MODULE 5

CONSTITUTIONAL SCHEME OF
DISTRIBUTION OF POWERS
BETWEEN
THE UNION AND THE STATES
• The Constitution of India, being federal in structure, divides all
powers (legislative, executive and financial) between the Centre and the
states.
• Though the Centre and the states are supreme in their respective fields,
the maximum harmony and coordination between them is essential for
the effective operation of the federal system.
• Hence, the Constitution contains elaborate provisions to regulate the
various dimensions of the relations between the Centre and the states.
• The Centre-state relations can be studied under three heads:
• Legislative relations.• Administrative relations.
• Financial relations.
By Going into great details of the relations, the Constitution
framers hope to minimize the conflicts between the centre and the
states.
Distribution of Powers: Legislative, Administrative and Financial:
• A total of 56 Articles from Article 245 to 300 in Part XI and
XII are devoted to the State-Centre relations.
• Part XI (Articles 245-263)contains the legislative and
administrative relations and
• Part XII (Articles 264-300) the financial relations.
• From point of view of the territory over which the legislation can have
effect, the jurisdiction of a State Legislature is limited to the territory of
that State.
• But in the case of Parliament, it has power to legislate for the whole or
any part of the territory of India i.e. States, Union Territories or any other
areas included for the time being in the territory of India.
The Constitution makes a two-fold distribution of legislative
powers:
(a) With respect to territory.
(b)With respect to subject matter of legislation, (i.e. three Lists).
Article 245 : The Ambit or Territorial limits of legislative
powers:
• The Parliament can make laws for the whole or any part of the
country.
• A State legislature can make laws for the whole or any part of
the State.
• The law of Parliament is never invalid even when the effect
pertains to outside the country.
• No law made by Parliament shall be deemed to be invalid on the
ground that it would have extra territorial operation.
• 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.
• Two reasons are there for 245(2).first reason is historical.
• "The essence of Article 245(2) of the Constitution is that the
Parliament has the authority to make laws with extraterritorial
operations. For instance, the Hindu Marriage Act has
extraterritorial applicability, allowing for prosecution in India if an
individual, already married, enters into another marriage in
abroad, such as in the United States. Similarly, the NIA Act
empowers the National Investigation Agency (NIA) to conduct
investigations in other countries. Additionally, several provisions
in criminal law provide for extraterritorial jurisdiction."
 Doctrine of Territorial Nexus
• Doctrine of Territorial Nexus means that laws passed by a state
legislature are not applicable outside of it unless there is an
adequate connection between the state and the object.
• In this doctrine of territorial nexus, the term "territorial" simply
means "related to territory, region, or location," and the term
"nexus" simply means "related to people, things, or events."
• Additionally, the idea of territorial nexus serves as a framework
for interstate extraterritorial operations.
• In order to give effect to the laws made by a state for
extraterritorial purpose, a nexus between the object and state
must be shown.
 Theory of Territorial Nexus
• The state legislature has the jurisdiction to make laws within its
territorial jurisdiction.
• Territorial nexus is one such exception which allows the
state to make laws for extraterritorial operations if it shows
that there exists a nexus between the object and the state.
• According to the Doctrine of Territorial Nexus, laws made by a
state legislature are not applicable outside that state, except
when there is a sufficient nexus between the state and the
object.
• This doctrine derives its authority from Article 245 of the Indian
 Doctrine of Territorial Nexus
• The doctrine states that in order for a state law to have an
extraterritorial operation, there must be a nexus between the
object and the State.
• Doctrine of territorial nexus says that laws made by a state
legislature are not applicable outside the state, except when
there is a sufficient nexus between the state and the object.
• Doctrine of territorial nexus says that laws made by a state
legislature are not applicable outside the state, except when
there is a sufficient nexus between the state and the object.
• The Doctrine of Territorial nexus can be invoked under the following
circumstances-
• Whether a particular state has extra-territorial operation.
• If there is a territorial nexus between the subject- matter of the Act and the
state making the law.
• It signifies that the object to which the law applies need not be
physically located within the territorial boundaries of the state,but
must have a sufficient territorial connection with the state.
• A state may levy a tax on a person, property ,object or transaction not
only when it is situated within its territorial limits,but also when it has a
sufficient and real territorial connection with it.
• The doctrine of territorial nexus is only applicable when the following
conditions are fulfilled. Those conditions are as follows :
i.The nexus must be legitimate.
ii.The liability shall be related to the territorial connection.
These conditions are sufficient enough to show that the nexus was
legitimate and the court would not question its validity.
• In several cases of the taxation law it has been held that the territorial
limits of a state would not hamper the sale and purchase of the goods.
• Buying and selling of goods would be a reasonable ground to sustain the
taxing power of the state.
 Wallace Bros. And Co. Ltd. vs The Commissioner
Of Income Tax
• BOMBAY HIGH COURT
• In the instant case, a company which was registered and incorporated in
England ,which also carried out its business in India through a partner.
• The firm made a huge profit in that accounting year.
• The income tax authorities sought to levy a tax upon the company of the
respondent.
• The income tax authority was challenged by the respondent.
• But it was held by the privy council that there existed the doctrine of
territorial nexus and held the tax valid.
• It is said that the major part of that income was extracted from British
India was the sufficient ground to establish a territorial nexus.
 Tata Iron And Steel Company vs. Bihar State Tax Act
• The state of Bihar passed sales tax act for levying a tax in on the sales
whether it took place within the territorial limits of the state or outside of
that limit.
• it was also stated that the goods should be manufactured in the state.
• The State of Bihar taxed all the sales of Tata Iron and Steel company
inside and outside the state.
• Tax Act for levy of sales tax whether the sale was concluded within the
state or outside if the goods were produced, found and manufactured
in the state.
• The court held there was sufficient Territorial Nexus and upheld the Act as
valid.
 Tata Iron And Steel Company vs. Bihar State Tax Act
• Whether there is sufficient Nexus between the Law and the
object sought to be taxed will depend upon the facts and
circumstances of a particular case.
• It was pointed out that sufficiency of the Territorial connection
involved consideration of two elements:
• the connection must be real and not illusory
• the liability sought to be imposed must be pertinent to that
connection.
• In the instant case, it was held that there was an established
nexus between the object which was to be taxed and the law.
 Tata Iron And Steel Company vs. Bihar State Tax Act

• These are the two essential elements that constitute the

doctrine of territorial nexus.
• 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.
 State of Bombay vs R.M.D. Chamarbaugwala
• In the instant case, the respondent who was not a resident of
Bombay conducted a prize competition of a crossword puzzle
through a newspaper which was printed and published in the
Bangalore.
• This paper was widely published in Bombay too.
• For this competition depots were established so that the forms
and fees can be collected.
• It attracted a lot of buyers for the ticket of that competition.
• The state government then levy tax over the respondents
company for contesting a prize competition in the state.
 State of Bombay vs R.M.D. Chamarbaugwala
• The respondent challenged the supreme court and a question
was raised whether the tax can be levied upon a person who
resides outside the territorial limits of the state.
• It was held by the supreme court that there was a sufficient
territorial nexus and the legislature has the authority to tax
the respondent for the revenue earned by his company
through the prize competition.
 State of Bihar vs Charusila Dasi
• Facts-Bihar legislature enacted the Bihar Hindu Religious Trusts
Act,1950, for the protection and preservation of properties appertaining to
the Hindu religious trusts. The Act applied to all trusts any part of which
was situated in the state of Bihar.
• The Respondent created a trust deed of her properties of several houses
and land in Bihar and Calcutta.The trust being situated in Bihar.
• Issue-The main question for decision was whether the Act apply to trust
properties which are situated outside the state of Bihar.
