The Realities for Government of Delhi: Is the Lieutenant Governor the "Government"?

  • Shubhendu Anand & Shivam Singhania
  • 05:08 PM, 16 Sep 2021

Read Time: 01 hours

Hon’ble Supreme Court on Monday (13/09/2021) agreed to hear Delhi Government’s plea against The Government of National Capital Territory of Delhi (Amendment) Act, 2021. The advocate for the Government of NCT of Delhi sought urgent hearing of the plea stating that the extra power given to the Lieutenant Governor has made governance difficult in Delhi. He argued that the Act (the Government of National Capital Territory (Amendment) Act 2021) is contrary to the constitution bench judgement of the Supreme Court and against Article 239AA (which deals with the status of Delhi) under the Constitution. The key highlights of the Act over which the Delhi Government is raising dispute are:

  1. The expression "Government" referred to in any law to be made by the Legislative Assembly shall mean the Lieutenant Governor.
  2. The conduct of the business of the Legislative Assembly shall not be inconsistent with the Rules of Procedure and Conduct of Business in House of People (Lok Sabha).
  3. The Legislative Assembly shall not make any rule to enable itself or its Committees to consider the matters of day-to-day administration of the Capital or conduct inquiries in relation to the administrative decisions.
  4. Before taking any executive action in pursuance of the decision of the Council of Ministers or a Minister, to exercise powers of Government, State Government, Appropriate Government, Lieutenant Governor, Administrator or Chief Commissioner, as the case may be, under any law in force in the Capital, the opinion of Lieutenant Governor in term of proviso to clause (4) of article 239AA of the Constitution shall be obtained on all such matters as may be specified, by a general or special order, by Lieutenant Governor.

The Statement of Objects and Reasons of the proposed Bill stated that the Bill would promote harmonious relations between the legislature and the executive, and further define the responsibilities of the elected Government and the Lieutenant Governor, in line with the constitutional scheme of governance of National Capital Territory of Delhi, as interpreted by the Hon'ble Supreme Court in its judgment dated the 04th July, 2018, and Division Bench of the Hon'ble Supreme Court, in its judgment dated the 14th February, 2019, which has interpreted the provisions of article 239AA of the Constitution relating to the structure of governance in National Capital Territory of Delhi.

In this regard it becomes imperative to know in detail what the constitution bench judgement of the Supreme Court laid down with regard to the scope and application of Article 239AA in the governance of NCT Delhi as a Union Territory.

While numerous commentators and the proponents of the present Delhi dispensation hailed the judgement as a federal masterstroke, it is clear that they failed in truly gathering the pulse of the judgement. A Constitution Bench of the Supreme Court of India on 4th July, 2018 answered a reference in Govt. of NCT Delhi v. Union of India, signifying the unique nature of the National Capital Territory of Delhi as a Union Territory with an elected regional government but under the administration of the President of India through the Lieutenant Governor.

Article 239AA of the Constitution governs the structure of legislature and executive in NCT Delhi. It provides for a legislature for Delhi directly elected by the people of Delhi and a Council of Ministers from such legislative assembly.

According to Article 239AA (3)(a), the legislative power of the NCT assembly extends to all matters in the state list except three matters (public order, police and land). According to Article 329(4) the executive powers of NCT government extends to all matters for which the NCT Assembly has power to make laws. Interestingly, the Parliament has the power to make laws for the Union Territory of NCT Delhi on matters on Union, State as well as Concurrent List. Therefore, for Delhi the Parliament can make laws for matters in the Union List, and on Land, Public Order and Police while both the NCT Assembly and the Parliament can make laws for other matters in the State List and Concurrent List and in case of conflict the law enacted by Parliament shall prevail.

This presents the unique state of NCT Delhi, conclusively proving that it is a Union Territory and does not have the features of a federal state as all its laws can be repugnant to Parliamentary laws and the NCT government is duty bound to follow and implement such Parliamentary laws which override the laws made by the NCT assembly itself.

