The Centre was pulled up by the Supreme Court for delay in taking a decision over government formation in Delhi.
The court will also examine the issue whether it can direct the government to take a decision during the period of President's rule in the state.
Aam Aadmi Party (AAP) sought dissolution of the Assembly and alleged that Centre and the Lt Governor for delay in taking a decision for over five-months.
Appearing before a constitution bench headed by Chief Justice of India HL Dattu, additional solicitor general P Narsimha submitted the President's letter in which he has given his consent to Lt Governor Najeeb Jung's proposal to invite BJP to form government.
Slamming the government, the court said that in a democracy President's Rule cannot go on forever and questioned why the authorities failed to act expeditiously.
"Just before matter is taken up for hearing earlier, you make a statement. Why was it not decided earlier? How long can you go on like this?" the bench said, adding that LG should have taken the decision at the earliest.
"In a democratic polity people have right to have government and not to be ruled by a governor." It said that such issues take time and that is why it adjourned the case many times to facilitate the LG to take a decision but nothing has been done.
Referring to the president's letter which was placed before the bench, the apex court said that "this exercise should have been done much earlier".
AAP lawyer Prashant Bhushan argued that BJP needs the support of 34 MLAs for a simple majority in a House of 70 with three vacancies which are to be filled in bye elections late next month.
BJP had emerged the single largest party after the Assembly polls in December last year with 31 seats apart from the support of ally Akali Dal's one MLA. But its numbers have now come down to 28 after three of its legislators--Harsh Vardhan, Ramesh Bidhuri and Pervesh Verma--were elected to Lok Sabha.
After falling short of majority by four seats after the elections last year, BJP had refused to form the government. He said AAP with 28 MLAs had formed the government with the support of eight Congress MLAs. AAP's strength has also come down to 27 after expulsion of one MLA .
The court was hearing a plea filed by AAP seeking dissolution of the Assembly and had earlier asked the Centre what steps it had taken to explore the possibility of government formation.
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