He, however, dismissed allegations that the then Congress government colluded in the violence and sought to put Narendra Modi in dock over riots in Gujarat in 2002 saying the chief minister was "firmly in control" in the state.
"In 1984, the government of India had collapsed. The PM (Indira Gandhi) had been assassinated. She was a very strong PM. The PMO became dysfunctional. The government was not functional... It (riots) was a massive failure of government.
But there was a reason for it. It was not that somebody was conspiring that we should kill Sikhs," he told PTI.
The Union government was in such a disarray following her death that he, despite being a mere director-rank officer, was the seniormost officer present in the PMO for two days while others were busy with her funeral arrangements, Habibullah said, adding that few in the government understood the enormity of riots raging in the capital.
When asked if he thought the government had abetted the riots, as being alleged by BJP and Sikh groups, he replied, "not at all".
On whether there was collusion of some Congress leaders, he said, "It's quite possible that people may have taken law in their own hands but there was no effort on behalf of the government to take revenge themselves on the Sikh community. Not at all."
The first concern on the mind of Rajiv Gandhi, who later took over as the prime minister, was "what happened to my mother" and when government realised the enormity of violence in a few days, it had begun ebbing.
"The information was not coming. Maybe local police, local leaders and others in the state of high emotions (might have colluded)... Because a very popular PM was assassinated. It's possible things started happening. We did not know. We thought these are routine, police will take action," Habibullah said.
The government should have anticipated the violence and there should have been a full deployment of police who were mostly outside the PM's residence where huge crowd was gathering all the time, he said.
Seeking to differentiate between the riots of 1984 and 2002, he said the most importance difference between them is whereas in 1984 riots there had been a collapse of government for "very good reasons", in 2002, there is no evidence of any such collapse.
Asked if as the head of the NCM, he believed the Modi government might have encouraged the rioters, he said he could not deny it.
"That is what is alleged and I cannot deny it. I cannot say it is most unlikely. There is a likelihood based on what I have heard from various... We have had hearings over here (NCM) with senior police officers," he said.
"The CM (Modi) we know this for a fact was holding meetings at that time. What was discussed in the meeting has been a subject of conjecture but the meeting was there... What kind of meeting was there in Delhi. Nothing," he said.
To buttress his point, he said even a cabinet minister in the Gujarat government had been convicted for her involvement in riots.