Decoding the legality and application of the MCD merger bill

The Lok Sabha on Wednesday passed The Delhi Municipal Corporation (Amendment) Bill, 2022 to unify the national capital’s three municipal corporations into a single entity, claiming the merger would ensure a robust mechanism for synergised and strategic planning and optimal utilisation of resources.

Introduced in the House by Union home minister Amit Shah, the Bill was passed by a voice vote and various amendments moved by the Opposition members were rejected following a debate.

Last week, the Union Cabinet approved the Bill for the unification of three municipal corporations in the national capital, sparking off a war of words between the central government and the Aam Aadmi Party (AAP) over the legal sanctity of the move. While the AAP has argued that the unification is a “pretext” for the BJP to delay the MCD elections, the Union government has said the Bill is necessary since the elected Aap-led Delhi government has showed a “stepmotherly” attitude towards the body by depriving it of necessary funds.

The MCD Amendment Bill, apart from kicking up a political storm, throws up an array of questions of law and constitutionality of the Centre’s move in the wake of its proposed provisions to completely overturn the Delhi Municipal Corporation (Amendment) Act of 2011, and further dilute the powers of an elected government.

The purpose of the Bill

The statement of objects and reasons of the 2022 Bill begins by blaming the Sheila Dixit-led Congress government in Delhi for the manner in which the MCD was trifurcated in 2011. It underscores that the trifurcation was supposed to be in the interest of providing more efficient civic services to the public but was uneven in terms of territorial divisions and revenue generating potential.

“As a result, there was a huge gap in the resources available to the three corporations compared to their obligations,” said the statement of the Bill, adding that this gap has only widened over the last 10 years, increasing the financial difficulties of the three municipal corporations in Delhi by leaving them incapacitated to make timely payment of salaries and retirement benefits to their employees.

According to the Union government, the delay in the payment of salaries and retirement benefits has resulted in frequent strikes by municipal employees that have eventually affected civic services in the city, in addition to making it difficult for the three municipal corporations to fulfil their contractual and statutory obligations.

“The experience of the last 10 years shows that the main objective of trifurcation, of creating compact municipalities in Delhi to provide more efficient civic services to the public has not been achieved,” said the statement of the Bill, adding that the level and quality of delivery of municipal services in the capital of India cannot be subjected to vagaries of financial hardship and functional uncertainties. Therefore, the Bill went on to claim, the unification of the municipal corporations is imperative to “ensure a robust mechanism for synergised and strategic planning and optimal utilisation of resources”, besides ushering in greater transparency, improved governance and more efficient delivery of civic service for the people of Delhi.

The trifurcation law of 2011 being undone

In 2011, the Delhi assembly passed the Delhi Municipal Corporation (Amendment) Bill that provided for transfer of some powers from the central to the Union territory’s government in overseeing functioning of the new municipal bodies as well as approving rules and by-laws framed by them. This 2011 Bill, which amended the original Delhi Municipal Corporation Act of 1957, was later approved by then President Pratibha Patil, following which Delhi government issued a notification splitting the MCD into the East Delhi municipal corporation, the South Delhi municipal corporation, and the North Delhi municipal corporation.

The 2011 law depended on a report by the Balakrishnan Committee, constituted by the Union ministry of home affairs, which recommended in 1989 that the monolithic MCD be abolished and replaced by a number of compact municipalities in the interest of providing to public more efficient civic services. The Virendra Prakash Committee, set up by the Delhi government, also recommended in its report in February 2001, that MCD be split into four corporations and two councils.

With the passage of the 2011 Act, various powers relating to the functional domain of MCD that vested in the Union government, were also delegated to the Government of NCT of Delhi. The 2011 Act substituted “central government” with “government” in several provisions of the original Delhi Municipal Corporation Act. Some of the significant instances related to establishment of the corporations, their constitution, nomination of members, reservation for the members of the Scheduled Castes, delimitation of wards, division of Delhi into zones and salary and allowances, among others. The Union government then was the Congress-led UPA one.

The 2022 Amendment Bill by the Centre proposes to undo all these provisions to regain the authority delegated to the Delhi government 10 years ago. The Bill makes it clear that there will be only one corporation “to be known as the Municipal Corporation of Delhi” and that the Union government will henceforth notify the total number of seats of councillors and the number of seats reserved for the members of the scheduled castes in the corporation. Similarly, authorities pertaining to action against councillors or officials for loss or waste or misapplication of Municipal Fund or property, delimitation of wards and zones, salary and allowances etc. have been sought to be redeemed by the Union government under the 2022 Bill. The MCD commissioner has also been made accountable only to the Centre under the new bill. In essence, the proposed law effectively takes the Delhi government out of the picture in terms of decision-making in the unified corporation.

The 2022 Bill also seeks to add establishment of an e-governance system as an obligatory function of MCD. The proposed law stated that an e-governance system shall be secured “for citizens’ services on an anytime-anywhere basis for better, speedy, accountable and transparent administration”.

Until the transition is complete and the first meeting of MCD is held under the new law, the 2022 Bill states, the Centre may appoint a “Special Officer”, to exercise the power and discharge the functions of the Corporation.

The legal opposition to the 2022 Bill

The proposed law has been drafted by the Centre banking on its power under clause (c) of subsection 3 of Article 239AA. Article 239AA was inserted in the Constitution in 1991, mandating an elected government in Delhi with a legislative assembly of its own.

