Metro contractors threaten BMC with contempt of court in property tax dispute

MUMBAI: Two Metro Rail contractors have sent a legal notice to the BMC and the Mumbai Metro Rail Corporation Ltd (MMRCL), demanding that their withheld payments over alleged non-payment of property tax dues be released, failing which they will file for contempt of court.

The contractors’ contention is that no property tax is applicable, as Section 184 of the Railways Act, 1989 exempts the casting yard used for working on Metro Rail projects from property taxes. Their legal notice adds that the action of the BMC and MMRCL is in violation of a Bombay high court order that granted ad interim reliefs to them against the coercive recovery of property taxes.

Of the two contractors, HCC MMS (JV) was slapped with a property tax bill of ₹53.17crore while Dogus Soma (JV) received a bill of ₹97.17 crore for utilising a plot that belonged to the BMC. The plot, situated at the Wadala Truck Terminal, is being used by the contractors as a casting yard for the Metro Line 3 project (Colaba-Bandra-SEEPZ). The contractors have also stated in their notice dated April 21 that they will halt the Metro construction work if the payments are not released soon by MMRCL.

HT was the first to report, on March 18, that the contractors had been issued a notice by MMRCL to clear the property tax due to the BMC, failing which their payments would be withheld by MMRCL.

Last year, after additional municipal commissioner (city) Ashwini Joshi passed speaking orders on March 27, 2024 that the contractors were liable to pay the property tax, the contractors moved the HC against the BMC’s notice and secured a stay in April. The stay was extended from time to time. The matter came up for hearing on October 25, 2024, and the court directed that the ad interim relief would continue till the next hearing, which is yet to take place.

On January 31, 2025, the BMC sent a notice to MMRCL, asking it to recover the dues from the contractors. MMRCL, in turn, sent a notice to the contractors on March 13 that it would withhold payments if property tax dues were not paid. The notice stated that the action was being taken to safeguard the interests of MMRCL and to ensure compliance with all legal and financial obligations.

Aggrieved by MMRCL’s notice, the two contractors have now issued notices to the BMC, requesting the release of their payments, failing which action will be initiated for contempt of court.

Advocate Prerak Choudhary who issued the contempt notice on behalf of the two contractors, told HT, “The actions of the BMC and MMRCL are not only a violation of law, being contrary to Section 184 of the Railways Act, but also a blatant violation of the ad interim orders of the high court. Such action is nothing short of contempt of court, and if payments are not released, the contractors will take such further legal action as may be required, including filing a contempt petition before the HC.”

Ashwini Joshi, when contacted, said she had not yet received a copy of the contempt notice. “It is MMRCL that has stopped their payment,” she said. “So why are they issuing a contempt notice to the BMC? Their agreement with MMRCL states that the burden of property tax lies with them. The BMC is just doing its duty by issuing property tax bills.”

MMRCL didnot respond to request for comment.