Constitutional Law

Explained: The
Doctrine of
Territorial Nexus
(Article 245)
Home » Explained: The Doctrine of Territorial Nexus (Article 245)

LexForti Legal News Network November 28, 2020 No Comments

This Articles explains the doctrine of territorial

nexus under the lens of Article 245 of the
Indian Constitution; written by Vartika
Shrivastava

Table of Contents 
1. Introduction
2. Territorial jurisdiction
3. Theory of Territorial nexus
4. Conclusion
5. FAQs

Introduction
One of the most important and essential feature
when it comes to federalism is the distribution
of power. The objective of a federal state so
formed involves the division of powers and
authority between the national government as
well as the governments of the respective states.

The key aspect of federalism is to distribute the

strength of the government among more
independent authorities. A constitution which
is federal in nature establishes the concept of
dual polity under which the union is at the
centre and the states are at a periphery, and
each of them is endowed with powers which are
sovereign in nature and can only be exercised in
the respective fields which have been assigned
to them by the constitution.

The basic concept of Federation is that the

legislative executive and financial authority is
divided in terms of power between the centre
and the state, not by the power of any law
which has been passed but by the constitution
itself.

With reference to the legislative relations, the

constitution of India has made 2 for
distribution of the legislative powers, one with
respect to territory and the second with respect
to the subject matter concerned.

Territorial
jurisdiction
According to Article 245 of the Indian
constitution
[https://indiankanoon.org/doc/574894/] –

“Extent of laws made by Parliament and by the

Legislatures of States-

1) Subject to the provisions of this Constitution,

Parliament may make laws for the whole or any
part of the territory of India, and the
Legislature of a State may make laws for the
whole or any part of the State

2) No law made by Parliament shall be deemed

to be invalid on the ground that it would have
extra territorial operation”[1] [#_ftn1]

Hence, with regard to the territory concerned,

Article 245 says that subject to the provisions of
the constitution the parliament is eligible to
make laws for the entire or any part of the
territory of India, clause 2 states that if a law
has been made by the parliament, it shall not be
deemed invalid on the basis that it may have
extraterritorial operations and takes effect
outside the territory of India.

Hence under Article 245(2) if any law is made

by the parliament which is with regard to the
extraterritorial operations then no questions
can be raised on the validity of the law. Hence
the validity of a legislation cannot be
questioned and in such a case the courts are
bound to enforce the laws which are made
regarding extraterritorial operations.

“In the case of a sovereign legislature the

question of extraterritoriality of any enactment
cannot be raised in a municipal court as a
ground in order to challenge its validity. The
legislation can offend the rules of international
law and may not be recognised by foreign
courts as there would be practical difficulties in
enforcing them but these are the questions of
policy with which the domestic tribunal’s are
concerned”[2] [#_ftn2]

Theory of
Territorial nexus
The legislative powers of the parliament as well
as the legislatures of the state are subject to
provisions of the constitution, that is – the
scheme of the distribution of powers, the
fundamental rights and other provisions of the
constitution.

In a case of Wallace vs. Income tax

commissioner, Bombay
[https://indiankanoon.org/doc/795066/] [3]
[#_ftn3] , there existed a company which was
registered in England and was a partner in a
firm which was situated in India. The
authorities of the Indian income tax
[https://lexforti.com/legal-news/sources-of-
income-tax-in-india/] attempted to tax the
entire income which was made by the company.
In this case the Privy Council applied the
doctrine of territorial Nexus and it was held
that the tax levied was valid as it was said that a
major part of the income was taken from
British India and this was a sufficient ground to
establish a nexus.

The legislature of a state make laws for the

whole or any of the part of the state as stated by
Article 245(1), which means that the state laws
would be considered void if they have an extra
territorial operation. However, there exists an
exception to this general rule. If a state law
which has an extraterritorial operation has a
sufficient nexus between the object and the
state it would be considered valid.

The constitution lays the power upon the state

in order to make laws which are within its
territorial jurisdiction; hence the state
legislature has been empowered to make laws
for the purpose of its own.

The doctrine of territorial Nexus would be

applicable if the 2 conditions which have been
specified are fulfilled.

