3 min readUpdated: Jul 21, 2026 01:09 PM IST
The Bombay High Court last week observed that the government and the civic officials should be held liable to pay for the damages when they abruptly cancel a public project midway, and not the taxpayers.
While hearing a petition by M/s SMS Limited over the stoppage of a parking project near the Mumbadevi Temple in South Mumbai, the High Court on Friday, July 17, noted that such decisions often result in substantial losses to the public exchequer.
The Brihanmumbai Municipal Corporation (BMC) had initiated a 17-storey robotic parking facility project worth Rs 122 crore in Mumbadevi, but stopped the work on the project last year.
In its petition, SMS Limited claimed “huge losses” due to an “abrupt” stop in the ongoing work and said that it had already initiated arbitration proceedings.
The bench of Acting Chief Justice Ravindra V Ghuge and Justice Gautam A Ankhad noted: “In such matters, we find that authorities like a Corporation or State instrumentalities or sometimes even the State, cancel a project midway through, or there is a stop-work notice, etc. This causes tremendous loss to the State Exchequer in view of the progress of the project. The added loss is that the affected party moves, either for arbitration or for damages, before the appropriate forum.”
“If such damages are awarded on account of the illegal acts of cancellation of projects or termination of projects abruptly/ midway, such compensation or damages are paid from the taxpayers’ money,” it said.
Underlining that the certain officers should be held accountable, the court said, “We find that, in such situations where certain officers are responsible for such decisions of illegal cancellation of projects midway through and that results in the payment of damages, 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…”
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The court has sought respondent authority’s response on the matter.
What did BMC say?
Advocate Madhuri Nalluri, representing the BMC, said that the SMS Limited had “already made headway into the project” and had completed construction up to the plinth level – the transitional base – before work was paused.
Putting the state government in the dock, the BMC further argued that it had written to the state government multiple times, seeking permission to proceed with the project.
The next hearing has been scheduled for August 18.
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