# GVK INDS. LTD. & ANR v. THE INCOME TAX OFFICER & ANR

- **Citation:** [2011] 3 S.C.R. 366
- **Court:** Supreme Court of India
- **Decided:** 2011-03-01
- **Case number:** Civil Appeal No. 7796 of 1997
- **Bench:** S.H. Kapadia Cji, B. Sudershan Reddy, K. S. Radhakrishnan, Surinder Singh Nijjar, Swatanter Kumar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gvk-inds-ltd-anr-v-the-income-tax-officer-anr-27551
- **Pages:** 71

## Headnote

C
CONSTITUTION OF IND/A, 1950:
Articles 245(1) and 245(2) read with Articles 51, 246, 248,
· 249, 250, 253 and 262 - Seventh Schedule Lists I and Ill -
Power of Parliament to legislate in respect of extra-territorial
0 aspects or causes - Held : Parliament has been constituted,
and empowered to, and that its core role would be to enact
laws to protect the interests, welfare and securif'/ of India -
Therefore, even those extra-territorial aspects or causes,
provided they have nexus with India, should be deemed to
E be within the domain of legislative competence of Parliament
except to the extent the Constitution itself specifies otherwise
- Parliament may exercise its legislative powers with respect
to extra-territorial aspects or causes - events, things,
phenomena (howsoever commonplace they may be),
resources, actions or transactions, and the like - that occur,
F arise or exist or may be expected to do so, naturally or on
account of some human agency, in the social, political,
economic, cultural, biological, environmental or physical
spheres outside the territory of lnd.'a, and seek to control,
modulate, mitigate or transform the effects of such extraG territorial aspects or causes, or in appropriate cases, eliminate
or engender such extra-territorial aspects or causes, only
when such extra-territorial aspects or causes have, or are
expected to have, some impact on, or effect in, or
H
366
--
--
GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 367
ANR.
corsequences for: (a) the territory of India, or any part of India;
A
or (b) the interests of, welfare of, wellbeing of, or security of
inhabitants of India, and Indians - Consequently, Parliament's
power to enact legislation, pursuant to clause (1) of Article 245
may not extend to those extra-territorial aspects or causes that
have no impact on or nexus with India -Any laws enacted by B
Parliament with respect to extra-territorial aspects or causes
that have no impact on or nexus with India, would be ultra
vires, and would be Jaws made for a foreign territory- Income
Tax Act, 1961 - ss.9(1)(1) and 9(1)(vii)(4).
Article 245(1) -Expression "for" "the whole or any part of C
the territory of India" - Connotation of- Explained.
Article 245(2) - Judicial review of an enactment - The
subject of Clause (2) of Article 245 is the law made by
Parliament, pursuant to Clause (1) of Article 245, and the
D
object, or purpose, of Clause (2) of Article 245 is to specify
that a law so made by Parliament, for the whole or any part of
territory of India, should not be held to be invalid solely on
the ground that such laws require extra-territorial operation -
Clause (2) of Article 245 acts as an exception, of a particular E
and a limited kind, to the inherent power of the judiciary to
invalidate, if ultra-vires, any of the Jaws made by any organ
of the State - Clause (2) of Article 245 carves out a specific
exception that a law made by Parliament, pursuant to Clause
(1) of Article 245, for the whole or any part of the territory of F
India may not be invalidated on the ground that such a law
may need to be operated extraterritorially - Nothing more -
The power of the judiciary to invalidate laws that are ultra-vires
flows from its essential functions, constitutional structure,
values ana ~cheme, and indeed to ensure that the powers
G
vested in the o. ~:ms of the State are not being transgressed,
and that they are being used to realise a public purpose that
subserves the general welfare of the people .... It is one of the
essential defences of the people in a constitutional
democracy.
H
368
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A
INTERPRETATION OF CONSTITUTION :
Constitutional provision - Interpretation of - Held : In
interpreting any law, including the Constitution, the text of the
provision under consideration would be the primary source for
8 discerning the meanings that inhere in the enactment -
However, in the light of the serious issues it would always be
prudent, as a matter of constitutional n

## Text

_Characters 0–39,971 of 143,392. This is a partial read: ask again with offset=39971 for what follows._

A
B
[2011] 3 S.C.R. 366
GVK INDS. LTD. & ANR.
V.
THE INCOME TAX OFFICER & ANR.
(Civil Appeal No. 7796 of 1997}
MARCH 1, 2011
[S.H. KAPADIA CJI., B. SUDERSHAN REDDY, K. S.
RADHAKRISHNAN, SURINDER SINGH NIJJAR, AND
SWATANTER KUMAR, JJ.]