• Can the legislature of Bihar make a law with respect to such a trust
situated in Bihar and other properties appertaining to such trust which is
situated outside Bihar?
• Decision- Applying the doctrine of territorial nexus, the Supreme court
held that the Act could affect the trust property situated outside Bihar, but
appertaining to a trust situated in Bihar where the trustees functioned.
• The Supreme Court ruled that the Bihar Hindu Religious Trusts Act, 1950
was valid and that the state legislature could legislate over charitable and
religious trusts located within its territory, even if some of the trust's
properties were located in another state. The court also ruled that the
trust was a public trust that benefited the Hindu community as a whole,
and that the income made by the trust was taxable.
• The Act aims to provide for the better administration of Hindu religious trusts in the
state of Bihar.The trust is situated in Bihar the state has legislative power over it and
also over its trustees or their servants and agents who must be in Bihar to administer
the trust.
 A.H. Wadia v. Income Tax Commissioner

• In the case of A.H. Wadia v. Income Tax Commissioner it

was held that a question of extraterritoriality of enactment
can never be raised against a supreme legislative
authority on the grounds of questioning its validity.
 Article 246
• Article 246 of the Constitution deals with the division of power
between the Union and the States.
• It demarcates the powers of the Union and the State by
classifying their powers into 3 lists.
• They are the Union List, the State List and the Concurrent List.
• Union list: The Union List is a list of 100 subjects that the
Union or Centre government enjoys supreme jurisdiction over.
• It consists of subjects of National Importance like defence,
foreign affairs, banking, atomic energy, railways, post etc.
• State list: The state list is a list of 61 subjects that state legislatures
enjoy jurisdiction over.
• It consists of subjects like public order, prisons, public health, production,
manufacture, transport, purchase and sale of intoxicating liquors,
agricultural ,education and research, fisheries, state public services etc.
• Concurrent list: The concurrent list is a list of 52 subjects on which
both the Union and State legislatures enjoy jurisdiction.
• It consists of subjects like criminal law, criminal procedure, preventive
detention, forests, protection of wild animals and birds, trade unions,
industrial and labour disputes etc.
• According to Article 246(1), Parliament has the “exclusive power” to enact
laws regarding any item on the Union List (List I in the Seventh
Schedule).
• Concurrent legislative power over the matters on the Concurrent List,
i.e., List III in the Seventh Schedule, is granted to the Centre and the
states under Article 246 (2).
• Article 246 (3) gives the states the exclusive power to make laws
concerning the items included in the State List (List II in the Seventh
Schedule).
• Under Article 246(4), Parliament has the power to enact legislation
for any area of India’s territory not covered by a state.
 Doctrine of Pith and Substance
• The Seventh Schedule specifies the subject matters and divides the
power to make laws between the Centre and the State.
• Although their spheres of influence are well established in the Seventh
Schedule, there often arise conflicts as to whether the Centre or the
State, as the case may be, is encroaching upon the sphere of the other.
• To deal with this conflict, the courts in India have evolved few doctrines
and the age-old doctrine of pith (essence of something) and substance
(essential part of something) is one among them.
• It is widely believed that the origin of the doctrine of pith and substance
lies in Canada and it was introduced in a case named Cushing v. Dupuy
in the year 1880.
 Doctrine of Pith and Substance
• The doctrine later made its way to India and is firmly supported
by Article 246 of the Constitution and the Seventh Schedule.
• The doctrine states that within their respective spheres the state
and the union legislatures are made supreme, they should not
encroach upon the sphere demarcated for the other.
• However, if one among the state and the Centre does encroach
upon the sphere of the other, the courts will apply the Doctrine
of Pith and Substance.
• Pith and Substance means the true nature of law.
 Doctrine of Pith and Substance

• The real subject matter is challenged and not its incidental effect
on another field. The doctrine has been applied in India also to
provide a degree of flexibility in the otherwise rigid scheme of
distribution of powers.
• The justification for the doctrine of pith and substance is that in a
Federal Constitution ,it is not possible to make a clear-cut
distinction between the powers of the Union and the state
legislatures.
• there is a bound to overlapping and in all such cases ,it is but to
reasonale to ask what in whole is the true nature and
character of the law.
 Doctrine of Pith and Substance
• pith : core
• substance :also means core
• Pith and substance in effect means core of the core ( under which list
does a subject matter fall when it has got application in multiple lists.)
• For instance, if a dog is standing on a road, with its legs on one
city (City A) and tail on the other city (City B) , if someone were
to ask you where is the dog standing? would you say City A or
city B?
• The earlier exaple was given by Justice. Vivain Bose in Tata
Steel’s case.
 Doctrine of Pith and Substance
• The Court should endeavour to find where does the core of the core of
the legislation falling under? either under the state list or under the central
list.
• The doctrine is a product of Canadian Constitution.
• A health law originally falls under the state list, but it may have branching
effects on the central list as well.
• So the Court has to declare that the matter is a righful subject of state list
and not central list (merely because there is a incedental enchroachment
on central list.).
• The Doctrine of Pith and Substance states that if the substance of
legislation falls within a legislature’s lawful power, the legislation does not
become unconstitutional just because it impacts an issue beyond its area
• Profulla Kumar Mukherjee v Bank of Khulna:The
Privy Council applied this doctrine
• In this case, the Bengal Money Lenders Act of 1946 enacted by
the State Legislature was challenged with the contention that
parts of the legislation dealt with promissory notes; a central
subject.
• The Privy Council while upholding the validity of the impugned
legislation stated that the Bengal Money Lenders Act was in pith
and substance a law relating to money lenders and money
lending – a state subject even though it incidentally trenches
upon Promissory note – a central subject.
 Doctrine of Colorable Legislation
• Doctrine of Colorable Legislation means that if a legislature lacks
the jurisdiction to enact laws on a specific subject directly, it
cannot make laws on it indirectly.
• In simple words, the doctrine checks if a law has been enacted
on a subject indirectly when it is barred to legislate on that topic
directly.
• This is designed to prevent the legislature from doing anything
that has been explicitly forbidden from being done indirectly or
secretly.
• Colourable legislation comes from a legal maxim-
“Quando aliquid prohibetur ex directo, prohibetur et per
obliquum” which means which is prohibited directly is also
prohibited indirectly.
• It basically means coloured legislation which is not its true
colour.
• So, whenever the Union or state encroaches their
respective legislative competence and makes such laws,
colourable legislation comes into the picture to determine
legislative accountability of that law.
 Concept of Doctrine of Colourable Legislation
• The expression “Colourable Legislation” means “what can’t be
done directly, can’t be done indirectly as well”.
• Concept of Doctrine of Colourable Legislation :
• In India, 'colorable legislation doctrine' simply means limiting the
legislature's ability to make laws.
• The doctrine of colorable legislation is used to determine whether or not
they are qualified to implement the specific law.
• As a result, a system of checks and balances emerges. With respect to
their respective subjects, the Constitution has split powers between the
federal government and the states.
 Concept of Doctrine of Colourable Legislation
• Article 246 of the Indian Constitution deals with subject matter
legislation, which refers to who has the authority to create laws
in relation to particular subject matter.
• However, the legislative body occasionally passes laws that are outside of
its purview. This signifies it has overstepped its boundries and done
something indirectly that could not have been done directly.
• This is known as a colourable legislation of legislative power or
establishing laws indirectly while doing so directly is illegal.
• As a result, the theory of colourable legislation was created to prevent
legislative authorities from abusing their powers.
 Concept of Doctrine of Colourable Legislation
• For example, the constitution provides reservation to only social and educationally
backward communities.
