AAP Delhi Government asserts stand on circle rates using legal precedent to reduce black money and improve farmer compensation


  • It is the duty of the elected government to act in accordance with the Constitution
  • 2011 precedent is clear in the matter – Government placing in public domain the letter of the then Union Home Minister Mr P Chidambaram along with Attorney General’s opinion
  • The letter & opinion make it clear that fixing of circle rates is the right of the elected government
  • Government bound by the 1998 judgment of the Delhi High Court
  • Hon’ble LG can ask for any file to see it: govt has sent it after notifying the decision

 New Delhi: 06/08/2015

Farmers in Delhi have been demanding an increase in circle rates since a very long time and the reason behind this demand is that the compensation they get on the acquisition of their land is on the basis of this circle rate.

Till now, the circle rate was fixed at Rs 53 lakh per acre whereas the market rate of agricultural land has increased manifold over the years, and the farmers felt cheated since they have been getting compensation at a very low rate.

The AAP government has accepted this age-old and justified demand of farmers in Delhi. The government has decided to increase the circle rate of agricultural land, and has now fixed it at Rs 3.5 crore per acre. The notification in this regard has been issued.

Since this matter solely falls within the Constitutional domain of the elected government of Delhi, therefore the file was not sent to the hon’ble Lieutenant Governor for seeking his approval.

It has been clearly laid down in the Constitution of India that except three matters – Police, Public Order and Land – all other matters are solely within the domain of the democratically elected government.

So the question that arises is – Does the elected government have a right to fix the circle rates ?

The obvious answer is YES for reasons given below. 

The same issue arose during the tenure of the previous Delhi government in 2010-2011. The then union Home Minister Mr P Chidambaram in a letter to then Chief Minister Ms Sheila Dikshit had clearly mentioned that it is the right of the elected government in Delhi to fix the circle rates (Please find attached a copy of Mr Chidambaram’s letter).

Mr Chidambaram’s letter was based on the opinion of the then top law officer of the Central Government, Attorney General, late Mr GE Vahanvati. (Copy of AG’s opinion is also attached with this press release).

Mr Vahanvati had categorically opined that fixing of circle rates solely falls within the domain of the elected government and the hon’ble LG is bound by the aid and advice of the council of ministers in this matter. Not only this, the Union Home and Law Ministries had also expressed the same opinion at that time.    

It is crystal clear that that since the decision of fixing circle rates is in the domain of the elected government, therefore there was no need of seeking the approval of the hon’ble LG.

In the past there was a practice of elected governments seeking approvals from the hon’ble LG on every matter, which led to inordinate delays in decisions being taken.

The new government which was sworn in on 14 February this year, witnessed that the hon’ble LG was regularly raising objections on files even in matters which did not fall within his domain according to the Constitution, thereby hampering the functioning of the government.

Following this, the government decided to find out whether at the Centre and in other states is it mandatory to seek approval of the hon’ble President and governors/LGs on every matter ?

It is clear that the functioning of governments at the Centre and in states is carried out in the names of hon’ble President/Governors/LGs, but files are not sent to them. Only those files which are required to be Constitutionally sent to them are so done.

Therefore, the elected government of Delhi issued orders that for matters which are within its domain, there is no need to seek hon’ble LG’s opinion.

The Delhi High Court, in its judgment in the case of Om Parkash Pahwa & Ors Vs State Of Delhi And Ors, dated 25 August 1998, ruled that in matters under the domain of the elected government, the relationship between the Chief Minister and the hon’ble LG is similar to the relations between the Chief Minister and Governor of any other state.

In view of the above mentioned facts and the clearly laid down Constitutional position, the Delhi government decided that in matters falling under its domain, the approval of hon’ble LG was not required.

The hon’ble LG, however, has maintained that the earlier practice of seeking his approval on all matters be continued. This is not possible due to the well laid down Constitutional provisions and the above mentioned 1998 judgment of the Delhi High Court.

The hon’ble LG has asked for the file on circle rates. In accordance with the law, the hon’ble LG is entitled to ask for any file of the Delhi government in case he wishes to see it. Therefore, the Delhi government has sent this file to the hon’ble LG, who wants to see it.   DO from HM to CM reg stamp duty – Chidambaram


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