C
CONSTITUTION OF IND/A, 1950:
Articles 245(1) and 245(2) read with Articles 51, 246, 248,
· 249, 250, 253 and 262 - Seventh Schedule Lists I and Ill -
Power of Parliament to legislate in respect of extra-territorial
0 aspects or causes - Held : Parliament has been constituted,
and empowered to, and that its core role would be to enact
laws to protect the interests, welfare and securif'/ of India -
Therefore, even those extra-territorial aspects or causes,
provided they have nexus with India, should be deemed to
E be within the domain of legislative competence of Parliament
except to the extent the Constitution itself specifies otherwise
- Parliament may exercise its legislative powers with respect
to extra-territorial aspects or causes - events, things,
phenomena (howsoever commonplace they may be),
resources, actions or transactions, and the like - that occur,
F arise or exist or may be expected to do so, naturally or on
account of some human agency, in the social, political,
economic, cultural, biological, environmental or physical
spheres outside the territory of lnd.'a, and seek to control,
modulate, mitigate or transform the effects of such extraG territorial aspects or causes, or in appropriate cases, eliminate
or engender such extra-territorial aspects or causes, only
when such extra-territorial aspects or causes have, or are
expected to have, some impact on, or effect in, or
H
366
--
--
GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 367
ANR.
corsequences for: (a) the territory of India, or any part of India;
A
or (b) the interests of, welfare of, wellbeing of, or security of
inhabitants of India, and Indians - Consequently, Parliament's
power to enact legislation, pursuant to clause (1) of Article 245
may not extend to those extra-territorial aspects or causes that
have no impact on or nexus with India -Any laws enacted by B
Parliament with respect to extra-territorial aspects or causes
that have no impact on or nexus with India, would be ultra
vires, and would be Jaws made for a foreign territory- Income
Tax Act, 1961 - ss.9(1)(1) and 9(1)(vii)(4).
Article 245(1) -Expression "for" "the whole or any part of C
the territory of India" - Connotation of- Explained.
Article 245(2) - Judicial review of an enactment - The
subject of Clause (2) of Article 245 is the law made by
Parliament, pursuant to Clause (1) of Article 245, and the
D
object, or purpose, of Clause (2) of Article 245 is to specify
that a law so made by Parliament, for the whole or any part of
territory of India, should not be held to be invalid solely on
the ground that such laws require extra-territorial operation -
Clause (2) of Article 245 acts as an exception, of a particular E
and a limited kind, to the inherent power of the judiciary to
invalidate, if ultra-vires, any of the Jaws made by any organ
of the State - Clause (2) of Article 245 carves out a specific
exception that a law made by Parliament, pursuant to Clause
(1) of Article 245, for the whole or any part of the territory of F
India may not be invalidated on the ground that such a law
may need to be operated extraterritorially - Nothing more -
The power of the judiciary to invalidate laws that are ultra-vires
flows from its essential functions, constitutional structure,
values ana ~cheme, and indeed to ensure that the powers
G
vested in the o. ~:ms of the State are not being transgressed,
and that they are being used to realise a public purpose that
subserves the general welfare of the people .... It is one of the
essential defences of the people in a constitutional
democracy.
H
368
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A
INTERPRETATION OF CONSTITUTION :
Constitutional provision - Interpretation of - Held : In
interpreting any law, including the Constitution, the text of the
provision under consideration would be the primary source for
8 discerning the meanings that inhere in the enactment -
However, in the light of the serious issues it would always be
prudent, as a matter of constitutional necessity, to widen the
search for the true meaning, purport and ambit of the provision
under consideration - No provision, and indeed no word or
c expression, of the Constitution exists in isolation - They are
necessarily related to, transforming and in turn being
transformed by, other provisions, words and phrases in t.~'3
Constitution - Our Constitution is both long and also an
intricate matrix of meanings, purposes and structures - ff i~
0 only by locating a particular constitutional provision under
consideration within that constitutional matrix could one hope
to be able to discern its true meaning, purport and ambit -
When something is specified in an Article of the Constitution,
it is to be taken, as a matter of initial assessment, as nothing
E more was intended - Further, it is well known dicutum of
statutory and constitutional interpretation that when the same
words or phrases are used in different parts of the Constitution,
the same meaning should be ascribed, unless the context
demands otherwise.
F
INTERPRETA T/ON OF STATUTES :
Interpretation of a statutory provision - Held : A
construction of provisions in a manner that renders words or
phrases therein to the status of mere surplt.;ssage ought to
G be avoided.
MAXIM:
'Expressio unius est exclusion alterius' - Applicability of.
H
WORDS AND PHRASES:
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GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 369
ANR.
Expressions "aspects" and "causes", "object" and A
"provocation", "extraterritorial aspects or causes",
"extraterritorial law", "extraterritorial operation", "nexus with
India" - Connotation of in the context of article 245 of
Constitution of India.
