The Bombay High Court, in a strong rebuke, criticised the Pune Municipal Corporation (PMC) for misusing its authority in a private dispute. A Bench of Justice G.S. Kulkarni and Justice Arif S. Doctor said that municipal bodies cannot be turned into tools for resolving contractual fights between private parties.

The Court found that PMC officials had acted arbitrarily and high-handedly by suddenly issuing a stop-work notice without any legal basis or proper inquiry. The judges noted that the impugned notice was issued in blatant disregard to statutory procedure and appeared to have been prompted only by anonymous complaints, without checking official records or conducting a site inspection.

Background:

The dispute came before the Court through writ petitions filed by M/s. Atria Constructions and a group of homebuyers from Rajgruhi Residency. Their grievance was linked to a conflict with Wellbuild Merchants Pvt. Ltd. over the separate development of different wings of the project. Atria Constructions, which was in charge of Wings C and D, had already finished Wing D and was waiting for an Occupation Certificate. At this stage, the PMC sent them a WhatsApp message calling them for a hearing, and the very next day issued a stop-work notice. The notice referred only to vague environmental and planning violations.

The Court noted that the notice was so unclear that it raised serious doubts about the conduct of the Executive Engineer. It did not explain the reasons for the hearing scheduled on 9 December 2024, and that hearing was attended by several people who had no connection to the project or the contractual dispute.

Reaffirming basic principles of administrative law, the Bench stressed that whenever a statutory authority issues an order that affects someone’s civil rights or has civil consequences, it must first issue a proper show-cause notice. This notice must clearly explain the reasons for the proposed action, and the affected party must then be given a fair chance to respond and be heard.

The judges noted with concern that in this instance, no show-cause notice had been served, no site inspection undertaken, nor any verification of the relevant records performed. The Court remarked that the municipal process had been exploited at the behest of Wellbuild Merchants Pvt. Ltd., which had earlier failed to obtain favourable orders against Atria Constructions in proceedings under Sections 9 and 37 of the Arbitration and Conciliation Act.

“… what could not be achieved directly by Wellbuild in a manner known to law, i.e. in the legal proceedings, Wellbuild has sought to achieve the same, by utilising the municipal machinery,” the Court observed.

Expressing disapproval of the officials’ actions, the bench directed the Municipal Commissioner to conduct an enquiry into the incident and submit an action-taken report to the Court.

Holding both the private party and the officials accountable, the High Court imposed exemplary costs of Rs. 25 lakh on Wellbuild Merchants Pvt. Ltd. for manipulating municipal machinery to pursue its private interests, and an additional Rs. 5 lakh jointly and severally on the municipal officials responsible for issuing the baseless stop-work notice.

Case Details: M/s. Atria Constructions v. Pune Municipal Corporation & Ors., WRIT PETITION NO. 1022 OF 2025