CENTRAL MOOTS ELIMINATION 2011

IN THE HONBLE SUPREME COURT OF INDICANA

ADVISORY JURISDICTION

Special Reference No.__/2011

In the matter of Art. 246, Schedule VII Of Constitution of Indicana

In Re Presidential Reference: Khambat Gas (Regulation of Transmission, Supply and Distribution) Act, 2010
Parties: 1. Union of Indicana 2. State of Khambat and ors.

BEFORE SUBMISSION TO THE

HONORABLE CHIEF JUSTICE AND HIS COMPANION JUSTICES OF HONORABLE SUPREME COURT OF INDICANA

MEMORANDUM ON BEHALF OF THE RESPONDENT

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CONTENTS
LIST OF ABBREVIATIONS..3 INDEX OF AUTHORITIES4 STATEMENT OF JURISDICTION...6 STATEMENT OF FACTS.......................................................................................................6 ISSUES PRESENTED..7 SUMMARY OF ARGUMENTS..8 ARGUMENTS ADVANCED 1. WHETHER NATURAL GAS
WHETHER THE IS A

UNION

SUBJECT OR

STATE

SUBJECT AND

STATE OF KHAMBAT AND THE OTHER STATES HAVE THE LEGISLATIVE NATURAL GAS.......................10

COMPETENCE TO MAKE LAWS ON THE SUBJECT OF

2. WHETHER NATURAL GAS IN WHICHEVER PHYSICAL FORM IS A UNION SUBJECT AND

WHETHER

UNION HAS EXCLUSIVE LEGISLATIVE POWER TO ENACT LAWS ON NATURAL ,

COAL BED

GAS, INCLUDING NATURAL GAS IN ALL ITS FORMS VIZ. SHALE GAS METHANE

ETC..

14
AND

3. WHETHER

THE

KHAMBAT GAS (REGULATION

OF

TRANSMISSION, SUPPLY

DISTRIBUTION) ACT, 2010

ENACTED

IS ULTRA VIRES TO THE CONSTITUTION AND HAS BEING THE LEGISLATIVE

WITHOUT

COMPETENCE.....................................................16

4. WHETHER
ENTITLED

THE STATES UNDER THE TO USE THE

UNION

OF INDICANA ARE WITHIN

SOVEREIGN
THEIR

ENTITIES

NATURAL

RESOURCES

TERRITORIAL

LIMITS.......20

CENTRAL MOOTS ELIMINATION 2011

PRAYER..................................................................................................................................... 23

LIST OF ABBREVIATIONS
1. AIR - All India Reporter 2. SCC Supreme Court Cases 3. SC - Supreme Court 4. Cal - Calcutta 5. Art. Article 6. S. - Section 7. Edn. Edition 8. Min. Mineral 9. Vol. Volume

CENTRAL MOOTS ELIMINATION 2011

INDEX OF AUTHORITIES

A. CASES
I. Naga Peoples Movement of Human Rights v. Union of India,AIR 1998 SC 431(para 20) II. Manufacturers Gas & Oil Co. v. Indiana Natural Gas & Oil Co. 57 N.E. 912 : 155 ind. 461 III.
IV.

Citizens Gas & Min. Co. V. Town of Elwood, 16 N.E. 624 : 114 Ind. 332 Shah Goverdhan L. Kabra Teachers' College, AIR 2002 SC 3675 Talishdar Singh v. State of U.P. AIR 1959 SC 1012 Venttaramana Devaru vs. state of Rajasthan AIR 1992 SC 225 P.N. Krishna Lal v. Government of Kerala(1995) Suppl. 2 SCC 187 (held headnote) K.S.E Board v. Indian Aluminium Co. AIR1976 SC1031 Hindustan Lever v. State of Mahrashtra (2004)9 SCC 438 (para 34) Goodricke Group Ltd. v. State of Bengal (1)SCC 707 State Of West Bengal &Amp; Ors vs The Committee For Protection

V. VI. VII. VIII. IX. X. XI.

B. BOOKS
I. II. III. IV. V. Shorter Constitution of India , DD Basu, 14th Edition 2009 Halsburys Law of England 19(2): Fuel and Energy, Fourth Edition 2007 Reissue Principles of Interpretation of Statues , G.P.Singh,J. Indian Constitutional Law , M.P. Jain, 5th Edition, 2003 Commentary on the Constitution of India, DD Basu,8th Edition, 2009, (Vol-1)
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VI. VII.

