Doctrine of Territorial Nexus

1. State of Bombay v. R.M.D. Chamarbaugwala, 1957, SC - 5 judge bench [LM case]

• The Supreme Court laid down two principles of law -
1) There must be a territorial connection between the person on whom the law operates and the
legislation and the connection must be real and substantive one and not an illusionary one.
2) The liability which is sort to be imposed must be pertinent to that connection.

Doctrine of extra territorial operations [Article - 245(2)]

• For any law to have an extra territorial operation, there needs to be ‘Active Nationality
Principle’ which means that the two elements have to be active and it has got some nexus with
India. It has two elements -
a) Provocation of law
b) Object
- When these 2 elements are present then only the doctrine of extra territorial operations can be
applied because there is some nexus.

1. Electronics corporation of India v. Commissioner of Income Tax (1989) SC [LM case]

• SC laid down four principles of law -
1)

2) Laws made by the Parliament has extra territorial operation therefore it cannot be ruled out
from contemplation. Operation of the law can extend to persons, things and acts outside the
territory of India.
3) Under the doctrine of sovereignty of States laws made by one state cannot have operation in
another state because the enforcement of the law cannot be contemplated outside the state.
Therefore, such laws can only be enforced through the machinery which is available to the
state.
4) a) Unless nexus exists Parliament will have no competence to make the law. Therefore, the
provocation of the law must be found within India.
b) Such a law has extra territorial operation in order to subserve the object and that object must be
related to India.

• These principles are cut copy paste from a judgement of UK named - British Columbia Electric
Railway Co. LTD. v. The King, 1946

2. GVK Industries Limited v. Income Tax Officer (2011) SC

• Supreme Court laid down principles of law -
3. Parliament is constitutionally restricted from enacting laws with respect to extra-territorial
aspects or courses that do not have or expected to have any direct or indirect, tangible or
intangible impact or effects or consequences for -
a) territory of India or any part of India
b) interest of, welfare of, well being of, common security of inhabitants of India and Indians.
4. Parliament do not have the power to legislate for any territory other than the territory of India or
any part of it.

Delegated Legislation
1. Re Delhi Laws Act, 1912
• 5 principles laid down -
1. The legislative bodies cannot delegate essential legislative functions. Essential legislative
functions includes laying down the policy of the law and enacting that policy into binding rules of
conduct. This is limitation on delegation of power.
2. “Separation of power” is not a part of Indian constitution.
3. Indian parliament was never considered as an agent of anybody. Therefore, doctrine of
Delegates non potest delegare is not applicable.
4. Parliament cannot completely abdicate itself by creating a parallel authority.
5. Only ancillary functions can be delegated.

Doctrine of Pith and Substance

1. Prafulla Kumar Mukherjee v. Bank of Commerce
• The privy council laid down 3 principles of law -
1. Does the act in question deal in pith & substance with money lending? (or whatever entry is)
— what is the true nature and character of the enactment?
— whether there is any ancillary or incidental matter falling within that entry.
2. If it does, is it valid though it incidentally trenches upon the matters reserved for the federal
legislature?
— is there any incidental encroachment, doctrine of incidental encroachment.
3. Once it is determined that in P & S it is money lending and what is the extent to which the
federal list has been encroached or invaded?
— what is the degree of that invasion?
 Doctrine of Repugnancy [Article - 254]
1. M Karunanidhi v. UOI
• 3 general principles -
1) There is a clear and direct repugnancy/ inconsistency b/w the SL & FL.
2) Such inconsistency is absolutely irreconcilable.
3) That the inconsistency between the provisions of State Law and federal law is of such a nature
as to bring the two acts in direct collision with each other and the situation is reached there it is
impossible to obey the one without disobeying the other.
Then the State Law can only be saved by presidential is sent.

• Doctrine of Occupied Field -

1. In order to decide the question of repugnancy, it must be shown that the two enactments contain
inconsistent and irreconcilable provisions so that they cannot Stand Together or operate in the
same field.
2. There can be no repeal by implication unless the inconsistency appears on the face of the two
statutes.
3. Where the two statutes occupy a particular field but there is a room or possibility for both the
statutes operating in the same field without coming into collision with each other, no
repugnancy will result.
4. Where there is no inconsistency but a statute occupying the same field, they seek to create
distinct and separate offences, no question of repugnancy arises and both the statutes continue
to operate in the same field.

List III different entries

Vijay Kumar Sharma v. State of Karnataka
• The SC said -
1. Article 254 does not apply as the federal law is a General law while the state law was a specific
law. Here laws are made from different entries as well.
2. They used the doctrine of pith and substance. They saw that the substance of the federal law
was general while the state law was specific in its substance.

Doctrine of Colourable Legislation

K.C. Gajapati Narayan Deo v. State of Orissa
• Supreme Court laid down 6 principles of law -
1. The Doctrine has no application where the powers of a legislature are not fettered by any
constitutional limitation.
2. Doctrine is not applicable to subordinate legislation.
3. the Doctrine does not involve any question of Bonafide or malafide on the part of the
Legislature.
4. A logical corollary of the above mentioned point is that the legislature does not act on
extraneous consideration. There is always a presumption of constitutionality in favour of the
statute.
5. When a legislature has the power to make a law with respect to a particular subject it also has
ancillary and incidental power to make that law an effective one.
6. Transgression of constitutional powers by legislation maybe patent, manifest or direct but also
maybe disguised, overt or indirect and it is only to this latter class of cases that the expression
calculated legislation is being applied.

Residuary powers [Article 248 & Entry 97 List I]

A. FL encroaching upon SL
UOI v. H.S. Dhillon
• Principle laid down -
The scheme of the distribution of Legislative powers in the constitution namely articles 246 and 248
and entry 97 list 1 shows that any matter including a tax which has not been allotted exclusively to
the state legislatures under list 2 or concurring with parliament under list 3 falls within list 1
including entry 97 of that list read with article 248.
If this is the true scope of the residuary powers of the Parliament then when dealing with the central
act the only enquiry is whether it is legislation in respect of any matter in list 2 for this is the only
field regarding which there is a prohibition against parliament. If a central act does not enter or
invade these prohibited fields, there is no point in trying to decide as to under which entry or entries
of list 1 or List 3 a central act would rightly fit.

B. SL encroaching upon FL
International Tourist Corporation v. State of Haryana
• Principles laid down by SC-
1. Where the competing entries are entries in the list 2 and entry 97 in list 1, the entry in the state
list must be given a broad and plentiful interpretation. In a federal constitution like ours where
there is a division of Legislative subjects but the residuary power is vested in the centre, the
residuary power cannot be so expensively interpreted so as to whittle down the power of state
legislature. That might affect and jeopardize the very Federal principle.
2. The federal nature of the constitution demands that an interpretation that would allow the
exercise of legislative power by parliament pursuant to the residuary powers vested in it to
trench upon the state legislations and which would thereby destroy or belittle state autonomy
must be rejected.
3. Before exclusive legislative competence can be claimed by the parliament by resorting to the
residuary power, the legislative incompetency of the state legislature must be clearly
established.
4. (Entry 97 is itself is specific that a matter can be brought under it only if not enumerated in list
2 or list 3 and in case of a tax, if not mentioned in either of these lists.)