Fadnavis' remarks in the Legislative Council came days after he ordered an inquiry against the minister over alleged violation of norms in a slum redevelopment project.
Mehta had allegedly allowed unauthorised transfer of extra building rights in a slum rehabilitation authority (SRA) project in south Mumbai, originally granted to slum dwellers, to project affected people (PAPs), apparently to favour a developer.
The Congress and the NCP have raised the pitch in the state legislature seeking removal of Mehta as minister.
"As far as allegations against Prakash Mehta are concerned, how can he be accused of corruption when no decision was taken place in the first place (on the basis of the file)?"
"Mehta had merely given his remarks on the file, over which no further action was taken. If the Opposition is still asking for his resignation, then these charges are politically motivated," Fadnavis told the Legislative Council.
The chief minister, his Cabinet colleagues and members of the treasury benches took part in the proceedings of the Upper House today, a day after MLCs of the ruling BJP and Shiv Sena staged a walkout in an unprecedented development.
They had walked out in the Council accusing the Opposition of "high handedness" and against their "act of flouting rules, creating ruckus and disrupting the proceedings".
The proceedings began today after Chairman Ramraje Nimbalkar laid down certain norms, regarding the conduct of business.
Fadnavis said he has ordered inquiry against Mehta as his is a transparent government.
If found guilty, appropriate action will be taken against the minister, he added.
As the proceedings began, Munde said the Opposition wanted the government to act on two demands, failing which, they would not allow the Upper House to function.
"One demand is (about) corrupt practices of (IAS officer and MSRDC chief) Radheshyam Mopalwar. Despite being involved in a largescale corruption, he is involved in the CM's pet (Mumbai-Nagpur expressway) project. Unless he is suspended and a serious inquiry is conducted against him, we will not allow functioning of the House," Munde said.
Responding to Munde and Congress member Sharad Ranpise, who made a similar demand, Fadnavis said Mopalwar will cease to hold the position of MSRDC chief, pending an inquiry against him.
"Mopalwar has been temporarily asked to step down. An inquiry will be conducted against him within a month. If he is found guilty, we will not hesitate in even dismissing him," Fadnavis said.
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