DOCTRINE OF TERRITORIAL NEXUS

Introduction

Every State, it may be stated, has two kinds of jurisdictions:

 Prescriptive Jurisdiction

 Enforcement Jurisdiction

While prescriptive jurisdiction of a state implies the area over which a law made by
the State will apply while on the other hand, enforcement jurisdiction implies the
area over which the State can enforce its law. For eg: I can say that Indian Penal Code
shall apply to any offence committed by an Indian citizen. But if the offender, who is
triable under the IPC, is for the time being in a foreign country, then what happens?
India has prescriptive jurisdiction to try such person under the IPC, but it may not
have the enforcement jurisdiction to put him in jail. See for eg, Section 4 of IPC.

So, it may be said that prescriptive jurisdiction of a State may be “extraterritorial” in

nature.

Under article 245 of the Indian constitution, which deals with prescriptive jurisdiction
of laws made by Parliament and State Legislatures, it has been stated that:

1. Parliament has jurisdiction to make laws for extraterritorial operations or

laws for the whole or any part of the country.
2. The state legislature has the jurisdiction to make laws for the whole or any
part of the state.

Under article 245(2) of the Indian constitution, if any law is made by the parliament
regarding the extraterritorial operations, no questions can be raised on its validity.
Thus the validity of a legislation can’t be questioned. In this case, a court is bound to
enforce the laws made with regards to extra-territorial operations. This legislation
can’t be invalidated.

Thus it can be said that both the union and the state have their own territorial
jurisdiction to make laws. While the Parliament has powers to make laws having
extraterritorial applications, the State government, vide Article 245, lacks such
power.

In the case of A.H. WADIA V. INCOME TAX COMMISSIONER , AIR 1949 SC 18 it was
held that a question of extraterritoriality of enactment can never be raised against a
supreme legislative authority on the grounds of questioning its validity. It may not
comply with the rules of international law or while enforcing it practical difficulties
may arise but they are subjected to questions of policy which is the concern of the
national or domestic tribunal.

Explaination: Theory of territorial nexus

As is evident from the aforesaid discussion, under the Indian Constitution, the state
legislature has the jurisdiction only to make laws within its territorial jurisdiction.
Territorial nexus is one exception which allows the state to make laws for
extraterritorial operations if it shows that there exists a nexus between the subject
matter of the law and the state.In order to give effect to the laws made by a state for
extraterritorial purpose, a nexus between the object and state must be shown. If the
State law has sufficient nexus/connection with the subject matter of the law, the
State law is valid even when it has extraterritorial operation.The doctrine of
territorial nexus is only applicable when the following conditions are fulfilled. Those
conditions are as follows;

1. The nexus must be legitimate.

2. The liability shall be related to the territorial connection.
These conditions are sufficient enough to show that the nexus was legitimate and the
court would not question its validity. In several cases of the taxation law it has been
held that the territorial limits of a state would not hamper the sale and purchase of
the goods. Buying and selling of goods would be a reasonable ground to sustain the
taxing power of the state.