These 2 conditions are –

1) The Nexus must be legitimate in nature

2) The liability must be related to the

territorial connection.
The above mentioned two conditions are
enough to determine whether a nexus is
legitimate or not. (Doctrine of Territorial
Nexus) Hence, the parliament possesses the
power to make laws which are within its
territorial jurisdiction and also for
extraterritorial purposes but which necessarily
have a legitimate Nexus with India.

The loss or legislations which are regarding this

matter fall under the ambit of the parliament
and such loss cannot be questioned for the
validity. But if the parliament in acts any law
which cannot establish any Nexus with India
would be called ultra vires.

The powers of the parliament are not absolute

in nature and hence the laws made by the
parliament for the extra territorial operations
are basically for the purposes of operating
outside the geographical limits of India. State
legislature does not possess the power to make
laws for such extraterritorial operations, but
this limitation is subjected to the exception of
territorial Nexus.

If it is proved that there exists a sufficient

connection with the object as well as the laws
enacted by the state legislature will have effect
outside the territorial limits of the state, the
following circumstances are required to invoke
the jurisdiction of the territorial Nexus –

1) If an extra territorial operation exists in a

state

2) If there exists a legitimate Nexus between

the object and the state and there should be
clarity with reference to the object being
situated outside the territorial limits of the state
but should have a territorial connection with it.

One such example is in the case of State of

Bombay vs R.M.D.C
[https://indiankanoon.org/doc/212098/] [4]
[#_ftn4] . The facts of the case are that the
State of Bombay had levied a certain tax on the
lottery as well as prize competitions, this tax
was extended to the newspapers which were
printed and published in Bangalore but also
had a wide circulation in the state of Bombay.
The respondent conducted the price
competitions through the medium of this
paper.

The respondent challenged the Supreme Court

and raised a question that whether the tax can
be levied upon a person who resides outside the
territorial limits of the state. The court was of
the opinion that there existed a sufficient
territorial Nexus in order to enable the state of
Bombay to tax the newspaper.

And if there exists a sufficient Nexus between

the people sought to be charged as well as the
state which is seeking to tax him then the taxing
statute would be upheld. Hence, the legislation
had the authority to tax the respondent for the
revenue which was earned by the company
through the medium of this prize competition.

The powers of the legislature under Article 245

for the enactment of laws is an absolute power
which is subject only to its legislative
competence as well as the other constitutional
limitations. Hence he power which is required
to make a law includes the power to give an
effect to it prospectively as well as
retrospectively [https://lexforti.com/legal-
news/prevention-of-corruption-amendment-
act-2018-will-not-have-retrospective-effect/] .

“The statute which is enacted by the parliament

or any of the state legislatures cannot be
declared unconstitutional first stop the coat
should be able to hold beyond any iota of doubt
that the violation of the constitutional provision
was so glaring that the legislative provision
under challenge cannot stand.”[5] [#_ftn5]
Conclusion
It can be concluded that the powers which have
been distributed between the centre and the
state are a key feature of federalism and this
power this partitioned by the constitution itself.
The constitution establishes a dual polity
feature between the union as well as the states
and the parliament has the power to make laws
for whole of India or any part of it, also it
possesses the power to make laws for the
extraterritorial operations but a state
legislature does not hold the right to make laws
for the extraterritorial operations.

But there exists one exception that enables such

legislature’s to make laws for the purposes
which are extraterritorial if a connection
between the object and the state is made, this
means that if the object is located outside the
territorial limits of the state but still has a
connection which is territorial with the state it
would be valid. This doctrine of territorial
nexus allows the effect of law out to the
territorial limits of a nation.

FAQs
What is doctrine of Repugnancy?
Repugnancy arises when the provisions of
two laws are so inconsistent and irreconcilable
that it is impossible to do one without
disobeying the other. In the Indian context, if
such a conflict arises between a central and a
state legislation, then the central law will
prevail.
What is pith and substance rule?
Pith and substance is a legal doctrine in
Canadian constitutional interpretation used to
determine under which head of power a given
piece of legislation falls.

[1] [#_ftnref1] Article 245 in The Constitution

Of India 1949
[2] [#_ftnref2] A.H. Wadia vs Income tax
Commissioner, Bombay ( AIR 1949 FC 18)

[3] [#_ftnref3] AIR 1948 PC 118

[4] [#_ftnref4] AIR 1957 SC 699

[5] [#_ftnref5] State of Madhya Pradesh vs

Rakesh Kohli( AIR 2012 SC 2351)

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