No Conversion Charges Leviable on Areas Formally Designated as Commercial in MPD 1962.

The petitioners are an association and individual traders operating shops in Chotta Bazar, Bara Bazar, Anaj Mandi, and Farsh Bazar in Shahdara Town, Delhi.

These shops have been used for commercial purposes since before 1962.

Under the Master Plan for Delhi (MPD) 1962, "Shahdara Town" was expressly listed as an "already built-up commercial area".

In November 2014, the East Delhi Municipal Corporation (EDMC) issued notices demanding conversion charges from the petitioners on the grounds that the premises were being used for commercial purposes.

The petitioners challenged these demands, arguing that conversion charges apply only to residential premises converted to commercial use, whereas their area was designated as commercial by the MPD 1962.

The Court applied Paragraph 5.1 of the Master Plan for Delhi 2021 (MPD-2021), which categorizes permissible commercial use into three disjunctive sets: (i) areas declared commercial in MPD-1962, (ii) areas where commercial use was allowed in MPD-1962, and (iii) areas where commercial activity existed prior to 1962, subject to documentary proof.

The Court also relied on Regulation 3 of the DDA (Fixation of Charges for Mixed Use and Commercial Use of Premises) Regulations, 2006, which mandates that conversion charges are only payable when residential premises are put to non-residential use under mixed-use regulations.

Furthermore, the Court followed the precedent set in Delhi Yarn Merchants Association v. North Delhi Municipal Corporation, W.P.(C) 7737/2015, regarding the interpretation of disjunctive categories in MPD-2021.

The Court noted that DDA admitted in its counter-affidavit that Shahdara Town, including the subject bazaars, was listed as an "already built-up commercial area" at Serial No. 19 of MPD-1962.

Interpreting Para 5.1 of MPD-2021, the Court rejected the respondents' contention that documentary proof of pre-1962 use is required for all categories; it held that the three categories are "separate and disjunctive".

Specifically, if an area was already declared "commercial" in MPD-1962, the requirement for a party to furnish evidence of use prior to 1962 (which applies only to the third category of residential areas) does not arise.

Since the area is a declared commercial zone and not a residential zone under "mixed-use," the DDA Regulations of 2006—which only trigger conversion charges for residential-to-commercial shifts—are inapplicable.

Consequently, traders in these areas are not liable to pay conversion charges.

The Court quashed the demand notices issued by the MCD for conversion charges in these specific localities.