Here are the latest developments:
The Cabinet is likely to meet on Wednesday and if the President's recommendation has reached it by then, it could decide to dissolve the assembly in Delhi, which has been under President's Rule since February this year, when Arvind Kejriwal resigned as chief minister.
Once the assembly is dissolved, the Election Commission has to hold elections within six months. The commission enrolls new voters in January and publishes revised rolls by the second week of that month and elections are likely after that, sources said.
Prime Minister Narendra Modi and BJP chief Amit Shah reportedly favour fresh elections in February.
The Congress has dared the ruling BJP to hold elections in Delhi by December, along with the Jammu and Kashmir and Jharkhand polls. The Aam Aadmi Party too has sought elections at the earliest.
On Monday, Mr Jung met leaders of all three parties to "explore the possibility of government formation" in Delhi. A statement from his office later said that all parties had conveyed that they could not form government.
The BJP was the single largest party in the assembly elections held last December, but is short of a majority. It had refused to form government then saying it did not have the numbers.
Sources said PM Modi does not want his party to try and cobble together a majority to form a government in Delhi risking allegations of horse-trading.
The BJP assesses in view of its recent wins in the national elections and in state elections in Maharashtra and neighbouring Haryana, that it stands a good chance of winning a clean majority in fresh Delhi elections.
If the Delhi assembly is dissolved, by-elections scheduled for November 25 to three assembly seats vacated by the BJP will be scrapped.
In the December 2013 elections, debutant AAP had come in second to the BJP. The Congress, which was routed, had helped set up an AAP government headed by Arvind Kejriwal, who resigned 49 days later.
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