Tussle for Control of “Services” – Ultimate Saga of Never-Ending Battle of Federalism Between Union and GNCTD

Prelude to the dispute

In 2016, the Delhi High Court, in Rajender Prashad v. State (NCT of Delhi)¹, ruled that despite the existence of Article 239-AA in the Constitution of India, Delhi remains a Union Territory, and the Lieutenant Governor (LG) holds the position of the Executive Head of the National Capital Territory (NCT). Article 239 grants the LG the authority to act independently of the Council of Ministers. Consequently, the Delhi Government’s establishment of Inquiry Commissions to investigate the 2002 CNG fitness scam and the illegal activities of the Delhi and District Cricket Associations was deemed illegal as they were formed without the LG’s agreement. The ruling stipulated that the Council of Ministers must seek the approval of the LG for any administrative decisions made.

The 2018 Constitution Bench judgment², established that the Government of National Capital Territory of Delhi (GNCTD) differs from other Union Territories, and Parliament exercised its constituent power to recognise it as a representative form of Government. According to the ruling, the executive power of National Capital Territory of Delhi (NCTD) is equal to its legislative power, encompassing all matters over which it has the authority to legislate. This implies that the legislative and executive power of NCTD extends to subjects listed in Lists II and III, except for those explicitly excluded. However, under Article 239-AA(3)(b), Parliament retains the power to enact laws pertaining to subjects in Lists II and III for NCTD; Entries 1, 2 and 18 of List II of the Seventh Schedule (public order, police and land) and Entries 64-66 of List III (Concurrent List) insofar as they relate to the aforesaid entries in the State List (List II). Additionally, the phrase “insofar as any such matter is applicable to Union Territories” is inclusive rather than exclusive and cannot be used to limit the legislative power of the Legislative Assembly of Delhi.

Overview

The Supreme Court of India emphasised on the importance of ensuring that the governance of States is not taken over by the Central Government, while delivering a crucial verdict confirming that the control over administrative services — barring those related to public order, police, and land in the national capital, belonged to the GNCTD.

The matter in State (NCT of Delhi) v. Union of India³ at hand revolves around the conflict between the Government of NCT and the Central Government regarding the administrative control of transfers and postings of civil servants, including those belonging to the IAS (Indian Administrative Service) and IPS (Indian Police Service), who have been assigned to Delhi by the Union Government. Additionally, the issue also pertains to the legislative and executive powers of the NCT Government concerning “services” as defined in Schedule VII List II and Entry 41⁴ of List II of the Seventh Schedule to the Indian Constitution.

Unanimous view

There was extensive examination of features of Indian federalism and the domains of competence of the Centre and the States and it was observed that federalism – a basic structure of the Constitution – in a multi-cultural, multi-religious, multi-ethnic and multi-linguistic country like India ensured the representation of diverse interests, the Bench said, before adding,

“81. It is a means to reconcile the desire of commonality along with the desire for autonomy and accommodate diverse needs in a pluralistic society. Recognising regional aspirations strengthens the unity of the country and embodies the spirit of democracy”.⁵

It further observed:

“81. Thus, in any Federal Constitution, at a minimum, there is a dual polity, that is, two sets of Governments operating: one at the level of the National Government and the second at the level of the regional federal units. These dual sets of Governments, elected by ‘We the People’ in two separate electoral processes, are a dual manifestation of the public will. The priorities of these two sets of Governments which manifest in a federal system are not just bound to be different but are intended to be different.”⁶

Cooperative federalism

Cooperative federalism is a concept that refers to the collaboration and interdependence between the Central Government and the State or regional Governments within a federal system. In a cooperative federalism model, the different levels of Government work together to address common goals, share responsibilities, and jointly make decisions that affect the entire country or region. This approach emphasises cooperation, coordination, and mutual support among the various levels of Government to effectively govern and serve the interests of the people. It often involves the sharing of resources, policymaking, and implementation of programs to achieve collective objectives while respecting the autonomy and jurisdiction of each level of Government. In the present judgment, it was emphasised that if the overarching democratic structure is a wheel, that being the Union, the democratic unit, that is, NCTD needs to align itself as a cog in the wheel, and work in tandem rather than in a manner to undercut the Union.

Sui generis status

Black’s Law Dictionary defines “sui generis” as “of its own kind or class; unique or peculiar”. The Supreme Court has previously granted sui generis status to even the Constitution of India in K.C. Vasanth Kumar v. State of Karnataka⁷. As per the court’s perspective, the Constitution of India is unique and exceptional in nature, being inherently sui generis. It originated in specific circumstances and encompassed distinct elements such as Geography, History, Economics, and more, which set it apart from other countries’ Constitutions. Consequently, attempting to interpret the Indian Constitution by strictly applying general rules of statutory interpretation would be entirely inappropriate. The court implies that the Constitution cannot be confined to rigid compartmentalisation and requires a nuanced and contextual understanding beyond standard interpretative approaches. However, while this judgment leaves no stone unturned while clarifying that, “NCTD is not similar to other Union Territories. By virtue of Article 239-AA, NCTD is accorded a ‘sui generis’ status, setting it apart from other Union Territories;…”, the same cannot become a basis for political brinksmanship.

