Ms Dikshit, Delhi's longest serving chief minister, alleged that the Aam Aadmi Party (AAP) was trying to "avoid" bypolls as it had not delivered on its promises.
"Obviously, they (AAP) are trying to avoid the election. If they were confident of winning these 20 seats, they would not have done all this (challenging the disqualification).
After all, the president of India has signed it (disqualification)," the Congress leader told PTI in an interview here.
Attacking AAP over the disqualification of 20 of its lawmakers for holding offices of profit, Ms Dikshit said if the party believes it can break rules and get away with it, it is living under a "fallacy".
"The court has taken a decision, the President of India has endorsed that decision, so it is for them to see what they want to do...Face an election. When you did something like this you should have thought of the consequences also," the 79-year-old leader, who ruled Delhi from 1998 to 2013, said.
AAP was not being victimised but being punished for what it did wrong, said Ms Dikshit.
The Delhi High Court in 2016 had set aside the AAP government's order appointing 21 lawmakers as parliamentary secretaries since it lacked the approval of the Lieutenant Governor (LG).
On January 19 this year, the Election Commission (EC) had made the recommendation for the disqualification of the 20 AAP legislators, which was cleared by the President. One of the 21 legislators, who were appointed parliamentary secretaries by Chief Minister Arvind Kejriwal, had resigned earlier.
Hitting out at the AAP government's contention that there was a precedent and nothing wrong in the appointment of 21 parliamentary secretaries, Dikshit said there were at most just three in her government, and they received no perks.
"This was a system which had been started by the previous government and we just carried it on. Whatever was allowed, within the post, that was given, nothing more than that," she said.
On a plea by the disqualified AAP lawmakers, the Delhi High Court had last week refused to stay the Centre's notification on their disqualification, but also restrained the EC from taking any "precipitate measures" such as announcing dates for bypolls till January 29.
Ms Dikshit asserted that the bypolls would be a "referendum" on the AAP government's performance as it might not be able to win these seats.
Asked if the bypolls would give the Congress a chance to gain a foothold in Delhi, the three-time chief minister said, "Yes, I think definitely (it will) and I am sure that when it happens, we certainly will improve our position."
"Most certainly it is a great opportunity because I think the people have also realised the difference between the government that the Congress gave them and the government that Mr Kejriwal has given them," Ms Dikshit said.
She held that the Congress was better placed than it was in 2015 because people had got a "taste" of the Kejriwal government.
"Where is the governance? Nothing is happening. Even the roads are not being repaired. Nobody knows what is happening to the schools. All those buildings that were there already are being shown as if they have made them. There is an absence of credibility with this government," she asserted.
Ms Dikshit said if the Congress goes to polls with a coordinated strategy, it has a "very good chance" to win some of the seats.
She said if the bypolls take place she would not be interested in contesting but would campaign if the party wanted her to.
Exuding confidence about the party's electoral fortunes in the national capital, Ms Dikshit said, "We have ruled this city for 15 long years. Tell me which of them (parties) have done that. Without any hitch or without any glitch, we did what was our duty and it is for the people to understand that.
"What is Delhi today... Delhi's metro is there because of us, Delhi's CNG is there because of us, Delhi's greenery is there because of us. All these flyovers and other things are there because of the then Delhi government of the Congress.
What have you given to them," she asked AAP and the BJP.
Asked about the Congress's strategy for the bypolls, she said, "It's too early to say (this) just now. But I think bringing fresh faces and women would be a very good idea."
Ms Dikshit also slammed AAP for its constant run-ins with the Centre, saying it must be understand that Delhi is not a full state, but a Union Territory and, therefore, the laws and the application of laws were different from those in the states.
"There is confrontation with the LG, confrontation with the Centre. You are only confronting, you are not doing any work," she said, referring to the AAP government.