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Defined: The Doctrine of Territorial Nexus (Article 245)

This Articles explains the doctrine of territorial nexus under the lens of Article 245 of the Indian Constitution; written by Vartika Shrivastava


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 –

“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]

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]

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[3], 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 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[4]. 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.

“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]


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.


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] Article 245 in The Constitution Of India 1949

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

[3] AIR 1948 PC 118

[4] AIR 1957 SC 699

[5] State of Madhya Pradesh vs Rakesh Kohli( AIR 2012 SC 2351)

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