Even though legislative powers overlap, the Supreme Court in its judgement dated 4th July, 2018 found that the executive powers vest only in the NCT government. It opined that the principles of representative government and collective ministerial responsibility are fundamental to a democratic setup, which being enshrined as a basic tenet of our Constitution cannot be done away with in favour of a completely centrally administered system when the Parliament in its constituent power by the Sixty-Ninth Amendment had decided to provide for the people of Delhi a representative government. This understanding is embodied by Article 239AA(2)(a) which says that the NCT of Delhi ‘shall’ have a legislative assembly. Therefore, when the Constitution has made it mandatory for Delhi to have an elected assembly and a council of ministers from its members, the aspirations of the people reflected in a democratically elected government which is collectively responsible to an elected assembly embodies our rich democratic principles and should be at the forefront of constitutional interpretation.

The Court vehemently reiterated the position in the NDMC case that the NCT of Delhi still in sum and substance remains a Union Territory and the Lieutenant Governor has more powers that the President as head of Union or the Governor of a State. This is because even though the Lieutenant Governor, like the President or the Governor is bound by the ‘aid and advice’ of the Council of Ministers proviso to Article 239AA(4) gives the power to the Lieutenant Governor that in case of any difference between him and the Council of Ministers, he shall refer the same to the President and the President’s decision shall be binding of the Delhi Government.

In substance, the will of the representative government can be overridden by the decision of the President (who acts by aid and advice of the Union) if the Lieutenant Governor has differences with the Delhi government on such issue. This unique power was vested keeping in mind that the Union has considerable stake in functioning of a National Capital.

In its judgment dated 14th February, 2019 in Govt. of NCT of Delhi vs. Union of India, the Hon’ble Supreme Could of India reiterated what it had already said earlier in its judgment dated 4th July, 2018, holding on four counts out of the six in dispute before it, either the exclusive or the discretionary domain of the Lieutenant Governor.

Firstly, the Supreme Court held that the Anti-Corruption Branch (ACB) of NCT Delhi could only investigate officers of the Delhi government and not of the Central government. It is important to note that the dispute over ACB was a huge political push and pull between the LG and the Delhi government, who played victimization at being unable to ‘put to task’ ‘errant’ central officials, allegedly being protected by the LG. it is pertinent to point out that by Notifications in 1986 and 1993 the Anti-Corruption Branch of Delhi Police had been notified as a ‘police station’ under the Criminal Procedure Code. In 2014 and 2015, notifications were issued stating that the ACB could only prosecute officials of the government of NCT Delhi and not Central employees. In rejecting a challenge on these notifications, the Court rightly reiterates the principles laid down by the Constitution Bench. It said that both the text of Article 239AA and all the three concurring opinions of the Constitution Bench judgement unanimously held that Entry 2 of List II (Schedule VII of the Constitution), i.e., ‘Police’, is excluded from both the legislative and executive domain of NCT Delhi. The following view in paragraph 108 and 109 leave no ambiguity –

We are of the opinion that the scope of the term ‘Police’ as occurring in Entry 2 of List II cannot, therefore, be artificially restricted or limited to only constitution of the Police force, but would take within its fold the legislative (and, therefore, executive) power to exercise supervision and control over the functioning of the Police so constituted, including by way of issuance of executive directions delineating the powers, functions and jurisdiction of different wings/sections of the Police. In essence, the impugned notifications, to the extent they are in the nature of administrative directions to the Police, are directly relatable to Entry 2 of List II and as such squarely within the competent of the Government of India. … Moreover, Entry 2 List II would also include the determination as to the nature and scope of investigations to be done by the Police. Therefore, while establishing the ACB as a Police Station, it would be permissible to circumscribe and limit the investigation sphere of the ACB.”    

Secondly, on the issue of Commissions of Inquiry Act, the Court again held in favour of the Centre. The question was on the interpretation of ‘appropriate government’ under the Commissions of Inquiry Act. Section 2(a) defines both central government and state government under the Act. The dispute was whether the government of NCT Delhi can be called a ‘state government’ under the Act, which effectively meant the power in relation to appointing commissions under the Act. The Court referred to the General Clauses Act, specifically Section 3(60) which says that ‘state government’, shall mean, in a Union territory, the Central Government. This is precisely put in the following observation in paragraph 132 –

“However, we are concerned with the meaning of ‘State Government’ which is defined in Section 3(60) of the GC Act. Here, it is specifically provided that in respect of Union Territory, the State Government would mean the Central Government.”

