Vishal Kumar vs New Delhi Municipal Council

$~19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 01.07.2026
+ LPA 455/2026, CM APPLs. 39693/2026, 39694/2026, 39695/2026
& 39696/2026
VISHAL KUMAR .....Appellant
Through: Mr. Sumeet Verma, Senior Advocate
with Mr. Vishal Gohri, Ms. Sonia
Malhotra and Mr. Mahinder Pratap
Singh, Advocates.
versus
NEW DELHI MUNICIPAL COUNCIL .....Respondent
Through: Ms. Puja S. Kalra, ASC for NDMC
with Mr. Virendra Singh, Advocates.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE TEJAS KARIA
TEJAS KARIA, J. ( ORAL )
1. The present intra-court Appeal is directed against judgment dated
23.04.2026 (“ Impugned Judgment ”) in Writ Petition being W.P.(C)
5449/2016 titled as ‘ Vishal Kumar v. New Delhi Municipal Council ’ (“ Writ
Petition ”), wherein the order dated 02.05.2016 (“ Order ”) passed by the
Appellate Tribunal, Municipal Corporation of Delhi (“ ATMCD ”) in Appeal
No. 862/2014 was upheld.
2. Vide the Order, the ATMCD dismissed the Appeal No. 862/2014 and
the Appellant was directed to deposit a penalty of ₹20,55,713/- along with
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SHARMA
Signing Date:07.07.2026
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interest (“ Penalty ”). Upon the deposit of the Penalty, the premises of the
th
Appellant being Flat No. 35, 9 floor, Dakshineshwar, 10, Hailey Road,
New Delhi – 110001 (“ Subject Property ”) had been directed to be de-
sealed.
3. Brief facts relevant to the present Appeal are hereunder:
3.1. Vide lease agreement dated 01.04.2009 (“ Lease Agreement ”),
the Appellant leased the Subject Property to Joint Stock
Aviation Holding Company “Sukhoi” (“ Tenant ”) for a period
of five years commencing from 01.04.2009 and ending on
31.03.2014. The agreed rent was ₹1.90 lakhs per month, subject
to an annual escalation of 6%. The Tenant was permitted to
establish a liaison office (“ LO ”) at the Subject Property, subject
to the express condition that no commercial trade or activity
would be carried out therefrom.
3.2. The Subject Property was sealed by the Respondent on
07.12.2011. Thereafter, the Appellant, along with the other co-
owners of the Subject Property, submitted representations dated
14.12.2011 and 23.12.2011 to the Respondent seeking de-
sealing of the Subject Property.
3.3. The Subject Property was temporarily de-sealed for the period
from 03.04.2012 to 09.04.2012, during which the Tenant
vacated the premises and removed all its belongings therefrom.
The Subject Property was thereafter re-sealed on 09.04.2012.
3.4. The Appellant subsequently submitted representations dated
18.09.2012 and 07.02.2013 to the Respondent, again seeking
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SHARMA
Signing Date:07.07.2026
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de-sealing of the Subject Property, on the ground that the
Tenant had already vacated the premises and handed over
possession thereof to the Appellant.
3.5. The Appellant thereafter filed a writ petition, being W.P.(C)
3860/2014 titled ‘ Vishal Kumar v. New Delhi Municipal
Council ’ (“ W.P.(C) 3860/2014 ”), before this Court. By order
dated 04.06.2014, this Court disposed of W.P.(C) 3860/2014 by
directing that the writ petition be treated as a representation to
the Respondent and further directed the Respondent to take a
decision thereon.
3.6. Pursuant to the order dated 04.06.2014, the Chief Architect of
the Respondent passed an order dated 30.06.2014 directing the
Appellant to deposit the Penalty and to file an application
seeking permanent de-sealing of the Subject Property.
3.7. Aggrieved by the order dated 30.06.2014, the Appellant
preferred an appeal before the ATMCD. Vide the Order, the
ATMCD dismissed the appeal and upheld the order dated
30.06.2014 passed by the Respondent.
3.8. Thereafter, the Appellant filed the Writ Petition challenging the
Order before this Court. The learned Single Judge, vide the
Impugned Judgment, dismissed the Writ Petition and upheld
the Order. Being aggrieved thereby, the present Appeal has
been preferred.
4. Mr. Sumeet Verma, learned Senior Counsel for the Appellant
submitted that:
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SHARMA
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4.1. The learned Single Judge failed to appreciate that the Subject
Property could not have been sealed without issuance of prior
notice to the Appellant requiring cessation of the alleged
misuse. There was, in any event, no misuse of the Subject
Property, as the Tenant was operating a LO duly approved by
the Reserve Bank of India (“ RBI ”). Under the RBI guidelines,
a LO is not permitted to undertake any commercial activity, and
the Tenant was not carrying on any commercial activity from
the Subject Property. Reliance was placed on Union of India
and Anr. v. UAE Exchange Centre , (2020) 9 SCC 329, in
support of the said submission.