The appellant filed a writ petition before the High
Court che''"11ging an order of the respondents whereby
B
the appellant was held liable for withholding a certain
portion of .monies being paid to a foreign company under
either of ss. 9(1){i) or 9(1)(vii){b) of the Income Tax Act, C
1961. T.he appellant also challenged the vires of s.
9(1 )(vii)(b) of the Income Tax Act, 1961 for want of
legislative competence and violation of Article 14 of the
Constitution of· 1ndia. The High Court held that s.
9(1)(vii)(b) and nots. 9(1)(i) applied to the facts of the case 0 .
. and also upheld constitutional validity of the said
provision. The High Court mainly relied on the ratio of the
judgment of a three-Judge Bench of the Supreme Court
in ECIL 1• The appeal challenging the said judgment was
listed before a two Judge Bench of the Supreme Court.
Keeping, in view that the far reaching issues of great E
constitutional purport and the fact that such issues had
been previously raised in ECIL, the matter, ultimately, was
referred to the Constitution Bench.
The questions for consideration before the Court F
were : (1) "Is the Parliament constitutionally restricted
from enacting legislation with respect to extra-territorial
aspects or causes that do not have, nor expected to have
any, direct or indirect, tangible or intangible impact(s) on,
or effect{s) in, or consequences for: (a) the territory of G
India, or any part of India; or (b) the interests of, welfare
of, wellbeing of, or security of inhabitants of India, and
Indians?" 2) "Does the Parliament have the powers to
legislate "for'' any territory, other .than the territory of India
or any part of it?"
H
370
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A
Answering the reference, the Court
HELD : 1.1 Our Constitution charges the various
organs of the State with affirmative responsibilities of
protecting the interests of, the welfare of and the security
B. oj the nation. Legislative powers are granted to enable
the accomplishment of the goals of the nation. The
powers of judicial review are granted in order to ensure
that legislative and executive powers are used within the
bounds specified in the Constitution. Consequently, it is
c imperative that the powers so granted to various organs
of the state are not restricted impermissibly by judicial fiat
such that it leads to inabilities of the organs of the State
in discharging their constitutional responsibilities.
Powers that have been granted, and implied by, and
0
borne by the Constitutional text have to be perforce
admitted.
Neverthel~ss, the very essence of
constitutionalism is also that no organ of the state may
arrogate to itself powers beyond what is specified in the
Constitution. [para 27) [405-A-D]
E
1.2 It is the Constitution that is supreme, with true
sovereignty vesting in the people. In as much as that true
sovereign has vested some of their collective powers in
the various organs of the state, including Parliament,
· there cannot be the legal capacity to exercise that power
F in a manner that is not related to their interests, benefits,
welfare and security. [para 49) [417-A-B]
The Changing Constitution, Ed. Jowell & Oliver 2nd Edn.
Clarendon Press, Oxford (1989) by A.W. Bradley; and
G Studies in Constitutional Law by Colin R. Munro, 2nd Ed.
H
Butterworths, OUP (2005) -referred to.
1.3 Under our Constitution, while some features are
capable of being amended by Parliament, pursuant to the
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GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 371
ANR.
amending power granted by Article 368, the essential A
features - the basic structure - of the Constitution is
beyond such powers of Parliament. The power to make
changes to the basic structure of the Constitution vests
only in the people sitting, as a nation, through its
representatives in a Constituent Assembly. One of the B
foundational elements of the concept of basic structure
is it .would b: ... the stability of purpose, and machinery
of government to be able to pursue the constitutional
vision in to the indeterminate and unforeseeable future.
[para 26] [404-F-G; 405-A]
C
Keshavanadna Bharati v. State of Kera/a 1973 Suppl.
SCR 1 _ = (1973) 4 SCC 225 and l.R. Coelho v. State of Tamil
Nadu 2007 (1 ) SCR 706 = (2007) 2 SCC 1 - relied on
1.4 In interpreting any law, including the Constitution, D
the text of the provision under consideration would be
the primary source for discerning the meanings that
inhere in the enactment. However, in the light of the
serious issues it would always be prudent, as a matter
of constitutional necessity, to widen the search for the E
true meaning, purport and ambit of the provision under
consideration. No provision, and indeed no word or
expression, of the Constitution exists in isolation - they
are necessarily related to, transforming and in turn being F
transformed by, other provisions, words and phrases in
the Constitution. Our Constitution is both long and also
an intricate matrix of meanings, purposes and structures.