• So any attempt to declare the socially forward communities as backward communities
and extend the reservation becomes coloured legislation.
• One of the ideas included in the Indian Constitution is colorable legislation. It
essentially implies coloured legislation that isn't its genuine colour.
• As a result, anytime the Union or a state exceeds their respective legislative
competence and passes such legislation, colorable legislation enters the picture to
assess parliamentary culpability for that law.
• The doctrine of colorable legislation firmly bans doing things indirectly when doing so
directly is prohibited.
• When the ability of a certain legislation to pass a particular law is called into question,
colorable legislation arises.
 EXAMPLE
• Suppose you have a fruit garden and beside that there is a
playground.
• There are players playing in the playground and every time they
throw their ball into your garden and come to take it back, they
take some fruits from there as well.
• But they escape by saying that they had only come to collect the
ball.
• Here, the players seem to engage in one act under the garb of
another as collecting their own balls from the premises is
permissible and cannot be prohibited.( “Colourable power”)
 M.R. Balaji v. The state of Mysore 1962
• In this case, the Mysore government has passed a law stating all
communities except the Brahmin community are socially and
educationally backward communities.
• It left only 32 % of seats for the merit pool and reserved nearly
68% in state medical and engineering colleges.
• The court held that it violated Article 15(4) and therefore is
invalid.
• In the case of M.R. Balaji v. The state of Mysore, an order of the
Mysore Government was challenged under Article 15(4) for
reserving seats for admission to the State medical and
engineering colleges.
 CASES
• The state issued an order that all the communities except the Brahmin
community, fell within the classes of educationally and socially backward
classes and scheduled castes and scheduled tribes and 75% seats were
reserved for them.
• On July 31, 1962 the State of Mysore passed another order which
superseded all the previous orders and left only 32% seats for the merit
pool.
• The petitioner said that the classification made by the state was irrational
and reservation of 68% was a fraud on the Article 15(4) of the
Constitution.
• The question was whether Article 15(4) gives constitutional power to the
States to pass such reservation power or not.
 K.C. Gajapati Narayan Deo v. State of Orissa
• K.C. Gajapati Narayan Deo v. State of Orissa:
In this case, the constitutional validity of the Orissa Agricultural Income Tax
(Amendment) Act,1950 was challenged as colorable legislation.
• The reason behind this was its real objective was to reduce the Net
income of intermediaries to keep the compensation paid to a minimum.
• The court felt that it is not a colorable piece of legislation as agriculture
income is a state subject and it had the authority to enact the law and
reducing the compensation is another part of it.
• This Act falls within the ambit of the state legislature as Agriculture is the
matter of State List and reduction of compensation is just another facet of
the Act. So, it is not colourable legislation and not invalid.
 State of Bihar v. Kameshwar Singh
• In State of Bihar v. Kameshwar Singh, the Bihar Land Reforms Act, 1950,was in
question.
• The State gave half of the arrears of rent due as compensation to the landlord.
• The compensation for property acquired comes under Concurrent List’s Entry 42. So,
here it was to be determined whether the Act is for a public purpose or not.
• The Supreme Court held that the Act instead of determining the compensation,
indirectly removes the petitioner from his property without any compensation.
• In reality the Act purported to lay down a principle for determining compensation and
indirectly deprived the petitioner of claiming compensation.
• Thus, the Act was colourable legislation and was held invalid.
 K.T. Moopil Nair v. State of Kerala,
• In the case of K.T. Moopil Nair v. State of Kerala, the petitioner was the owner of a
25,000 acres forest land.
• Due to the Preservation of Private Forest Act,1949 the yearly income of petitioners
was only 3,100 Rs per year.
• Then the Travancore-Cochin Land Tax Act, 1955 came into existence and Section 4 of
the Act imposed yearly tax liability of Rs. 2 per acre and as a result, the petitioner had
to give a tax of Rs. 50,000 per year.
• Also, Section 7 exempted 78 types of land from the operation of this Act after
notification.
• In this case, tax liability was greater than the petitioner’s income. It held that Section 4
and Section 7 of the Act violated Articles 14 and 19(1)(f) of the Indian Constitution.
• The Travancore-Cochin Land Tax Act,1955 was held to be invalid on the ground that
the Act apparently purported to be a Taxing Act but in reality, it was not Taxing Act but
was confiscatory in nature.
 Doctrine of Harmonious Construction
• The Doctrine states:
• "Whenever there is a case of conflict between two or more Statutes or
between two or more parts or provisions of a Statute, then the Statute has
to be interpreted upon harmonious construction.
• It signifies that in case of inconsistencies, proper harmonization is to be
done between the conflicting parts so that one part does not defeat the
purpose of another."
• The fundamental principle behind this doctrine is, a statute has a legal
purpose and should be read in its totality and after that, the interpretation
that is consistent with all the provisions of that statute should be used.
• In a situation where harmonizing all clauses is unlikely the court’s
decision on the provision then takes precedence.
 Doctrine of Harmonious Construction
• This doctrine came cloaked as the rule of conciliation first in the case of
C. P. and Berar Act , where the involved court resolved the
inconsistency between an entry of List I, and an entry of List II in the
Indian Constitution and interpreted them harmoniously.
• In the aforesaid case, the question was whether a tax imposed by a
provincial legislature on the sale of oil by a person who manufactured it,
based on the ground that it was actually an excise duty.
• Then, a sales tax could be imposed by a provincial legislature, and excise
duty could be imposed only by the union legislature.
• The Apex Court, in this case, remarked that it would be peculiar if the
Union had exclusive power to tax retail sales when the province had
 executive power to make laws with respect to trade and commerce, its
production and supply, and the distribution of goods within its boundaries.
• Hence, it was a sales tax and the Act was not ultra vires. The Court added
that there was no overlapping or conflict of two entries, so as to apply a
non-obstante clause.
• The doctrine’s conception can be tracked all the way back to the first
amendment to the Constitution of India, 1951, in the landmark judgement
of Sri Shankari Prasad Singh Deo v. Union of India (1951).
• The disagreement between the Fundamental Rights (Part III) and the
Directive Principles (Part IV) of the Constitution of India was the subject of
the case.
• The Apex Court, in this case, made use of the rule of harmonious
construction and held that Fundamental Rights are granted against the
State and they may be revoked only under certain circumstances and
even modified by the Parliament to comply with the constitutional
provisions.
• The Supreme Court gave preference to both and said that the
Fundamental Rights and Directive Principles of State Policy are two sides
of the same coin, and it is beneficial that they must work together.
• The Supreme Court further held that the Fundamental Rights enforce
limitation over both the legislature and executive power. They are not
sacrosanct and the Parliament can amend them to bring them in
conformity with the Directive Principles.
• The Supreme Court articulated the doctrine of harmonious construction in
the case, Re Kerala Education Bill Case (1957).
• The court added that there was no inherent conflict between the
Fundamental Rights and the Directive Principles of the State Policy and
they together constitute an integrated scheme and a comprehensive
administrative and social programme for a modern democratic state.
• The court called them supplementary and complementary to each other.
• Therefore, effort should be put to construe them harmoniously, so that the
courts avoid any conflict among the Fundamental Rights and Directive
Principles.
• They basically run parallel to each other and neither one is subordinate to
the other.
• The aim of the judiciary and the courts should be to view the law as a whole.
• The interpretation of the law should be such that it prevents confusion or
incompatibility between the different sections or parts of the statute being used.
• Whenever a discrepancy arises between two or more statutes or different clauses or
sections of a statute, the doctrine of harmonious construction must be followed.
• The doctrine is based on the straight forward principle that every
statute has a legal purpose and should be read in totality.