4.2. The Penalty was erroneously imposed at the rate of ₹1,534/- per
square meter, being the rate prescribed for retail shops. The
activity carried out by the Tenant at the Subject Property was
not in the nature of a retail shop. Accordingly, the Penalty, if at
all leviable, could not exceed ₹384/- per square meter, being the
rate applicable to professional activities.
4.3. The learned Single Judge failed to appreciate that, for the
purpose of sealing the Subject Property, the Respondent relied
upon a general public notice dated 29.05.2007 (“ Public
Notice ”) issued for removal of misuse. The said Public Notice
was issued much prior to the leasing of the Subject Property
vide the Lease Agreement and required misuse to be stopped
within 15 days from the date of its issuance. Consequently, the
Public Notice, having been issued prior to the commencement
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SHARMA
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of the tenancy in question, could not have been relied upon
against the Appellant. Reliance was placed upon the following
decisions in support of the said submission:
i. M.C. Mehta v. Union of India , (2006) 3 SCC 399;
ii. North Delhi Municipal Corporation v. DCM Limited &
Anr. , 2018 SCC OnLine Del 7447; and
iii. APJ School v. Office of District Magistrate, South and
Ors. , 2020 SCC OnLine Del 2442.
4.4. The learned Single Judge erred in holding that the Subject
Property was sealed without service of any prior notice,
notwithstanding that Section 345A of the Municipal
Corporation Act, 1957 (“ MCD Act ”) and Sections 250 and 252
of the New Delhi Municipal Council Act, 1994 (“ NDMC Act ”)
mandate issuance of prior notice before any punitive action
contemplated under the MCD Act and the NDMC Act is
undertaken. Reliance was placed upon the decision in Rajinder
Rai v. MCD and Ors. , Neutral Citation: 2011:DHC:5201, in
support of the aforesaid submission.
4.5. The learned Single Judge further failed to appreciate that the
process of sealing could have been carried out only by the
Monitoring Committee, or with its prior approval. In the
present case, no prior approval of the Monitoring Committee
was obtained before sealing the Subject Property. The Supreme
Court has held that the appointment and supervision of a
Monitoring Committee is necessary, rather than leaving such
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SHARMA
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discretion solely to the officers of the MCD. Reliance was
placed upon the decisions in M.C. Mehta v. Union of India ,
(2013) 16 SCC 351 in support of the aforesaid submission.
4.6. In view of the foregoing submissions, it was prayed that the
present Appeal be allowed and the Impugned Judgment be set
aside.
5. Ms. Puja S. Kalra, learned ASC for the Respondent submitted that:
5.1. The Respondent sealed the Subject Property upon finding,
during inspection conducted on 03.10.2011, that the Subject
Property was being used as an office, which was not
permissible under the Master Plan for Delhi, 2021 (“ Master
Plan ”). The information regarding the sealing of the Subject
Property was thereafter forwarded by the Respondent to the
Monitoring Committee appointed by the Supreme Court.
5.2. The Subject Property was being used by the Tenant as a LO.
The permission granted to the Tenant to establish such office
was subject to compliance with applicable law and any further
approvals required from the competent regulatory authority.
5.3. The Subject Property could be de-sealed only upon deposit of
the Penalty by the Appellant in terms of Paragraph No. 15.9(v)
of the Master Plan. Since the Appellant deposited the Penalty
during the pendency of the Writ Petition, the Respondent de-
sealed the Subject Property.
5.4. The Respondent had issued the Public Notice in newspapers
calling upon occupants to remove misuse. The said Public
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SHARMA
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Notice clearly stated that, in the event the misuse was not
stopped within 15 days, the premises would be liable to be
sealed in terms of Section 250 of the NDMC Act.
5.5. In view of the foregoing submissions, it was prayed that the
present Appeal be dismissed and the Impugned Judgment be
upheld.
6. We have heard learned Senior Counsel for the Appellant and learned
ASC for the Respondent, and have perused the material available on record.
7. The contention urged on behalf of the Appellant is that the sealing of
the Subject Property on 07.12.2011 was carried out without issuance of any
prior notice and was, therefore, vitiated in law. We are unable to accept this
contention. The record shows that the Respondent had issued the Public
Notice in newspapers, calling upon occupants to cease misuse of premises
within 15 days, failing which sealing would follow in terms of Section 250
of the NDMC Act. The obligation to refrain from misuse, and the
consequence of sealing upon continued misuse, attach to the property and its
use, and do not stand extinguished merely because the tenancy under which
the property came to be misused commenced at a later point in time. The
decision in Rajinder Rai ( supra ) is distinguishable on facts, as that case
concerned a complete absence of any notice prior to sealing, whereas, in the
present case, a Public Notice was given and covered the category of misuse
for which the Subject Property was sealed. Therefore, lack of notice cannot
be equated with insufficiency of notice.
