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

-- A welfare and security, by shattering the very concepts that under- gird peace between nations. By recognizing international peace to be sine qua non for 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 B Article 51. To claim the power to legislate for some other territories, even though aspects or causes arising, occurring or existing there have no connection, to India would be to demolish the very basis on which international peace and security can be premised. c 48. For the aforesaid reasons we are unable to agree that Parliament, on account of an alleged absolute legislative sovereignty being vested in it, should be deemed to have the powers to enact any and all legislation, de hors the requirement that the purpose of such legislation be for the benefit of India. D The absolute requirement is that all legislation of the Parliament has to be imbued with, and at the core only be filled with, the purpose of effectuating benefits to India. This is not just a matter of the structure of our Constitution; but the very foundation. E

49Copy pinpoint49. The arguments that India inherited the claimed absolute or illimitable powers of the British parliament are unacceptable. One need not go into a lengthy or academic debate about whether in fact the British parliament always did, F or as a matter of absolute necessity needs to, possess such powers. There is a healthy debate about that, casting serious doubts about the legal efficacy of such arguments. (See Chapter 2: "The Sovereignty of Parliament - in Perpetuity?", by A.W. Bradley in The Changing Constitution, Ed. Jowell & G Oliver23 and Studies in Constitutional Law by Colin R. Munro24 }. It is now a well accepted part of our constitutional jurisprudence that by virtue of having a written constitution we have effectively severed our links with the Austinian notion that law as specified

23. 2nc1 Ed. Clarendon Press, Oxford (1989).

H 24. 2nc1 Ed. Butterworths, OUP (2005)

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 417 ANR. [B. SUDERSHAN REDDY, J.] by a sovereign is necessarily just, and the Diceyan notion of parliamentary sovereignty. 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 the Parliament, there cannot be the IPgal capacity to exercise that power in a manner that is not related to their interests, benefits, welfare and security.

50Copy pinpoint50. We now turn our attention to other arguments put forward by the learned Attorney General with regard to the implications of permissibility of making laws that may operate extra-territorially, pursuant to Clause (2) of Article 245. In the first measure, the learned Attorney General seems to be arguing that the act and function of making laws is the same as the act and function of "operating" the law. From that posiUon, he also seems to be arguing that Clause (2) of Article D · . 245 be seen as an independent source of power. Finally, the thread of that logic then seeks to draw the inference that in as much as Clause (2) prohibits the invalidation of laws on account of their extra-territorial operation, it should be deemed that the courts do not have the power to invalidate, - i.e., strike down E as ultra vires -, those laws enacted by Parliament tbat relate to any extra-territorial aspects or causes, not withstanding the fact that many of such aspects or causes have no impact on or nexus with India. F

51Copy pinpoint51. 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 acts of changing and enacting laws. The phrase operation of law, in its ordinary sense, means the effectuation or implementation of the laws. G The acts and functions of implementing the laws, made by the legislature, fall within the domain of the executive. Moreover, the essential nature of the act of invalidating a law is different from both the act of making a law, and the act of operating a law. Invalidation of laws falls exclusively within the functions of H

p. 418 Copy page pinpoint

-- A the judiciary, and occurs after examination of the vires of a particular law. 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 legislature, the executive and the judiciary respectively, unless the context or specific text, in the Constitution, unambiguously points to some other association.

52Copy pinpoint52. In Article 245 we find that the words and phrases "make laws" "extra-territorial operation", and "invalidate" have been used in a manner that clearly suggests that the addressees implicated are the legislature, the executive and the judiciary respectively. While Clause (1) uses the verb "make" with respect to laws, thereby signifying the grant of powers, Clause (2) uses the past tense of make, "made", signifying laws that have already been enacted by the Parliament. The subject of Clause (2) of Article 245 is the law made by the Parliament, pursuant to Clause (1) of Article 245, and the object, or purpose, of Clause (2) of Article 245 is to specify that a law so made by the Parliament, for the whole or any part of territory of India, E should not be held to be invalid solely on the ground that such laws require extra-territorial operation. The only organ of the state which may invalidate laws is the judiciary. 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 ultra-vi res only to the extent of that one ground of invalidation. One thing must be noted here. In as much as the judiciary's jurisdiction is in question here, 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 beyond the pale of judicial scrutiny have been expanded over and above that which has been specified. The learned Attorney General is not only seeking an interpretation of Article 245 wherein the Parliament is empowered to make laws "for" a foreign territory, which we have seen above is impermissible, but also an interpretation that places those

