Justice S Ravindra Bhat and Justice S Muralidhar said that the report and further proposals in this regard should be made available before the next date of hearing.
The court has been monitoring the issue of redevelopment of the walled city through a petition filed by NGO Manushi Sangathan in 2007.
The court had last year directed the government to start implementing the development plan for the area and create dedicated non-motor vehicle lanes.
The court had also directed removal of illegal encroachments in the form of defunct and completely idle and non-operational police chowkis or posts and other structures as these add to traffic congestion.
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Advocate Indira Unninayar, representing Chandni Chowk Serve Vyapar Mandal (CCSVM), has claimed that these directions of the court have not been complied with by the authorities.
The application has also said that the authorities have filed no action taken report in compliance of the court's order till date.
Earlier this year, the government had submitted a proposal to ban motorised vehicles from the main road in Chandni Chowk and start a tram system for the convenience of pedestrians.
The court directed the government to formulate a policy on e-rickshaws, stating that these vehicles would have to be considered while creating a lane system.