Interpretation of Statutes, N.S. Bindra Halsbury law of India volume 21: Fuel and Energy-II (Petroleum and Natural Gas)

VIII. IX. X. XI.

Kirk Othmer, Encyclopedia of Chemical Technology (3rd Edn, Vol 17) Handbook of Organic Chemistry by Pradeep Wade,H.W.R :Administrative Law, ELBS, Oxford University Press,Oxford, 1982 'The New Book of Popular Science' Vol. 2

C. DICTIONARIES
I. II. III. IV. Blacks Law Dictionary, 7th Edition, Henry Campbell Supreme Court Words & Phrases (1950-2004), R.P.Sethi Advanced Law Lexicon, Ramanatha Aiyar, 3rd Edition, 2005 Websters New 20th Century Dictionary

D. STATUTES
I. II. III. IV. V. Oil Industry Development Act 1974 Gas Act 1986 (England) Petroleum Act 1934 s 2(a) Petroleum and Natural Gas Pipelines Acquisition Act 1962 Petroleum and Natural Gas (Amendment) Rules, 2003

E.MISCELLANEOUS
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I. Constitution of India, 1950

STATEMENT OF JURISDICTION

The Honourable President of Indicana referred the case to the Apex court under the Advisory jurisdiction under Art.143(1).

STATEMENT OF FACTS
The Republic of Indicana has adopted doctrine of separation of powers and a federal setup,with a similar pattern of internal governance as that of India and has also adopted the laws of India. The Union Legislature and the State legislatures powers have been expressly mentioned in the Constitution. Natural Gas is one of the major sources of power used in Indicana, 80% of the requirements of which are fulfilled by the State of Khambat.It thus has a very good infrastructure and has most of the industries, using Natural Gas as a power source, situated within it. The State of Khambat in the year 2010 passed a Legislation by the name Khambat Gas( Regulation of Transmission, Supply and Distribution) Act, 2010.The object of which was to provide for regulation of transmission, supply and distribution of natural gas, in the interest of general public and to promote gas-fuelled industry in the Khambat State. In counter-action to the above Legislation passed by the State of Khambat, the Union Government of Indicana under its regulatory power/functions increased the transportation and basic prices of Natural Gas supplied by various Companies throughout Indicanna.

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The Consumer Association of Oil and Natural Gas filed a writ petition against the Union in the High court of Khambat challenging their power to make laws which increased the prices of Natural Gas. The Honourable President of Indicana referred the case to the Supreme Court under Art.143(1).

ISSUES PRESENTED
1. WHETHER NATURAL GAS IS A UNION SUBJECT OR STATE SUBJECT AND WHETHER THE STATE OF KHAMBAT AND THE OTHER STATES HAVE THE LEGISLATIVE COMPETENCE TO
MAKE LAWS ON THE SUBJECT OF

NATURAL GAS AND WHETHER THE STATE OF KHAMBAT NATURAL GAS UNDER ENTRY 25 OF

HAS THE LEGISLATIVE COMPETENCE TO MAKE LAWS ON

LIST II.
2. WHETHER NATURAL GAS IN WHICHEVER PHYSICAL FORM IS A UNION
WHETHER SUBJECT AND

UNION HAS EXCLUSIVE POWER TO ENACT LAWS ON NATURAL GAS, INCLUDING

NATURAL GAS IN ALL ITS FORMS.

3. WHETHER THE KHAMBAT GAS (REGULATION OF TRANSMISSION, SUPPLY AND

DISTRIBUTION) ACT, 2010 IS ULTRA VIRES TO THE CONSTITUTION BEING ENACTED WITHOUT
THE LEGISLATIVE COMPETENCE.

4. WHETHER THE STATES UNDER THE UNION OF INDICANA ARE SOVEREIGN ENTITIES
ENTITLED TO USE THE NATURAL RESOURCES WITHIN THEIR TERRITORIAL LIMITS.

SUMMARY OFARGUMENTS

1. Whether natural gas is a Union subject or a state subject and whether the States have legislative competence to make laws under entry 25 list II
Under entry 25 list II the State has legislative competence to make laws on gas and gasworks.
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Gas has been defined to be any substance wholly or partially containing methane, ethane,propane, etc. Natural gas is primarily made up of methane. Thus the state has thelegislative competence to pass legislations with regard to it.Methane and propane which constitute 90% of the compoisition of natural gas at normal temperature and pressure are gasses. In the same sense even natural gas should be regarded as a gas. On the other hand in entry 53 of List I the union can legislate on the regulation and development of oil fields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable. Petroleum has been expressly defined to constitute hydrocarbons. But petroleum product has neither been defined nor has the criteria to qualify as a petroleum product has been laid down. Either a substance can be termed as a petroleum product on the basis of similar chemical composition or on the factor of mutually co-existive. On the argument of similar chemical constituents even coal is made up of hydrocarbons yet it is not declared to be a petroleum product. On the criteria of occuring together on Earth , although gas is mainly found with petroleum it is not necessary to always be found with petroleum.

