Delhi's Power department has removed the Arvind Kejriwal government's four nominees, including AAP leader Jasmine Shah, from the boards of power discoms and replaced them with senior officials, on the directions of Lieutenant Governor V K Saxena.

The action triggered a fresh confrontation between the Raj Niwas and the AAP government, with Deputy Chief Minister Manish Sisodia terming the move "illegal, unconstitutional and contrary to the procedures" and accusing the lieutenant governor of not following the Constitution and Supreme Court orders.

Sources at the Raj Niwas said on Saturday that besides Shah, a spokesperson of AAP, Naveen Gupta, the son of AAP MP N D Gupta, and other private persons "illegally" appointed as "government nominees" have been removed.

The Power department of the Delhi government issued an order removing the four nominees on Friday, following directions from LG Saxena.

The lieutenant governor's directions for removal of the government nominees came as an interim measure since the issue was referred by him for approval of the President which is still pending.

The ruling Aam Aadmi Party in a statement said the lieutenant governor does not have the power to issue such orders.

The sources at the LG's office, meanwhile, said the finance secretary, power secretary and the MD of Delhi Transco will now represent the city government on the boards of the discoms.

AAP, however, said only the elected government has powers to issue orders on the subject of electricity. The LG had invoked "difference of opinion" provision under Article 239AA of the Constitution of India after the Kejriwal government persisted upon their continuance as government nominees, despite "proven misconduct and maleficence", by allegedly benefiting the discoms to the tune of more than Rs 8,000 crore, the sources claimed.

Sisodia asserted there was no "scam" of Rs 8,000 crore as was alleged and challenged the LG to get the matter investigated by any central agency.

The LG in his file notings observed "the matter being urgent and sensitive in nature warrants expeditious action, under Rule 51 of the TBR'1993 read with Proviso to Article 239AA (4) of the Constitution, I direct that immediate action be taken to replace these four private persons with senior government officers as government nominees...pending decision of Hon'ble President of India." It was also mentioned by Saxena in his notings that the Delhi Cabinet decision for nominations on October 3, 2019 was "illegal" and contrary to the observations of then LG Anil Baijal.

It was observed that the Cabinet decision was not submitted before then LG for his approval, as was required by the Transaction of Business Rules (TBR) and an order was issued on November 1, 2019 for appointment of four nominees to the boards of discoms.

Further, the Cabinet decision gave "only justification" for nominating private persons on the board discoms that government officers were "overburdened", but it did not mention "implications" of nominating private persons on the board, said LG in his noting.

"Had the Cabinet discussed in detail the implications of nomination of private persons on the boards of dicoms, the government might not have faced the allegations of collusion of these private persons with the discoms resulting in purported loss of Rs 8683.67 crore to the government exchequer," said LG noting.

The alleged loss was on account of lowering of late payment surcharge (LPSC) rates from 18 per cent to 12 per cent. "I am not in agreement with views recorded by the Cabinet, owing to the fact that there are huge obvious and apparent complications/ implications of nominating private persons on the Boards of discom," noted the LG.

The Delhi government owns 49 per cent stake in the discoms. Senior officers used to serve on the boards of the discoms earlier, but the Kejriwal government started nominating politically affiliated persons to them, the sources claimed.