Introduction:

The case of Perch A Unit of Sunrise F and B Restaurant Pvt. Ltd. v. NDMC & Ors. came before the Delhi High Court as a significant dispute involving regulatory compliance, urban infrastructure constraints, and the right of businesses to operate in one of the capital’s most iconic commercial hubs—Khan Market. A batch of petitions was filed by several well-known restaurants operating in the area, including Perch, Yum Yum Cha, Starbucks Coffee, Khan Chacha, Anglow, and Sly Granny. These establishments challenged the actions of civic authorities, particularly the New Delhi Municipal Council (NDMC), which had either denied renewal or withheld necessary licenses on the ground that the restaurants lacked a valid Fire No Objection Certificate (NOC). The issue assumed importance due to the peculiar structural and historical characteristics of Khan Market, a heritage commercial space with inherent architectural limitations. The matter was adjudicated by Justice Purushaindra Kumar Kaurav, who was tasked with balancing competing considerations—ensuring public safety through fire regulations while also recognizing the practical difficulties faced by businesses operating in legacy structures. The Court’s decision ultimately provided conditional relief to the restaurants, allowing them to continue operations under specific safeguards, thereby setting an important precedent in reconciling regulatory compliance with ground realities.

Arguments by the Petitioners (Restaurants):

The petitioners, comprising various restaurant operators in Khan Market, advanced a comprehensive set of arguments challenging the actions of the authorities. At the outset, they contended that they had been operating their establishments lawfully for years, having obtained all requisite permissions and licenses from the concerned authorities. These licenses, they pointed out, were subject to periodic renewal, and the sudden refusal or delay in renewal on the ground of absence of a Fire NOC was arbitrary and unjustified. The petitioners argued that their establishments did not fall within the category of “assembly buildings” as defined under the Unified Building Bye-Laws, 2016. According to the relevant provisions, a building is classified as an assembly building if it accommodates 50 or more persons for purposes such as amusement, recreation, or social gatherings. The petitioners emphasized that their restaurants maintained a seating capacity below this threshold and therefore should not be subjected to the stringent requirements applicable to larger assembly spaces. A significant aspect of the petitioners’ case was the inconsistency in the application of regulatory standards. They pointed out that while their health trade licenses had been granted on the basis of a seating capacity of fewer than 50 guests, the authorities had suddenly begun applying a different criterion, insisting on compliance with an occupant load factor of 1.8 square metres per person. This, according to the petitioners, amounted to an arbitrary change in the regulatory framework, causing undue hardship to businesses that had been operating in good faith. The petitioners also highlighted the unique structural constraints of Khan Market, noting that the buildings in the area were constructed decades ago and were not designed to accommodate modern fire safety requirements such as multiple entry and exit points. They argued that these structural limitations were inherent to the heritage nature of the market and could not be altered without compromising its architectural integrity. In light of these constraints, the petitioners submitted that strict enforcement of fire safety norms designed for modern constructions would effectively render their businesses non-operational. Importantly, the petitioners expressed their willingness to comply with alternative safety measures. They undertook before the Court that they would limit the number of occupants to fewer than 50 at any given time and would adhere to any additional safety mechanisms prescribed by the authorities. This undertaking, they argued, demonstrated their commitment to ensuring public safety while also seeking a pragmatic solution to the regulatory impasse.

Arguments by the Respondents (NDMC and Authorities):

The respondents, including the NDMC and other regulatory authorities such as the Delhi Fire Services, defended their actions by emphasizing the importance of fire safety regulations. They argued that the requirement of a Fire NOC is a critical component of ensuring public safety, particularly in commercial establishments where large numbers of people congregate. The respondents contended that the absence of such certification posed a significant risk, and therefore, strict compliance with the applicable norms was necessary. The authorities also relied on the provisions of the Unified Building Bye-Laws, 2016, to argue that restaurants, by their very nature, fall within the category of assembly buildings when they accommodate a certain number of occupants. They submitted that the classification is not merely based on the stated seating capacity but also on the potential occupancy and the nature of the activities conducted within the premises. The respondents further argued that the insistence on an occupant load factor of 1.8 square metres per person was in line with established safety standards and was necessary to ensure adequate space for evacuation in case of emergencies. They contended that any relaxation of these norms could compromise the safety of patrons and employees alike. At the same time, the respondents acknowledged the challenges posed by the structural limitations of Khan Market. They informed the Court that efforts had been made to address these issues through consultations and joint meetings involving various stakeholders. The authorities also pointed out that certain regulatory relaxations had already been introduced, such as the notification issued by the NDMC dispensing with the requirement of a health trade license, subject to compliance with other directives. The respondents thus sought to strike a balance between enforcing safety norms and accommodating the practical realities of operating in a heritage market. However, they maintained that the requirement of a Fire NOC could not be entirely dispensed with, as it forms a crucial aspect of the regulatory framework.

Court’s Judgment:

The Delhi High Court, after carefully considering the submissions of both sides, adopted a balanced and pragmatic approach in resolving the dispute. Justice Purushaindra Kumar Kaurav recognized the competing interests at play—the need to ensure public safety through compliance with fire regulations and the practical difficulties faced by businesses operating in a heritage market with inherent structural constraints. At the outset, the Court noted that Khan Market is one of Delhi’s most prestigious and historically significant commercial areas, often described as the “shaan of Delhi.” It acknowledged the unique architectural character of the market, including the limitation of having only one feasible entry and exit point for the upper floors where many of the restaurants are located. The Court observed that these structural features have existed since the inception of the market and cannot be easily modified. The Court also took into account the developments that had occurred during the pendency of the petitions, including the NDMC’s notification dispensing with the requirement of a health trade license, subject to compliance with other directives. In light of these developments, the Court noted that the core legal issue—whether licenses could be denied solely on the ground of absence of a Fire NOC—might not require a definitive adjudication. However, the Court emphasized the need to balance the equities and provide a workable solution. A key factor in the Court’s decision was the undertaking given by the petitioners. The restaurants had assured the Court that they would limit their occupancy to fewer than 50 guests at any given time and would comply with any additional safety measures prescribed by the authorities. The Court found this undertaking to be credible and sufficient to address safety concerns, particularly in light of the structural constraints of the market. Accordingly, the Court held that the restaurants should not be denied the right to operate solely on the ground of absence of a Fire NOC, provided they adhere to their undertaking regarding occupancy and safety measures. The Court further directed that if any action is contemplated against the petitioners for lack of a Fire NOC, such action shall not be given effect without a prior notice of 30 days. This provision was intended to ensure that the petitioners have an opportunity to seek appropriate legal recourse. At the same time, the Court made it clear that the relief granted was conditional. If the restaurants fail to comply with the undertaking—particularly the limit on occupancy—the authorities would be at liberty to take appropriate action in accordance with law. The Court thus struck a careful balance, allowing the businesses to continue operations while ensuring that safety considerations are not compromised. In conclusion, the Court disposed of the petitions, observing that keeping them pending would not serve any useful purpose. The judgment reflects a nuanced approach to adjudication, taking into account not only the letter of the law but also the practical realities and broader public interest.