2023 (5) TMI 1462 - SC - Indian Laws

NCTD declared sui generis; Assembly controls List II and III except exclusions under Article 239AA(3)(a); Entry 41 covers services

SC held that the NCTD is sui generis and its Legislative Assembly has competence over List II and III subjects except those expressly excluded by Article ... Scope of legislative and executive powers of the Centre and National Capital Territory of Delhi (NCTD) with respect to the term “Services” - Contest of power between a Union Territory and the Union Government - who would have control over the “services” in the NCTD the Government of NCTD (GNCTD) or the Lieutenant Governor acting on behalf of the Union Government? - effect of notification (2015 notification) dated 21 May 2015 issued by the Union Ministry of Home Affairs. HELD THAT:- The following have been derived as conclusions: a. There does not exist a homogeneous class of Union Territories with similar governance structures; b. NCTD is not similar to other Union Territories. By virtue of Article 239AA, NCTD is accorded a “sui generis” status, setting it apart from other Union Territories; c. The Legislative Assembly of NCTD has competence over entries in List II and List III except for the expressly excluded entries of List II. In addition to the Entries in List I, Parliament has legislative competence over all matters in List II and List III in relation to NCTD, including the entries which have been kept out of the legislative domain of NCTD by virtue of Article 239AA(3)(a); d. The executive power of NCTD is co-extensive with its legislative power, that is, it shall extend to all matters with respect to which it has the power to legislate; e. The Union of India has executive power only over the three entries in List II over which NCTD does not have legislative competence; f. The executive power of NCTD with respect to entries in List II and List III shall be subject to the executive power expressly conferred upon the Union by the Constitution or by a law enacted by Parliament; g. The phrase ‘insofar as any such matter is applicable to Union Territories’ in Article 239AA(3) cannot be read to further exclude the legislative power of NCTD over entries in the State List or Concurrent List, over and above those subjects which have been expressly excluded; h. With reference to the phrase “Subject to the provisions of this Constitution” in Article 239AA(3), the legislative power of NCTD is to be guided, and not just limited, by the broader principles and provisions of the Constitution; and i. NCTD has legislative and executive power over “Services”, that is, Entry 41 of List II of the Seventh Schedule because: (I) The definition of State under Section 3(58) of the General Clauses Act 1897 applies to the term “State” in Part XIV of the Constitution. Thus, Part XIV is applicable to Union territories; and (II) The exercise of rule-making power under the proviso to Article 309 does not oust the legislative power of the appropriate authority to make laws over Entry 41 of the State List. The issue referred to this Constitution Bench by the order dated 6 May 2022 is answered. The Registry shall place the papers of this appeal before the Regular Bench for disposal after obtaining the directions of the Chief Justice of India on the administrative side. ISSUES PRESENTED AND CONSIDERED 1. Whether the National Capital Territory possesses legislative competence and concomitant executive control over 'services' under Entry 41 of List II of the Seventh Schedule. 2. The scope and effect of the phrase 'insofar as any such matter is applicable to Union Territories' in Article 239AA(3)(a): whether it is inclusionary or exclusionary for the legislative competence of the National Capital Territory. 3. The effect of the opening limitation 'Subject to the provisions of this Constitution' in Article 239AA(3)(a) on the legislative and executive powers conferred thereby. 4. Whether Part XIV of the Constitution (services and public service commissions) and the definition of 'State' for purposes of Part XIV apply to Union Territories including the National Capital Territory. 5. The division and delimitation of legislative and executive powers between the Union and the National Capital Territory in respect of List II and List III subjects (including the interplay of Articles 73, 162 and 239AA(3)-(4)). 6. The permissible extent of Union control over services in the National Capital Territory in light of constitutional text, rules of business and the need to preserve democratic accountability (the 'triple chain' of ministerial-bureaucratic-legislative accountability). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Legislative competence and executive control over 'services' (Entry 41) Legal framework: Article 239AA(3)(a) grants the Legislative Assembly power to make laws with respect to matters in the State List and Concurrent List 'insofar as any such matter is applicable to Union Territories' except Entries 1, 2 and 18 and related Entries 64-66; Article 239AA(4) confers a Council of Ministers to aid and advise the Lieutenant Governor 'in relation to matters with respect to which the Legislative Assembly has power to make laws.' Entry 41 of List II covers 'State Public Services; State Public Service Commission.' Part XIV (Arts. 308-323) regulates services and public service commissions; Art. 309 provides transitional rule-making power to President/Governor. Precedent treatment: Earlier decisions (including a four-judge