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 419 ANR. [B. SUDERSHAN REDDY, J.] vaguely defined laws, which by definition and implication can range over an indefinite, and possibly even an infinite number, of fields beyond judicial scrutiny, even in terms of the examination of their vires. That would be contrary to the basic · structure of the Constitution. 25 8

53Copy pinpoint53. Clause (2) of Ar.icle 245 acts as an exception, of a particular and a limited kind, to the inherent power of the judiciary to invalidate, if ultra-vires, ciny of the laws made by any organ of the State. Generally, an exception can logically be re(ld as only operating within the ambit of the clause to which it is an exception. It acts upon the main limb of the Article - the more general clause - but the more general clause in turn acts upon it. The relationship is mutually synergistic in engendering the meaning. In this case, Clause (2) of Article 245 carves out a specific exception that a law made by Parliament, pµrsuant to Clause (1) of Article 245, for the whole or any part of the territory of 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 and scheme.• and indeed to ensure that the powers vested in the organs 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.

54Copy pinpoint54. If one were to read Clause (2) of Article 245 as an independent source of legislative power of the 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, it would immediately call into question as to why Clause (1) of Article G 245 specifies that it is the territory of India or Ci part thereof"for" which the 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 245, the phrase "for the whole or any .

25. Supra note 18. H

420 SUPREME COURT REPORTS [2011) 3 S.C.R. ·· -- A part of the territory of India" in Clause (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 it is the territory of India that is specified by the phrase "for the B whole or any part of the territory of India." "Expressio uni us est exclusio alterius"- the express mention of one thing implies the exclusion of another. In this case Parliament has been granted powers to make laws "for'' a specific territory - and that is India or any part thereof; by implication, one may not read that the c Parliament has been granted powers to make laws "for" territories beyond India.

55Copy pinpoint55. The reliance placed by the learned Attorney General on the history of changes to the pre-cursors of Article 245, in the Draft Constitution, in support of his propositions is also D inapposite. In fact one can clearly discern that the history of changes, to Clause 179 of the Draft Constitution (which became Article 245 In our Constitution), supports the conclusions we have arrived at as to the meaning, purport and ambit of Article

245. The first iteration of Clause 179 of the Draft Constitution E read, in part, as follows: "Subject to the provisions of this Constitution, the Federal Parliament may make laws, including laws having extra-territorial operation, for the whole or any part of the territories of the Federation ...... " Clearly the foregoing iteration shows that what was under consideration were the F entire class of laws that the Parliament was to be empowered to make "for the whole or any part of the territories of the Federation ..... ", and included within that class were the laws "having extra-territorial operation." Subsequently Clause 179 of the Draft Constitution was split into two separate clauses 179 G (1) and 179(2). The learned Attorney General's arguments suggest that the conversion of Draft Clause 179 into two separate draft clauses, 179(1) and 179(2), should be interpreted to mean that the framers of the Constitution intended the two clauses to have a separate existence, independent of H each other. We are not persuaded. The retention of the phrase

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 421 ANR. [B. SUDERSHAN REDDY, J.] "extra-territorial operation" as opposed to the phrase "extra- A territorial laws" implies that the drafters were acutely aware.of the difference between the meaning of the phrase "operation of law" and the "making of law". Further, by beginning Clause (2) of Article 245 with the phrase "No law made by the Parliament...", it is clear that the drafting committee intended B to retain the link with Clause (1) of Article 245. (See: The Framing of India's Constitution, by The Project Committee, Chairman B. Shiva Rao) 26 Thus we cannot view Clause (2) of Article 245 as an independent source of legislative powers on account of the history of various iterations of the pre-cursor to c Article 245 in the Constituent Assembly.

VIII Analysis of Constitutional Topological Space: Chapter 1, Part ~: D

56Copy pinpoint56. We now turn to Chapter 1 Part XI, in which Article 245 is located, to examine other provisions that may be expected to transform or be transformed by the meaning of Article 245 that we have discerned and explained above. In particular, the E search is also for any support that may exist for the propositions • of the learned Attorney General that the Parliament may make laws for any territory outside India.

