Any confusion within the Delhi government about the law has been clarified by the high court, he said.
Naidu said Aam Aadmi Party (AAP) should now cease its tirade against the Union government.
"I hope the Delhi government understands and gives up its confrontational attitude and quarrelsome mentality," he told reporters here, adding that the judgement makes it amply clear that "we must confine to our jurisdiction accordingly."
For the past 18 months, AAP "has been accusing and abusing the BJP government, dragging Narendra Modi in everything" but it has now lost the excuse to do so, he said.
In a huge blow to the Kejriwal government, the Delhi High Court held that the LG is the administrative head of the National Capital Territory and also that the AAP government's contention that he was bound to act on the advice of Council of Ministers was "without substance".
Asked about reports of 'blackout' of Home Minister Rajnath Singh's statement during SAARC ministerial meeting, Naidu said that this was "Pakistan's model of democracy".
"We have our own line, don't worry. We should think about national interest," the Urban Development Minister said.
Government sources have described the reports of a 'blackout' of Singh's statement as "misleading".
"It is the standard SAARC practice that the opening statement by the host country is public and open to the media while the rest of the proceedings are in camera, which allows for a full and frank discussion of issues," a government source said.
On a question about imposition of President's rule in Arunachal Pradesh, Naidu accused Congress of double standards saying the party had imposed it on "scores of occasions.
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