• The interpretation should be such that all of the statute’s provisions should be used.
• In the event that harmonizing two or more statutes or different clauses or sections of a
statute is unlikely, the court’s decision on the provision would take precedence.
• The Supreme Court laid down principles of rule of Harmonious
Construction in the landmark case of CIT v Hindustan Bulk Carriers:
• The courts must avoid a head on clash of seemingly contradicting
provisions and they must construe the contradictory provisions so as to
harmonize them.
• The provision of one section cannot be used to defeat the provision
contained in another unless the court, despite all its effort, is unable to
find a way to reconcile their differences.
• When it is impossible to completely reconcile the differences in
contradictory provisions, the courts must interpret them in such as
way so that effect is given to both the provisions as much as
possible.
• Courts must also keep in mind that interpretation that reduces one
provision to a useless number or dead is not harmonious
construction.
• To harmonize is not to destroy any statutory provision or to render
it fruitless.
 The Doctrine of Incidental or Ancillary powers
• The doctrine of incidental or ancillary powers indicates that if a legislative
body has the power to legislate on a particular matter, then they have the
power to legislate on ancillary topics related to that matter. Unless that
ancillary topic is mentioned explicitly under the jurisdiction of another
legislative body.
• What this means is that the authority to legislate on a subject includes the
ability to legislate on ancillary subjects that are reasonably related to that
subject.
• For example, the power of the central government to impose income tax
would include the ability to examine and seize property in order to prevent
income tax evasion.
• However, Powers connected to banking, on the other hand, cannot be
extended to non-banking businesses ( as there is a clear cut allocation of
powers.)
• However, a subject cannot be considered auxiliary if it is specifically specified in a
State or Union list.
• For example, pilgrimage is a state subject but it cannot include pilgrimage
outside India is not ancillary as it is a separate entry in the Union List.
• This doctrine states that the express powers to legislate on a matter also
consist of the implied power to legislate on an incidental or ancillary
matter to the reasonable extent.
 EXAMPLE
• Alcohol is the subject of the state list under the 7th schedule of
Constitution of India.
• Suppose , if state of Rajasthan wants to impose licker ban,
expressly; it is only empower to prohibit its production,
consumption, buying and selling within the state, but not to its
procurement from other states, as inter-state trade is the subject
of union list.
• But due to the effect of this doctrine, the state becomes impliedly
empower to legislate on this aspect as well, as without banning
its import and export, the total prohibition is not possible.
• Ancillary or incidental powers mean those powers that support the powers
that are expressly conferred.
• There are some express powers given to both the Central and State
Governments through the three lists specified in the Seventh Schedule.
• The doctrine of ancillary or incidental powers means that these express
powers to legislateon a matter also consist of the power to legislate on an
incidental or ancillary matter.
• Such a power is essential for the proper exercise of the expressly
conferred legislative powers.
• For example, the power to legislate on banking would also include all the
related powers to legislate on matters like functions of banks, the
composition of their boards, relationship with RBI, etc.
 Important Cases
• United Provinces Vs. Atiqa Begum & Others, AIR 1941
• This was known to be the first case in which this doctrine applied in India.
• The reference was taken from the common law and Canadian
Constitution.
• It was in this case that the doctrine of ancillary or incidental powers was
first explained.
• State of Rajasthan v G. Chawla, AIR 1959 :
In this case, the Apex Court held that “the power to legislate on a
topic includes the power to legislate on an ancillary matter which
can be said to be reasonably included in the topic”.
 Residuary powers
• Residuary powers are special powers given to the Union
Government by the Constitution.
• These powers are not mentioned in the subject of the Constitution.
• The Parliament can make any law based on any matter that is not a part
of the State List or Concurrent List.
• Article 248 of the Indian Constitution deals with the residuary
powers of legislation. It further states that:
• Parliament has exclusive power to make any law with respect to any
matter not enumerated in the Concurrent List or State List.
• Such power shall include the power of making any law imposing a tax not
mentioned in either of those Lists.
• Residuary powers have been vested in the Centre so as to make
the Centre strong. As was stated in the Constituent Assembly by
Jawaharlal Nehru, Chairman of the Union Powers
Committee:
• “We think that residuary powers should remain with the
Centre. In view however of the exhaustive nature of the
three lists draw up by us, the residuary subjects could only
relate to matters which, while they may claim recognition in
the future, are not at present identifiable and cannot
therefore be included now in the lists.”
 DOCTRINE OF RESIDUARY POWERS
• Constitution of India has specifically vested the residuary power as an
exclusive head of power in the Union by entry 97 of List I of the Seventh
Schedule and Article 248 of the Constitution.
• The residuary power has been increasingly pressed into service in
connection with the resolution of conflicts of power between the Union
and the States.
• Since the commencement of the Constitution residuary powers of
Parliament have been exercised several times.
• The scope of residuary powers is very wide. For example, under entry 3
in List III, Parliament can legislate with respect to preventive detention in
grounds mentioned therein.Further, Parliament can legislate with respect
to preventive detention under entry 9, List I, on ground mentioned therein.
• But these two entries do not exhaust the entire field of preventive
detention.
• Parliament can legislate under its residuary power with respect to
preventive detention on any ground not mentioned in these two entries.
• Thus, Parliament has enacted the Conservation of Foreign Exchange
and Prevention of Smuggling Act, 1974 [COFEPOSA] providing for
preventive detention in connection with smuggling and foreign exchange
racketeering.
• In the famous I. C. Golaknath v. State of Punjab[ 1967 ], the Supreme
Court had held that the power of the Parliament to amend the Constitution
was derived from Article 248 read with entry 97 of List I and that Article
368 dealt only with the procedure for amendment.
• However, in view of the 24th Amendment of the Constitution and the
Supreme Court’s pronouncement in Keshavanand Bharti v. State of
Kerala, Article 368 should be held to include both the power and
procedure for amendment and there is no case for invoking a residuary
power for constitutional amendment.
• Parliament’s residuary power is not to be interpreted so expansively as to whittle down
the power of the State Legislatures.
• “Residuary should not be so interpreted as to destroy or belittle State autonomy.”
 Repugnancy (Article 254)
• The Doctrine of repugnancy is basically when two
pieces of legislation have a conflict between them
and when are applied to the same facts but they
produce different outcomes or results.
• When provisions of 2 laws are so contrary and
disconfirmed that it becomes difficult to do one
without opposing the other, this is a situation where
repugnancy arises.
 Doctrine of repugnancy
• The doctrine of repugnancy, in accordance with Article
254, states that if any part of State law is repugnant or
conflicting to any part of a Central law which the
Parliament is competent to enact, or to any part of a law
of the matter of List III, then the Central law made by
the Parliament shall prevail and the law made by the
State legislature shall become void, to the extent of
its repugnancy.
 Doctrine of repugnancy
• The Constitution of India, the supreme law of the nation, has
empowered the Central and the State Government to enact laws
by virtue of various Articles read with Schedule VII.
• Black’s Law Dictionary defines repugnancy as inconsistency or
contradiction between two or more parts of a legal instrument.
• In a system that divides its law-making power between the Centre
and the States, an inconsistency can arise between the laws
made by the Centre and those made by the State.
• The Doctrine of Repugnancy was introduced in the Constitution to
resolve such situations.
• Article 254 of the Indian Constitution establishes the doctrine of
repugnancy in India.
• Repugnancy means a contradiction between two laws
which when applied to the same set of facts produce
different results.
• It is used to describe inconsistency and incompatibility
between the Central laws and State laws when applied in
the concurrent field.
• The situation of repugnancy arises when two laws are so
inconsistent with each other that the application of any
one of them would imply the violation of another.