57Copy pinpoint57. As is well known, Article 246 provides for the division of legislative competence, as between the Parliament and the F State legislatures, in terms of subjects or topics of legislation. Clauses (1 ), (2) and (3) of Article 246 do not mention the word territory. However, Clause (4) of Article 246 specifies that Parliament has the. power to "make laws for any part of the territory of India not included in a State" with respect to any G matter, notwithstanding that a particular matter is included in the State List. In as much as Clause (1) of Article 245 specifies that it is for "the whole or any part of the territory of India" with respect o'f which Parliament has been empowered to make

26. Vol. 3, Universal Law Publichsing Co. H

422 SUPREME COURT REPORTS [2011] 3 S.C.R.

A laws, it is obvious that in Article 246 legislative powers, whether of Parliament or of State legiS!atures, are visualized as being "for" the territory of India or some part of it. '·"

58Copy pinpoint58. Article 248 provides for the residuary power of legislation. However, in this instance, the Constitution speaks of the powers of Parliament in terms of the subject matters or fields of legislative competence not enumerated in Concurrent and State lists in the Seventh Schedule, etc. Article 248 does not mention any specific territory. Nevertheless, in as much as it retains the link to Article 246, it can only be deemed that the original condition that all legislation be "for" the whole or some territory of India has been retained.

59Copy pinpoint59. It would be pertinent to note, at this stage that List I - Union 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 the Parliament has been granted residuary legislative powers and competence with respect to matters that are not enumerated in Concurrent and State Lists, vide Article 248, the fact that Parliament has been granted legislative powers and competence over various matters, as listed 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, vide Article 246, and the powers to make laws "for the whole or any part of the territory of India", vide Article 245, we must conclude that, contrary to the 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 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 the Parliament, it logically follows that Parliament is not empowered to legislate with

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 423 ANR. [B. SUDERSHAN REDDY, J.] respect to extra-territorial aspects or causes that have no nexus whatsoever with India. To the extent that some of the implications of learned Attorney General's propositions only reach such a limited reading of the legislative powers of the Parliament, which nevertheless are not as restricted as the narrow understanding of the ratio in ECIL may suggest, we are in partial agreement with the same.

60Copy pinpoint60. When we look at Articles 249 (conditions under which Parliament may legislate with respect to matters in List II of Seventh Schedule, wherein the Council of States 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) we find that legislative powers of the Parliament are spoken of, in the said articles also, only in terms of as being "for the whole or any part of the territory of D 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 India." Nowhere within Chapter 1, Part XI do we find support for the propositions of the learned E Attorney General that the Parliament may make laws "for" any territory other than the "whole or any part of the territory of India." To the contrary, we only find a repeated use of the expression "for the whole or any part of the territory of India." It is a well known dictum of statutory and constitutional interpretation that F- 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, we do not see any contextual reasons that would require reading a different meaning into the expression "for the whole or any part of the G territory" in the context of Articles 249, 250 or 253, than what we have gathered from the text of Article 245.

•• IX . Wider Structural Analysis: H

-- 424 SUPREME COURT REPORTS [2011] 3 S.C.R. •

A 61" 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 governance - legislative, executive and judicial. Learned Attorney General did not point s to this Article as lending particular support for his propositions. However, on closer examination, Article 260 appears to further support the conclusions we have arrived at with respect to Article 245. It provides as follows:

"Article 260. Jurisdiction of the Union in relation to c territories outside India - The Government of India may by agreement with the Government of any territory not being part of the territory of India undertake any executive, legislative or judicial functions vested in the Government of such territory, but every such agreement shall be subject to, and governed by, any law relating to the exercise of · foreign jurisdiction for the time being in force."

62Copy pinpoint62. It is clear from the above text of Article 260 that it is the 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 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,

63Copy pinpoint63. 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, that such a jurisdiction can be exercised only upon an agreement with the 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

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 425 ANR. [B. SUDERSHAN REDDY, J.] agreements, and the manner of effectuating such an agreement has to be in conformity with a law specifically enacted QY the Parliament (whereby the control of the people of India ovef the actions of the Government of India, even extra-territorially is retained), implies that it is only "for'' India that Parliament may make laws. The Parliament still remains ours, and exclusiveiy ours. Though the Government of India, pursuant to Article 260, acts on behalf of a foreign territory, there is always the Parliament to make sure that the Government of India does not act in a manner that is contrary to the interests of, welfare of, well-being of, or the security of India. The foregoing is a very c different state of affairs from a situation in which the Parliament itself acts on behalf of a foreign territory, as implicated by the expression "make extra-territorial laws". The former comports with the notions of parliamentary democracy in which the people ultimately control the .Executive through their Parliament; while 0 the latter indicates the loss of control of the people themselves over their elected representatives. ·

