By: Shrasti Singh
Distribution of powers is one of the main features of the Indian Constitution. There are two levels of government under the Federal Constitution. On the one hand, there exists a Central Government having the power over the whole country. On the other hand, there exists the State Government each of which exercises jurisdiction in one of the states which are provided under the constitution. Thus people of India have been governed by two governments – Center and state.
The two levels of Government divide and share the governmental functions and powers between themselves. A federal constitution thus envisages a division of powers and functions between two.
Chapter I of Part XI (Article 245 to 255) of the Indian Constitution read with Seventh Schedule thereto covers the legislative relationship between the Union and the States.
Article 245 of the Indian Constitution provides the provision for the extent of laws made by the parliament and by the legislatures of States.
According to this the union legislature i.e.; Parliament has the power to make laws for the whole territory of India or any part thereof, and the State Legislature has the power to make laws for the whole or any part of the territory of the respective States. Thus, while the laws of the union can be operative throughout the territory of India, the laws of a State cannot be enforced beyond the territorial limits of those states. However, clause 2 of Article 245 provides that law made by Parliament shall not be deemed to be invalid on the ground that it has an extra-territorial operation.
The Doctrine of Territorial Nexus-
It signifies that the object to which the law is applied need not be physically located within the territorial boundaries, but what is necessary is that it should have a sufficient territorial connection.
Itis used in two circumstances:
- Whether a particular state has an extra-territorial operation.
- If there is a territorial connection or relation between the object of the act and the state making the law.
For a better understanding of the territorial division of legislative jurisdiction, we should study by breaking it into Parliament and State Legislature.
From the territorial point of view, parliament may make laws for the whole of India or any part thereof; and it can also make laws that may have their application even beyond the territory of India if there is sufficient nexus of the law with India. A law made by Parliament is not invalid merely because it affects India. No question can be raised on its validity. A court is bound to enforce the laws made with regards to extra-territorial operations. If any law made by the Parliament has no real nexus with India become invalid or ultra vires.
In the case of Wallace v. Income-Tax Commissioner, Bombay AIR 1948 P.C. 118, there was a company that was registered and incorporated in and which also carried out its business in India through a contract with an Indian firm. The firm made a huge profit of around 60-70% in that year. The income tax authorities wanted to levy a tax upon the entire income of the company of the respondent. The income tax authority was challenged by the respondent, but the Privy Council held that there exists the doctrine of territorial nexus and held the tax is valid.
As explained by Kania C.J.in the case of A.H. Wadia v. Income Tax Commissioner AIR 1949 F.C. 1825, “ In the case of Sovereign Legislature, questions of extra-territoriality of any enactment can never be raised in the municipal courts as a ground for challenging its validity. The legislation may offend the rules of International law, may not be recognized by foreign courts, or there may be practical difficulties in enforcing them but these are questions of policy with which the domestic tribunals are not concerned.”
State Legislature(Doctrine of Territorial Nexus)
The State Legislature has the power to make laws within its state. It does not have extra-territorial operation. But if a law is made which may extend beyond the territory of that State can be valid only based on “Doctrine of Territorial Nexus”. It is an exception for the extra-territorial operation. It means there is sufficient relation or nexus between the State and the Subject- a matter of the law that falls beyond the territory of the state the law. The sufficiency of the nexus is to be seen based on the test laid down by our Supreme Court in State of Bombay v. R.M.D.C., AIR 1957 S.C., 699, according to which two conditions should be fulfilled:
- The connection must be real and not illusory; and
- The liability sought to be imposed by that law must be pertinent to that connection.
It is valid only if both the conditions are fulfilled by a law simultaneously otherwise not.
In the case of Sondur Gopal v.Sondur Rajini AIR 2013 S.C. 2678, the general principle was laid that laws made by one State cannot have an operation in another State. A law that has extra-territorial operation cannot directly be enforced in another State but such a law is not invalid and saved by Article 245(2) of the constitution.