Generally, the state has the authority to make the laws only to the citizen of the state or to the property that lies in the state. This is the general understanding that how can an authority make law over those persons or property which do not come under its competency. Suppose, if A, a citizen of Saudi Arabia, is licensed by the government there to drive.

In the territory of India, a law is there related to negligent driving that any person who is found driving negligently shall be penalized for 6 months imprisonment in case of rash driving. Shall this law apply to A? the answer is surely no. It is very simple to understand that the practice of driving of A in Saudi Arabia has no territorial linkage with India because the subject matter of the act of driving of taxi by A in Saudi Arabia and the law enacted by the Indian parliament has no territorial nexus.

Neither A is a citizen of India nor India has any territorial authority over the land of Saudi Arabia. Now, what will happen if A who is a citizen of India practices driving in Saudi Arabia gets arrested for rash driving? Here, by the doctrine of territorial nexus, A shall be penalized as per the Indian Penal Code under section 279. Section 3 and 4 of the Indian Penal Code deals with the territorial nexus of crime taken place beyond the territory of India.

Section 3 talks about the punishment for any criminal act which is done by the citizen of India outside the boundaries of India shall be dealt with as per the provisions of the Indian Penal Code. Section 4 also deals with the punishment to any offense outside India which shall be done as per IPC including offenses done in aircraft or ships.

Constitutional Validity of Extra-territorial laws:

The laws made by parliament are not invalid merely because of extraterritorial impact as per Clause 2 of Article 245 [[i]]. For the whole country, the parliament can make a law but the state legislature can make laws only for the state. The parliament can enact laws beyond its territories but one thing is compulsorily needed for this which is territorial nexus that is the real connection with 'India'[[ii]].

India is a sovereign country and it can make laws for those issues which have a real connection with it. article 245 has an independent source of Power [[iii]]. The parliament may enact legislation that has an impact beyond the territories in the interest of the people who are native of India but it did not have powers to make laws for any other territory beyond India [[iv]]. In State (NCT of Delhi) v. Brijesh Singh [[v]], it was stipulated in Para 23 that the statutes which are made by the Sovereign Nation States cannot be invalidated merely on the grounds of extraterritoriality.

The need for extra-territorial laws:

The states are interdependent. There are so many facts with extra-territorial aspects which have a nexus with the territory of any nation [[vi]]. it would surely be impossible to exercise legislative powers in a proper and full-fledged effective manner if there will be no extraterritorial operations as such [[vii]]. Then the competency of the legislature shall be in question and the legislature will be limited only to its territory [[viii]]. But is a common understanding that the center has also authority over all of the citizens and it is entitled to protect their rights of them. We can say that center is the father of every citizen.

If the child does any wrongful act in another's house it is only the father who has authority to punish him. Others can do only the complaint of the child to his father for his wrongful acts. Also, if for the rights of child father has to go beyond the territory of his house to premises of other, he will go. So, parliament can make a law beyond the territories for a bona fide purpose and the law must have a nexus with India.

In the case of Wallace vs. Income Tax Commissioner [[ix]] there was a British company that was controlled and managed in the UK. It was carrying the business in India from Britain and was making a huge profit here. The court here held that the government of India could levy taxes to the whole income of the company as the company has the territorial nexus with India [[x]].

The laws can be for economic purposes, monetary matters, trade, and commerce, social, fiscal purposes, regarding carbon emissions, for the maintenance of peace and security, etc. [[xi]].

When A State Law Can Have Such Extra-Territorial Impact:

Clause 1 of Article 245 says that the state legislature can make laws only for the state. A similar doctrine also applies here i.e territorial nexus. If there is any territorial linkage between the state and the subject matter of the law passed by the state legislature, then the law shall not be void and shall remain in application. It is so because the co-existence of sovereignty and the operation of extra-territorial laws in question makes the emergence of the doctrine of territorial nexus [[xii]].

Implementation of territorial laws enhances the smoothness of administration. Generally, one state tries to implement such laws which favor its interests in the other state for the trade-in that state which is in the variance of the laws and the policies of another state. Then the nexus plays a great role as to clarify the validity of the law. [[xiii]]

In the case of State of A. P. v. National Thermal Power Corp. ltd. [[xiv]] It was contended by hon'ble coram that in a case when a legislature has an extraterritorial operation, it has to be enacted by the parliament only. The state legislations have always a territorial nexus and that territorial nexus must be actual and in a true sense.,

In G. V. K. industries' case, it was contended that "clause 2 of article 245 of Indian constitution doesn't give the legislature an unhinged power to go beyond the territories of India as to enact laws. Clause 1 of the same specifies that the parliament may make a law to a whole or any part of India. If the passed legislature has neither any nexus with India nor it is made for the purpose to benefit India then the statute will be called in question. Clause 2 of Article 245 will come into the picture only when the parliament will have the power to make laws for any other territory except India" [[xv]].

Conclusion:
It is assumed that the state shall make a law only for its citizen. The law can be made for the benefit of the natives that will satisfy their interests. Therefore, the nexus is checked which clarifies the validity of the laws.

There is no general formula to determine the sufficient territorial nexus [[xvi]]. It is a question of fact and "the interpretation of the extent of the territorial nexus" is observed and examined by the courts. It is also known that the power to quash a law with extraterritorial impact is within the courts only. Thus, judicial activism and rule of law become very important tools. By these only, efficiency in the functioning of the legislature in making and applying a law can be accessed.

End-Notes:

1. The Constitution of India Art 245
2. Dr. Dharmendra Kumar Singh, 'Constitutional Space And Legislative Development In India On Extra-Territorial Operation Of Law' https://ili.ac.in/pdf/dks.pdf.
3. V.N. Muralidharan, 'Extra-Territorial Jurisdiction Under the Constitution of India: An Analytical Study with Particular Reference to Tax Issues' (2013) 9 SCC J-50
4. J. Venkatesan, Parliament can legislate in respect of extraterritorial aspects, https://www.thehindu.com/news/national/Parliament-can-legislate-in-respect-of-extraterritorial-aspects/article14937996.ece
5. (2017) 10 SCC 779
6. Id
7. Id
8. Id
9. AIR 1948 PC 118
10. M. P. Jain, Indian Constitutional Law,  (8th ed, Lexisnexis 2020) Pg 533
11. Supra. Note iii, V.N. Muralidharan.
12. Girish R, 'Constitutional Governance of Extra-Territorial Operation of Indian Law' (2017) 7 GJLDP (October) 7
13. A. V. Lowe, 'The Problems of Extraterritorial Jurisdiction: Economic Sovereignty and the Search for a Solution' (1985), The International and Comparative Law Quarterly, 34(4), 724–746 <http://www.jstor.org/stable/759196>
14. State of A.P. v. National Thermal Power Corpn. Ltd (2002) 5 SCC 203 also see 20th-century finance Corpn. ltd. V. the State of Maharashtra (2000) 6 SCC 12
15. GVK Industries Ltd. v. ITO, (2011) 4 SCC 36
16. Supra. Note ix, M. P. Jain, Page 534