It is only by locating a particular constitutional provision
under consideration within that constitutional matrix
could one hope to be able to discern its true meaning, G
purport and ambit. [para 28] [405-F-H; 406-A]
1.5 A construction of provisions in a manner that
372
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A renders words or phrases therein to the status of mere
surplussage ought to be avoided. [para 31] [407-F]
2.1 The text of Clause (2) of Article 245, when read
together with Clause (1) of Article 245 of the Constitution
8 of India makes it sufficiently clear that the laws made by
Parliament relating to aspects or causes that occur, arise
or exist or may be expected to occur, arise or come into
existence within the territory of India may not be
invalidated on the ground that such laws require to be
c operated outside the territory of India. [para 10] [394-DE]
2.2 The implication of the nexus requirement is that
a law that is enacted by Parliament, whose "objects" or
"provocations" do not arise within the territory of India,
D would be unconstitutional. The words "object" and
"provocation", and their plural forms, may be conceived
as having been used in ECIL as synonyms for the words
"aspect" and "cause", and their plural forms, as used in
this judgment. In ECIL, the Court while interpreting
E Clauses (1) and (2) of Article 245, drew a distinction
between the phrases "make laws" and "extraterritorial
operation" - i.e., the acts and functions of making laws
versus the acts and functions of effectuating a law
already made. In drawing the distinction, two analytically
F separable, albeit related issues were considered. They
relate to the potential conflict between the fact that, in the
international context, the "principle of Sovereignty of
States" (i.e., nation-states) would normally be "that the
laws made by one State can have no operation in
G another State" (i.e., they may not be enforceable), and the
prohibition in Clauses (2) of Article 245 that laws made
by Parliament may not be invalidated on the ground that
they may need to be or are being operated extraH territorially. [para 11-12] [394-H; A-F]
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GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 373
ANR.
Electronics Corporation of lndiaLtd., v. Commissioner of A
Income Tax & Anr. (1989) 2 SCC 642 -referred· to. .
British Columbia Railway Company Limited v. King
[1946) A.C. 527-referred to.
2.3 The subject in focus in the first part of Clause (1)
8
of Article 245 is "the whole or any part of the territory of
India", and the object is to specify that it is Parliament
which is empowered to make laws in respect of the same.
[para 32] [407-G]
c
2.4 The word that links the subject, "the whole or any
part of the territory of India" with the phrase that grants
legislative powers to Parliament, is "for". It is used as a
preposition. The word "for", when ordinarily used as a
preposition, can signify a range of meanings between the
D
subject, that it is a preposition for, and that which
preceded it. [para 33] [408-A-B]
2.5 Consequently, the range of senses in which the
word "for" is ordinarily used would suggest that,
E
pursuant to Clause (j) of Article 245, Parliament is
empowered to enact those laws that are in the interest
of, to the benefit of, in defence of, in support or favour
of, suitable or appropriate to, in respect of or with
reference to "the whole or any part of the territory of F
India". [para 34) [408-D]
2.6 In as much as many extra-territorial aspects or
causes may have an impact on or nexus with the nationstate, they would legitimately, and indeed necessarily, be
G
within the domain of legislative competence of the
national parliament, so long as the purpose or object of
such legislation is to benefit the people of that nation ·
state. [para 35] [408-F-G]
2.7 Because of interdependencies and the fact that H
374
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A many extra-territorial aspects or causes have an impact
on or nexus with the territory of the nation-state, it would
be impossible to conceive legislative powers and
competence of national parliaments as being limited only
to aspects or causes that arise, occur or exist or may be
B expected to do so, within the territory of its own nationstate. Our Constitution has to be necessarily understood
as imposing affirmative obligations on all the organs of
the State to protect the interests, welfare and security of
India. Consequently, it has to be understood that
C Parliament has been constituted, and empowered to, and
that its core role would be to, enact laws that serve such
purposes. Therefore, even those extra-territorial aspects
or causes, provided they have a nexus with India, should
be deemed to be within the domain of legislative
D competence of Parliament, except to the extent the
Constitution itself specifies otherwise. [para 41) [412-0E]
3.1 In order to discern as to whether Parliament is
E empowered to enact laws in respect of extra-territorial
aspects or causes that have no nexus with India, and
furthermore could such laws be bereft of any benefit to
India, the word "for" again provides the clue. 'To legislate
for a territory' implies being responsible for the welfare
F of the people inhabiting that territory, deriving the powers
to legislate from the same people, and acting in a capacity
of trust. In that sense, Parliament belongs only to India;
and its chief and sole responsibility is to act as
Parliament of India and of no other territory, nation or
G people. There are two related limitations that flow from
this. The first one is with regard to the necessity, and the
absolute base line condition, that all powers vested in any
organ of the State, including Parliament, may only be
exercised for the benefit of India. All of its energies and
H focus ought to be directed only to that end. It may be the
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GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 375
ANR.
case that an external aspect or cause, or welfare of the
A
people elsewhere may also benefit the people of lnd.ia.
