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PART L impliedly excluded from the legislative competence of NCTD because list II of the Seventh Schedule is titled ‘State list’.

121. Furthermore, the conclusion of the Balakrishnan Report that Entry 41 of the State List of the Seventh Schedule is not available to Union Territories because the Constitution does not envisage a third category of services covering the services of Union territories is contrary to the judgment of this Court in Prem Kumar Jain (supra), which had upheld services for NCTD. The judgment in Prem Kumar Jain (supra) was rendered prior to the Balakrishnan Committee Report of December 1989. The Balakrishnan Committee did not refer to the said judgment. Thus, the report of the Balakrishnan Committee cannot be relied upon determine if “Services” is available to NCTD.

L. Applicability of Part XIV to Union Territories

122. The Union of India has submitted that NCTD does not have legislative competence over Entry 41 of List II because Part XIV of the Constitution does not contemplate any services for Union Territories. It has been argued that the legislative power of NCTD can be restricted if Part XIV does not contemplate services to Union Territories since Article 239AA begins with the phrase “Subject to the provisions of the Constitution”.

(a) Meaning of “State” for the purpose of Part XIV of the Constitution

123. It needs to be seen if the phrase “State” in Part XIV of the Constitution includes Union Territory. Article 308 provides the definition of ‘State’ for Part XIV