Mughal Emperor Shahjahan founded Old Delhi in 1639 which was formerly known as Shahjahanabad. Till the end of Mughal dynasty it remained the capital of the Mughals. During ancient times, the city was known for housing exquisitely designed mosques, beautiful gardens, and magnificent mansions of members and nobles of the royal court. Though this part of Delhi has become extremely crowded yet it symbolizes the heart of Delhi.
The Mughals built many palaces and forts in Delhi. The wall city was built by Shah Jahan in between 1638 to 1649, including the Chandni Chowk and the Lal Qila. The original cantonment of Delhi was at Daryaganj which later shifted to Ridge area. Old Delhi had the first wholesale market and the first hardware market was opened in Chawri Bazaar in the year 1840. Then the next wholesale market was opened at Khari Baoli which was of dry fruits, herbs and spices in 1850. Daryaganj also had a Phool Mandi (Flower Market), established in 1869. Though the area is small and densely populated it holds much importance.
The capital of India was shifted to Calcutta post 1857 revolt and after the fall of the Mughal Empire. It remained the capital until 1911. So, Lutyens' Delhi was developed after the change was declared. It was developed in New Delhi located south-west of Shahjahanabad. Therefore, the Old Delhi was named so and New Delhi was considered as the seat of national government then. In the year 1931, it was officially inaugurated. Some people moved out of the walled city by 1930s as it became congested and areas around the city were getting developed.