The court also relies on an earlier decision in relation to Goa when it was a Union Territory (Goa Sampling Employees’ Association case, (1985) 1 SCC 206), where the question was who could refer an industrial dispute in Goa to the industrial tribunal, the administrator or the central government? In answering the question, it was held that the ‘State Government’ in a Union Territory would mean the ‘Central Government’, in terms of Section 3(60) of the General Clauses Act. It would not be constitutionally correct to describe the Administration of a Union Territory as a “State Government.

In conclusion, the court held “We, therefore, are unable to accept the submission of Mr. Naphade that the expression ‘State Government’ occurring in Section 2(a) of the COI Act would mean GNCTD, a Union Territory.”

Thirdly, on the issue of revision of agricultural land (circle rates) under the Indian Stamp Act, the court gave a balanced view, ultimately siding with the constitutional primacy of the LG, over and above the NCT Delhi government. The revenue department of the Delhi government had revised the minimum rates on which stamp duty was to be paid in relation to sale/transfer of agricultural land. The court summarized the issue as one relatable to Entry 18 of State List (List II), i.e., rights in or over land, or Entry 63 of List II, i.e., Rates of stamp duty. It is pertinent to note that Article 239AA excludes Entry 18, i.e., Land, from legislative and executive domain of NCT Delhi. Hence, on Entry 18, only Parliament can enact and LG can take decisions while on Entry 63, being in the State List and not being an exception like Entry 18, only Delhi assembly and Delhi government can enact and take decisions. The court, in answering this question, holds in paragraph 158 “Circle rates are fixed for the purpose of payment of stamp duty. Therefore, they do not pertain to ‘land’ namely rights in or over land, land tenures etc. or transfer of alienation of agricultural land etc. Stamp duty is not a duty on instrument but it is in reality a duty on transfer of property.”

The irresistible takeaway from this finding would be that the Court finds charge of stamp duty to be relatable to Entry 63, and thus by implication, not in the domain of the centre but of the government of NCT Delhi. However, it is the subsequent caveat which encapsulates the limitations of a government in the Delhi Secretariat, which the present dispensation is not only ignorant about but continues to repel. It is trite to quote them verbatim, (paragraph 163) –

“…the proviso recognises that there may be contingencies where LG and his Ministers may differ. In such circumstances, LG is supposed to refer the matter to the President for decision and act according to the decision given thereon by the President. It means that final say, in case of different between LG and Council of Ministers, is that of the President. Such a scheme of things clearly contemplates that the Council of Ministers is supposed to convey its decisions to the LG to enable the LG to form his view thereupon. The decision cannot be implemented without referring the same to the LG in the first instance. More pertinently, the decision here touches upon the governance of the UT. Therefore, we agree with the conclusion of the High Court that views of LG should have been taken before issuing circular dated August 4, 2015.”

On two issues, the Court sided with the arguments of the Delhi government. However, as would be seen in the following, these issues pertained to perceptibly micro-administrative decisions of a government, which rightly ought to be within the powers of the locally elected government in a democratic setup. Nevertheless, they do not take away from the broad architecture of a Union Territory that is the NCT of Delhi and the overarching principles of ‘Union interest in the governance of a UT, more so the national capital’ and constitutionally protected discretionary powers of the LG.

One of these issues was appointment of Special Prosecutors under the Criminal Procedure Code. The court again relied on the General Clauses Act to reiterate that ‘state government’ for a UT means the President and the Administrator. Hence, LG had the right to appoint Special Prosecutors. However, as this power was relatable to Entries 1 and 2 of List III (Concurrent List), from which scope of the government of NCT Delhi is not barred, the LG could appoint only on the aid and advice of the Council of Ministers of NCT Delhi.

