Re-classification of colonies makes properties incapable of sale. Reject MCV-IV Report

Re-classification of colonies makes properties incapable of sale. Reject MCV-IV Report

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Vivek Agarwal started this petition to Joint Assessor & Collector (HQ) South Delhi Municipal Corporation (Assessment & Collection Department, SDMC 20th Floor, E 1 Block Civic Centre, Minto Road New Delhi)

The Fourth Municipal Valuation Committee (“MVC-IV”) appointed by the Government of NCT of Delhi presented its interim report dated 12.09.2018 to the South Delhi Municipal Corporation (“SDMC”). The Committee has proposed to change the classification / categorisation of various colonies in South Delhi. One of the recommendations of MCV-IV is to upgrade several of these colonies from Category B to Category A.  The methodology adopted by MVC-IV to arrive at this recommendation is completely flawed and arbitrary and directly affects the circle rates of properties in these colonies in a manner that literally renders such properties incapable of sale and purchase.

Therefore, by way of the present online petition, we the residents of these colonies, are submitting our objections before the SDMC and requesting the SDMC to reject the recommendation of MVC-IV.



Joint Assessor & Collector (HQ)

Assessment & Collection Department, SDMC

20th Floor, E 1 Block

Civic Centre, Minto Road

New Delhi – 110 002

Email :



The brief facts and objections are as follows:

1.      South Delhi Municipal Corporation (SDMC) levies an annual House Tax on properties coming under its jurisdiction. This House Tax depends largely on the category of the colony in which the taxed property is situated.  For this purpose, various colonies of Delhi are categorised into Categories A to H. Higher the category to which a property belongs, the more its House tax.

2.      Re-classification of a colony to a higher category increases the house tax burden. For instance, re-classifying a colony from category B to A would mean that house tax of all properties in that colony would increase by as much as 68%. This in turn would increase cost of living for everyone concerned – whether a resident or not.

3.      On the other hand, the Government of NCT Delhi adopts this categorisation/ classification of colonies made by SDMC to decide the circle rates of properties. For instance, a property in Category A has more than thrice the circle rate of a similar property situated in Category B.

4.      In the year 2004, Municipal Valuation Committee (“MVC-1”) had categorised the colonies of Delhi, based on a flawed and incorrect matrix. That matrix had 10 parameters and 3 grades to assign weightage to each colony. Based on the grades that each colony was awarded on those 10 parameters, a colony was assigned a particular category. Higher the grades, higher the category. The grading was done in a highly arbitrary and flawed manner. Colonies with similar infrastructure and amenities or social status etc were awarded different grades. This led to a huge outcry in general public and resultantly a Hardship and Anomaly Committee (“HAC”) was formed, which rejected the methodology and outcome of that exercise. As a result several colonies which were placed in Category A, were brought down to Category B. The categorisation of colonies as finalised by HAC is still in effect.

5.      MVC-IV was constituted to make recommendations on matters relating inter-alia to classification of vacant lands and buildings and fixation of base unit values and determination of factors varying the same. MVC-IV has submitted its interim report wherein it has recommended re-categorised/ re-classified various colonies in South Delhi. This report can be found at:

6.      Unfortunately, MVC -IV, instead of developing a new and fresh methodology to categorise the colonies, has borrowed the flawed and arbitrary matrix used by MVC-I (which was rejected by HAC) to form the basis of its new matrix/methodology. Even the parameters of old MVC-1 matrix have not been re- graded. The very foundation and basis of the methodology of MVC-IV is thus flawed.

7.      By adopting the grades of MVC-1 on 10 parameters, this MVC-IV has acknowledged that no change has taken place in those parameters since 2004. This is absolutely incorrect. In the last 15 years all colonies have not received equal development or upgradation in respect of those 10 parameters. Some colonies have benefited on those 10 parameters, while the others have not gained at all. 

8.      The matrix put in place by MVC -IV has added two more parameters in addition to the 10 (used in  MVC-1 matrix). These are “metro marks” (11th parameter) and “notified commercial/ mlu/ pedestrian street/ marks” (12th parameter).

9.      To quote from the report-  “As far as categorisation of areas/colonies due to impact of metro lines is concerned, MVC-IV would like to add the weightage of 10 additional marks in the following manner :- Areas coming within 500 meters of metro stations will be awarded 10 marks, Areas which fall within 500-1000 mts will be awarded 5 marks and the areas beyond 1000 metres of the metro stations will be given no marks. In case portion of any area falls within 500 meters and another portion of the area falls within 1000 meters then the higher marks will be awarded.” (emphasis supplied).

The distance specified should be calculated from the centre of the colony not from the edge of the colony. If even one house of the entire colony, comes within the 0.5 km distance, then the entire colony is awarded 10 marks. Common sense suggest that at least 50% of the houses of the colony should come within the notified distance, for the entire colony to be upgraded.