The laws enacted by Parliament may enhance the welfare
of people in other territories too; nevertheless, the
fundamental condition - the benefit to or of India -
remains the central and primary purpose. That being the
B
case, the logical corollary and, therefore, the second
limitation that flows thereof, would be that an exercise of
legislative powers by Parliament with regard to extraterritorial aspects or causes that do not have, or may be
expected not to have any nexus with India, would C
transgress the first condition. Consequently, Parliament's
powers to enact legislation, pursuant to Clause (1) of
Article 245 may not extend to those extra-territorial
aspects or causes that have no impact on or nexus with
India. The word "for", that connects the territory of India
D
to the legislative powers of Parliament in Clause (1) of
Article 245, when viewed from the perspective of the
people of India, implies that it is "our" Parliament, a
jealously possessive construct that may not be tinkered
with in any manner or form. [para 43-44] [412-H; 413-AE
H]
3.2 The grant of the power to Parliament, in Clause
(1) of Article 245, to legislate, comes with a limitation that
arises out of the very purpose for which it has been
F
constituted. That purpose is to continuously, and forever
be acting in the interests of the people of India. It is a
primordial condition and limitation. [para 45] [414-D]
3.3 No organ of the Indian State can be the repository
of the collective powers of the people of India, unless that G
power is being used exclusively for the welfare of India.
Incidentally, the said power may be used to protect, or
enhance, the welfare of some other people, also;
however, even that goal has to relate to, and be justified
H
376
SUPREME COURT REPORTS
[2011) 3 S.C.R.
A by, the fact that such an exercise of power ultimately
results in a benefit - either moral, material, spiritual or in
some other tangible or intangible manner - to the people
who constitute India. [para 45] [414-E-G)
.
3.4 The conclusion that Parliament may not legislate
8 for territories beyond India also derives interpretational
support from Article 51, a Directive Principle of State
Policy, though not enforceable, nevertheless,
fundamental in the governance of the country. To enact
C legislation with respect to extra-territorial aspects or
causes, without any nexus to India, would in many
measures be an abdication of the responsibility that has
been cast upon Parliament under Article 51. International
peace and security has been recognised as being vital
0 for the interests of India. This is to be achieved by India
maintaining just and honourable relations, by fostering
respect for international and treaty obligations etc., as
recogniZed in Article 51. It is one matter to say that
because certain extra-territorial aspects or causes have
E an impact on or nexus with India, Parliament may enact
laws with respect to such aspects or causes. That is
clearly a role that has been set forth in the Constitution,
and a power that the people of India can claim. How
those laws are to be effectuated, and with what degree
F of force or diplomacy, may very well lie in the domain of
pragmatic, and indeed ethical, statecraft that may, though
not necessarily always, be left to the discretion of the
Executive by Parliament. Nevertheless, that position is
very different from claiming that India has the power to
G interfere in matters that have no nexus with India at all.
To claim such powers, would be to make such powers·
available. Invariably available powers are used, and in this
case with a direct Impact on the moral force of India, and
its interests, welfare and security, by shattering the very
H concepts that under-gird peace between nations. By
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GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 377
ANR.
recognizing international peace to be sine qua non for A
India's welfare and security, the framers have charged the
State, and all of its organs, with responsibility to
endeavour to achieve the goals set forth in Article 51. To
claim the power to legislate for some other territories,
...
even though aspects or causes arising, occurring or 8
existing there have no connection to India, would be to
demolish the very· basis on which international peace
\
and security can be premised. [paras 46-47] [414-H; 415A-D-H; 416-A-B]
,/'
3.5 If one were to read Clause (2) of Article 245 as an c
independent source of legislative power of Parliament to
enact laws for territories beyond India wherein, neither the
aspects or causes of such laws have a nexus with India,
nor the purposes of such laws are for the benefit of India,
D
it would immediately call into question as to why Clause
(1) of Article 245 specifies that it is the territory of India
or a part thereof "for" which Parliament may make laws.
If the power to enact laws for any territory, including a
foreign territory, were to be read into Clause (2) of Article
E
245, the phrase "for the whole or any part of the territory
of India" in Cl&;.cse (1) of Article 245 would become a mere
surplassage. When something is specified in an Article
of the Constitution it is to be taken, as a matter of initial
assessment, as nothing more was intended. In this case
F
it is the territory of India that is specified by the phrase
"for the whole or any part of the territory of India."
