Center-State Relation (Article 245-255 of Constitution)

Center-State Relation (Article 245-255 of Constitution)

There are two forms of government which is related to the Center-State Relation 1) Unitary 2) Federal

In unitary form, maximum power or only source of power lied with the state. Classic examples of this form of government are

  1. France
  2. Japan
  3. China

While in a federal form of gov. the powers are divided between both center and state. The classic example of this form is

  1. The U.S.
  2. India

In India only during periods of emergency do we follow the Unitary form of Government. Meaning at the time of emergency, more power rests with the center, and states are left with very little power. Otherwise, during normal times India, has a federal form of government.

Power between center and states divided under 3 heads. And this divination decides the Center-State Relation.

  • Legislative relations
  • Administrative relations
  • Financial realations

Legislative relations:

It is have been discussed in the constitution from Article 245 to Article 255. The Center-State Relation has been divided into 2 aspects.

  1. Territorial Jurisdiction
  2. Subject matter

Territorial jurisdiction means who can make the law applicable over a certain specific territory. While subject matter jurisdiction refers to the subject matter of laws be it agriculture, electricity, water projects, etc. who can make laws related to such specific subject matters.

  • Territorial jurisdiction:-

For that, the most important article is article 245. See, there are 2 clauses to this article. For purpose of understanding, I have divided article 245 into 3 categories. Foremost, article 245 says that the parliament has the power, Whenever I write “Parliament” it will mean center. And whenever I write “Legislature” it means State. The first part of Article 245 says that Parliament has the power to make laws for the entire territory of India, or for some part of it. Second. It says that the state legislature has the power to make laws for the entire territory of that state or part of the territory of that state. So what we have understood here is that Parliament has power to law for the entire of India or for some part of it. And the legislature has the power to make law for the entire state or some part of it. The third part talks about the extra-territorial operation, it means that the power that parliament possesses to make laws does not mean that parliament can make laws only for people residing in India or their property, no. Parliament also possesses extraterritorial jurisdiction meaning those persons or those properties situated outside India, Parliament can govern them as well.

This extraterritorial power is only possessed by the parliament, and not by the state. But in the case where Parliament makes extraterritorial laws for persons residing outside India and their property, How will it be determined if the law is right or wrong? So for that, we have a territorial nexus test. The famous case for this test is, “Wallace v. Income Tax Commissioner, Bombay (AIR 1948 PC 118)”. You might have come across this in company law as well. What happened, in this case, was that there was a company registered in England. Now this company was a partner of an Indian firm. Indian Tax authority wanted to tax the entire income of this company. It was said that since the major income of this company comes from India, the Indian tax authority has the power to tax that income. So the territorial nexus test says that if the parliament wishes to make an extraterritorial law and the subject which such a law is to govern there must be a reasonable connection between both.


Fro here, we question arises, that under Article 245, the law-making power that parliament possesses is that absolute? The answer to this would be NO. Parliament does not enjoy absolute power under article 245. And these are 3 exceptions to it.

1st exception is Article 240 which says that the 4 union territories.

  • Dadar & Nagar Haveli
  • Daman & Diu
  • Andaman & Nicobar Islands
  • Lakshadweep Island

For these 4 union territories, President has the power that for their “Peace, Progress & Good Governance” he can make regulations. The extent of the power of the president to make regulations is so much that for these 4 territories, he can amend, modify or repeal the laws of Parliament.

2nd exception is the 5th schedule, where scheduled areas are covered. This exception says that the governors of these respective states have powers that at any point of time they can declare that in these tribal areas laws of parliament shall not apply.

3rd exception is that of the 6th schedule. (Tribal Areas)

  • Assam
  • Mizoram
  • Meghalaya
  • Tripura

The tribal areas of these states, 6th schedule say that the governors of these states can at any point of time say that the specific laws of parliament will not be applied in these areas, or they should be modified or amended.

So these 3 are exceptions to parliament’s law-making powers.

After territorial legislation, 2nd aspect is subject matter legislation.

Referring to who has power with regards to which subject matter to make laws. The power that center & state(Center-State Relation) have been categorized by 7th schedule in 3 lists.

First in Union List, also known as List I

Second, State List, also known as List II

Third Concurrent List, also known as List III

Union list includes all those things which are of national importance, Like the defense, atomic energy, etc. So there is a total of 100 items here. Parliament has the exclusive right to make laws related to these items. Similarly, those items are covered in State lists, which are of local importance/regional importance, like agriculture, police, prison, all these things. So their area totals 61 such items here. The state has exclusive power to make laws related to these items. And in Concurrent list such 52 items, in relation to which state and the Union both can make laws. Here two Articles are important.

Article 246 says that Whatever articles are there in List I & List II, parliament can make laws on any of them. Before understanding the second article, there is one question that can come to your mind. Is it possible that no item, other than those mentioned in all 3 of these lists, may exist? If a new subject matter comes up, who will make laws on that? This question has been answered in Article 248. It is also known as residuary power. Article 248 says that, if a new subject matter comes up, which has not been covered in any of these 3 lists and it is required to make law on that, so that residuary power lies with the Union.

In case of conflict in the topic of the center-state relation, one thing is understood here i.e. Union list is greater than the concurrent list and the concurrent list is greater than the state list. So if there is a conflict in the Union list or State list then the Union list will prevail and vise versa. But this arrangement may be changed in some extraordinary circumstances.

So what extraordinary circumstances are possible? See below

  • National emergency, President Rule(Parliament gets the power to make laws on any subject matter from state list)

  • Rajya Sabha passes a Resolution (Rajya sabha feels there is the subject matter in state list which is of national importance then after resolution Parliament can make laws on that subject.

  • On States request( 2 or more state legislatures request the parliament that on a subject matter parliament should make the law)

  • Implementing International Agreement ( for fulfilling them, Parliament can make law on any subject matter of the state list


Federal form of Government, i.e. division of power between center and state. It is an essential feature of our Constitution. There are some situations in which the center on the states’ subject or the state on the center’s subject want to make law. If the law comes into being, which is not in state list or Union list, How would we determine if the law is valid or not? and how the center-states relation will work?

So to determine this, courts apply a doctrine. It is known as the doctrine of Pith & Substance. Let us see its leading case to understand it. i.e. Prafulla Kumar V. Bank of Commerce (AIR 1947 PC 60). In this case, Moneylender, who gives away loans, to recover them, how much amount can be taken & How much interest can be taken? To regulate that a state regulation “Bengal Moneylenders Act, 1946” was passed. Why did Bengal pass that legislation? Because money lending is a state subject. Money lending is listed in List II-Entry 7. But this Act was challenged by Central Govt. and said that this Act also governs promissory notes, and promissory note is a central subject under List I- Entry 28. To check if the legislation is valid or not? The courts applied the doctrine of Pith & Substance & said that whenever you want to find out the true nature of any legislation you will see the legislation as a whole. Meaning its object, its scope & its effect- these 3 things are found out. Applying the test of this doctrine, the court said that, the main nature of the Bengal Money Lending Act is to govern the money lending activities. And it is incidentally encroaching upon the matter of promissory note. The Act was held to be valid.

Let us see Article 254. Which talks about repugnancy. Meaning that if parliament makes the law on the same subject matter, and the state makes it too, so art. 254 says that for this subject matter, the law made by parliament would be valid. And the law made by the state would be void.

This is all about Center-State Relation.


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