Magistrate A.G. Mohabey of Borivali suburban court directed the senior police inspector of Aarey Police Station to register a first information report against Bhansali and his production house, Applause Bhansali Films.
The directive came following a complaint filed by Farida Hoosenally, an antique furniture dealer, whose furniture was destroyed during the shooting of Bhansali's film "Black" in October 2005.
The magistrate also directed the police to submit a report in the case within two months.
The fire on the sets of "Black" at Mumbai Film City had gutted Rs.25 million worth of antique furniture rented out by Hoosenally, who allegedly has still not been fully compensated.
Hoosenally alleges that Bhansali had under-insured the movie sets in order to reduce his premium outgoings and has charged him and others with criminal negligence that caused her the losses.
However, when the police did not register an FIR, she moved the concerned senior police officials in November 2005, but to no avail.
Later Hoosenally approached Borivali magistrate, who ordered an enquiry but observed that in such matters public interest litigation (PIL) needs to be filed.
A criminal writ petition was, therefore, filed by Hoosenally in Bombay High Court in April this year. A bench of Justice D.G. Deshpande and Justice Vijaya Kapse Tahilramani ordered the magistrate to hear the case without filing of a PIL.
Earlier, state-run Maharashtra Film, Stage and Cultural Development Corporation, which owns Mumbai Film City, had slapped a Rs.60 million suit on Bhansali for causing damage to its studio.