decision relied upon) recognised applicability of Part XIV constructs to Union Territories in suitable contexts (e.g., recognition of all-India/State cadre rules). The 2018 Constitution Bench and concurring opinions construed Article 239AA expansively to confer broad legislative and co-extensive executive powers on the National Capital Territory, except where expressly excluded. Interpretation and reasoning: The Court applies purposive and contextual interpretation of Article 239AA, holding that Entry 41 is not expressly excluded and therefore falls within the Legislative Assembly's competence. Executive power flows co-extensively from legislative competence under Article 239AA(4). The existence of central rule-making under Art. 309's proviso is transitional and does not negate the substantive legislative power of the local legislature. Ratio vs. Obiter: Ratio - National Capital Territory has legislative competence and corresponding executive control over 'services' under Entry 41, subject to the specific exclusions in Article 239AA(3)(a) and to any Parliamentary law that may override or limit such competence. Discussion of specific statutes enacted by the Territory (e.g., Fire Service Act) is applied as evidentiary support and forms part of the operative reasoning. Conclusions: The National Capital Territory possesses legislative and executive authority over 'services' (Entry 41) except insofar as those services are integrally connected to excluded entries (public order, police, land) or where Parliament has enacted law altering competence. Issue 2 - Meaning of 'insofar as any such matter is applicable to Union Territories' in Article 239AA(3)(a) Legal framework: The phrase appears in Article 239AA(3)(a) qualifying legislative competence over State and Concurrent List matters. The interpretation interacts with the General Clauses Act (s.3(58)) and prior authorities on whether 'State' includes Union Territories for constitutional provisions. Precedent treatment: The 2018 Constitution Bench (majority and concurring opinions) treated the phrase as not exclusionary; historical authorities caution that 'State' may not always include Union Territories when repugnant to context (Kanniyan, NDMC), but later authorities (Advance Insurance; Prem Kumar Jain) support application of the General Clauses Act inclusive definition where context permits. Interpretation and reasoning: The phrase was introduced as a facilitative measure to make entries that use 'State' available to the National Capital Territory without wholesale amendment of the Seventh Schedule. Context, constitutional history, and the constitutional design of Article 239AA show the phrase is inclusionary; read restrictively would defeat the intent to create a sui generis representative government for the capital. Concurring reasoning, statutory practice (GNCTD Act and enacted laws), and the need to harmonize entries support an inclusive reading. Ratio vs. Obiter: Ratio - the phrase is not to be read as a further implied exclusion of entries from the Legislative Assembly's competence beyond those expressly carved out by Article 239AA(3)(a). Conclusions: The phrase 'insofar as any such matter is applicable to Union Territories' must be read inclusively; it does not, by itself, exclude Entry 41 or other List II/III entries from the Legislative Assembly's competence unless context or specific constitutional text provides otherwise. Issue 3 - Effect of 'Subject to the provisions of this Constitution' in Article 239AA(3)(a) Legal framework: The opening qualifier mirrors similar limitations in Articles 245, 73 and 162 and denotes that legislative/executive powers are constrained by other constitutional provisions, justiciable mandatory limitations, and the scheme of federal distribution. Precedent treatment: Courts have treated such qualifiers as indicators that legislative/executive power is not absolute and must be exercised within constitutional boundaries (including fundamental rights, distribution rules, and other express constraints). Interpretation and reasoning: The clause requires that the Territory's law-making and executive action conform to the Constitution's other mandates and to any Parliamentary law applicable under Article 239AA(3)(b)-(c) and (7). It is not a free-standing vehicle to read broad additional exclusions into the local legislature's domain; rather it guides interpretation in light of constitutional structure and limits. Ratio vs. Obiter: Ratio - the qualifier imposes constitutional bounds but does not independently retract legislative competence over Entry 41 where text and context support such competence. Conclusions: The Legislative Assembly's powers are to be exercised subject to the Constitution and any Parliamentary law, but the phrase does not operate to narrow Article 239AA(3)(a) beyond its express terms. Issue 4 - Applicability of Part XIV and the meaning of 'State' for Part XIV Legal framework: Part XIV addresses services under the Union and States; Art. 308 and Article 366 definitions, the General Clauses Act s.3(58) (as adapted), Article 372A adaptations, and precedent on whether the term 'State' includes Union Territories for various Articles. Precedent treatment: Advance Insurance and Prem Kumar Jain held that the General Clauses Act inclusive definition applies unless repugnant in subject/context; contrary older authority (Kanniyan, Shiv Kirpal Singh) has been discussed and limited. Interpretation and reasoning: The