8. The Appellant has contended that the Tenant was operating a LO duly
approved by the RBI and that, since such LOs are, by definition, prohibited
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SHARMA
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from undertaking commercial activity, there could be no “misuse” of the
Subject Property warranting sealing. This submission conflates two distinct
regulatory regimes. The approval granted by the RBI to a LO operates
within the framework of foreign exchange regulation and governs the nature
of activities that such office may undertake from the standpoint of that
framework. It does not, however, override or supersede the zoning and land-
use classification prescribed under the Master Plan, which the Respondent is
required to enforce. Whether a particular use of premises is permissible
under the Master Plan is a question to be determined independently of any
approval granted by the RBI.
9. In the present case, the Respondent found, upon inspection conducted
on 03.10.2011, that the Subject Property was being used as LO, which was
not a permissible use under the Master Plan in respect of the Subject
Property. The fact that the Tenant may have been operating within the scope
of its RBI approval does not detract from, or in any manner cure, the finding
that the Subject Property was being put to a use impermissible under the
Master Plan. The decision in UAE Exchange Centre ( supra ) was rendered
in the context of the RBI’s regulatory authority and does not concern
municipal land-use classification. Therefore, it is of no assistance to the
Appellant.
10. The last contention of the Appellant concerns the rate at which the
Penalty has been computed. It is submitted that the rate of ₹1,534/- per
square meter, applicable to retail shops, has been erroneously applied,
whereas the activity carried out by the Tenant was professional activity and,
therefore, attracted the lower rate of ₹384/- per square meter.
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SHARMA
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11. This contention proceeds on the premise that the nomenclature
“liaison office” assigned to the Tenant’s activity is determinative of its
character for the purposes of computing the Penalty. We do not find this
submission to be merited. The rate applicable under Paragraph No. 15.6.1 of
the Master Plan clearly provide for charges for “Retail Shops and Offices”
as one category. Having found that the Subject Property was being used as
an office falling within the category attracting the higher rate, the
Respondent cannot be faulted for computing the Penalty accordingly. The
Appellant’s claim to the benefit of the lower rate applicable to professional
activity is, therefore, without any merit.
12. As regards the submission of the Appellant that sealing could have
been carried out only by the Monitoring Committee appointed by the
Supreme Court in M.C. Mehta ( supra ), we are of the view that the said
order of the Supreme Court was interlocutory in nature and did not divest
the Respondent of its statutory authority to undertake sealing action in
accordance with the provisions of the NDMC Act. In any event, after the
Subject Property was sealed on 07.12.2011, information regarding such
sealing was forwarded to the Monitoring Committee constituted by the
Supreme Court for approval, as is evident from Annexure R-1 appended to
the Counter Affidavit filed by the Respondent in the Writ Petition before the
learned Single Judge. Accordingly, the contention that the sealing was
carried out without approval of the Monitoring Committee cannot be
accepted.
13. We find that none of the grounds urged by the Appellant in the
present Appeal, whether relating to the absence of a fresh notice, the nature
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SHARMA
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of the Tenant’s use of the Subject Property, the rate at which the Penalty was
computed, or the alleged non-involvement of the Monitoring Committee, is
sufficient to dislodge the concurrent findings recorded by the ATMCD and
affirmed by the learned Single Judge.
14. In view of the foregoing, we find no infirmity in the Impugned
Judgment warranting interference in the present Appeal.
15. The Subject Property has already been de-sealed upon the Appellant
depositing the amount towards the Penalty, i.e., ₹20,55,713/-, by way of a
Fixed Deposit Receipt (“ FDR ”). The Impugned Judgment directed the
Registry to release the said amount, along with accrued interest, in favour of
the Respondent. However, learned ASC for the Respondent submitted that
the FDR stands in the name of the Appellant. Accordingly, the Registrar
General of this Court is directed to ensure that the amount of the Penalty,
together with accrued interest, is paid by the Appellant to the Respondent
prior to release of the FDR.
16. Accordingly, the present Appeal is dismissed with the aforesaid
direction. All pending Applications stand disposed of. There shall be no
order as to costs.
TEJAS KARIA, J
DEVENDRA KUMAR UPADHYAYA, CJ
JULY 01, 2026
N/ap
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Signed By:NEELAM
SHARMA
Signing Date:07.07.2026
19:10:41