A bench of Justice Rajiv Shakdher issued notice to LG and Delhi government and posted the matter for further hearing on July 24.
Gupta, the leader of opposition in Delhi assembly, said in his plea that the 4th finance commission has given its report in March 2013 but it is yet to be tabled in assembly.
He also sought court's direction to the LG for calling an urgent special session of assembly to the report to be tabled at the earliest.
"This lack of funds has impeded and continues to impede the smooth functioning of the municipal bodies, namely North Delhi Municipal Corporation (NDMC) and East Delhi Municipal Corporation (EDMC) badly effecting civic life of nearly 80 percent of Delhi's population," the plea said.
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It said there is an annual shortfall of Rs 500 crore in EDMC alone and the NDMC's situation is no better with an annual deficit of Rs 700-800 crores as both the civic bodies are facing acute financial crisis since trifurcation of erstwhile MCD in 2012.
"The financial aid is invariably converted into loan account and charged as interest. Out of six lakh properties, revenue generation is provided by only 1/3rd of properties in East Delhi. There are number of unauthorized colonies and Resettlement Colonies which do not generate any revenue," the plea said.