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Informist, Tuesday, Jul. 21, 2026

 

NEW DELHI – The Bombay High Court has said that the officers who are responsible for the "illegal" cancellation of projects midway should pay for damages from their salary accounts and not taxpayers. In these cases, the taxpayers are not at fault when such illegal decisions are taken by authorities who are in the seat of power, said the high court.

 

"...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 part progress of the project," said the court. The added loss is that the affected party moves, either for arbitration or for damages, before the appropriate forum, said the court. If such damages are awarded on account of the illegal acts of cancellation of projects or termination of projects abruptly or midway, such compensation or damages are paid from the taxpayers' money, noted the court. "...the time has come to hold such officers personally liable to pay such damages from their salary accounts," said the court.

 

The high court was hearing a petition by SMS Ltd. against halting of an underground parking project near Mumbadevi Temple by the Municipal Corporation of Greater Mumbai. SMS Ltd. had said that it suffered huge losses due to an abrupt stop in the ongoing work and it had already initiated arbitration proceedings in the case. The high court has sought the response of the civc body and others on SMS Ltd.'s plea. 

 

The case has its genesis from SMS Ltd. being given a contract for a multi-level underground parking project by the civic body. It had already built the structure up to the plinth level when the work was suddenly stopped, said the company. The civic body is now in the process of issuing a fresh advertisement by modifying the project, said the company.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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