Federal Functionalism and Democracy : 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.

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

July 04, 2018
Government of NCT of Delhi … Appellant
Union of India & Another … Respondents
Dipak Misra, CJI (for himself, A.K. Sikri and A.M. Khanwilkar, JJ.) 
84. Democracy is a form of government where the people rule. Aristotle viewed democracy as a form of government in which the supreme powers are in the hands of freemen and where people form a majority in an elected sovereign government to exercise some role in decision making. Thomas Jefferson defined democracy as a "government by its citizens in mass, acting directly and personally, according to rules established by the majority". Abraham Lincoln defined democracy as “a government of the people, by the people, and for the people”. The Black's Law Dictionary defines democracy as:" That form of government in which the sovereign power resides in and is exercised by the whole body of free citizens; as distinguished from a monarchy, aristocracy, or oligarchy. According to the theory of a pure democracy, every citizen should participate directly in the business of governing, and the legislative assembly should comprise the whole people." Black's Law Dictionary 6th Edition Pg. 432 

85. The Preamble to our Constitution, at the outset, proclaims that India is a sovereign democratic republic. The citizens of India are the sovereign and participate in the process of governance by exercising their virtuous right to vote under the system of universal adult suffrage. The citizens elect their representatives and send them to the Parliament and State Legislatures for enacting laws and shaping policies at the Union and State level respectively which are reflective of the popular will of the collective.
86. The parliamentary form of democracy as envisaged by the Constitution has at its very base the power bestowed upon people to vote and make the legislature accountable for their functioning to the people. If the legislature fails to transform the popular will of the people into policies and laws, the people in a democracy like ours have the power to elect new representatives by exercise of their vote. The political equality makes people aware of their right in unison and there is a consistent endeavour to achieve the same. 
87. In this context, we may turn to a passage from Mohinder Singh Gill and another v. Chief Election Commissioner, New Delhi and others, AIR 1978 SC 851 wherein Krishna Iyer, J. quoted with approval the statement of Sir Winston Churchill which is to the following effect:
"At the bottom of all tributes paid to democracy is the little man, walking into a little booth, with a little pencil, making a little cross on a little bit of paper no amount of rhetoric or voluminous discussion can possibly diminish the overwhelming importance of the point." 
88. Thus, democratic set up has its limbs firmly entrenched in the ability of the people to elect their representatives and the faith that the representatives so elected will best represent their interest. Though this right to vote is not a fundamental right, yet it is a right that lies at the heart of democratic form of government. The right to vote is the most cherished value of democracy as it inculcates in the people a sense of belonging. In Raghbir Singh Gill v. S. Gurcharan Singh TohraAIR 1980 SC 1362 the learned Judges, after referring to Mohinder Singh Gill's case, stated that nothing can diminish the overwhelming importance of the cross or preference indicated by the dumb sealed lip voter. That is his right and the trust reposed by the Constitution in him is that he will act as a responsible citizen in choosing his representatives for governing the country.
89. The aforesaid situation warrants for reciprocative functionalism by thought, action and conduct. It requires the elected representatives to uphold the faith which the collective have reposed in them. Any undue interference amounts to betrayal of the faith of the collective in fulfilment of their aspirations of democratic selfgovernance. In Kesavananda Bharati (supra), it has been observed that the two basic postulates of democracy are faith in human reason and faith in human nature and that there is no higher faith than faith in democratic process. The Court further stated that democracy on adult suffrage is a great experiment with its roots in the faith in the common man. P. Jaganmohan Reddy, J., in his opinion, stated that the republican and democratic form of government is a part of the basic structure of the Constitution and the Parliament has no power to abrogate or emasculate the basic elements or fundamental features of the Constitution such as the sovereignty of India and the democratic character of our polity. Further, he stated that the framers of the Constitution adopted a sovereign democratic republic to secure for the citizens of India the objectives of justice, liberty and equality as set out in the Preamble to our Constitution.
90. Dealing with the concept of democracy, the majority in Indira Nehru Gandhi v. Raj NarainAIR 1975 SC 2299 ruled that 'democracy' as an essential feature of the Constitution is unassailable. The said principle has been reiterated in T.N. Seshan, CEC of India v. Union of India and others, (1995) 4 SCC 611 and Kuldip Nayar v. Union of India others, AIR 2006 SC 3127. When it is conceived that democracy is a part of the basic structure of the Constitution, the essential value of democracy has to be condignly understood and that is why we have referred to certain precedents. The correctness or fallacy of the interpretation of Articles 239 to 239AB would depend upon our appreciation of democratic form of government in a mature body polity.