The clause empowers the central government to enact a law with respect to the same matter on which the legislative assembly has already framed a legislation. This constitutional provision authorises Parliament to add to, amend, vary, or even repeal the law so made by the legislative assembly by making a law subsequently.

In NDMC Vs State of Punjab (1996), the Supreme Court cited sub-section 3 of Article 239AA to hold that “the plenary power to legislate upon matters affecting Delhi still vests with Parliament as it retains the power to legislate upon any matter relating to Delhi and, in the event of any repugnancy, it is the parliamentary law which will prevail”.

While the letters of the law give an upper hand to the central government, the purposive interpretation of Article 239AA by the Supreme Court has recently underscored how Delhi is different from every other UT and is in “a class by itself” and that the principles of democracy and federalism must be reinforced in NCT of Delhi in their truest sense.

A Constitution bench in July 2018 held that the intent behind the 1991 Act was to establish a democratic setup and representative form of government wherein the majority has a right to embody their opinion in laws and policies pertaining to the NCT of Delhi subject to the limitations imposed by the Constitution. “The legislative assembly, council of ministers and the Westminster style cabinet system of government brought by the 69th amendment highlight the uniqueness attributed to Delhi with the aim that the residents of Delhi have a larger say in how Delhi is to be governed,” held the five-judge bench, led by then CJI Dipak Misra. The 69th amendment created the National Capital Territory of Delhi .

The top court was emphatic in ruling that the exercise of establishing a democratic and representative form of government for NCT of Delhi by insertion of Articles 239AA would turn futile if the Government of Delhi, which enjoys the confidence of the people of Delhi is not able to usher in policies and laws over which the Delhi Legislative Assembly has power to legislate for the NCT of Delhi.

“The elected representatives and the council of ministers of Delhi, being accountable to the voters of Delhi, must have the appropriate powers so as to perform their functions effectively and efficiently,” held the Constitution bench even as it acknowledged that sub-section 3 of Article 239AA gave concurrent powers to both the Centre and the Delhi government to frame laws on a variety of subjects relating to the administration of the national capital.

At the same time, the apex court emphasised that the ideas of pragmatic federalism and collaborative federalism will be destroyed if it were to say that the Union has overriding executive powers even in respect of matters for which the Delhi legislative assembly has legislative powers. “Thus, it can be very well said that the executive power of the Union in respect of NCT of Delhi (land, police and law and order) is confined to the three matters in the State List for which the legislative power of the Delhi legislative assembly has been excluded under sub-section 3 of Article 239AA,” held the court.

It added: “The authorities in power should constantly remind themselves that they are constitutional functionaries and they have the responsibility to ensure that the fundamental purpose of administration is the welfare of the people in an ethical manner. There is a requirement of discussion and deliberation. The fine nuances are to be dwelled upon with mutual respect. Neither of the authorities should feel that they have been lionized. They should feel that they are serving the constitutional norms, values and concepts.”

In at least seven different places in that judgment, the apex court has said that the Delhi assembly has legislative and executive competence over all subjects except three (land, police, and law and order) .

Relying on this judgment, the Delhi government has also challenged the 2021 Government of National Capital Territory of Delhi (NCTD) Act, giving overriding powers to the Centre’s nominee, the Lieutenant Governor, over Delhi legislature and executive. On March 3, the Supreme Court admitted the AAP government’s plea, seeking the Centre’s response to the petition.

Impact of the proposed law

The new Bill does not specifically mention the structure of the unified civic body, except that it will have a commissioner after the elections. At present, there are three commissioners. Once unified, there will be one commissioner who will be appointed by the Central government.

The 2022 Bill also proposes to restrict the maximum number of municipal wards under MCD to 250. Currently, there are 272 municipal wards under three corporations (104 wards each under North and South MCD, 64 under EDMC). The new number of wards will be announced later. As per the information placed before the Lok Sabha, the unified MCD will have one mayor instead of three. It will have 25 committees instead of 75 at present and instead of three headquarters, there will be one. These measures will reduce ₹150 crore of expenditure annually, claims the Centre.

The Bill further seeks to remove Section 484A from the old law, which deals with the director, local bodies -- an office under the urban development department of Delhi government that was introduced at the time of 2012 trifurcation to coordinate between three MCDS and between the state government and corporations.

It is likely that MCD elections in Delhi will be held by October or November. HT has learnt that the Centre is aiming to conduct municipal polls in Delhi in the next six months. This is because Section 490 of the Delhi Municipal Corporation Act, 1957, mandates that an election to constitute the Corporation will have to be completed “before the expiration of a period of six months from the date of its dissolution”.

The civic polls in Delhi (for the three MCDS) were earlier scheduled in April. The current terms of municipal corporations in South, North and East Delhi municipal bodies — with 272 wards under them — will expire on May 18, May 19 and May 22, respectively.

To be sure, the 2022 Bill does not propose altering any of the provisions mentioned under Section 490 of the DMC Act, 1957, which means the elections will have to be held within six months from the date of dissolution of the three MCDS if it goes through the Upper House of Parliament as well.

While the stage is set for a political battle as to which side benefits from a delay in MCD elections, issues of collaborative federalism and purposive interpretation of Article 239AA are also bound to crop up, especially in the wake of the constitution bench ruling in 2018. The legal objections to the proposed move will further infuse principles of constitutional governance and idea of respect for a representative government in NCT of Delhi, which has been accorded by the Constitution the status of “sui generis” — a class apart.