"Expressio unius est exclusio alterius"- the express
mention of one thing implies the exclusion of another. In
this case, Parliament has been granted powers to make G
laws "for" a specific territory - and that is India or any
part thereof; by implication, one may not read. that
Parliament has been granted powers to make laws "for"
territories beyond India. [para 54] [419-F-H; 420-A-C]
3.6 It would be pertinent to note, that List I - Union
H
378
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A List of the Seventh Schedule clearly lists out many
matters that could be deemed to implicate aspects or
causes that arise beyond the territory of India. In
particular, but not limited to, note may be made of Entries
9 through 21 thereof. Combining the fact that Parliament
e has been granted residuary legislative powers and
competence with respect to matters that are not
enumerated in Concurrent and State Lists, [Article 248],
the fact that Parliament has been granted legislative
powers and competence over various matters, as listed
c in List I of the Seventh Schedule, many of which may
clearly be seen to be falling in the class of extra-territorial
aspects or causes, [Article 246], and the powers to make
laws "for the whole or any part of the territory of India",
[Article 245], it must be concluded that, contrary to the
o rigid reading of the ratio in ECIL, Parliament's legislative
powers and competence with respect to extra-territorial
aspects or causes that have a nexus with India was
considered and provided for by the framers of the
Constitution. Further, in as much as Article 245, and by
E implication Articles 246 and 248, specify that it is "for the
whole or any part of the territory of India" that such
legislative powers have been given to Parliament, it
logically follows that Parliament is not empowered to
legislate with respect to extra-territorial aspects or causes
F that have no nexus whatsoever with India. [para 59) [422D-H; 423-A]
3.7 When one looks at Articles 249 (conditions under
which Parliament may legislate with respect to matters in
List II of Seventh Schedule, wherein the Council of States
G has deemed it to be in national interest to do so) and 250
(ambit of Parliamentary powers as inclusive of
competence to legislate with respect to matters in the
State List while a Proclamation of Emergency is in
operation), one finds that legislative powers of Parliament
H
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are spoken of, in the said articles also, only in terms of A
as being "for the whole or any part of the territory of
India". Article 253 deals with legislation that may be
needed to give effect to various international agreements,
and again the powers are specified only in terms· of
making laws "for the whole or any part of the territory of B
India." It is a well known dictum of statutory and
constitutional interpretation that when the same words or
phrases are used in different parts of the Constitution, the
same meaning should be ascribed, unless the context
demands otherwise. In this case, there do not seem to be C
contextual reasons that would require reading a different
meaning into the expr:ession "for the whole or any part
of the territory" in the context of Articles 249, 250 or 253,
than what has been gathered from the text of Article 245.
[para 60] [423-C-G]
D
3.8 Article 260, in Chapter II of Part XI is arguably the
only provision in the Constitution that explicitly deals
with the jurisdiction of the Union in relation to territories
outside India, with respect to all three functions of E
governance - legislative, executive and judicial. On
closer examination, Article 260 appears to further support
the conclusions arrived at by this Court with respect to
Article 245. [para 61]. [424-A-B]
3.9 It is clear from the text of Article 260 that it is the F
Government of India which may exercise legislative,
executive, and judicial functions with respect of certain
specified foreign territories, the Governments of which,
and in whom such powers have been vested, have
entered into an agreement with Government of India G
asking it do the same. Indeed, from Article 260, it is clear
that Parliament may enact laws, whereby it specifies the
conditions under which the Government of India may
enter into such agreements, and how such agreements
are actually implemented. [para 62] [424-E-F]
H
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A
3.10 Nevertheless, the fact, even in the sole instance
in the Constitution where it is conceived that India may
exercise full jurisdiction - i.e., executive, legislative and
judicial - over a foreign territory, is that such a jurisdiction
can be exercised only upon an agreement with the
B foreign government (thereby comporting with
international laws and principles such as "comity of
nations" and respect for "territorial sovereignty" of other
nation-states), and the manner of entering into such
agreements, and the manner of effectuating such an
C agreement has to be in conformity with a law specifically
enacted by Parliament (whereby the control of the people
of India over the actions of the Government of India, even
extra-territorially is retained), implies that it is only "for"
India that Parliament may make laws. In this regard
D support can also be drawn from the text of Articles 1 and
2. Consequently, the positive affirmation, in the phrase in
Clause (1) of Article 245, that Parliament "may make laws
for the whole or any part of the territory of India" has to
be understood as meaning that unless a territory is a part
E of the territory of India, Parliament may not exercise its
legislative powers in respect of such a territory. In the
constitutional scheme it is clear that Parliament may not
make laws for a territory, as a first order condition, unless
that territory is a part of India. [para 63, 64] [424-G-H; 425F A-B-E; 426-A-B]
Berubari Union and Exchange of Enclaves, Re AIR 1960
SC 845 - referred to.
3.11 Clearly, the statements that under our
G Constitution, Parliament has been given absolute powers
and, therefore, it can enact extra-territorial laws, are not
in comport with present day constitutional jurisprudence
in India that the powers of every organ of the State are
as provided for in the Constitution and not absolute. [para
H 67] [428-F]
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3.12 Indeed, it may be necessary for the State to
A
possess some extraordinary powers, and exert
considerable force to tackle situation with regard to
foreign affairs or situations, both within and outside the
territory, in which the government claims the existence
of serious security risks or law and order problems.