64Copy pinpoint64. The text of Articles 1 and 2 leads us to an irresistible conclusion that the meaning, purport and ambit of Article 245 is as we have gathered above. Sub-clause (c) of Clause (3) of E Article 1 provides that territories not a part of India may be acquired. The purport of said Sub-Clause (c) of Clause 3 of Article 1, pace Berubari Union and Exchange of Enclaves, . Re27is that such acquired territory, automatically becomes a ·.part of India. It was held in Berubari, that the mode· of acquisition of such territory, and the specific time when such acquired territory becomes a part of the territory of India, are determined in accordance with international law. It is only upon such acquired territory becoming a part of the territory of India would the Parliament have the power, under Article 2, to admit such acquired territory in the Union or establish a new ~tate. The crucial aspect is that it is only when the foreign territory becomes a part of the territory of India, by acquisition in terms of relevant international laws, is the Parliament empowered to

27. AIR 1960 SC 845. H

426 SUPREME COURT REPORTS [2011] 3 S.C.R.

A make laws for such a hitherto foreign territory. Consequently, the positive affirmation, in the phrase in Clause (1) of Article 245, that the 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 of the territory of India, Parliament B may not exercise its legislative powers in respect of such a territory. In the constitutional schema it is clear that the Parliament may not make laws for a territory, as a first order condition, unless that territory is a part of India.

c x Relevance of Case Law Cited by the learned Attorney General:

65Copy pinpoint65. The learned Attorney General cited and relied on many decisions in support of his arguments. We find that none of the 0 cases so cited have considered the issues of what the impact of constitutional text, wider constitutional topological and structural spaces, the representative capacity of a parliament and the like would be on the extent of powers of the parliament. Moreover, having gone through the cases, we do note that none stand for the proposition that the powers of a parliament are unfettered and that our Parliament possesses a capacity to make laws that have no connection whatsoever with India.

66Copy pinpoint66. Nevertheless, we will address a few of the cases relied on by the learned Attorney General primarily for limited purpose of locating their rationale and reasoning. In Governor General in Council v. Raleigh lnvestments28 , the key issue was about .. extra-territorial operation of a law, and not whether the law as made was with respect to aspects or causes outside the territory of British India and bearing no nexus with it. In this regard the Privy Council's observations about the Appellant's contention are pertinent: "The appellant's arguments ..... comprised two contentions. It was first argued that these provisions were not extra-territorial. It was also argued that even if they should be found in any degree to operate extra-

H 28. Supra note 9.

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 427 ANR. [B. SUDERSHAN REDDY, J.] te"itorial/y, that would be no ground of holding them to be invalid, so far as municipal courts called upon to deal with them are concerned", 29 and finally "in our judgment therefore, the extent, if any, of extra-territorial operation which is to be found in the impugned provisions, is within the legislative powers given to the Indian Legislature by the Constitution Act." 30 It is clear that in the cited case, the Privy Council was dealing with the issue of extra-territorial operation of the law, and not extra- territorial law. In Wallace Brothers v. CIT, Bombay City and Bombay Suburban District31 also the issue was with regard to . sufficiency of territorial connection, and it was held that the c principle - sufficient territorial connection - not the rule giving effect to that principle - residence - is implicit in the power conferred by the Government of India Act, 1935. In Emmanuel Mortenssen32 , the Court of Justiciary upheld the jurisdiction of the local Sheriff with respect to the owners and operator of a D trawler boat used for fishing inside the estuary. However, jurisdiction was not extended on the basis of parliamentary supremacy or of powers to enact extra-territorial laws. Rather, the principle enunciated was that an estuary, under international law, falls within the territory of Scotland, and that the North Sea E Fisheries Convention of 1883 did not derogate from the foregoina general principle of international law. Consequently in as much as the operator or owner of that fishing trawler engaged in acts that were prohibited within the territorial limits over which the legislature that enacted the applicable statute had jurisdiction, the local sheriff exercised proper jurisdiction. F Croft v. Dunphy33 was with regard to domestic laws operating beyond the territorial limits, and it was recognized that a law which protects the revenue of the states may necessarily have to. be operated outside the territorial limits, but that such operation does not violate the principle that legislatures enact G

