The apex court said that in a democracy, President's Rule cannot go on forever and questioned why the authorities failed to act expeditiously.
A five-judge constitution bench headed by Chief Justice H L Dattu said that it will hear the petition filed by Aam Aadmi Party (AAP) seeking dissolution of the House even though the Centre informed the bench that the President has given his consent on Lt Governor Najeeb Jung's proposal to invite BJP to form government.
The bench also asked why the Centre always comes out with one statement or another just a day before the matter is taken up for hearing by it.
"Just before matter is taken up for hearing, 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.
"We can't shrug our responsibility and we will hear the case on merit," the bench said, adding, "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".
During the last hearing, the Centre had told the apex court that its stand on government formation in Delhi will only be known after Diwali as the LG's proposal to the President seeking his response on inviting single-largest party BJP was still under consideration.
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.
In his letter to the President, the LG had referred to the resignation of the AAP government on February 14, saying that it was not in "the interest of public to hold elections in such a short time after the elections of December 2013".
"In accordance with the constitutional convention and also keeping in mind the law laid down by the Supreme Court that every effort must be made to form a popular government before recommending dissolution, I shall be grateful if the Hon'ble President of India grants approval to invite BJP, that is even today the single largest party in the legislature to seek their interest in forming the government (MLA strength of all parties as well as independents is attached).
"Should the BJP agree, I would ask them to demonstrate their strength to form a stable government on the floor of the house within a stipulated time frame, possibly one week.
"Future course of action can be determined after taking into the account the response of the BJP," the letter had said.
BJP had emerged the single largest party after the Assembly polls in December last year with 32 seats including ally Akali Dal's one MLA in the 70-member House.
BJP fell four seats short of a simple majority and had refused to form the government, saying it did not have the numbers and will not resort to any "unfair means" to take the reins.
AAP with 28 MLAs had later formed the government with the support of eight Congress MLAs. AAP's strength has also come down to 27 after expulsion of party MLA Vinod Kumar Binny.
BJP's number came down to 28 in the House in May after three of its legislators--Harsh Vardhan, Ramesh Bidhuri and Pervesh Verma--were elected to Lok Sabha.
On August 5, the apex court had given five weeks' time to the Centre to take a decision on dissolution of the Delhi Assembly "one way or another", questioning it for continuing to keep the House in suspended animation when no party was coming forward to form the government.