Health Trade License requirement for restaurants dispensed with if FSSAI or GST registration exists.

The petitioners are owners of fine-dining restaurants located on the first and second floors of buildings in Khan Market, New Delhi

Between 2020 and 2021, the New Delhi Municipal Council (NDMC) refused to renew the petitioners' mandatory health licenses due to the lack of a Fire No Objection Certificate (Fire NOC) from the Delhi Fire Service (DFS)

The DFS contended that these establishments qualify as "assembly buildings" under the National Building Code because their floor area allows for a capacity exceeding 50 persons, thus requiring a Fire NOC

The petitioners challenged this, arguing that only the dining area should be considered for capacity and that structural constraints of the heritage market made strict compliance with modern fire codes impossible

During the pendency of the litigation, NDMC issued a notification on 23.02.2026, dispensing with the requirement for separate health licenses for establishments holding valid GST or FSSAI registrations

1. Whether the restaurants operated by the petitioners constitute "assembly buildings" requiring a Fire NOC under the Delhi Fire Service Rules, 2010

2. Whether the requirement for a separate Health Trade License remains mandatory in light of the NDMC notification dated 23.02.2026

3. What practical mechanism can balance the commercial operation of restaurants in heritage structures with public safety and fire norms

The court examined the Delhi Fire Service Rules, 2010, specifically Rule 27 and Rule 34, regarding the issuance of Fire Clearance Certificates for assembly buildings

It referred to Clause 3.1.5 and Clause 4.3 of the National Building Code of India, Part-IV, 2016, which defines the occupancy threshold for assembly buildings

furthermore, the court applied Sections 318, 325, 327, 330, 331, and 332 of the NDMC Act, 1994, as modified by the NDMC Resolution No. 52 and the "Ease of Doing Business" notification dated 23.02.2026, which deems FSSAI/GST registrations as valid municipal licenses

The Court noted that the primary grievance regarding the non-renewal of health licenses had been largely resolved by the NDMC notification dated 23.02.2026, which rendered the health license redundant if GST/FSSAI registrations are present

Consequently, the legal classification of the restaurants as "assembly buildings" became an academic question

To reconcile the "iconic and distinctive architectural character" of Khan Market’s heritage buildings with safety requirements, the court accepted a 14-point voluntary undertaking from the petitioners

The reasoning focused on balancing equities: allowing business continuity while strictly enforcing a 50-person occupancy cap, which keeps the establishments below the "assembly building" threshold that triggers more rigorous fire safety mandates

The Court ordered that petitioners shall not be denied permission to operate solely for lacking a Fire NOC, provided they maintain an occupancy limit of 50 persons

Specific directives included mandatory installation of automatic fire alarms, quarterly self-attested Fire Safety Audits to be submitted to the DFS, and a requirement for the authorities to provide a 30-day notice before taking any adverse action for lack of a Fire NOC

Any violation of the safety undertaking will entitle the respondents to take punitive action under the NDMC Act