29. Ibid, p. 273.

30. Ibid, p. 284.

31. Supra note 10.

32. Supra note 6.

33. Supra note 7. H

428 SUPREME COURT REPORTS [2011] 3 S.C.R.

A laws with respect to aspects or causes that have a nexus with the territory for which the legislature has the law making responsibility for. The control of smuggling activities and revenue collection were seen necessarily as related to the territorial interests, and it was in furtherance of such territorial B interests, was extra-territorial operation permissible. In State v. Narayandas34 the issue considered by the Bombay High Court was with regard to the vires of a law enacted by a state legislature declaring a bigamous marriage contracted outside the territory of the state to be unlawful. The main issue was with c regard to the power of a state to legislate beyond its territory, and Chief Justice Chagla held that it could not. One paragraph in that decision that could be deemed to be supportive of the learned Attorney General's propositions is:

"Now under our present Constitution, Parliament has been given absolute powers. Therefore, today Parliament may enact an extra-territorial law. The only limitation on its powers is the practicability of the law. If an extra-territorial law cannot be enforced, then it is useless to enact it but no one can suggest today that a law is void or ultra-vires which is passed by the Parliament on the ground of its extra-territoriality".

67Copy pinpoint67. Clearly, the statements that under our 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. We discern that the second half of the excerpt cited above provides the clue to the fact that Chief Justice Chagla was concerned more with laws that require an operation outside India, and not in terms of laws that have no connection with India whatsoever. At best the comment reveals the concern of the learned jurist about the Parliament having the competence to enact laws with respect to objects and

H 34. Supra note 12.

-- I GVK INDS. LTD. & Af\JR. v. INCOME TAX OFFICER &429 ANR. [B. SUDERSHAN REDDY, J.] provocations·lying outside the territory, but whose effect is felt A inside the territory. Hence, that broad statement does not derogate from the textual meaning, purport and ambit of Article 245 that we have exp~unded hereinabove. XI B Conclusion:

68Copy pinpoint68. There are some important concerns that we wish to share our thoughts on, before we proceed to answering the· questions that we set out with. Very oftenarguments are made claiming supremacy or sovereignty for various organs to act in· C a manner that is essentially unchecked and uncontrolled. Invariably such claims are made with regard to foreign affairs or situations, both within and outside the territory, in which the government claims the existence of serious secturity risks or law and order problems. Indeed, it may be necessary for the State D to possess some extraordinary powers, and exert considerable force to tackle such situations. 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.

69Copy pinpoint69. There are two aspects, of such extreme arguments claiming absolute powers, which are worrisome. The first one relates to a misconception of the concepts of sovereignty and of power, and a predilection to oust judicial scrutiny even at the minimal level, such as examination of the vires of legislation or other types of state action. The second one r&lates to predilections of counsel of asking for powers that are undefined, un~pecified, vague and illimitable be read into the constitutional text, as matter of some principle of inherent design or implied necessity.

70Copy pinpoint70. The modern concept of sovereignty emerged in a troubled era of civil wars within thE! territories of, and incessant conflict between, nation-states. At one end of the spectrum political philosophers such as Thomas Hobbes and Jean Bodin

430 SUPREME COURT REPORTS (2011) 3 S.C.R.

A postulated the necessit~ of absolute power within the territory, arguing that failure of order was inimical to the well being of the people, and further arguing that if the governments were to not have such absolute powers invariably leads to internal disorder. While it is generally and uncritically argued that B Hobbes and Bodin stood for blind political absolutism, when viewed from a historical perspective, they can also be seen as the starting points of human beings quest for greater accountability of states and governments, which were to be increasingly viewed as the repositories of collective powers of c the people. Hobbes specifically recognized that governments would become unstable and lose their legitimacy if they failed to protect the welfare of the subjects. For Bodin, the absolute sovereign was tempered by divine law (or "natural law"}, and the customary laws of the community. Alan James states that "[ijrom this basis it could be argued that sovereignty lay not with 0 the ruler but with the ruled. In this way ihe ultimate authority could be claimed for the people, with the government simply acting as their agent." (See: Sovereign Statehood - The Basis of International Society35}. These seeds of accountability, carried within them the incipient forms of arguments that would inexorably lead to the modern notion of self-determination by the people: that each nation state, formed by the people, and answerable to the people through the organs of the State, would act in accordance with the wishes of the people - both in terms of ordinary moments of polity, and also in terms of constitutional moments, with the latter setting forth, in greater or lesser specificity, the acts that may or may not be done by the organs of the state.