Definition of “Services”

The central question in this case revolved around determining the extent of legislative and executive authority held by the Government of NCT of Delhi concerning “services” as outlined in Schedule VII List II and Entry 41 of the Indian Constitution. Additionally, the case explored whether the officers belonging to different “services” like IAS, IPS, Delhi, Andaman & Nicobar, Lakshadweep, Daman and Diu and Dadra and Nagar Haveli (Civil) Services (DANICS), and Delhi, Andaman & Nicobar, Lakshadweep, Daman and Diu and Dadra and Nagar Haveli (Police) Services (DANIPS), who were assigned to Delhi by the Union of India, fell under the administrative jurisdiction of the Government of National Capital Territory of Delhi (GNCTD).

GNCTD possesses legislative and executive authority over “services,” specifically Entry 41 of List II in the Seventh Schedule. This authority is derived from the application of the definition of “State” as outlined in Section 3(58) of the General Clauses Act, 1897, which is applicable to Part XIV of the Constitution. Consequently, Part XIV extends to Union Territories, thereby granting the NCTD the power to make laws concerning Entry 41 of the State List. It should be noted that the exercise of rule-making power under the proviso to Article 309 does not invalidate the legislative authority of the appropriate governing body.

Article 309 of the Constitution of India provides the following:

“309. Recruitment and conditions of service of persons serving the Union or a State.— Subject to the provisions of this Constitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State:

Provided that it shall be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor [***] of a State or such person as he may direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment, and the conditions of service of persons appointed, to such services and posts until provision in that behalf is made by or under an Act of the appropriate legislature under this article, and any rules so made shall have effect subject to the provisions of any such Act.”

The Government of NCTD has the authority and responsibility for the legislative and executive control over services like the Indian Administrative Services and joint cadre services. These services play a crucial role in implementing policies and fulfilling the vision of NCTD for the effective day-to-day administration of the region. Even if the officers serving under these services were not originally recruited by NCTD, they can still serve within NCTD. To illustrate this point, certain rules clearly outline the division of control between the Union and the States regarding all India or joint cadre services. NCTD, like other States, operates as a representative form of Government. The involvement of the Union of India in NCTD’s administration is constrained by constitutional provisions, and any further expansion would contradict the constitutional framework of governance.

While much can be surmised about our version of federal polity and the organisation of powers vis-à-vis the Centre and the State and Union Territories, in the present judgment the very core question lies with the governance of civil servants. This very fact makes it important to have a long and hard look at the phenomenon of civil services.

In a Constitutional Government following the Westminster style, it is difficult to conceive a situation where the elected political executive, who is accountable to the people, lacks any practical authority over the officials in the Government of NCT of Delhi, who are crucial for accomplishing the government’s tasks. The elected executive requires the cooperation and support of these officials to effectively carry out their responsibilities. The absence of functional control by the elected executive over these officials creates a significant challenge in ensuring efficient governance and fulfilling the expectations of the people.

Very importantly the judgment emphasises upon the fact that civil servants are required to be politically neutral. Finally laying the debate to rest, this judgment takes a holistic approach and first notes that NCTD has legislative and executive power with respect to “services” under Entry 41, a natural question that arises is as to the extent of control of NCTD over “services”. Then it also acknowledges that the excluded entries of public order, police and land are inextricably linked with “services”.

It is essential to make a clear distinction while considering the extent of legislative and executive power granted to NCTD by the Constitution and the principles of constitutional governance established for NCTD in the 2018 Constitution Bench judgment⁸. The scope and limitations of NCTD’s authority, as outlined in the Constitution, need to be considered, along with the guiding principles for constitutional governance set forth in the aforementioned judgment. By understanding and applying these constitutional provisions and principles, a proper framework for governance in NCTD can be established and upheld.

Conclusion

This judgment, rather unanimous verdict of the Supreme Court, clarifies that NCTD is unique, and its governance cannot be corralled with that of other Union Territories as that would amount to an antithesis to the concept of federalism and negate the legislative intent of Article 239-AA of the Constitution of India. NCTD does have legislative and executive powers over “services”, as provided in Entry 41 of List II of the Seventh Schedule, save and except those services which relate to Entries 1, 2 and 18 of the State List which are specifically excluded and therefore, the same is not ousted by the exercise of rule-making power under proviso to Article 309. The LG is bound by the aid and advice of the Council of Ministers of NCTD in relation to matters within the legislative scope of NCTD.

The authors hope that this judgment shall pave the path for the end of tussle for power in Delhi between the Centre and the democratically elected Government of National Capital Territory of Delhi, which must result in better governance with the balance of cooperative federalism.

Note: Post the Constitution Bench judgment in State (NCT of Delhi) v. Union of India (supra), the Central Government on 19-05-2023, promulgated an Ordinance to amend Government of National Capital Territory Act, 1991 read with Article 239-AA wherein Entry 41 of the State List (Services of the State and State Public Service Commission) has been added to the existing list of items (1, 2, 18) from the State List which stand excluded from the legislative power of the Democratically elected government of National Capital Territory of Delhi. The Lieutenant Governor of Delhi has been given overriding powers to act in discretion in cases of conflict of decisions with the committee headed by the Chief Minister of Delhi. The Ordinance also envisages creation of a National Capital Civil Services Authority headed by the Chief Minister of Delhi who shall make recommendations for transfers and postings of administrative officers in NCTD which shall be finalized by the Lieutenant Governor.

Further in addition to the aforesaid ordinance, the Central Government has filed a Review Petition against the judgment of the Constitution Bench of the Supreme Court dated 11-05-2023 which had envisaged that NCTD has powers to legislate regarding matters related to ‘services’ under Entry 41 of List II save and except the services related to Entries 1, 2, 18 of List II.