Khan Market Welfare Association (Regd.) vs UOI & Ors.

The present Writ Petition under Article 226 of the Constitution of India has been preferred by the Petitioner, an association of property owners, entrepreneurs and residents in commercial and mixed-use areas falling within the jurisdiction of Respondent No.3/New Delhi Municipal Council (hereinafter referred to as „NDMC‟). The principal grievance of the Petitioner is with regard to the manner in which rateable values are determined and property tax is assessed by the NDMC. The Petitioner alleges that different methods are being adopted for similarly situated properties, resulting in wide disparities in rateable values and consequent property tax liability. The Petitioner seeks, inter alia, a direction to the NDMC to formulate and implement a uniform method for determination of rateable value, constitution of an expert committee to inquire into alleged irregularities, and directions for strict compliance with Sections 63, 65, 70, 71, 72 and 73 of the NDMC Act.

The grievance of the Petitioner essentially arises from the post-2019 position concerning assessment of property tax in the NDMC area. The Petitioner contends that although the Dual Method introduced through the 2009 Bye-laws was declared ultra vires by the Supreme Court, NDMC continues to apply, in different forms, the principles underlying the Unit Area Method (UAM), actual rent, comparable rent and historical rateable values. According to the Petitioner, such differential treatment has resulted in similarly situated properties being subjected to substantially different rateable values and has vested excessive and unguided discretion in the assessing authorities.

NDMC disputes the allegations of arbitrariness, discrimination and misuse of power. It contends that the rateable value is determined in accordance with Section 63(1) of the NDMC Act and the law laid down by this Court and the Supreme Court. NDMC further explains that the factors relevant for determination of rateable value necessarily differ depending upon whether a property is let out, self-occupied or subject to rent, which cannot be treated as a reliable indicator on account of extraneous circumstances. It is its case that what may appear to be different “methods” are, in substance, means of applying the statutory test of the annual rent at which a property might reasonably be expected to let.

The facts, insofar as relevant for adjudication of the present controversy, may briefly be noticed.

In the year 2009, NDMC introduced Bye-laws (hereinafter referred to as „2009 Bye-laws‟) which incorporated what was described as a Dual Method of assessment and which included principles of the UAM. The validity of the said Bye-laws came to be considered in proceedings before this Court and thereafter the Supreme Court in New Delhi Municipal Council & Ors. v. Association of Concerned Citizens of New Delhi & Ors.^{11.(2019) 15 SCC 303}. The Supreme Court declared the said Bye-laws ultra vires but, considering the peculiar situation arising from their operation for several years and the fact that approximately 95% of the assessees had accepted and paid tax under the said Bye-laws, issued directions in exercise of powers under Article 142 of the Constitution of India protecting such assessments from being reopened.

Following the aforesaid judgment, NDMC took a number of administrative steps concerning different categories of assessees. According to NDMC, persons who had challenged the Bye-laws and whose assessments were pending were dealt with under Section 63 of the NDMC Act. In respect of the large number of assessees who had accepted the 2009 Bye-laws and paid tax thereunder, the assessments were continued in terms of the directions of the Supreme Court. NDMC further states that, where a notice under Section 72 of the NDMC Act is issued thereafter, the rateable value is revised in accordance with Section 63.

The Petitioner, however, disputes the manner in which the aforesaid position has been implemented. Reliance is placed upon the assessment lists of areas such as Khan Market and Connaught Place to contend that properties which are substantially similar in size, location and character have been assigned substantially different rateable values. The Petitioner has referred, in particular, to assessment lists in which the rateable values of properties in Khan Market allegedly range from relatively nominal amounts to very substantial figures.

The Petitioner also relies upon the order dated 16.05.2024 passed in W.P.(C) 6815/2022 captioned Saroj Tandon v. New Delhi Municipal Council & Ors., wherein the Court had noticed the stand taken by NDMC regarding the manner in which assessments were being dealt with after the Supreme Court judgment. The order recorded, inter alia, that NDMC had continued the rateable values of certain assessees who had earlier been assessed under the 2009 Bye-laws until a notice under Section 72 of the NDMC Act was issued and decided. The Court also observed that the variation in rateable values placed before it was, prima facie, inexplicable.

NDMC points out, however, that W.P.(C) 6815/2022 was subsequently dismissed by this Court on 06.02.2025. NDMC also relies upon an affidavit filed in those proceedings stating that no notice under Section 72 of the NDMC Act had been issued after 22.01.2019 proposing revision of rateable value on the basis of the UAM, while the assessments of those who had already accepted and paid tax under the 2009 Bye-laws were continued in accordance with the directions of the Supreme Court.