• The doctrine of repugnancy, in accordance to Article 254,
states that if any part of State law is repugnant or conflicting
to any part of a Central law which the Parliament is
competent to enact, or to any part of a law of the matter of
List III, then the Central law made by the Parliament shall
prevail and the law made by the State legislature shall
become void, to the extent of its repugnancy. While
considering this doctrine, whether the central law is passed
before or after the State law is immaterial.
• Hence, this is a principle to ascertain that when a state law
becomes repugnant to the Central law.
• One of the landmark judgments concerning this doctrine is M.
Karunanidhi v. Union of India(1979):
• In this case, a constitutional bench of the Apex court considered
the question of repugnancy between a law made by the
Parliament and a law made by the State legislature.
 It was observed that the following conditions should be
satisfied for the application of the doctrine of repugnancy:
• A direct inconsistency between the Central Act and the State
Act.
• The inconsistency must be irreconcilable.
• The inconsistency between the provisions of the two Acts should
be of such nature as to bring the two Acts into direct collision
with each other and a situation should be reached where it is
impossible to obey the one without disobeying the other.
• The Hon’ble Court also laid down some propositions in this
respect.
• For the application of the doctrine of repugnancy, two
enactments must contain provisions that are so inconsistent that
they cannot stand together in the same field.
• Repeal by implication cannot be done unless there is a prima
facie repugnancy in the enactments.
• Another landmark judgment is Government of Andhra Pradesh v. J.B.
Educational Society(2005):
• where the Court observed that the judiciary must interpret legislation made by the
Parliament and the State Legislature in such a way that the question of conflict
does not arise or can be circumvented.
• However, if such a conflict between laws is unavoidable, then the Parliamentary law
shall prevail.
• Since List III gives equal competence to both the Parliament and the State
Legislatures, to enact laws, the highest scope of a conflict exists here.
• Clause (2) of Article 254 deals with a situation where the State legislation having been
reserved and having obtained President’s assent, prevails in that State;
• this again is subject to the proviso that Parliament can again bring a legislation to
override even such State legislation.
• The case of Hoechst Pharma ltd. v. State of
Bihar(1983) :
• It was observed that the assent of the President for a state law which is
repugnant to a Central law for a matter related to a concurrent subject is
important as it results in the prevailing of the State law in that particular
State, thereby, overriding the application of the Central law in that state
only.
• The Court observed that the application of both the provisions at the
same time is impossible as they are contradictory to each other. Hence, in
substance, there is repugnancy.
• The Court held the provisions of the Bihar Act void and applied those of
the Code.
• The principles of repugnancy have been applied under the
Australian Constitution and have been borrowed by analogy for their
application in India.
• Following Australian precedents, the Court in the case of Deep Chand v.
State of Uttar Pradesh observed that repugnancy between two
enactments can be identified with the help of the following three tests:
• Whether there is a direct conflict between the two conflicting provisions;
• Whether the Parliament intended to lay down an exhaustive enactment on
the subject-matter and to replace the law made by the State legislature;
and
• Whether the law made by the Parliament and that made by the State
legislature occupies the same field.
• In the case Mati Lal Shah v Chandra Kanta Sarkar before the
Calcutta High Court.
• A conflict arose between Section 20 and Section 34 of the
Bengal Agricultural Debtors Act, 1936, and Section 31 of the
Presidency Small Causes Courts Act, 1882 which is an existing
Indian law in force. The former required that the service of a
notice shall stay for the execution of certain decrees against the
agricultural debtors while the latter required that the execution
shall take place through other courts, if necessary. The Court
held the provisions of the Bengal Act void due to
repugnancy.
• The Zaverbhai Amaidas v. State of Bombay case, decided on October
8, 1954, is a significant judgment related to the Doctrine of Repugnancy
under Article 254 of the Indian Constitution.
 Background
• Zaverbhai Amaidas was charged with transporting food grains without a
permit, violating the Bombay Food Grains (Regulation of Movement and
Sale) Order, 1949.
• The State of Bombay had enacted Act No. XXXVI of 1947 to enhance the
punishment for such offenses.
• The Central Government later amended the Essential Supplies
(Temporary Powers) Act, 1946 through Act LII of 1950, which also
covered the same subject matter.
 Issue
The main issue was whether the State Act (Bombay Act No. XXXVI of 1947) was
repugnant to the Central Act (Essential Supplies Act as amended by Act LII of 1950) and
thus void under Article 254 of the Constitution.
 Judgment
The Supreme Court held that the Central Act prevailed over the State Act as both
legislations covered the same subject matter.
The Court applied the Doctrine of Repugnancy, stating that when there is a conflict
between a State law and a Central law on a Concurrent List matter, the Central law
prevails.
 Significance
This case established the principle that Central laws take precedence over State laws in
case of repugnancy, reinforcing the supremacy of the Union in legislative matters.
 Administrative Relations between Centre and
States
• The administrative relations between the Centre and the States
are stated under Article 256 to Article 263 of the Constitution of
India.
• The Government of India has also constituted the Punchhi
Commission in 2007, to determine the Centre-State Relations.
 The obligation of States and the Union
• Article 256 of the Constitution of India can be divided into
two parts.
 Firstly, it lays down that the executive powers of the State are to
be exercised in such a manner that it complies with the laws
made by the Parliament or any other existing laws which are
applicable in the State.
 Secondly, it states that the executive power of the Union
includes in its ambit such directions that are given to the State
by the Central Government, which it deems necessary for the
purpose.
• It appears from reading the provision that if the States duly
comply with the first part, then the second part does not
seem necessary.
• Whereas, if the second part indeed serves its purpose
sometimes, then it is evident that the States are guilty of
violating the first part of the provision.
• The Constitution lays down this provision with the assumption
that the States will be, at some juncture, guilty of either wilful
defiance or negligence of its duties.
• Although this provision is particularly silent about the
consequences in case of non-compliance.
• The drastic sanction is laid down in Article 365 of the Constitution.
• To explain, if a State fails to comply with the directions issued by the
Centre, then it is lawful for the President to hold that a situation has arisen
wherein the State government cannot be carried on according to the
provisions of the Constitution.
• Consequently, a state emergency can be imposed.
• The primary theme of this provision is that there should be a proper
execution of the central laws in all the states.
Landmark Judgements:
• In the case of Rameshwar Oraon vs. State of Bihar and Ors. (1995), it
was observed that it is mandatory for the State Government to act
according to the directions issued by the Central Government.
• In the case of State of Karnataka vs. Union of India (1977), it was held
that the Centre can issue directions to a State under Article 256 as a legal
entity, not as a geographical or territorial unit.
• In State of Rajasthan vs. Union of India (1977), the Apex Court held
that the issuance of directions to the State government by the Centre
under Article 256 is justified if the Union Government is of the opinion that
the manner in which the executive power of the State is exercised may be
in contravention to the enforcement of Central Laws.
• In Swaraj Abhiyan vs. Union of India (2017), the Apex Court
drew attention to this provision, calling it a ‘forgotten provision’.
• This is because of the seldom usage of this provision since the
Constitution came into force.
 Control of the Union over States in certain cases
• Article 257 of the Constitution of India, deals with the subject of
Control of the Union over States in certain cases.
• Article 257(1) provides that the exercise of the executive powers of the
State should be done in such a manner that it does not hamper or
prejudice the exercise of the executive powers of the Centre.
• Further, the second part of this clause is similar to that of Article 256. It
lays down that the Centre can issue directions to the State Governments
for purposes deemed necessary.
• Article 257(2) provides that the executive power of the Union to issue
directions to the States shall also extend to the matters of construction
and maintenance of means of communication declared to be of national
or military importance.