The second issue was the power of the Delhi government to issue directions to the State Commissioner under the Electricity Acts. Here, the Act provided under Section 2(5) that apart from enlisted purposes, for any other purpose the state government will have jurisdiction under the Act.  Thus, the court held that this is relatable to local government where the LG is duty bound to act on the aid and advice of the Council of Ministers.

We come to the most contentious dispute last, not because the outcome is any different than the other ‘big battles’ the Delhi government as seen above had taken up and lost. The reason is that a correct legal reading on this issue of ‘Services’ tells us that the findings of both the judges had elements of overlap and distinctiveness in them. In other words, while both the judges reason similarly, they come to slightly different conclusions which now needs a larger bench to decide the issue afresh. Nevertheless, as we will see, one view is convincingly in favour of the centre while the other view is balanced, slightly hinging in favour of the LG’s exercise of powers. Therefore, in no way can the Delhi government claim respite that the issue will be heard afresh.

There was unanimity that for All India Services like IAS, IPS the cadre was a common UT cadre of which Delhi was only one among many, and likewise were the DANICS and DANIPS (Delhi, Andaman and Nicobar Civil Services and Police Services respectively). Thus, they were administered by the Home Ministry, and the Central government had the powers to allocate/transfer personnel from one UT to another.

The question was whether once the personnel are allocated to NCT Delhi by the Home Ministry, does the government of NCT Delhi have the power to post such personnel at different places within the Delhi government.

The fulcrum to the answer was whether the Delhi Assembly has legislative competence, and by consequence the Delhi government has the executive powers, with respect to Entry 41 of List II (State List). Entry 41 deals with ‘State Public Services’ and ‘State Public Service Commission’. It is well known that Delhi does not have a State Public Service Commission. Further, the nature of All India Services, DANICS and DANIPS as discussed above for UTs, they cannot be called State Service for the singular reason that the cadre is controlled, transferred and posted by the Home Ministry and serves multiple UTs, not only Delhi. Hence, Entry 41 being of no avail to the nature of the Union Territory that is Delhi, and in the absence of legislative competence in this regard, matters pertaining to ‘services’ ought to squarely fall within the discretionary domain of the LG, as provided by Section 41 of the Government of NCT Delhi Act. This is precisely what Justice Bhushan also holds, in paragraph 42 of his separate opinion –

“I having held that Entry 41 of List II of the Seventh Schedule of the Constitution is not available to the Legislative Assembly of GNCTD, there is no occasion to exercise any Executive power with regard to “Services” by the GNCTD.”

Justice Sikri, on the other hand, also relies on IAS Service Rules and DANICS Rules to point out that according to the former, state includes a Union Territory and according to the later, Administrator is empowered to make postings, who ought to function on the aid and advice of his Council of Ministers.

However, what is perplexing in this need to balance the control over services is when interpretation of Article 239AA(4), Entry 41 in List II, Schedule VII of the Constitution, and a legislative provision (namely Section 41 of GNCTD Act) lead to one interpretation as discussed above, can interpretation from Service Rules, which are delegated legislations, lie in the face of Constitutional interpretation and legislative provisions? Rules of interpretation force us to answer vehemently in the negative.

Even then, Justice Sikri ruled that transfers and postings of Secretaries, HODs and officers on the scale of Joint Secretary and above is within the executive domain of the LG. Even for other levels (logical corollary is the levels below those already mentioned above), “In case of difference of opinion between the Lieutenant Governor and the Chief Minister, the view of the Lieutenant Governor should prevail and the Ministry of Home Affairs can issue a suitable notification in this regard.” (paragraph 90)

In summary, the Hon’ble Supreme Court upheld the democratic principles within the sphere of the unique structure of the NCT of Delhi, strengthening through the constitutional trust reposed in the Lieutenant Governor and thereby upholding the legitimate interest of the Union in the governance of the NCT of Delhi.

It would be interesting to see how the Hon’ble Supreme Court would now deal with the Delhi Government’s plea for hearing against GNCTD (Amendment) Act, 2021.


(The authors are advocates practicing in the Supreme Court of India.)