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Concept of Federal Balance : Government of NCT of Delhi Vs. Union of India [SC JUDGMENT]

Constitution of India, 1950 – Arts. 239, 239A & 239AA - Government of National Capital Territory of Delhi Act, 1991 - Transaction of Business of the Government of National Capital Territory of Delhi Rules, 1993 - Interpretation of - Ideals / Principles of Representative Governance - Constitutional morality - Constitutional objectivity - Constitutional Governance and the Conception of Legitimate Constitutional Trust - Collective Responsibility - Federal Functionalism and Democracy - Collaborative Federalism - Pragmatic Federalism - Concept of Federal Balance - Interpretation of the Constitution - Purposive interpretation - Constitutional Culture and Pragmatism - Interpretation of Article of the Constitution - Status of NCT of Delhi - Executive power of the Council of Ministers of Delhi - Essence of Article 239AA of the Constitution - Constitutional Renaissance.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

(Dipak Misra, CJI) (A.K. Sikri, J.) (A.M. Khanwilkar, J.) (Dr. D.Y. Chandrachud, J.) (Ashok Bhushan, J.)

July 04, 2018
CIVIL APPEAL NO. 2357 OF 2017
Government of NCT of Delhi … Appellant
Versus
Union of India & Another … Respondents
WITH
CONTEMPT PETITION (CIVIL) NO. 175 OF 2016 IN WRIT PETITION (CRIMINAL) NO. 539 OF 1986 CIVIL APPEAL NO. 2358 OF 2017 CIVIL APPEAL NO. 2359 OF 2017 CIVIL APPEAL NO. 2360 OF 2017 CIVIL APPEAL NO. 2361 OF 2017 CIVIL APPEAL NO. 2362 OF 2017 CIVIL APPEAL NO. 2363 OF 2017 CIVIL APPEAL NO. 2364 OF 2017 AND CRIMINAL APPEAL NO. 277 OF 2017
J U D G M E N T
Dipak Misra, CJI (for himself, A.K. Sikri and A.M. Khanwilkar, JJ.) 
CONTENTS
127. Another complementary concept in this context, we think, is “federal balance”. Federalism in contradistinction to centralism is a concept which envisions a form of Government where there is a distribution of powers between the States and the Centre. It has been advocated by the patrons of the federal theory that the States must enjoy freedom and independence as much as possible and at the very least be on an equal footing with the Centre. The Indian Constitution prescribes a federal structure which provides for division of powers between the States and the Centre, but with a slight tilt towards the Centre. This unique quasifederal structure is inherent in the various provisions of the Constitution as it was felt by the framers of our Constitution keeping in mind the needs of independent India and that is why, the residuary powers in most, if not all, matters have remained with the Centre. This, however, is not unconditional as the Constitution has provided for a federal balance between the powers of the Centre and the States so that there is no unwarranted or uncalled for interference by the Centre which would entail encroachment by the Centre into the powers of the States. The need is for federal balance which requires mutual respect and deference to actualize the workability of a constitutional provision.


128. Sawer's 'federal principles' reiterate this concept of federal balance when he states:
power of the centre is limited, in theory at least, to those matters which concern the nation as a whole. The regions are intended to be as free as possible to pursue their own local interest.” 
129. The interest of the States inherent in a federal form of government gains more importance in a democratic form of government as it is absolutely necessary in a democracy that the will of the people is given effect to. To subject the people of a particular State/region to the governance of the Union, that too, with respect to matters which can be best legislated at the State level goes against the very basic tenet of a democracy. The principle of federal balance which is entrenched in our Constitution has been reiterated on several instances holding that the Centre and the States must act within their own spheres. In In re: Under Article 143, Constitution of India, (Special Reference No. 1 of 1964) (supra), the Constitution Bench observed:
"...the essential characteristic of federalism is the distribution of limited executive, legislative and judicial authority among bodies which are coordinate with and independent of each other'. The supremacy of the Constitution is fundamental to the existence of a federal State in order to prevent either the legislature of the federal unit or those of the member States from destroying or impairing that delicate balance of power which satisfies the particular requirements of States which are desirous of union, but not prepared to merge their individuality in a unity. This supremacy of the Constitution is protected by the authority of an independent judicial body to act as the interpreter of a scheme of distribution of powers." 
[Underlining is ours] 
130. In UCO Bank v. Dipak Debbarma(2017) 2 SCC 585 the Court has made several observations on the federal character of our Constitution and the need to maintain the federal balance which has been envisaged in our Constitution to prevent any usurpation of power either by the Centre or the States. We reproduce the same with profit:
"The federal structure under the constitutional scheme can also work to nullify an incidental encroachment made by the Parliamentary legislation on a subject of a State legislation where the dominant legislation is the State legislation. An attempt to keep the aforesaid constitutional balance intact and give a limited operation to the doctrine of federal supremacy can be discerned in the concurring judgment of Ruma Pal, J. in ITC Ltd. vs. Agricultural Produce Market Committee and Ors., wherein after quoting the observations of this Court in the case of S.R. Bomai v. Union of India (para 276), the learned Judge has gone to observe as follows (para 94 of the report): 
"276. The fact that under the scheme of our Constitution, greater power is conferred upon the Centre visavis the States does not mean that States are mere appendages of the Centre. Within the sphere allotted to them, States are supreme. The Centre cannot tamper with their powers. More particularly, the courts should not adopt an approach, an interpretation, which has the effect of or tends to have the effect of whittling down the powers reserved to the States."" 
131. Thus, the role of the Court in ensuring the federal balance, as mandated by the Constitution, assumes great importance. It is so as the Court is the final arbiter and defender of the Constitution.


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