91. The Court in Manoj Narula (supra), while delineating the concept of democracy, stated that democracy has been best defined as the Government of the People, by the People and for the People, which expects prevalence of genuine orderliness, positive propriety, dedicated discipline and sanguine sanctity by constant affirmance of constitutional morality which is the pillar stone of good governance. Further, it is stated that democracy in India is a product of rule of law which aspires to establish an egalitarian social order and that it is not only a political philosophy but also an embodiment of constitutional philosophy. Democracy being a cherished constitutional value needs to be protected, preserved and sustained and for that purpose, instilment of certain norms in the marrows of the collective is absolutely necessitous. In the said case, the Court, while emphasizing that good governance is a sine qua non for a healthy democracy, stated thus:
"In a democracy, the citizens legitimately expect that the Government of the day would treat the public interest as primary one and any other interest secondary. The maxim Salus Populi Suprema Lex, has not only to be kept in view but also has to be revered. The faith of the people is embedded in the root of the idea of good governance which means reverence for citizenry rights, respect for Fundamental Rights and statutory rights in any governmental action, deference for unwritten constitutional values, veneration for institutional integrity, and inculcation of accountability to the collective at large. It also conveys that the decisions are taken by the decision making authority with solemn sincerity and policies are framed keeping in view the welfare of the people, and including all in a homogeneous compartment. The concept of good governance is not an Utopian conception or an abstraction. It has been the demand of the polity wherever democracy is nourished. The growth of democracy is dependant upon good governance in reality and the aspiration of the people basically is that the administration is carried out by people with responsibility with service orientation." 
[Emphasis supplied] 
92. Now, we shall proceed to discuss the concept of federalism in the context of the Constitution of India. Encyclopedia Britannica defines federalism as:
"Federalism, mode of political organization that unites separate states or other polities within an overarching political system in such a way as to allow each to maintain its own fundamental political integrity. Federal systems do this by requiring that basic policies be made and implemented through negotiation in some form, so that all the members can share in making and executing decisions. The political principles that animate federal systems emphasize the primacy of bargaining and negotiated coordination among several power centres; they stress the virtues of dispersed power centres as a means for safeguarding individual and local liberties." 
93. In common parlance, federalism is a type of governance in which the political power is divided into various units. These units are the Centre/Union, States and Municipalities. Traditional jurists like Prof. K.C. Wheare lay emphasis on the independent functioning of different governing units and, thus, define federalism as a method of dividing powers so that the general/central and regional governments are each within a sphere coordinate and independent. As per Prof. Wheare "the systems of Government embody predominantly on division of powers between Centre and regional authority each of which in its own sphere is coordinating with the other independent as of them, and if so is that Government federal?" Prof. K.C. Wheare, Federal Government, 1963 Edn. at page 33 
94. However, modern jurists lay emphasis on the idea of interdependence and define federalism as a form of government in which there is division of powers between one general/central and several regional authorities, each within its sphere interdependent and coordinate with each other.

95. The framers of our Constitution, during debates in the Constituent Assembly on the draft Constitution, held elaborate discussions on whether to adopt a unitary system of government or federal system of government. During the Constituent Assembly debates, Shri T.T. Krishnamachari said:
“...Are we framing a unitary Constitution? Is this Constitution centralizing power in Delhi? Is there any way provided by means of which the position of people in various areas could be safeguarded, their voices heard in regard to matters of their local administration? I think it is a very big charge to make that this Constitution is not a federal Constitution, and that it is a unitary one. We should not forget that this question that the Indian Constitution should be a federal one has been settled by our Leader who is no more with us, in the Round Table Conference in London eighteen years back.” “I would ask my honourable friend to apply a very simple test so far as this Constitution is concerned to find out whether it is federal or not. The simple question I have got from the German school of political philosophy is that the first criterion is that the State must exercise compulsive power in the enforcement of a given political order, the second is that these powers must be regularly exercised over all the inhabitants of a given territory; and the third is the most important and that is that the activity of the State must not be completely circumscribed by orders handed down for execution by the superior unit. The important words are 'must not be completely circumscribed', which envisages some powers of the State are bound to be circumscribed by the exercise of federal authority. Having all these factors in view, I will urge that our Constitution is a federal Constitution. I urge that our Constitution is one in which we have given power to the Units which are both substantial and significant in the legislative sphere and in the executive sphere.” 