NDMC has further placed reliance upon its Council Resolution dated 22.12.2019 and the legal opinion obtained thereafter. It is stated that, until the statutory framework is amended, NDMC would determine rateable value on the basis of comparable rent in accordance with Section 63(1) of the NDMC Act and the principles laid down by the Supreme Court, including in Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee^{22.(1980) 1 SCC 685}. NDMC has also referred to the Jan Vishwas (Amendment of Provisions) Bill, 2025 (hereinafter referred to as „Jan Vishwas Bill‟), which, according to it, proposes amendments to the NDMC Act so as to provide for the UAM.

The Petitioner, in rejoinder, disputes the aforesaid explanation. It contends that the continued adoption of different assessment regimes amounts to an admission of the very arbitrariness complained of in the Writ Petition. It further submits that the 2019 Council Resolution itself contemplated determination of rateable value on the basis of comparable rent until amendment of the statutory framework and that the same cannot justify selective application of UAM principles. The Petitioner also contends that the Jan Vishwas Bill, being only a Bill, cannot cure the alleged illegality in the existing assessment regime.

Heard learned Senior Counsel representing the Petitioner and learned Counsel representing the NDMC and have perused the pleadings and material placed on record.

Learned Senior Counsel for the Petitioner has made the following submissions:

It may also be noticed that, while addressing arguments, learned Senior Counsel representing the Petitioner did not press the challenge to the constitutional validity of the expression “at any time” occurring in Section 72 of the NDMC Act.

Per contra, learned Counsel representing the NDMC has made the following submissions:

No other submissions have been made by the learned Senior Counsel and learned Counsel representing the respective parties.

Preliminarily, it may be noticed that the present Writ Petition is preceded by a series of proceedings instituted by shopkeepers/property owners of Khan Market, as well as by associations of property owners and concerned citizens, raising grievances substantially concerning the assessment of property tax by NDMC. The proceedings instituted by the Association of Concerned Citizens of New Delhi and others ultimately culminated in the judgment of the Supreme Court in Association of Concerned Citizens of New Delhi (supra). Thereafter, property owners, in their individual capacity, instituted W.P.(C.) Nos.6815/2022, 8101/2022 and 8306/2022, inter alia, challenging the validity of the proviso to Section 72 read with Section 72(1)(f) of the NDMC Act, which came to be dismissed by a Division Bench of this Court on 06.02.2025. A further batch of petitions, namely, W.P.(C.) Nos.5995/2025, 6428/2025, 6954/2025, 7674/2025, 7839/2025, 8218/2025, 13622/2025, 13654/2025, 13655/2025 and 16720/2025, raising overlapping grievances, was thereafter dismissed on 04.12.2025. The present Writ Petition thus represents a subsequent attempt to agitate, through an association, issues which have already been pursued before this Court by individual property owners in earlier proceedings.

The substantive reliefs sought by the Petitioner may first be noticed. The prayers in the Writ Petition read as under:

Learned counsel representing the Petitioner, however, does not press prayer (b). The controversy, therefore, survives only in relation to prayers (a), (c) and (d).

At the outset, this Court finds it difficult to appreciate the maintainability of the aforesaid three prayers in the form in which they have been framed. The jurisdiction under Article 226 of the Constitution undoubtedly extends to issuance of a writ of mandamus against a statutory or public authority. However, the existence of a public authority, by itself, does not furnish a ground for issuance of mandamus. A mandamus is issued to enforce a legal right in the Petitioner corresponding to a legal or public duty cast upon the authority against whom the writ is sought. The remedy is thus directed towards requiring an authority to perform a duty which the law requires it to perform. It does not ordinarily empower the Court to assume the statutory or administrative function of the authority itself.

The nature of the jurisdiction is well settled. Mandamus is essentially a command requiring a public authority to act according to law or to refrain from acting contrary to law. Where an authority is vested with a statutory discretion, the Court may, in an appropriate case, require the authority to exercise that discretion in accordance with law, but cannot itself exercise that discretion or direct that the discretion be exercised in a particular manner. The proper direction, where warranted, is ordinarily to require the competent authority to consider and decide the matter in accordance with the governing statute and the circumstances of the case. This principle finds expression, inter alia, in Union of India v. S.B. Vohra^{44.(2004) 2 SCC 150}; Govind Sugar Mills Ltd. v. Hind Mazdoor Sabha^{55.AIR 1975 SC 1735}; and State of Mysore v. K.N. Chandrasekhara and Others^{66.AIR 1965 SC 532}.

