The matter was sent to the subordinate court as per the high court's November 24 office order which states that cases of value less than Rs one crore were to be transferred to the trial court.
Dikshit filed the suit against Gupta in 2010, alleging that hoardings were erected across the city accusing her government of corruption in determination of new power tariff and conniving with the private discoms.
The advertisements had also allegedly claimed that the Delhi Electricity Regulatory Commission (DERC) was going to recommend reduction in power tariff, but the "chief minister came in the way".
Dikshit moved court after Gupta refused to tender a "public apology for the slander" as demanded by her. Gupta had maintained that he would reply in court.
As per the allegations, the hoardings were erected at Pusa Road, Karol Bagh, Shankar Road, Hari Nagar, Jhandewalan, Delhi Gate, Rani Jhansi Road, Najafgarh Road, Rajendra Nagar Road, New Rohtak Road, Filmistan and Subzi Mandi.