96. In this context, Dr. B.R. Ambedkar, speaking on the floor of the Constituent Assembly, said:
"There is only one point of Constitutional import to which I propose to make a reference. A serious complaint is made on the ground that there is too much of centralization and that the States have been reduced to Municipalities. It is clear that this view is not only an exaggeration, but is also founded on a misunderstanding of what exactly the Constitution contrives to do. As to the relation between the Centre and the States, it is necessary to bear in mind the fundamental principle on which it rests. The basic principle of Federalism is that the legislative and executive authority is partitioned between the Centre and the States not by any law to be made by the Centre but the Constitution itself. This is what the Constitution does. The States, under our Constitution, are in no way dependent upon the Centre for their legislative or executive authority. The Centre and the States are coequal in this matter. It is difficult to see how such a Constitution can be called centralism. It may be that the Constitution assigns to the Centre too large a field for the operation of its legislative and executive authority than is to be found in any other Federal Constitution. It may be that the residuary powers are given to the Centre and not to the States. But these features do not form the essence of federalism. The chief mark of federalism, as I said lies in the partition of the legislative and executive authority between the Centre and the Units by the Constitution. This is the principle embodied in our Constitution." 
97. The Court in In re: Under Article 143, Constitution of India, (Special Reference No. 1 of 1964)AIR 1965 SC 745 observed that 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. Further, the Court stated that 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, the Court stated, is protected by the authority of an independent judicial body to act as the interpreter of a scheme of distribution of powers and, thus, the dominant characteristic of the British Constitution cannot be claimed by a Federal Constitution like ours.
98. Gajendragadkar, C.J., in the said case, observed that our Constitution has all the essential elements of a federal structure as was the case in the Government of India Act 1935, the essence of federalism being the distribution of powers between the federation or the Union and the States or the provinces. In State of Karnataka v. Union of India (supra), Untwalia, J. (speaking for Justice Singhal, Justice Jaswant Singh and for himself) observed that the Constitution is not of a federal character where separate, independent and sovereign States could be said to have joined to form a nation as in the United States of America or as may be the position in some other countries of the world. It is because of this reason that sometimes it has been characterized as quasifederal in nature.
99. In Shamsher Singh (supra), this Court held that our founding fathers accepted the parliamentary system of quasifederalism while rejecting the substance of Presidential style of Executive. Dr. Ambedkar stated on the floor of the Constituent Assembly that the Constitution is "both unitary as well as federal according to the requirement of time and circumstances". He further stated that the Centre would work for the common good and for the general interest of the country as a whole while the States would work for the local interest. He also refuted the plea for exclusive autonomy of the States.
100. In S.R. Bommai v. Union of India38, the Court considered the nature of federalism under the Constitution of India. A.M. Ahmadi, J. (as the learned Judge then was) observed:
"In order to understand whether our Constitution is truly federal, it is essential to know the true concept of federalism. Dicey calls it a political contrivance 38(1994) 3 SCC 1 for a body of States which desire Union but not unity. Federalism is, therefore, a concept which unites separate States into a Union without sacrificing their own fundamental political integrity. Separate States, therefore, desire to unite so that all the memberStates may share in formulation of the basic policies applicable to all and participate in the execution of decisions made in pursuance of such basic policies. Thus the essence of a federation is the existence of the Union and the States and the distribution of powers between them. Federalism, therefore, essentially implies demarcation of powers in a federal compact." 
101. P.B. Sawant, J. (on behalf of himself and Kuldip Singh, J.) opined that the States are constitutionally recognised units and not mere convenient administrative divisions as both the Union and the States have sprung from the provisions of the Constitution. After quoting extensively from H.M. Seervai's commentary Constitutional Law of India, he expressed thus:
"99. The above discussion thus shows that the States have an independent constitutional existence and they have as important a role to play in the political, social, educational and cultural life of the people as the Union. They are neither satellites nor agents of the Centre. The fact that during emergency and in certain other eventualities their powers are overridden or invaded by the Centre is not destructive of the essential federal nature of our Constitution. The invasion of power in such circumstances is not a normal feature of the Constitution. They are exceptions and have to be resorted to only occasionally to meet the exigencies of the special situations. The exceptions are not a rule.
100. For our purpose, further it is really not necessary to determine whether, in spite of the provisions of the Constitution referred to above, our Constitution is federal, quasifederal or unitary in nature. It is not the theoretical label given to the Constitution but the practical implications of the provisions of the Constitution which are of importance to decide the question that arises in the present context, viz., whether the powers under Article 356(1) can be exercised by the President arbitrarily and unmindful of its consequences to the governance in the State concerned. So long as the States are not mere administrative units but in their own right constitutional potentates with the same paraphernalia as the Union, and with independent Legislature and the Executive constituted by the same process as the Union, whatever the bias in favour of the Centre, it cannot be argued that merely because (and assuming it is correct) the Constitution is labeled unitary or quasifederal or a mixture of federal and unitary structure, the President has unrestricted power of issuing Proclamation under Article 356(1).” 