71Copy pinpoint71. The path to modern constitutionalism, with notions of divided and checked powers, fundamental rights and affirmative duties of the State to protect and enhance the interests of, welfare of, and security of the people, and a realization that "comity amongst nations" and international peace were sine qua non for the welfare of the people was

H 35. Allen & Unwin, London (1986).

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 431 ANR. [B. SUDERSHAN REDDY, J.] neither straight forward, nor inevitable. It took much suffering, bloodshed, toil, tears and exploitation ofthe people by their own governments and by foreign governments, both in times of peace and in times of war, before humanity began to arrive at the conclusion that unchecked power would sooner, rather than later, turn tyrannical against the very people who have granted such power, and also harmful to the peaceful existence of other people in other territories. Imperial expansion, as a result of thirst for markets and resources that the underlying economy demanded, with colonial exploitation as the inevitable result of that competition, and two horrific world wars are but some of c the more prominent markers along that ::iathway. The most tendentic:.is use of the word sovereignty, wherein the principles of self-determination were accepted within a nation-state but not deemed to be available to others, was the rhetorical question raised by Adolf Hitler at the time of annexation of D Austria in 1938: "What can words like 'independence' or 'sovereignty' mean for a state of only six million?"36 We must recognize the fact that history is replete with instances of sovereigns who, while exercising authority on behalf of even those people who claimed to be masters of their own realm, contradictorily claimed the authority to exercise suzerain rights E over another territory, its people and its resources, inviting ultimately the ruin of large swaths of humanity and also the very people such sovereigns, whether a despot or a representative organ, claimed to represent. F

72Copy pinpoint72. India's emergence as a free nation, through a non- violent struggle, presaged the emergence of a moral voice: that while we claim our right to self-determination, we claim it as a matter of our national genius, our status as human beings in the wider swath of humanity, with rights that are ascribable to G us on account of our human dignity. Such a morality arguably does not brook the claims of absolute sovereignty to act in any manner or form, on the international stage or within .the country.

36. · De Smith, Stanley A. : "Microstates and Micronesia" (New York, NYU Press - 1970), p. 19. H

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A To make laws "for another territory" is to denigrate the principle of self-determination with respect to those people, and a denigration of the dignity of all human beings, including our own. The debates in the Constituent Assembly with regard to the wording of Article 51, which was cited earlier in this judgment, B gives the true spirit with which we the people of this country have vested our collective powers in the organs of governance. This is so particularly because they were made in the aftermath of World War II, arguably the most brutal that mankind has ever fought, and the dawn of the atomic age. In particular the c statements of Prof. Khardekar, are worth being quoted in extenso: "Mr. Austin, a great jurist, says that there is no such thing as international law at all - if there is anything it is only positive morality .... In saying that there may be positive D morality I think even there he is wrong. If there were to be morality amongst nations, well we would not have all that has been going about. If there is a morality amongst nations today, it is the morality of robbers. If there is any law today it is the law of the jungle where might is right. ..... E The part that India is to play is certainly very important because foundations of international morality have to be laid and only a country like India with its spiritual heritage can do it.. .... Therefore it is in keeping with our history, with our tradition, with our culture, that we are a nation of peace and we are going to see that peace prevails in the World." 37

73Copy pinpoint73. In granting the Parliament the powers to legislate "for" India, and consequently also with respect to extra-territorial aspects or causes, the framers of our Constitution certainly intended that there be limits as to the manner in which, and the extent to which, the organs of the State, including the Parliament, may take cognizance of extra-territorial aspects or

