Mumbai, July 21, 2026: The Bombay High Court has observed that government and civic officials who take illegal decisions to abruptly cancel public projects midway should be held personally liable for the financial consequences instead of burdening taxpayers.
The observation came while a bench of Acting Chief Justice Ravindra Ghuge and Justice Gautam Ankhad was hearing a petition filed by M/s SMS Limited over the suspension of a Rs 122-crore robotic parking project near the Mumbadevi Temple in south Mumbai.
The BMC had awarded the contract for the proposed 17-storey automated parking facility. However, work on the project was stopped last year. The contractor has claimed it suffered huge losses because of the sudden halt and has already initiated arbitration proceedings.
Court Seeks Accountability
Expressing concern over the repeated cancellation of public projects after work has begun, the court said such decisions often result in a double financial burden on the public exchequer.
"In such matters, authorities like a Corporation, State instrumentalities or even the State cancel a project midway through, or issue a stop-work notice. This causes tremendous loss to the State exchequer because the project has already progressed," the bench observed.
The court added that affected contractors are then forced to seek arbitration or damages, and any compensation awarded is ultimately paid from public funds.
"If such damages are awarded on account of illegal cancellation or abrupt termination of projects, such compensation is paid from the taxpayers' money," the bench said.
Stressing the need for accountability, the judges remarked, "The time has come to hold such officers personally liable to pay such damages from their salary accounts because the taxpayers are not at fault when illegal decisions are taken by authorities who are in seats of power."
BMC Awaits State Decision
During the hearing, advocate Madhuri Nalluri, appearing for the BMC, informed the court that the municipal corporation was "not inclined" to stop the project. She said the contractor had already completed construction up to the plinth level before work was halted.
According to the BMC, it had written to the state government on multiple occasions seeking permission to resume the project from the stage where it was paused, but a decision is still awaited. The civic body also informed the court that a meeting with the contractor was held in April this year to pursue the request.
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The High Court has granted the contractor permission to amend its petition if a fresh tender issued by the authorities includes the same parking project. It has directed the BMC and the state government to file their replies before the next hearing on August 7.
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