The distinction assumes significance in the present case. Prayer (a) does not merely seek enforcement of an identified statutory duty which the Respondents have failed to discharge. It seeks a direction that, until a UAM is implemented, the Respondents should formulate a uniform method for fixing rateable values and implement such method in a particular manner. In substance, therefore, what is sought is a direction from this Court as to the manner in which the statutory authority should formulate and administer the methodology for determination of rateable values.

Such a direction cannot ordinarily be issued in exercise of the writ jurisdiction. The determination of the methodology to be adopted for assessment of rateable values, so long as the authority acts within the statutory framework, involves the exercise of statutory and administrative functions entrusted to the authority by the legislature. The Court cannot, under the guise of issuing a mandamus, substitute its own formulation for that of the competent statutory authority. The principle is not that the exercise of statutory power is immune from judicial review, rather, it is that judicial review is directed towards the legality of the exercise of power and not towards the Court itself undertaking the function entrusted to the statutory authority.

The position is no different merely because the Petitioner alleges that the existing methodology results in arbitrariness, discrimination or hardship. It is well settled that a writ of mandamus will not issue to interfere with an administrative policy merely because the Court may perceive a different or more desirable manner of dealing with the matter, or because the existing arrangement causes hardship. Interference may, of course, be warranted where the exercise of power is shown to be mala fide, irrational, based on extraneous considerations, or otherwise contrary to law. Refernce in this regard can be made to the decision rendered by the Supreme Court in Tamil Nadu Education Department Ministerial on General Subordinate Services Association v State of Tamil Nadu^{77.(1980) 3 SCC 97}.

The relevant inquiry, therefore, is whether the Respondents have acted contrary to a specific statutory obligation or have exercised their power in a manner prohibited by law. It is not whether this Court considers another methodology to be preferable.

Prayer (c) stands on an even different footing. The Petitioner seeks constitution of an expert committee, armed with powers to inquire into alleged frauds, irregularities and discrepancies in the fixation of rateable values throughout the jurisdiction of the Respondent-Authority, apart from inviting and considering suggestions from stakeholders and devising safeguards against alleged victimisation or unfair practices in future. The prayer does not identify any specific statutory duty requiring the constitution of such a committee, nor does it identify any particular statutory power which the Respondents have failed to exercise.

A direction of this nature would require the Court to create an administrative mechanism, prescribe its composition and remit, and entrust it with functions which have not been shown to have been statutorily vested in such a body. The jurisdiction under Article 226 cannot ordinarily be invoked for creation of such an institutional mechanism merely because the Petitioner alleges irregularities in the functioning of a statutory authority. In the absence of a demonstrated legal right in the Petitioner and a corresponding legal duty in the Respondents, prayer (c) therefore cannot be sustained as a prayer for mandamus.

Prayer (d), though differently worded, also does not furnish a basis for issuance of mandamus in the manner sought. The prayer seeks a general direction requiring the Respondents to ensure strict compliance with Sections 63, 65, 70, 71, 72 and 73 of the NDMC Act. A statutory authority is, in any event, bound by the statute governing its functioning. A general direction to comply with statutory provisions, without identifying a particular statutory duty which has been refused or neglected, would not amount to enforcement of a specific legal right through mandamus. If, in a particular case, the Respondents act contrary to any of the aforesaid provisions, such action would be amenable to challenge in appropriate proceedings. But a general supervisory direction to ensure compliance with the statute cannot, by itself, be converted into a writ of mandamus.

The above conclusion, however, must be understood in the context of the nature of the present challenge. It is not the law that mandamus is unavailable in matters concerning levy or collection of tax or property tax. The jurisdiction under Article 226 can certainly be invoked where a taxing or revenue authority seeks to levy or collect a tax which is unconstitutional, ultra vires the statute, or which the authority has no jurisdiction to levy. The Court may, in an appropriate case, issue a mandamus restraining such unlawful levy or direct consequential relief where the law so warrants.

Thus, the availability of mandamus in a taxation matter depends upon the nature of the illegality complained of and the relief sought. Where the complaint is that the taxing authority has acted without jurisdiction, contrary to the charging provision, in excess of the statutory power, or in violation of a constitutional limitation, the Court may exercise its writ jurisdiction notwithstanding the fact that the dispute concerns assessment or levy of tax. Conversely, where the complaint is essentially that the statutory authority has adopted a particular methodology for assessment, and the relief sought is a direction to substitute or formulate another methodology, the Court would not ordinarily issue a mandamus merely because another method may appear fairer or more appropriate.

