1.

DOCTRINE OF TERRITORIAL NEXUS (Art 245)

As regards territory Article 245(1) provides that subject to the provisions of this
constitution, parliament may make laws for the whole or any part of the territory of India.
According to clause (2) of Article 245 a law made by parliament shall not be deemed to be
invalid on the ground that it has extra-territorial operation, i.e. takes effect outside the territory
of India. Thus, Article 245(2) carves out an exception to the first clause and establishes the
doctrine of territorial nexus.

DOCTRINE OF TERRITORIAL NEXUS-EXPLAINED

The Legislature of a state may make laws for the whole or any part of has extra-
territorial operation i.e. takes effect outside the state as held in Kochuni Vs. State of Madras.
However, there is one exception to this general rule. A state law of extra-territorial operation
will be valid if there is sufficient nexus between the object and state.

In Wallace v. Income tax Commissioner, Bombay a company which was registered in

England was a partner in a firm in India. The Indian Income tax Authorities sought to tax the
entire income made by the company. The privy council applied the doctrine of territorial nexus
and held the levy tax valid. It is said that the derivation from British India of a major part of its
income for a year gave to a company for that year sufficient territorial connection to justify its
being treated as at home in India for all purposes of tax on its income for that year from
whatever source income may be derived.

In State of Bombay v. R. M. D. C. the Bombay state levied a tax on lotteries and prize
competitions. The tax was extended to a newspaper printed and published in Banglore but had
wide circulation in Bombay. The respondent conducted the prize competitions through this
paper. The court held that there existed a sufficient territorial nexus to enable the Bombay state
to tax the newspaper. If there is sufficient nexus between the person sought to be charged and
the state seeking to tax him, the taxing statute would be upheld. But illusory and the liability
sought to be imposed must be pertinent to that connection. Whether there is sufficient
connection is a question of fact and will be determined by courts in each accordingly.

In A.H. Wadia v. Income tax Commissioner, Bombay, the Supreme Court Held : “In the case of a
sovereign Legislature question of extra- territoriality of an enactment can never be raised in the
municipal court as a ground for challenging its validity. The legislation may offend the rules
 of international law, may not be recognized by foreign courts, or there may be practical
difficulties in enforcing them but these are questions of policy with which the domestic
tribunals are concerned.”
2. DOCTRINE OF PITH AND SUBSTANCE

Within their respective spheres, the Union and the State legislature are made supreme and they
should not encroach into the sphere reserved to other. If a law passed by one Encroaches upon
the field assigned to the other the court will apply the doctrine of pith and substance to
determine whether the legislature concerned was competent to make it. If the pith and substance
of law, i.e., the true object of the legislation or a statute, relates to a matter within the
competence of Legislature which enacted it, it should be held to intra vires even though it might
incidentally trench on matters not within the competence of Legislature. In order to ascertain
the true character of the legislation one must have regard to the enactment as a whole, to its
object and to the scope and effect of its provision.

The Privy Council applied this doctrine in Profulla Kumar v. bank of [Link] this case the
validity of the Bengal Money Lenders’ Act, 1946 which limited the amount and the rate of
interest recoverable by a money lender on any loan was challenged on the ground that it was
ultra vires of the Bengal Legislature in so far as it related to ‘promissory notes’, a central
subject. The Privy Council held that the Bengal Money-Lenders Act was in Pith and substance
a law in respect of Money-Lending and Money-lenders a state subject, and was valid even
though it trenched incidentally on “Promissory note”- a central subject.

In State of Bombay v. F.N. Balsara ,the Bombay Prohibition Act, which prohibited sale and
possession of liquors in the state, was challenged on the ground that it incidentally encroached
upon import and export of liquors across custom frontier- a central subject. It was contended
that the prohibition, purchase, use, possession and sale of liquor will affect its import. The
court held that Act valid because the pith and substance of the Act fall under the State List and
not under the Union List even though the Act incidentally encroached upon the Union Powers
of legislation.

3. DOCTRINE OF COLOURABLE LEGISLATION

In K.C.G. Narayan Dev v. State of Orissa, the Supreme Court explained the meaning and scope of
the doctrine of colourable legislation in the following terms:-

The whole doctrine of colourable legislation is based upon the maxim that you cannot do
indirectly what you cannot do directly. In these cases the Court will look in the true nature and.
character of the legislation and for that its object, purpose or design to make law on a subject
is relevant and not its motive. If the legislature has power to make law, motive in making the
law is irrelevant.

In State of Bihar v. Kameshwar Singh , Bihar Land Reforms Act,1950 was held void on the
ground that though apparently it purported to lay down principle for determining compensation
yet in reality it did not lay down any such principle and thus indirectly sought to deprive the
petitioner of any compensation.

4. DOCTRINE OF REPUGNANCY (Art 254)

Article 245 establishes the Doctrine of Repugnancy which is based upon the principle that “if
one prevails the other cannot”. Article 254(1) says that when there is in inconsistency between
the State Law and the Central Law with respect to the subjects mentioned in the Concurrent
List, the Central Law would prevail and the State Law shall, to the extent of the repugnancy be
void.

In M. Karunanidhi v. union of India, the court summarized the test of repugnancy.

Accordingly, repugnancy would arise between the two statutes in the following situation:

1. It must be shown that there is clear and direct inconsistency between the two enactments
(Central Act and State Act) which is irreconcilable, 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 room or possibility of both the
statutes operating in the same field without coming into collusion with each other, no
repugnancy results.

4. Where there is no inconsistency but a statute occupying the same field seeks to create distinct
and separate offences, no question of repugnancy arises and both the statutes continue to
operate in the same field.

However, it is note-worthy that the doctrine is subject to the exception provided in clause (2)
of Art 254. According to clause (2) if a State law receives the assent of the president it shall
prevail notwithstanding such repugnancy. But still the parliament would have the powers to
amend, repeal or vary the laws.
In Zaverbhai v. State of Bombay, parliament enacted the Essential Supplies Act,1946, for
regulating production and distribution of essential commodities. A contravention of any
provision of the above Act was punishable with imprisonment up to 3 years or fine or both. In
1947, considering the punishment inadequate, the Bombay Legislature passed passed an Act
enhancing the punishment provided under the Central Law. The Bombay Act received the
assent of the president and thus prevailed over the Central Law and become operative in
Bombay. However, in 1950 parliament amended its Act of 1946 and enhanced the punishment.
It was held that as both occupied the same field (enhanced punishment) the State law became
void as being repugnant to the Central law.