The Supreme Court on Thursday held that the national capital was a Union Territory, where the Centre had the power to appoint a Commission of Inquiry (CoI) and not the Delhi government.
The top court said there was no "state government" in the Union Territory and the state government (for this purpose) would mean the central government.
It upheld the August, 2016 judgment of the Delhi High Court, saying the power to appoint a CoI rested with the Centre.
A bench of justices A K Sikri and Ashok Bhushan said it was unable to accept the submission of the Aam Aadmi Party-led Delhi government's counsel that the expression "state government" in section 2(a) of the Commission of Inquiry Act would mean the government of NCT (National Capital Territory) of Delhi, a Union Territory.
"It is not for us to deal with the argument...that Entry 45 of List III confers legislative and executive competence on GNCTD and, therefore, GNCTD can pass an appropriate order appointing a Commission of Inquiry in exercise of its executive powers.
"In the instant case, we are concerned with the notification dated August 11, 2015, which was passed under the CoI Act. We, therefore, uphold the judgment of the high court on this aspect," the bench said.
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The Directorate of Vigilance of the Delhi government had on August 11, 2015 appointed a CoI to go into all aspects of awarding of work related to the grant of CNG fitness certificates in the transport department and there was a subsequent probe.
The August 11, 2015, notification was issued without placing it before the Lieutenant Governor for his views or concurrence.
On the issue of setting up of a CoI, the bench relied upon the verdict of a Constitution bench of the apex court delivered on July 4 last year in the Delhi-Centre row and said "there is no 'state government' in the Union Territory and the state government (for this purpose) shall mean the central government".
Of the six contentions issues, the Delhi government won in three and lost to the Centre on the critical aspects of power to probe central government employees and setting up of inquiry commissions. The issue related to who would have powers over transfers and postings of Delhi government officers was referred to a larger bench.
The bench said there was no doubt that the definition of "state" in section 3(58) of the General Clauses (GC) Act included Union territories.
"However, we are concerned with the meaning of 'state government', which is defined in section 2(60) of the GC Act. Here, it is specifically provided that in respect of Union territories, the state government would mean the central government," it said.
The Centre's counsel had contended that the August 11, 2015 notification constituting a CoI was violative of the Government of National Capital Territory of Delhi (GNCTD) Act and it was the result of the mala fide powers of the GNCTD.