Court holds that the amended General Clauses Act definition applies to constitutional interpretation in the absence of contextual repugnancy; there is nothing in Part XIV's subject-matter that compels exclusion of Union Territories. The transitional rule-making power under Art. 309 proviso does not displace the substantive legislative competence of the appropriate legislature. Ratio vs. Obiter: Ratio - Part XIV is applicable to Union Territories for relevant purposes and the term 'State' in Part XIV may include Union Territories where context does not require otherwise. Conclusions: Part XIV applies to Union Territories including the National Capital Territory; the National Capital Territory can consequently exercise functions under Entry 41, subject to constitutional limitations and any Parliamentary law. Issue 5 - Division of legislative and executive powers between the Union and the National Capital Territory Legal framework: Articles 246, 73, 162, and Article 239AA(3)-(4) set out legislative fields and corresponding executive powers; Article 239AA(3)(b) and (c) give Parliament wide law-making and repugnancy-overriding power in relation to the National Capital Territory. Precedent treatment: The 2018 Constitution Bench concluded that the Territory's executive power is co-extensive with its legislative power, and Parliament retains the capacity to legislate for the Territory on any subject and to prevail in cases of repugnancy. Interpretation and reasoning: The executive authority of the National Capital Territory extends over subjects on which it may legislate (except expressly excluded entries); the Union's executive control within the Territory is limited to those excluded subjects or to situations where Parliament has enacted law conferring Union executive power. Transaction of Business Rules and GNCTD Act procedural safeguards reconcile the Lieutenant Governor's limited discretion with the Council of Ministers' aid and advice role. Ratio vs. Obiter: Ratio - executive power of the Territory is co-extensive with its legislative competence except for the three excluded entries; Parliament's plenary legislative power over the Territory and repugnancy provisions preserve Union primacy where constitutionally provided or legislated. Conclusions: The Territory's legislature and executive have broad competence over List II/III subjects except Entries 1, 2, 18 (and related Entries 64-66 to that extent); the Union retains legislative primacy and executive competence where the Constitution or Parliamentary law so provides. Issue 6 - Control of services, administrative rules and democratic accountability Legal framework: Westminster principles of ministerial responsibility; Part XIV; Transaction of Business Rules; GNCTD Act (notably ss.41, 44, 46, 49) which define Lieutenant Governor discretion, rule-making, and President's control. Precedent treatment: Authorities emphasise civil service centrality to governance and the necessity of administrative control residing with elected ministers to preserve the triple chain of accountability (bureaucracy ? ministers ? legislature ? electorate). Interpretation and reasoning: Constitutional design and Article 239AA's purposive reading require that civil servants deployed in the Territory be accountable to the elected government for matters within the Territory's competence; where services are within the Territory's legislative domain (Entry 41 excluding public order/police/land), the Lieutenant Governor must act on aid and advice of the Council of Ministers, and rules providing for postings and other administrative actions are to be interpreted so as to give effect to democratic accountability. The Lieutenant Governor's discretion is limited to matters outside the Territory's domain or where law requires independent action; Transaction of Business Rules prescribe reference to the President only in rare/resolved circumstances. Ratio vs. Obiter: Ratio - civil service control in the Territory must, to the extent constitutionally permissible, be exercised so as to preserve accountability to the elected government; central rules and cadres must be read and applied so as to enable the Territory Government to exercise administrative control over officers serving in connection with the Territory's affairs. Conclusions: Democratic accountability and the triple chain require that the Territory have operational control over services within its constitutional domain; where central rules refer to 'State Government' or to services in the Territory, they must be construed to recognise the role of the Territory Government and the Lieutenant Governor acting in accordance with aid and advice, subject to constitutionally specified exceptions. OVERALL CONCLUSION The National Capital Territory is a sui generis Union Territory endowed by Article 239AA with legislative competence over State List and Concurrent List matters 'insofar as applicable to Union Territories,' and that phrase is inclusionary. Part XIV applies to Union Territories; Entry 41 (services) is within the Legislative Assembly's competence (subject to express exclusions concerning public order, police and land and subject to Parliamentary law). Executive power is co-extensive with legislative power within that domain, and administrative control over services must be exercised so as to preserve democratic accountability, with the Lieutenant Governor's discretionary role confined to constitutionally specified exceptions and procedures.