Shops Above Shops? Supreme Court Says No Without Conversion Charges.


31 October 2025 Interim Application >> Civil & Consumer Law   |   Property Law >> Personal Law  

The recent judgment of the Supreme Court in the case of Plot No. 106 in New Rajinder Nagar Market, New Delhi, further clarifies the already complex sealing and de-sealing jurisprudence of Delhi. The applicant had sought de-sealing of his commercial premises on the basis of an order passed in 2023 by a Judicial Committee formed by the Court itself. However, the Bench, after considering the planning history of the city, lease conditions, and the Master Plans from 1962 to 2021, rejected the application and held that only the ground floor of the property could be lawfully used for commercial purposes.

The order traces the evolution of the regulatory framework for Delhi, starting from the MPD 1962, through increasing cases of misuse of residential areas for commercial purposes, the prevailing sealing drives, and several judicial interventions. The constitution and functioning of various oversight bodies were examined, namely the Monitoring Committee in 2004 and 2006, and the Judicial Committee in 2022, in recognition of case-specific adjudication over area-wide directions.

 

 

Thus, at the heart of the dispute was the applicant's reliance upon historical allotment and correspondence from the 1950s to indicate that the entire plot was being used for commercial purposes. The Court found there was no documentary evidence to show that use of the upper floors as commercial was ever-sanctioned or approved. Both the conveyance deed and the approved building plans indicated that the upper floors were sanctioned for residential use only; the latter was from 2005. The Bench also observed that New Rajinder Nagar falls within the category of a "shop-cum-residence" Local Shopping Centre under MPD–2021, which offers scope for the commercial conversion of upper floors with the payment of conversion charges.

The judgment specifically deals with the concept of Floor Area Ratio (FAR) and holds that the applicant had built more than the sanctioned area. In this background, the conversion to commercial use in the designated LSCs will be allowed, provided the applicant pays the prescribed conversion charges and penalty charges and removes the non-compoundable construction. If these requirements are not fulfilled, de-sealing cannot be allowed.

The Court further directed the MCD to conduct a joint inspection and give a detailed notice about the deviations, and to allow the applicant to regularize the construction as the rule of law demands. This balanced approach underlines the fact that equitable remedies must coexist with regulatory discipline. It also shows the continued supervisory role of the Court to see that the development in the capital city is done in consonance with the law. 


Through this judgment, the Supreme Court is reiterating that compliance with the norms of city planning is not optional, that the commercial zeal of property owners has to be tempered by the intrinsic principles of sustainable urban governance. The order also sends a broader message: judicial leniency in regularization has its limits and ownership rights cannot override planning regulations designed to preserve order in a densely built metropolis.