• The proviso states that nothing in this particular provision will be
considered as restricting the power of the Parliament to:
 Declare certain highways or waterways as national highways or
waterways;
 Construct and maintain means of communication as a part of its
functions with reference to naval, military and air force purposes.
 Article 257(3) provides that the executive power of the Union to
issue directions to the States shall also extend to the measures
required to be taken for the protection of the railways within
a particular State.
• Article 257(4) provides that for the purpose of compliance to the
directions under clause (2) or clause (3), the States incur
excess costs, which would not have occurred in the
discharge of the normal duties of the State in the absence
of such directions, then these costs shall be paid by the
Government of India such sum as may be agreed.
• If there is a default of agreement, the sum of the extra costs so
incurred by the State will be determined by an arbitrator
appointed by the Chief Justice of India.
 Power of the Union to confer powers, etc. on
States in certain cases :
• Article 258(1) It states that the President, with the consent of the
Governor of the State, can entrust conditionally or unconditionally
the State Government or its officers to perform functions which are
related to any matter which is included in the ambit of the executive
power of the Union.
• Article 258(2) provides that a Parliament-made law which is
applicable in any State may confer certain powers and impose
duties, or authorise such conferring of powers and imposition of
duties upon the State or its officers and the authorities thereof.
• It states that even if the Legislature of the State has no power to make
laws on that matter, the Parliament made law is applicable.
• Article 258(3) states that the extra costs of administration which
the States incur, in connection with the exercise of such
conferred powers and imposed duties, shall be paid by the
Government of India – such sum as may be agreed.
• If there is a default of agreement, the sum of the extra costs so
incurred by the State will be determined by an arbitrator
appointed by the Chief Justice of India.
 Power of the States to entrust functions to the
Union
• This power is laid down under Article 258-A of the Constitution of
India.
• It states that the Governor of a State, with the consent of the
Union Government, may entrust conditionally or unconditionally
to that particular State’s government or its officers, functions
which are related to any matter that is included in the scope of
the executive power of the State.
• This provision was inserted into the Constitution by the
Constitution (Seventh Amendment) Act, 1956.
 Adjudication of disputes relating to waters of inter-
State rivers or river valleys
• Article 262 of the Constitution of India deals with the adjudication
of disputes relating to the above-stated issues.
• Article 262(1) states that the Parliament may formulate laws to
provide for the adjudication of any dispute or complaint with
reference to the use, distribution or control of waters of, or in,
any inter-State river or inter-State river valley.
• Article 262(2) the Parliament may by law provide that neither the
Apex Court(SC) nor any other court shall be able to exercise
their jurisdiction in respect of any such dispute or complaint as
mentioned in clause (1).
• In exercise of the powers bestowed by Article 262, the
Parliament enacted the Inter-State Water Disputes Act, 1956.
• If the water disputes cannot be settled by negotiations then the
Central Government establishes a Water Disputes Tribunal for
the adjudication of such disputes.
• There are currently five active tribunals – namely, Ravi and
Beas Water Tribunal, Krishna Water Disputes Tribunal – II,
Vasundhara Water Disputes Tribunal, Mahadayi Water
Disputes Tribunal and Mahanadi Water Disputes Tribunal.
• There are several legal doctrines related to the issue of inter-
state waters. These include – Doctrine of Riparian Rights, Prior
Appropriation, Territorial Sovereignty, Community of Interest and
Equitable Apportionment.
• Doctrine rights of Riparian: The doctrine of riparian rights emphasises the
recognition of equal rights to the use of water by all owners of land
abutting a river, as long as there is no resulting interference with the rights
of other riparian owners.
• The Supreme Court in the judgment of State of Kerala through the Chief
Secretary to Government vs. State of Tamil Nadu through the Chief
Secretary to Government (2018), finally settled the age-long Cauvery
Water Dispute.
 Provisions with respect to an inter-State Council
• Under Article 263 of the Constitution of India, if the President believes that
the establishment of an inter-state council would help in serving the public
interests, then it is lawful for the President to establish such Council by
order.
• He shall also define the nature of duties to be performed by the Council,
its organisation and the procedure to be followed.
 The President can charge the Council with the following duties:
• To inquire into and advise upon disputes which may have arisen between
States;
• To investigate and discuss subjects in which some or all of the States, or
the Union and one or more of the States display a common interest;
 inter-State Council
• To make recommendations upon any subject and in particular, to make
recommendations for enhanced coordination of policy and action pertaining to that
subject.
• The Inter-State Council was established based on the recommendations of the
Sarkaria Commission.
• The Council was established in 1990 pursuant to a Presidential order.
• It functions as a permanent independent national forum for consultation.
• The Council was recently reconstituted in 2019, with the Prime Minister as its
chairperson.
• In the current crisis due to the enactment of the Citizenship Amendment Act, 2019,
there is an increased distrust between the Centre and the States. In such times of
constitutional crisis, it is essential that the Council meets to arrive at a harmonious
solution.
 Emergency Provisions and Indian Federalism

• Federalism according to Dicey is a weak form of government

because it involves division of power between the Centre and
the units.
• Every modern federation, however, has sought to avoid this
weakness by providing for the assumption of larger powers by
the federal government whenever unified action is necessary by
reason of internal or external emergent circumstances.
• For different kinds of emergencies, The Indian Constitution confers
extraordinary powers upon the union.
• The emergency provisions provided under the Constitution enables the
federal government to acquire the strength of a unitary system whenever
the exigencies of the situation so demand.
• There are times when a nation is unexpectedly and suddenly overtaken
by events and forces, which seriously endanger its security and the lives
of its citizens.
• Such situations may require that the individual liberties of the citizens be
temporarily suspended in order to cope with the dangers confronting the
nation.
• Emergency situations place democratic governments in a real dilemma by
bringing about a conflict between its primary obligation to protect the
integrity of the State and its equally important obligation to protect the
human rights of its citizens and other persons within its jurisdiction.
• That is the rationale of emergency provisions, which finds place in many
national constitutions permitting the suspension of guaranteed
fundamental rights.
• Emergency provision is a unique feature of Indian Constitution that allows
the Centre to assume wide powers so as to handle special situations.
• In emergency, the Centre can take full legislative and executive
control of any state.
• Emergency provision also allows the Centre to curtail or suspend
freedom of the citizens.
• Existence of emergency provision in the Constitution is a big reason
why academicians are hesitant to call Indian Constitution as fully
federal.
• In India, federalism and state emergency provisions are outlined in the
Constitution of India. The Indian Constitution establishes a federal system
of government with a division of powers between the central government
and the state governments.
• The emergency provisions are intended to be exceptional measures to
address critical situations and are subject to constitutional checks and
balances to prevent their misuse.
• The rationality behind the incorporation of these provisions in the Constitution is to safeguard
the sovereignty, unity, integrity and security of the country, the democratic political system,
and the Constitution.
• During an Emergency, the Central government becomes all powerful and the states go into the
total control of the Centre. It converts the federal structure into a unitary one without a formal
amendment of the Constitution.
• In this context, Dr. B.R. Ambedkar observed in the Constituent Assembly that “All federal
systems including American are placed in a tight mould of federalism. No matter
what the circumstances, it cannot change its form and shape. It can never be
unitary. On the other hand, the Constitution of India can be both unitary as well
as federal according to the requirements of time and circumstances. In normal
times, it is framed to work as a federal system. But in times of Emergency, it is
so designed as to make it work as though it was a unitary system.”
• Under the Indian Constitution, emergency provisions are detailed in Part XVIII, specifically
Articles 352, 356, and 360.
