Mumbai: BMC Faces ₹65.31-Crore Liability After 25-Year Sewage Contract Legal Battle; Standing Committee Orders Inquiry

Mumbai, September 15, 2026: The Brihanmumbai Municipal Corporation (BMC) is facing a financial liability of Rs 65.31 crore after suffering a setback in its prolonged legal battle over a sewage operations and maintenance consultancy contract.

Alleging that negligence and dereliction of duty by officials in the civic body’s Legal Department had resulted in the financial burden on taxpayers, corporators across party lines lashed out at the administration during Tuesday’s Standing Committee meeting.

The Committee directed the administration to conduct a detailed inquiry into the matter and submit a report identifying the officials responsible within 15 days.

The civic body’s petition against a Canada-based consultancy firm in connection with the sewage department contract was dismissed by the Supreme Court. In its order dated August 24, the apex court directed the BMC to clear the consultancy firm’s outstanding dues by September 24.

However, corporators questioned why the administration had waited until the last moment to bring the proposal before the Standing Committee for approval despite the court ruling having already been delivered.

Corporators Demand Accountability

BJP group leader Prabhakar Shinde launched a strong attack on the Legal Department, alleging that the negligence of certain officials had repeatedly resulted in major financial losses to the civic body.

He questioned why the proposal was brought before the committee so late despite the Supreme Court’s decision being known earlier, and demanded a detailed inquiry into the officials responsible.

Congress group leader Ashraf Azmi said the settlement of the dispute after nearly 25 years exposed serious shortcomings in the BMC’s legal management. He demanded an inquiry into why the civic body continued pursuing litigation even after an arbitration award was passed in 2010.

Senior Shiv Sena UBT corporator Yashodhar Phanse also criticised the officials’ handling of the case and demanded strict action against those responsible for the financial burden being imposed on Mumbaikars.

MNS corporator Yashwant Killedar questioned why the Legal Department had failed to establish a strong legal position at the outset, particularly since the BMC’s petitions were subsequently rejected by the higher courts.

House Leader Ganesh Khankar demanded details of the total expenditure incurred by the civic body on the prolonged litigation, including the legal experts engaged to represent it.

Dispute Dates Back To 1995

In 1995, the BMC appointed Canada-based M/s R.V. Anderson Associates, along with its local partner M/s PHE Consultants, as consultants for upgrading sewage operations and maintenance services.

After the work was completed in 2001, a dispute arose between the civic body and the consultants over outstanding payments and interest. In 2010, an arbitrator ruled in favour of the consultant and directed the BMC to make the payment along with 14% interest.

The BMC challenged the award in the High Court and subsequently in the Supreme Court. However, in 2026, the Supreme Court dismissed the civic body’s review petition, effectively upholding the arbitration award.

Also Watch:

BMC Faces Crore-Rupee Liability

After a 25-year-long legal battle, the BMC is now required to pay crores of rupees towards the increased contract value, interest and withholding tax. The focus has now shifted to the inquiry ordered by the Standing Committee and whether officials found responsible for the prolonged litigation and resulting financial liability will face action.

To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/