The development came a day after the kin of the victims of the Uphaar Grand cinema hall fire tragedy urged Chief Minister Arvind Kejriwal not to consider Ansal's plea.
The cinema hall was owned by Ansal and his elder brother Sushil.
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Subsequently, the ministry had sought the opinion of the Delhi government on the issue.
"Delhi Home Minister Satyendar Jain has recommended rejection of Ansal's mercy petition following a representation from the family members of the Uphaar tragedy victims," said a senior government official.
The Supreme Court had, on February 9, ordered real estate baron Ansal to serve the remaining part of his one-year jail term in connection with the case.
On the same day, the apex court had given relief to Sushil, due to his advanced age, by exempting him from serving the remainder of his jail term.
Both the brothers were also asked to pay Rs 30 crore each, which would be used to set up a trauma centre in the national capital.
Fifty-nine people, trapped in the balcony of the Uphaar Grand cinema hall in the Green Park area of south Delhi, had died of asphyxia when a fire broke out during the screening of Bollywood movie 'Border' on June 13, 1997.
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