37. Constituent Assembly Debates Official Report, 1948-49, page 601 (Lok H Sabha Secretariat, New Delhi).

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 433 ANR. [B. SUDERSHAN REDDY, J.] causes, and exert the State powers (which are the powers of the collective) on such aspects or causes. Obviously, some of those limits were expected to work at the level of ideas and of morals, which can be inculcated· by a proper appreciation of our own history, and the ideas of the framers of our constitution. They were also intended to have a legal effect. The working of the principles of public trust, the requirement that all legislation by the 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 enforceable in c 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 aspects or causes have no nexus whatsoever with India. D

74Copy pinpoint74. 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 unambiguously support. To readily E 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. Take the instant case itself. It would appear that the concerns of learned Attorney General may have been more· with whether the ratio in ECIL F could lead to a reading down of the legislative powers granted to the Parliament by Article 245. A thorough textual analysis, combined with wider analysis of constitutional topology, structure, values and scheme has revealed a much more intricately provisioned set of powers to the Parliament. Indeed, G when all the powers necessary for an organ of the State to perform its role completely and to 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, why should such unnecessarily imprecise H

434 SUPREME COURT REPORTS [2011] 3 S.C.R.

-- A arrogation of powers be claimed? To give in to such demands, would be to run the risk of importing meanings and possibilities unsupportable by the entire text and structure of the Constitution. Invariably such demands are made in seeking to deal with external affairs, or with some claimed grave danger or a serious B law and order problem, external or internal, to or in.India. In such circumstances, it is even more important that courts be extra careful. The words of Justice Jackson in Woods v. Cloyd W. Miller Co., 38 in dealing with war powers, may be used as a constant reminder to be on guard: C "I agree with the result in this case, but the arguments that have been addressed to us lead me to utter more explicit misgivings ..... The Government asserts no constitutional basis for this legislation other than this vague, undefined and undefinable "war power." ..... It usually is invoked in haste and excitement when calm legislative consideration of constitutional limitation is difficult. It is executed in a time of patriotic fervor that makes moderation unpopular. And, worst of all, it is interpreted by judges under the influence of the same passions and pressures. Always, as in this case, the Government urges hasty decisions to forestall some emergency or serve some purpose and pleads that paralysis will result if its claims to power are denied or their confirmation delayed. Particularly when the war power is invoked to do things to the liberties of the people, ....... that only indirectly affect conduct of war and do not relate to the management of war itself, the constitutional basis should be scrutinized with care."

75Copy pinpoint75. The point is not whether and how India's constitution grants war powers. The point is about how much care should be exercised in interpreting the provisions of the 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

H 38. 333 U.S. 138.

-- GVK INDS. LTD. & ANR. v. INCOME TAX OFFICER & 435 ANR. [B. SUDERSHAN REDDY, J.] circumstances that are fraught with grave danger. We do not A need to go looking for powers that the text of the Constitution, so analysed, does not reveal.

76Copy pinpoint76. We now turn to answering the two questions that we set out with: B (1) Is the Parliament constitutionally restricted from enactlrg 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) c 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? The answer to the above would be yes. However, the 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, 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 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 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 inhabitants of India, and Indians. It is important for us to state and hold here that the powers of legislation of the Parliament with regard to all aspects or causes that are within the purview of its competence, including with fespect to extra-territorial aspects or causes as delineated above, and as specified by the Constitution, or i_mplied by its essential role in the constitutional scheme, ought not to be

436 SUPREME COURT REPORTS [2011) 3 S.C.R.

A subjected to some a-priori quantitative tests, such as "sufficiency" or "significance" or in any other manner requiring a pre-determined degree of strength. All that would be required would be that the connection to India be real or expected to be real, and not illusory or fanciful. Whether a particular law enacted B by Parliament does show such a real connection, or expected real connection, between the extra-territorial aspect or cause and something in India or related to India and Indians, in terms of impact, effect or consequence, would be a mixed matter of facts and of law. Obviously, where the Parliament itself posits c a degree of such relationship, beyond the constitutional requirement that it be real and not fanciful, then the 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. (2) Does the Parliament have the powers to legislate D "for" any territory, other than the territory of India or any part of it? The answer to the above would be no. 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 as explained above in the answer to Question 1 above. Such laws would fail 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 Parliament with respect to extra-territorial aspects or causes that have no impact on or nexus with India would be ultra-vires, as answered in response to Question 1 above, and would be laws made "for" a foreign territory.

77Copy pinpoint77. Let the appeal be listed before an appropriate bench for disposal. Ordered accordingly. H R.P. Reference answered.