102. K. Ramaswami, J., in paragraphs 247 and 248 of his separate judgment, observed:
"247. Federalism envisaged in the Constitution of India is a basic feature in which the Union of India is permanent within the territorial limits set in Article 1 of the Constitution and is indestructible. The State is the creature of the Constitution and the law made by Articles 2 to 4 with no territorial integrity, but a permanent entity with its boundaries alterable by a law made by Parliament. Neither the relative importance of the legislative entries in Schedule VII, Lists I and II of the Constitution, nor the fiscal control by the Union per se are decisive to conclude that the Constitution is unitary. The respective legislative powers are traceable to Articles 245 to 254 of the Constitution. The State qua the Constitution is federal in structure and independent in its exercise of legislative and executive power. However, being the creature of the Constitution the State has no right to secede or claim sovereignty. Qua the Union, State is quasifederal. Both are coordinating institutions and ought to exercise their respective powers with adjustment, understanding and accommodation to render socioeconomic and political justice to the people, to preserve and elongate the constitutional goals including secularism.
248. The preamble of the Constitution is an integral part of the Constitution. Democratic form of Government, federal structure, unity and integrity of the nation, secularism, socialism, social justice and judicial review are basic features of the Constitution." 
103. B.P. Jeevan Reddy, J., writing a separate opinion (for himself and on behalf of S.C. Agrawal, J.), concluded in paragraph 276 thus:
"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. It is a matter of common knowledge that over the last several decades, the trend the world over is towards strengthening of Central Governments be it the result of advances in technological/scientific fields or otherwise, and that even In USA the Centre has become far more powerful notwithstanding the obvious bias in that Constitution in favour of the States. All this must put the court on guard against any conscious whittling down of the powers of the States. Let it be said that the federalism in the Indian Constitution is not a matter of administrative convenience, but one of principle the outcome of our own historical process and a recognition of the ground realities. This aspect has been dealt with elaborately by Shri M.C. Setalvad in his Tagore Law Lectures "Union and State relations under the Indian Constitution" (Eastern Law House, Calcutta, 1974). The nature of the Indian federation with reference to its historical background, the distribution of legislative powers, financial and administrative relations, powers of taxation, provisions relating to trade, commerce and industry, have all been dealt with analytically. It is not possible nor is it necessary for the present purposes to refer to them. It is enough to note that our Constitution has certainly a bias towards Centre visavis the States..." 
104. In ITC Ltd. v. Agricultural Produce Market Committee(2002) 9 SCC 23 the Court observed that the Constitution of India deserves to be interpreted, language permitting, in a manner that it does not whittle down the powers of the State Legislature and preserves federalism while also upholding the central supremacy as contemplated by some of its articles.
105. In Kuldip Nayar (supra), the Court, while dealing with the question of state domicile for elections to the Rajya Sabha, opined that it is true that the federal principle is dominant in our Constitution and the said principle is one of its basic features but it is equally true that federalism under the Indian Constitution leans in favour of a strong Centre, a feature that militates against the concept of strong federalism. Some of the provisions that can be referred to in this context include the power of the Union to deal with extraordinary situations such as during emergency and in the event of a proclamation being issued under Article 356 that the governance of a State cannot be carried on in accordance with the provisions of the Constitution; the power of the Parliament to legislate with respect to a matter in the State List in the national interest in case there is a resolution of the Council of States supported by prescribed majority; the power of the Parliament to provide for the creation and regulation of All India Services common to the Union and the States in case there is a resolution of the Council of States supported by not less than twothirds majority; the existence of only one citizenship, namely, the citizenship of India; and, perhaps most important, the power of the Parliament in relation to the formation of new States and alteration of areas, boundaries or names of States.
106. From the foregoing discussion, it is clear as day that both the concepts, namely, democracy, i.e., rule by the people and federalism are firmly imbibed in our constitutional ethos. Whatever be the nature of federalism present in the Indian Constitution, whether absolutely federal or quasifederal, the fact of the matter is that federalism is a part of the basic structure of our Constitution as every State is a constituent unit which has an exclusive Legislature and Executive elected and constituted by the same process as in the case of the Union Government. The resultant effect is that one can perceive the distinct aim to preserve and protect the unity and the territorial integrity of India. This is a special feature of our constitutional federalism.

107. It is selfevident that there is a meaningful orchestration between the concepts of federalism and nature of democracy present in our Constitution. It would not be a fallacious metaphor if we say that just as in a fusion reaction two or more atomic nuclei come together to form a bigger and heavier nucleus, the founding fathers of our Constitution envisaged a fusion of federalism and democracy in the quest for achieving an egalitarian social order, a classical unity in a contemporaneous diversity. The vision of diversity in unity and the perception of plurality in eventual cohesiveness is embedded in the final outcome of the desire to achieve the accomplished goal through constitutional process. The meeting of the diversity in unity without losing identity is a remarkable synthesis that the Constitution conceives without even permitting the slightest contrivance or adroitness.

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