Delhi HC gives 4 weeks to NDMC to explain Khan Market ‘rent inequality’

The petitioner said that NDMC cannot be allowed to apply two contradictory and different bases for fixing the rateable value for similar shops in a particular market

Expressing its displeasure with the disparity in fixing rateable value (rental value) of shops in central Delhi’s Khan Market by the by New Delhi Municipal Council (NDMC), the Delhi high court said the whole exercise portrayed an “alarming state of affairs” that “may lead to corrupt practices”.

The rent value of properties depend on size of the property, location, proximity to landmarks, locality, condition of the premises, and amenities provided, among others. (Raj K Raj/HT Archive)

The rateable value (RV) is the estimated annual rental value of a commercial property, as calculated by municipal body. The value may depend on size of the property, location, proximity to landmarks, locality, condition of the premises, and amenities provided, among others.

The bench of acting chief justice Vipin Sanghi and justice Navin Chawla, was hearing a plea by shop owner Saroj Tandon against the “inequality” in charging RV. Tandon, through her counsel MA Niyazi and Anamika Ghai Niyazi, contended that practically all shops in the Khan market are of the same area; however, NDMC has been fixing different RVs for similar shops, ranging from ₹600 to ₹1 crore.

She alleged that NDMC is adopting two methods for fixation of the RV, namely, under Section 63 of the NDMC Act, 1994 and also under the unit area method (UAM), which has been struck down by the Supreme Court with respect to the NDMC area.

The petitioner further contended that NDMC cannot be allowed to apply two contradictory and different bases for fixing the RV for similar shops in a particular market.

The petitioner counsel also contended that their client’s shop, No 49-A Khan Market, on the ground floor, measured roughly around 534 square feet. There are 153 shops in Khan Market and about 135 shops are similar to their client’s in terms of position (ground floor), area ( 534 sq ft), location (Khan Market ) and age (same year of construction).

“Many are self occupied and many are on rent and the petitioner’s shop is among these 135 identical shops which are on rent. Despite all these 135 shops being identically similar, the RV of all these shops range from ₹600 to ₹1 crore,” the plea said.

Cautioning the municipal body, the court said the NDMC’s actions “prima facie, appears to be arbitrary and discriminatory and, we dare say, would lead to corrupt practices”. The court asked the NDMC to file its response within four weeks, adding that no further time would be granted in the matter.

It also stayed the notice issued to the petitioner proposing to increase the RV from ₹64, 80,000 to ₹98, 26,300. The bench also stayed the operation of the assessment order dated November 9, 2021, subject to the petitioner clearing arrears of property tax on the basis of the rent realised by the petitioner from her tenant under the registered lease agreement.

The matter will be heard next on July 27.