluka of Thane district, the project is designed to supply 1,140 million litres of water per day to urban local bodies in the Mumbai Metropolitan Region. Its delay has affected eight municipal corporations and nine municipal councils, including Mumbai, Thane and Ulhasnagar.

A bench of Justices Manish Pitale and Shreeram Shirsat, on October 14, vacated an interim order passed on December 7, 2016, in a petition filed by F.A. Enterprises challenging a notice issued to rescind its contract for the project.

Decade-Old Stay Prevented Fresh Tender

The earlier order had restrained KIDC from allotting the contracts awarded to the petitioner to any other party. With the order remaining in force for almost a decade, the corporation could not proceed with a fresh contract.

KIDC, represented by senior advocate Rajiv Chavan, approached the court seeking permission to move ahead with the project and initiate a fresh tendering process, citing the prolonged delay and the project's importance to regional water supply.

Chavan relied on a June 8, 2021, order passed in connected petitions involving the same contractor. In those proceedings, another bench had permitted KIDC to execute irrigation projects through the original petitioner or any other interested party, subject to due process.

Dispute Over Responsibility For Delay

KIDC had submitted in the connected matters that an Anti-Corruption Bureau inquiry had not found corruption, grave irregularities or illegality in the execution of the project. The corporation also said it had restructured its policies to prevent irregularities.

Opposing the application, F.A. Enterprises urged the court to list its main petition for final hearing rather than vacate the interim protection. The contractor disputed responsibility for the delay, arguing that obtaining forest clearances was the corporation's responsibility. KIDC maintained that securing the clearances was the contractor's responsibility.

The bench declined to decide the dispute over responsibility for the delay but said it was inclined to lift the interim order in view of the directions issued in the connected cases.

Fresh Tender Process Gets Court Approval

The court considered disposing of the main petition as well but refrained from doing so after the contractor's counsel submitted that other issues required consideration.

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Allowing KIDC's application, the bench permitted it to take necessary steps to float a fresh tender. F.A. Enterprises will also be eligible to participate in the bidding alongside other interested parties. The main writ petition will remain pending.

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