B
Nevertheless, all such powers, competence, and extent
of force have to be locatable, either explicitly or implicitly,
within the Constitution, and exercised within the four
corners of constitutional permissibility, values and
scheme. [para 68]
C
3.13 In granting Parliament the powers to legislate
"for'' India, and consequently also with respect to extraterritoria I aspects or causes, the framers of our
Constitution certainly intended that there be limits as to
D
the manner in which, and the extent to which, the organs
of the State, including Parliament, may take cognizance
of extra-territorial aspects or causes, and exert the State
powers (which are the powers of the collective) on such
aspects or causes. The working of the principles of public
E
trust, the requirement that all legislation by Parliament
with respect to extra-territorial aspects or causes be
imbued with the purpose of protecting the interests of,
the welfare of and the security of India, along with Article
51, a Directive Principle of State Policy, though not
F
enforceable in a court of law, nevertheless fundamental
to governance, lends unambiguous support to the
conclusion that Parliament may not enact laws with
respect to extra-territorial aspects or causes, wherein
such c..:;pects or causes have no nexus whatsoever with
G
India. [par."' 73] [432-G; 433-A-D]
3.14 Thus, Parliament is constitutionally restricted
from enacting legislation with respect to extra-territorial
aspects or causes that do not have, nor expected to have
H
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[2011] 3 S.C.R.
A any, direct or indirect, tangible or intangible impact(s) on
or. effect(s) in or consequences for: (a) the territory of
India, or any part of India; or (b) the interests of, welfare
of, wellbeing of, or security of inhabitants of India, and
Indians. However, Parliament may exercise its legislative
B powers with respect to extra-territorial aspects or causes,
- events, things, phenomena (howsoever commonplace
they may be), resources, actions or transactions, and the
like - that occur, arise or exist or may be expected to do
so, naturally or on account of some human agency, in the
C social, political, economic, cultural, biological,
environmental or physical spheres outside the territory
of India, and seek to control, modulate, mitigate or
transform the effects of such extra-territorial aspects or
causes, or in appropriate cases, eliminate or engender
D such extra-territorial aspects or causes, only when such
extra-territorial aspects or causes have, or are expected
to have, some impact on, or effect in, or consequences
for: (a) the territory of India, or any part of India; or (b) the
interests of, welfare of, wellbeing of, or security of
E inhabitants of India, and Indians. [para 76) [435-A-F]
3.15 It is important to state and hold that the powers
of legislation of Parliament with regard to all aspects or
causes that are within the purview of its competence,
F including with respect to extra-territorial aspects or
causes as delineated above, and as specified by the
Constitution, or implied by its essential role in the
constitutional scheme, ought not to be subjected to some
a-priori quantitative tests, such as "sufficiency" or
G "significance" or in any other manner requiring a predetermined degree of strength. All that would be required
would be that tho connection to India be real or expected
to be real, and not illusory or fanciful. Whether a particular
law enacted by Parliament does show such a real
H connection, or expected real connection, between the
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extra-territorial aspect or cause and something in India A
or related to India and Indians, in terms of impact, effect
or consequence, would be a mixed matter of fact and of
law. Obviously, where Parliament itself posits a degree
of such relationship, beyond the constitutional
requirement that it be real and not fanciful, then the B
courts would have to enforce such a requirement in the ·
operation of the law as a matter of that law itself, and not
of the Constitution. [para 76] [435-G-H; 436-A-C]
Governor General in Council v. Raleigh Investment Co. c
Ltd. [1944] 12 ITR 265, Wallace Brothers and Co. v.
Commissioner of Income Tax, Bombay [1948] 16 ITR 240
and State v. Narayandas Mangilal Dayame AIR 1958 Born
68 - referred to.
Emmanuel Mortensen v. David Peters [1906]8 F (J.) 93,
D
Croft v. Dunphy [1933] A.C. 156 - referred to.
4.1 The distinction drawn in ECIL between "make
laws" and "operation" of law is a valid one, and leads to
a correct assessment of the relationship between E
Clauses (1) and (2) of Article 245. [para 16] [397-E-F]
4.2 It is important to draw a clear distinction between
the acts & functions of making laws and the acts &
functions of operating the laws. Making laws implies the
F
acts of changing and enacting laws. The phrase
operation of law, in its ordinary sense, means the
effectuation or implementation of the. laws. The acts and
functions of implementing the laws, made by the
legisla~.:"e, fall within the domain of the executive. G
Moreover, l."ie essential nature of the act of invalidating
a law is differE-•. : from both the act of making a law, and
the act of operating a law. Invalidation of laws falls
exclusively within the functions of the judiciary, and
occurs after examination of the vires of a particular law. H
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[2011) 3 S.C.R.