10.  To again quote from the report  “.........There have been extensive facilities built around metro stations namely parking for all kinds of vehicles, banking facilities at the metro stations through ATMs, commercial/local shopping centres close to the Metro stations for convenience of the commuters. All these measures have healthy influence on the convenience of the citizens and on creation of economic activity/employment around 26 metro station complexes. In addition, a number of shopping malls have come up in the land given to DMRC for creation of facilitation centres. As per the information received from DMRC, 23 Commercial spaces including Malls, cineplexes and 42 parking slots have been constructed alongside metro stations in South Delhi Municipal Corporation areas. (Annexure 3.1 - List of Commercial spaces and parking facilities made available by DMRC))”

There are some areas where DMRC has provided ‘extensive facilities’ or where shopping malls/ commercial spaces/ cineplexes have been built and there are other areas where no such infrastructure has come up within 500mts/ 1km of metro station, due to non- availability of space etc. and only basic metro connectivity has been provided.                                                                     

Both such areas/ neighbourhoods cannot be put on the same pedestal and awarded the same marks/ grades. The marks/ grades  awarded for metro connectivity must reflect this inequality and areas where all these extensive facilities and commercial spaces have come up must have higher grades than the others.  The criteria of awarding grades on the basis of distance from metro station is parochial and biased.

11.  In so far as the 12th parameter is concerned if even one street in the colony is notified for commercial user, the entire colony is awarded additional 5 or 10 marks. MVC-IV has lost sight of the fact that in a residential colony, allowing non-residential use on a hitherto residential street is detrimental to the peace and quiet of the entire colony. The entire texture of the colony is downgraded when some houses in the colony are allowed non-residential user. Instead of downgrading such a colony in its matrix, MVC-IV has awarded extra points to the colony as if such a non -residential user has made the neighbourhood a better place to live! This is absolutely flawed. Instead of putting a higher tax on properties that fall on such notified non-residential streets, all properties in the entire colony are made to pay extra house tax, since those marks would put the colony in a higher category.

12.  The cut off marks decided by MVC-IV are as follows:

A       96 to 120

B       84 to 95

C       72 to 83

D       60 to 71

E       48 to 59

F       36 to 47

G       24 to 35

H       Below 24

The 120 marks should be divided amongst all categories equally with 15 marks falling to each category. ‘H’ category should cover colonies with 0-15 marks and ‘A’ category should cover colonies with 106-120 marks. However presently categories ‘B’ to ‘G’ are covering 11 marks each while ‘A’ and ‘H’ categories are covering 24 marks each. This is not correct. Further, there is no need for the number of categories to remain static, additional number of categories can be added.

13.  One look at the following lists will show how unfair this entire exercise is:

The following colonies are proposed to be upgraded to category A from category B (which was finalised by HAC):

1.      Kailash Colony

2.      Hauz Khas

3.      Green Park Extn.

4.      Greater Kailash IV

5.      Defence Colony

6.      Pamposh Enclave

7.      Chirag Enclave

8.      Anand Lok

9.      Gulmohar Park

10.  Panchsheel Enclave

11.  Safdarjung Enclave

The following colonies are proposed to be downgraded to category B from category A (which was finalised by HAC):

1.      Sunder Nagar

2.      West End

3.      Panchshila Park

4.      Mayfair Garden

5.      Maharani Bagh

6.      Friends Colony


14.  MVC -IV is fully seized of the fact that re-categorisation of colonies will have a direct effect on the circle rates imposed by the Delhi Government. For instance, the circle rates of category A are more than 3 times than those of category B. These circle rates are applied at the time of transfer of properties. Transfers done on less than circle rates invite penalties from Income Tax Department. This is bound to create havoc for the property owners of the colonies which are proposed to be upgraded from Category B to A, since the actual value of properties in category B colonies are nowhere near the circle rate values applicable on category A colonies. MVC-IV cannot shirk its responsibility on the ground that it does not have the mandate to fix circle rates. It has to be sensitive about the un-intended consequence of its report and the hardship and misery that will be caused to residents of these colonies and the economic burden and harassment that will be imposed on them. MVC-IV cannot be indifferent or casual about this concern, nor can it seek to use its powers in an arbitrary manner and hide behind technicalities.

15A perusal of the aforesaid facts makes it clear that the methodology adopted by MVC-IV to arrive at its recommendation for re-categorisation/ re-classification of South Delhi colonies is completely flawed and arbitrary and directly affects the circle rates of properties in these colonies in a manner that literally renders such properties incapable of sale and purchase, especially when colonies are being shifted from category B to category A.

16.  These recommendations of the MVC-IV are part of its interim report dated 12.09.2018. This interim report has been placed in the public domain on 17/06/2019 for inviting objections from public at large within 30 days.

17.  It is put on record, that the aim of filling these objections is not to object or complain about downgrading some colonies from a higher category to a lower category, but the intention is to demand a fresh, fair and rational methodology to categorise/ classify colonies of South Delhi. While the need to increase house tax revenues of the corporation is well appreciated, but to shuffle colonies up and down a matrix based on an unscientific methodology, thereby causing unwanted collateral damage, is neither correct nor fair.

In view of the above, by way of the present online petition, we the residents of South Delhi are submitting our objections before the SDMC and requesting that the interim report of MCV-IV dated 12.09.2018, insofar as it relates to re-categorisation/ re-classification of South Delhi colonies, be forthwith rejected and a new and objective methodology be established to grade these colonies and to tax the properties situated therein.

This petition on behalf of South Delhi residents may be treated as our legal objections filed in pursuance of the public notice dated 17.06.2019 issued by SDMC.

Yours sincerely

Vivek Agarwal

Advocate, Supreme Court of India

136, Sukhdev Vihar, New Delhi


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