• These provisions enable the central government to intervene in the affairs of the states during
times of emergency.
 National Emergency (Article 352): The President of India has the authority to declare a
national emergency if there is a threat to the security of India, either due to war, external
aggression, or armed rebellion. During a national emergency, the central government can
assume certain powers, which may include the centralization of state authority and the
suspension of some fundamental rights.
 President's Rule (Article 356): An Emergency due to the failure of the constitutional
machinery in the states (Article 356). This is popularly known as ‘President’s Rule’. It is also
known by two other names–‘State Emergency’ or ‘constitutional Emergency’.However, the
Constitution does not use the word ‘emergency’ for this situation.
• The central government assumes direct control over the state's administration,
 and the state government is temporarily suspended. President's Rule can be imposed if there is a
breakdown of governance, internal disturbances, or the inability to conduct free and fair elections.
• Financial Emergency (Article 360): A financial emergency can be declared by the President if
the financial stability or credit of India or any state is threatened. During a financial
emergency, the central government gains authority over the financial matters of the state, and
the President can give directions to the state government regarding financial matters.
• In addition to these emergency provisions, the Constitution also establishes a system of
cooperative federalism, emphasizing the importance of cooperation and coordination
between the central government and the state governments. Various provisions and
institutions, such as the Inter-State Council, the Planning Commission (replaced by NITI
Aayog), and the Finance Commission, are in place to facilitate cooperation and address the
concerns of the states.
• It is important to note that the Indian Constitution provides a delicate balance between
the central government's authority during emergencies and the autonomy of the states.
NATIONAL EMERGENCY
• National emergency can be declared on the basis of war, external aggression or
armed rebellion. The Constitution employs the expression ‘proclamation of
emergency’ to denote an emergency of this type.
 Grounds of declaration:
• Under Article 352, the president can declare a national emergency when the
security of India or a part of it is threatened by war or external aggression or
armed rebellion.
• The President can declare a national emergency even before the actual occurrence
of war or armed rebellion or external aggression
• When a national emergency is declared on the grounds of ‘war’ or ‘external
aggression’, it is known as ‘External Emergency’. On the other hand, when it is
declared on the grounds of ‘armed rebellion’, it is known as ‘Internal
Emergency’.
• This term ‘armed rebellion’ is inserted from the 44th amendment. Before
this term it was known as internal disturbance.
• The 38th Amendment Act of 1975 made the declaration of National
Emergency immune to judicial review. But, this provision was
subsequently deleted by the 44th Amendment Act of 1978.
• In Minerva Mills case (1980), the Supreme Court held that National
Emergency can be challenged in the court on the ground of malafide or
that the declaration was based on wholly extraneous and irrelevant facts.
 Parliamentary approval and duration:
• The proclamation of emergency must be approved by both the houses of
parliament within one month from the date of its issue.
• However, if the proclamation of emergency is issued at a time when the
Lok Sabha has been dissolved or the dissolution takes place during the
period of one month without approving the proclamation, then the
proclamation survives until 30 days from the first sitting of Lok Sabha after
its reconstitution, provided the Rajya Sabha has in the meantime
approved it.
• If approved by both the houses, the Emergency continues for 6 months
and can be extended to an indefinite period with an approval of the
Parliament for every six months.
• Every resolution approving the proclamation of emergency or its
continuance must be passed by either House of Parliament by a special
majority.
 Revocation of proclamation
• A proclamation of Emergency may be revoked by the President at any
time by a subsequent proclamation. Such proclamation does not require
parliamentary approval.
• The emergency must be revoked if the Lok Sabha passes a resolution by
a simple majority disapproving its continuation.
 Effects on the centre-state relations: While a proclamation of Emergency
is in force, the normal fabric of the Centre-State relations undergoes a
basic change. this can be studied under three heads:
• Executive: Centre becomes entitled to give executive directions to a state
on ‘any’ matter
• Legislative: The parliament becomes empowered to make laws on any
subject mentioned in the state list, the president can issue ordinances on
State subjects also, if the parliament is not in session. The laws made on
state subjects by the parliament become inoperative six months after the
emergency has ceased to be in operation.
• Financial: the president can modify the constitutional distribution of
revenues between the centre and the states.
 Article 356
• According to Article 356, President’s Rule can be imposed on any state of India on the
grounds of the failure of the constitutional machinery.
• If the President receives a report from the state’s Governor or otherwise is convinced
or satisfied that the state’s situation is such that the state government cannot carry on
the governance according to the provisions of the Constitution.
• Article 365: As per this Article, President’s Rule can be imposed if any state fails to
comply with all directions given by the Union on matters it is empowered to.
• In simple words, President’s Rule is when the state government is suspended and the
central government directly administers the state through the office of the governor
(centrally appointed).
• It is also called ‘State Emergency’
 President’s Rule
• Parliamentary approval is necessary for the imposition of the President’s
Rule on any state. The proclamation of President’s Rule should be
approved in both Houses of Parliament within two months of its issue.
The approval is through a simple majority.
• The President’s Rule is initially for a period of six months. Later, it can be
extended for a period of three years with parliamentary approval, every
six months.
• The 44th Amendment to the Constitution (1978) brought in some
constraints on the imposition of the President’s Rule beyond a period of
one year.
• It says that President’s Rule cannot be extended beyond one year unless:
• The Election Commission of India certifies that it is necessary to continue
the President’s Rule in the state because of difficulties in conducting
assembly elections to the state.
 What happens after President’s Rule is imposed:
The governor carries on with the administration of the state on behalf of the
President. He or she takes the help of the state’s Chief Secretary and other
advisors/administrators whom he or she can appoint.
• The President has the power to declare that the state legislature’s powers
would be exercised by the Parliament.
• The state legislative assembly would be either suspended or dissolved by
the President.
• When the Parliament is not in session, the President can promulgate ordinances with
respect to the state’s administration.
 When is President’s Rule imposed:
• It has been seen that the President’s Rule has been imposed when any one of the
following circumstances have occurred:
• The state legislature is not able to elect a leader as the Chief Minister for a time
prescribed by the state’s governor.
• Breakdown of a coalition in the state government, that leads to the CM having minority
support in the legislature, and the CM is unable to prove his majority within the time
prescribed by the governor.
A no-confidence vote in the legislative assembly leading to a loss of majority.
• Postponement of elections owing to unavoidable reasons such as a natural disaster,
epidemic or war.
Revocation of President’s Rule:
• President’s Rule can be revoked anytime after such a
proclamation has been made by a subsequent proclamation by
the President. A proclamation of revocation does not require
approval by the Parliament.
 Misuse of Article 356
• Article 356 gave the Central government wide powers to stamp
its authority on the state governments. Although it was meant
only as a means to preserve the integrity and unity of the
country, it had been used blatantly to oust state governments
who were ruled by political opponents of the centre.
• It was used for the first time in 1951 in Punjab.
• Between 1966 and 1977, Indira Gandhi’s government used it
about 39 times against various states.
• In the S.R. Bommai case (1994), the Supreme Court of India
put forth strict guidelines for the imposition of Article 356.
• The proclamation (of President’s Rule) is subject to judicial review on
grounds of mala fide intention.
• The state assembly cannot be dissolved before parliamentary approval
for the imposition of Article 356 and the President can only suspend the
assembly.
• Serious allegations of corruption against the state ministry and financial
instability are not grounds for the imposition of Article 356.
• Any action by the state government that leads to the security of
secularism (which is a basic feature of the Constitution) cannot be
grounds for the use of Article 356.
• The power under Article 356 is to be used only in case of exigencies. It is
an exceptional power.