The distinction is particularly material here. The Petitioner has not pressed the challenge to the expression “at any time” occurring in Section 72 of the NDMC Act. Consequently, the Court is not called upon to examine the constitutional validity of that provision or the validity of any particular assessment on the ground that it is beyond the statutory authority conferred by the Act. What remains is, in substance, a request that this Court direct the Respondents to adopt a particular system of assessment, constitute an expert committee to examine the functioning of the assessment mechanism, and issue a general direction for compliance with various statutory provisions.

Such reliefs travel beyond the permissible scope of a mandamus. The Court does not, in exercise of judicial review, ordinarily take over the functions of a statutory authority or prescribe the manner in which a statutory discretion is to be exercised. As observed in S.B. Vohra (supra), the Court would ordinarily permit the statutory authority to perform the functions entrusted to it by law rather than itself entering that field. The power under Article 226 is a power of judicial review and not a power to administer the statute.

This does not mean that the Respondents are free to act arbitrarily. The statutory discretion vested in them remains subject to the requirements of the NDMC Act and to the constitutional limitations governing State action. An assessment or levy which is shown, in an appropriate proceeding, to be contrary to the statute, without jurisdiction, discriminatory in a legally cognisable sense, or otherwise vitiated by an impermissible exercise of power, can certainly be subjected to judicial review. But that is materially different from asking the Court to prescribe a uniform assessment methodology for the Respondents or to establish an expert mechanism for overseeing their statutory functions.

The Petitioner must, therefore, demonstrate not merely an interest in proper assessment or in the performance of the statutory functions of the Respondents, but a legal and judicially enforceable right corresponding to a legal duty which the Respondents have failed to perform. The material placed before the Court does not disclose such a right in respect of the reliefs now pressed. The grievances articulated by the Petitioner may, at their highest, invite the statutory authority to examine whether its assessment practices conform to the governing provisions of the NDMC Act. They do not, in the form presented, warrant the issuance of a mandamus requiring this Court to formulate the methodology or constitute an administrative mechanism for that purpose.

There is also a distinct question as to the capacity in which the present Writ Petition has been instituted. The Petitioner is an association, whereas the alleged prejudice arising from the determination of rateable values and levy of property tax is, in substance, stated to be suffered by individual property owners and assessees. The present proceedings are not in the nature of a public interest litigation seeking enforcement of a public right or a right of persons unable to approach the Court themselves. In a petition seeking a mandamus, the Petitioner must ordinarily establish a legal and judicially enforceable right corresponding to a legal duty on the part of the Respondents. The Petitioner has not demonstrated any independent right of the association which has been infringed.

The distinction is material, since an association cannot, merely by aggregating the individual grievances of its members, seek a mandamus for enforcement of rights which are personal to such members. As recognised in Indian Sugar Mills Association v. Secretary to Govt., Uttar Pradesh^{88.(1950) All LJ 767}, an association cannot complain where only the personal rights of its individual members are affected. In the present case, therefore, unless the Petitioner establishes that the rights of the association itself are affected, or that the petition falls within the permissible parameters of a representative or public interest action, it cannot maintain the present prayers merely on the basis of alleged individual grievances of its members.

In view of the conclusion reached hereinabove as to the maintainability of prayers (a), (c) and (d), it is not necessary for this Court to examine the various factual and legal submissions advanced by the Petitioner on the merits of the grievances underlying those prayers. The exercise of writ jurisdiction cannot be invoked for granting reliefs which, in the form in which they have been sought, are themselves not amenable to a writ of mandamus. Any examination of the merits, in such circumstances, would be academic and would serve no useful purpose.

It is, therefore, clarified that this Court has not examined or expressed any opinion on the merits of the allegations made by the Petitioner regarding the manner in which rateable values are assessed or property tax is levied by the Respondents. The dismissal of the present Writ Petition is confined to the reliefs sought in prayers (a), (c) and (d) and the conclusion that such reliefs, as presently framed, cannot be granted in exercise of the jurisdiction under Article 226 of the Constitution.

It is also clarified that the dismissal of the present Writ Petition shall not preclude any individual assessee from availing of the remedies available under the NDMC Act against a particular assessment, including a challenge to the determination of rateable value, non-compliance with the statutory procedure or unreasonable delay in finalisation of proceedings, in accordance with law.

For the aforesaid reasons, prayers (a), (c) and (d), as presently framed, cannot be granted in exercise of the writ jurisdiction of this Court. Prayer (b) having not been pressed, no adjudication thereon is called for.

The present Writ Petition is, accordingly, dismissed.