Full Text
HIGH COURT OF DELHI
Date of Decision: 01.07.2026
& 39696/2026 VISHAL KUMAR .....Appellant
Through: Mr. Sumeet Verma, Senior Advocate with Mr. Vishal Gohri, Ms. Sonia Malhotra and Mr. Mahinder Pratap
Singh, Advocates.
Through: Ms. Puja S. Kalra, ASC for NDMC with Mr. Virendra Singh, Advocates.
HON'BLE MR. JUSTICE TEJAS KARIA TEJAS KARIA, J. (ORAL)
JUDGMENT
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 interest (“Penalty”). Upon the deposit of the Penalty, the premises of the Appellant being Flat No. 35, 9th floor, Dakshineshwar, 10, Hailey Road, New Delhi – 110001 (“Subject Property”) had been directed to be desealed.
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 coowners of the Subject Property, submitted representations dated 14.12.2011 and 23.12.2011 to the Respondent seeking desealing 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 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:
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 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 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 desealed the Subject Property.
5.4. The Respondent had issued the Public Notice in newspapers calling upon occupants to remove misuse. The said Public 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 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 landuse 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.
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 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