An electrocution near a Ganesh pandal in the Lalbaug area killed two people and injured several others on Sunday.
A loose wire at a nearby stall was the cause, according to police.
The dead include an 8-year-old girl.
Police have registered an FIR for negligence.
Investigations are continuing.
Officials and civic bodies usually issue safety advisories about temporary wiring, earthing and open cables before festival crowds gather.
Devotees are advised not to touch loose or hanging wires, especially in wet conditions, and to report exposed cables to local authorities.
Wet conditions raise the risk of electric shocks from damaged wiring in crowded public places, which is why safety advisories stress caution in the monsoon season.
The injured were taken to nearby hospitals, and the woman who died had been admitted to Global Hospital in Parel.
The incident took place at around 2 am on Sunday, September 20, when devotees were present near the Ganesh pandal.
Electric shocks from a loose wire at a cold drink stall near Aastha Hospital on Dattaram Lad Marg in Kalachowki injured several people.
An 8-year-old girl was declared dead on arrival at hospital.
A woman who was admitted to Global Hospital in Parel later succumbed to her injuries, taking the toll to two.
At least four others, aged between 8 and 20, were reported to have suffered burn injuries and were undergoing treatment.
Police have registered an FIR against the operator of the nearby stall under Sections 106(1) and 125(b) of the Bharatiya Nyaya Sanhita, alleging negligence.
Section 106(1) of the Bharatiya Nyaya Sanhita deals with causing death by negligence, and Section 125 deals with acts that endanger life or the personal safety of others.
An investigation has begun into how the loose wire came to be exposed and who was responsible for the electrical fitting.
Ganesh festival decoration (representative image), Wikimedia Commons, CC BY-SA 4.0
