Doctrine of Territorial Nexus

 The doctrine of territorial nexus is used by the judiciary to check if a territorial nexus can be established between the law and jurisdiction of the law-making body. Failure of which the law fails the doctrine of territorial nexus and can be declared invalid. In simpler words, any law-making body can legislate on matters outside their territorial jurisdiction only if it establishes a territorial nexus.

Concept of Doctrine of Territorial Nexus

Article 245 of the Indian constitution mentions that

  • Parliament has the authority to enact laws for extraterritorial operations as well as legislation for the entire country or any part of it.
  • The state legislature has the authority to enact laws that apply to the entire state or just a portion of it.
  • Thus both the Union as well as the states have their own territorial jurisdictions.

Article 246 of the Indian constitution mentions that

  • Parliament has the exclusive authority to enact legislation on the topics listed in the union list (list I of the 7th schedule)
  • The state has authority to enact laws on the topics included in the state list (list II of the 7th schedule)
  • Both the state and the union government have the authority to enact legislation on the topics included in the concurrent list (list III of the 7th schedule)
  • Therefore, the legislative power is distributed by territory and list of items in the Schedule 7 of the constitution.
  • Whenever a state makes laws beyond this, to keep it valid the court will check for territorial nexus between the state and the law beneficiary.
  • For instance, a state can impose restrictions on a company that manufactures in its territorial jurisdiction and transacts in another state jurisdiction. A territorial nexus is present which enables the state to regulate it.

Supreme Court Judgements in which doctrine of territorial nexus is used

State of Bombay vs R.M.D. Chamarbaugwala 1957

  • A non-resident of Bombay had published a crossword puzzle competition in a newspaper that is circulated in Bangalore. However, the newspaper was widely published in Bombay as well.
  • This invited many people to enrol by paying a fee.
  • The State government levied a tax on these fees, but the organizer challenged in the Supreme Court stating he is residing outside Bombay.
  • However, the Supreme Court ruled that the tax levy is valid as there is sufficient territorial nexus and asked the organizer company to pay the tax.

Tata Iron And Steel Company vs. Bihar State Tax Act 1958

  • The State of Bihar taxed all the sales of Tata Iron and Steel company inside and outside the state.
  • Since the goods are manufactured in the state of Bihar the Supreme Court felt there is a clear case of territorial nexus between the state and Tata Iron and Steel Company which can be taxed by law.
Conclusion

Conclusion

  • In a nutshell, the constitution under Articles 245 and 246 restricts the jurisdiction of the state.
  • However, there is one exemption that allows the state legislature to pass legislation for extraterritorial purposes provided the object and the state are sufficiently connected.
  • It implies that the object is located outside of the state's geographical bounds but has a territorial relationship to the state.
  • The territorial nexus has a broad application and can be used outside of India's borders. The idea of territorial linkage allows the force of law to extend beyond a nation's borders.

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