Bombay High Court Slaps Rs 5 Lakh Penalty On PMC Officials For ‘Arbitrary’ Action and ‘Misuse of Power’ Against Housing Project
HC urges Baba Kalyani and siblings to consider mediation
The Court says PMC officials acted without inquiry, allowed themselves to be used in a private dispute, and stalled work on a nearly completed building.
The Bombay High Court has come down strongly on the Pune Municipal Corporation (PMC), imposing a joint penalty of Rs 5 lakh on civic officials for what it called arbitrary and unjustified action against a housing project in Pune. The Bench also directed Wellbuild Merchants Pvt Ltd to pay an exemplary cost of Rs 25 lakh for misusing municipal machinery to settle a private commercial dispute.
The case concerns Rajgruhi Residency, where Towers A and B are completed and occupied, while Towers C and D are being developed by Atria Constructions. Tower D is fully constructed and awaiting an Occupancy Certificate, while Tower C has reached the fourth floor. On 10 December 2024, PMC issued a stop-work order citing alleged violations, missing approvals, and stormwater drain issues. But the Court found that the officials acted without any proper inquiry, documentation, or verification.
Judges noted that PMC had issued a show-cause notice on 6 December without specific details and halted construction the very next day after a brief hearing. The Bench called the move “hasty” and “without factual basis”, pointing out that there was neither a site inspection nor an examination of records before issuing the drastic stop-work order.
The Court observed that the action was triggered by a private dispute between Atria Constructions and Wellbuild Merchants Pvt Ltd, the developer of Towers A and B. After failing to secure relief in arbitration, Wellbuild allegedly influenced PMC to intervene through complaints. The Bench held that municipal authorities cannot function as tools in private disputes and cannot be manipulated for leverage when legal remedies have already failed.
Recognising the hardship caused to Atria Constructions and homebuyers waiting for possession, the judges imposed Rs 25 lakh as exemplary costs on Wellbuild for misusing public systems, and Rs 5 lakh on PMC officials for violating principles of fairness. The judgment stressed that such misuse of public authority “cannot be tolerated in a constitutional democracy” and reaffirmed that administrative powers must be exercised with transparency, integrity and procedural discipline.