• The Sarkaria Commission Report (1983) recommended that Article 356
should be used “very sparingly” and only as a last resort.
• The President’s proclamation of President’s Rule should include reasons
as to why he thinks the state cannot run normally.
Whenever possible, the centre should give the state government a warning
before imposing Article 356.
• The Article should not be used for settling political scores.
• The commission recommended the amendment of the article in order for
the President to be authorised to dissolve the state legislature only after
getting parliamentary approval.
 S. R. Bommai v. Union of India case
• The S. R. Bommai v. Union of India case is a landmark judgment
by the Supreme Court of India, decided in 1994.
Background
• In 1989, the Janata Dal government in Karnataka, led by S. R.
Bommai, was dismissed using Article 356 after losing majority
support due to defections.
• Bommai challenged the dismissal in the Supreme Court, arguing
that the Governor's report and the President's proclamation were
mala fide (in bad faith).
Supreme Court's Judgment
• The Court held that the President's power under Article 356 is not
absolute and is subject to judicial review.
• The Court emphasized that the proclamation must be based on relevant
and legitimate grounds.
• It ruled that if the proclamation is found unconstitutional, the dismissed
state government must be reinstated unless fresh elections have already
been held.
• The judgment underscored the principles of federalism and secularism,
stating that Article 356 should be used only in extraordinary
circumstances.
Significance
• The S. R. Bommai case is considered a watershed moment in
Indian constitutional law, providing clarity on the scope and
limitations of Article 356.

• It established that the misuse of Article 356 for political gains is

subject to judicial scrutiny.
 Power over trade and commerce (Article 301-307)
Freedom of Trade, Commerce and Intercourse: Articles 301 to
307 :
• The makers of the Constitution wished to encourage the free flow of trade and
commerce in India, because according to them, a country should work as a single
economic unit without any barriers or obstacles in internal trade.
• They perceived that economic unity and integration of the nation would be the
main sustaining power for stability and cultural unity of the federal polity.
• In a federation, it is essential to reduce the barriers (tariffs, non-tariffs, quotas,
etc.) between the states as much as possible so that the people feel that they are
members of the same country though living in different geographical areas of the
nation.
• Articles 301 to 307 deal with freedom of trade, commerce and
intercourse within the territory of India subject to certain
limitations.
• Article 301 talks about the freedom of trade, commerce, and intercourse
throughout the country.
• It states that subject to other provisions under Part XIII, the freedom to carry on
these activities shall be free.
• Freedom here means the right to freedom of movement of persons, property,
things that may be tangible or intangible, unobstructed by barriers within the state
or across the states.
Trade
• Trade means buying and selling of goods for profit-making purposes.
Under Article 301, the word trade means an actual, organized &
structured activity with a definite motive or purpose.
• For the motive of Article 301, the word trade is interchangeably used
with business.
Commerce
• Commerce means transmission or movement by air, water, telephone,
telegraph or any other medium;
• what is essential for commerce under Article 301 is transportation or
transmission and not gain or profit.
Intercourse :
• It means the movement of goods from one place to another. It
includes both commercial and non-commercial movements and
dealings. It would include travel and all forms of dealing with
others. Here it mean “commercial-intercourse” and not purposeless
motion.
• The use of the word ‘free’ in Article 301 does not mean freedom from laws and
rules governing the country.
• There is a clear distinction between the laws obstructing freedom and laws
containing rules and regulations for the proper conduction of trade activities in a
smooth and easy manner.
 Restrictions to trade and commerce
• Parliament’s power to regulate trade and commerce in the public interest :
• Article 302 gives power to the Parliament to impose restrictions on the freedom
of trade, commerce or intercourse carried on within a state or across states
anywhere in the territory of India. These restrictions can solely be imposed taking
into due consideration the interests of the public.
• The power to decide whether something is in the interest of the public or not
is solely given to the Parliament.
• It can be seen as in the case of Surajmal Roopchand and Co v/s the State of
Rajasthan (1967) were under the Defence of India Rules, in the interest of the
general public, restrictions were imposed on the movement of grain.
• The power of the Parliament in Article 302 is kept in check by Article 303.
• Article 303(1) states that the Parliament & State legislature do not have the power to
make any law which will keep one State at a more preferable position than the other
State, by virtue of any entry in trade and commerce in any one of the lists in 7th
Schedule.
• However, Clause (2) states that the Parliament can do so if it is proclaimed by law
that it is essential to make such provisions or regulations, as there is indeed a scarcity
of goods in some parts of the country.
• The power to decide whether there is a scarcity of goods in some parts of the territory
or not is vested in the hands of the Parliament.
Discrimination and Preferential Treatment (Article 303)
• Article 303 ensures that neither the Parliament nor the State Legislatures can give
preferential treatment to any state or discriminate against any state by virtue of any
entry related to trade and commerce.
• However, in cases of scarcity of goods in any part of India, the
Parliament may make laws favoring that particular region.
 Prohibition on Discrimination: Article 303(1) prohibits both the
Parliament and state legislatures from giving preference to one
state over another or discriminating against any state.
 Exception: Article 303(2) provides an exception, allowing the
Parliament to make any law giving preference to one state over
another or discriminating against any state if it’s necessary for
the country’s overall development.
• Article 304(a) further says that the State should impose taxes on any
goods transported/imported from other States if alike goods are taxed in
the State too.
• It is done so that there is no discrimination between goods produced
within the State and goods imported from some other states.
• Clause (b) of Article 304 guides the States to impose certain reasonable
restrictions on the freedom of trade, commerce, and intercourse as may
suit the public interest.
• But no Bill or Amendment for such shall be put forward in the State
Legislature without the prior approval of the President.
• Article 304 empowers states to impose taxes on goods imported from
other states, provided similar goods within the state are also taxed. This
ensures a level playing field and prevents discrimination against goods
coming from outside the state.
• In the case of State of Madhya Pradesh v/s Bhailal Bhai,(1964) the
State of Madhya Pradesh imposed taxes on imported tobacco which was
not even subject to tax in the very own State i.e State of Madhya
Pradesh. The Court disapproved of the tax statement that it was
discriminatory in nature.
 Appointment of authority for carrying out the purposes of Articles
301 to 304
• Article 307 under Part XIII permits the Parliament to designate
such authority as it deems fit for carrying out the provisions laid
down in Articles 301, 302, 303 and 304.
• The Parliament can also bestow such authorities with functions
and powers as it feels are required.
 Landmark Judgments
Atiabari Tea Co. vs the State of Assam (1961):
Facts :
• In this case of Atiabari Tea Co.Ltd. v/s the State of Assam,
Assam Taxation Act levies a tax on goods transmitted through
Inland Waterways and road.
• The petitioner in the present case carried on the business of
transporting tea to Calcutta (now Kolkata) via Assam.
• Now while passing through Assam for the purpose of
transportation to Calcutta, the tea was liable to tax under the
said Act.
Issues :
The rationality of The Assam Taxation Act of 1954 was questioned on the
grounds that:
• whether it is violative of Article 301 or not?
• whether it could be protected by making it fall under the ambit of Article
304 (b) or not?
Judgment:
• The Supreme Court said that the disputed law undeniably levied a tax that
directly and immediately infringed the movement of goods and therefore it
comes under the purview of Article 301.
• The Supreme Court further clarified that these taxes can only be
levied after fulfilling the conditions of Article 304(b) which states
that the sanction by the President is required before any State
enacts such a law.
• In this case, the requirements of Article 304(b) were also not
fulfilled.
• Freedom assured under Article 301 would become non-existent
or imaginary if transmission of goods is obstructed without
meeting the criteria set out by Article 302 to Article 304 of the
Constitution.