A While there may be some overlap of functions, the
essential cores of the functions delineated by the
meanings of the phrases "make laws" "operation of laws"
and "invalidate laws" are ordinarily and essentially
associated with separate organs of the state - the
B legislature, the executive and the judiciary respectively,
unless the context or specific text, in the Constitution,
unambiguously points to some other association. [para
51] [417-F-H; 418-A-B]
c
4.3 In Article 245 the words and phrases "make laws"
"extra-territorial operation", and "invalidate" have been
used in a manner that clearly suggests that t::e
addressees implicated are the legislature, the executive
and the judiciary respectively. While Clause (1) uses th~
0 verb "make" with respect to laws, thereby signifying the
grant of powers, Clause (Z) uses the past tense of make,
"made", signifying laws that have already been enacted
by Parliament. The subject of Clause (2) of Article 245 is
the law made by Parliament, pursuant to Clause (1) of
E Article 245, and the object, or purpose, of Clause (2) of
Article 245 is to specify that a law so made by Parliament,
for the whole or any part of territory of India, should not
be held to be invalid solely on the ground that such laws
require extra-territorial operation. The only organ of the
F state which may invalidate laws is the judiciary. [para 52]
[418-C-E]
4.4 Consequently, the text of Clause (2) of Article 245
should be read to mean that it reduces the general and
inherent powers of the judiciary to declare a law ultraG vires only to the extent of that one ground of invalidation.
H
However, it must be noted, as regards the judiciary's
jurisdiction, that an a-priori, and a strained inference that
is unsupported by the plain meaning of the text may not
be made that the powers of the legislature to make laws
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beyond the pale of judicial scrutir have been expanded
A
over and above that which has been specified. [para 52]
[418-E-G]
4.5 Clause (2) of Article 245 acts as an exception, of
a particular and a limited kind, to the inherent power of B
the judiciary to invalidate, if ultra-vires, any of the laws
made by any organ of the State. It carves out a specific
exceptli:m that a law made by Parliament, pursuant to
Clause (1) of Article 245, for the whole or any part of the
territory of India may not be invalidated on the ground c
that such a law may need to be operated extraterritorially.
Nothing more. The power of the judiciary to invalidate
laws that are ultra-vires flows from its essential functions,
Constitutional structure, values and scheme, and indeed
to ensure that the powers vested in the organs of the o
State are not being transgressed, and that they are being
used to realise a public purpose that subserves the
general welfare of the people. It is one of the essential
defences of the people in a constitutional democracy.
[para 53] (419-B-E]
E
4.6 Courts should always be very careful when vast
powers are being claimed, especially when those claims
are cast in terms of enactment and .implementation of
laws that are completely beyond the pale of judicial .
scrutiny and which the Constitutional text does -not F
unambiguously support. To readily accede to demands
for a reading of such powers in the constitutional matrix
might inevitably lead to a destruction of the complex
matrix that our Constitution is. A thorough textual
analysis, combined with wider analysis of constitutional G
topology, structure, values and scheme has revealed a
much more intricately provisioned set of powers to
Parliament Indeed, all the powers necessary for an organ
of the State to perform its role completely and to H
386
SUPREME COURT REPORTS
[2011) 3 S.C.R.
A effectuate the Constitutional mandate, can be gathered
from the text of the Constitution, properly analysed and
understood in the wider context in which it is located. To
give in to such demands, would be to run the risk of
importing meanings and possibilities unsupportable by
B the entire text and structure of the Constitution. In the
cases dealing with external affairs, or with some claimed
grave danger or a serious law and order problem,
external or Internal, to or in India, It is even more important
that courts be extra careful. [para 74] [433-D-H; 434-A-B]
c
Woods v. Cloyd W. Miller Co., 333 U.S. 138- referred
to.
4.7 The point is about how much care should be
exercised in interpreting the provisions of the
D Constitution. Very often, what the text of the Constitution
says, when interpreted in light of the plain meaning,
constitutional topology, structure, values and scheme,
reveals the presence of all the necessary powers to
conduct the affairs of the State even in circumstances
E that are fraught with grave danger. [para 75] [434-G-H;
435-A]
4.8 Parliament has no powers to legislate "for" any
territory, other than the territory of India, or any part of it
F It is obvious that Parliament is empowered to make laws
with respect to aspects or causes that occur, arise or
exist, or may be expected to do so, within the territory of
India, and also with respect to extra-territorial aspects or
causes that have an impact on or nexus with India. Such
G laws would fall within the meaning, purport and ambit of
the grant of powers to Parliament to make laws "for the
whole or any part of the territory of India", and they may
not be invalidated on the ground that they may require
extra-territorial operation. Any laws enacted by
H Parliament with respect to extra-territorial aspects or
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