Under what circumstances can the university council withhold Ph.D. degree?
The system you / they are operating under with multiple approvals needed is not normal in North America. The normal case is that the committee makes the decision, and there is no further consideration. Someone can lodge a complaint which may lead to an investigation by the relevant university-level governing body ("The Graduate School"), which could lead to overturning a committee approval, if it was found that there was something seriously wrong. The final "decision" is usually made by an even higher body, often called "The Trustees", but that is normally pro forma -- except, again, if there is something seriously wrong with the case. Of course there may be North American universities that are more than two sd's from the norm.

By "seriously wrong", I mean that there was proof of academic misconduct, or possibly a wanton abandonment of academic standards by the committee.