2.WHETHER NATURAL GAS

WHETHER

IN WHICHEVER PHYSICAL FORM IS A

UNION

SUBJECT AND INCLUDING

UNION

HAS EXCLUSIVE POWER TO ENACT LAWS ON

NATURAL GAS,

NATURAL GAS IN ALL ITS FORMS

Natural gas occurs in many forms some of which are wet gas and dry gas. Shale gas, coalbed methane , and tight gas are also forms of natural gas found in the depths of the earth. Coalbed methane is found in coal beds and around coal mines.It is not found in association with petroleum and neither is it a by product of the same. Thus it cannot be accrued to be a petroleum product and cannot therefore fall within the ambit of Entry 53 of list I. Tight gas refers to natural gas reservoirs locked in extraordinarily impermeable, hard rock, making the underground formation extremely "tight. It is also found trapped deep within coal deposits .

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Coal bed methane and tight gas two physical types of natural gas are formed in association with coal and are not found near petroleum fields. They do not fall in the ambit of petroleum products and thus it is beyond the legislative competence of the Union government to pass legislations in regard to it.

3. WHETHER THE KHAMBAT GAS (REGULATION OF TRANSMISSION, SUPPLY AND DISTRIBUTION) ACT, 2010 IS ULTRA VIRES TO THE CONSTITUTION BEING ENACTED
WITHOUT THE LEGISLATIVE COMPETENCE.

Ultra vires is defined to be beyond powers; therefore the expression is used to mean any act performed in excess of powers of the authority or the person performed in excess of powers of the authority or the person who performs the act.It has been contended in the previous issues that Natural Gas falls within the ambit of gas and gasworksand as it is specified under List II it prima facie can not be declared to be ultra vires. But it may be possible that natural gas falls within both lists i.e . List I and List II . Both the entries will have to be interpreted together and this is the doctrine of harmonious construction . The purpose of this doctrine is to try to see whether both entries can co-exist together without overlapping. Then to find the validity of the legislation and under whose jurisdiction it falls, the doctrine of pith and substance is to be used. Under this doctrine the legislation is interpreted by the court as a whole so that the true meaning and scope of the legislation can be determined. The legislation is presumed to be constitutional and it is to be interpreted in the widest possible sense so as to incorporate natural gas in all its forms. For a legislation of the State to be declared ultra vires it must be extra territorial in nature that means the legislation must effect people and property outside the state. This can only be combated if the state has territorial nexus which can be proved as 80% of the natural gas reserves is in the State of khambat and most of the industries as well.Thus there is a valid and real connection between the legislation and the state of Khambat.

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4.WHETHER
LIMITS.

THE STATES UNDER THE

UNION

OF

INDICANA

ARE

SOVEREIGN

ENTITIES ENTITLED TO USE THE NATURAL RESOURCES WITHIN THEIR TERRITORIAL

Sovereign State is that possesses an independent existence, being complete in itself, without being merely part of a larger whole to whose Government it is subject; a political community whose members are bound together by the tie of common subjection to some central authority, whose commands those members must obey. State is sovereign because it has the various characteristics of a sovereign, which is it independent and permanent in nature. India is a federal country ,this fact has been reinforced by Dr. Ambedkars views in the parliamentary debates and in the SR Bommai case. Thus State of Khambat is a sovereign entity and is entitled to use the natural resources within its territorial limit.

ARGUMENTS ADVANCED 1.WHETHER NATURAL GAS

AND WHETHER THE LEGISLATIVE IS A

UNION

SUBJECT OR

STATE

SUBJECT

STATE OF KHAMBAT AND THE OTHER STATES HAVE THE

TO MAKE LAWS ON THE SUBJECT OF

COMPETENCE

NATURAL GAS

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I humbly submit before this Honourable Court that the Republic of Indicana has adopted the laws of India and thus has adopted the Constituion of India which is the Supreme law of the land. The dispute in this case is whether natural gas falls under Entry 25 of List II (State List) or Entry 53 of List I (Union List).Thus raising a question as to the legislative competence of the two Legislatures. Under Entry 25 of List II (State List) VII Schedule of the CONSTITUTION OF INDIA, 1950, Gas and Gasworks is included in the State legislatures field to make laws under Art. 246 (3) of the Constitution of India. As defined in the Halsbury Laws of England Gas means any substance in a gaseous state which consists wholly or mainly of methane, ethane, propane, butane, hydrogen or carbon monoxide, or a mixture of two or more of those gases or a combustible mixture of one or more of those gases and air1.

Gas and Gas works covers all types of gas produced in public utility or private plants whose main purpose is manufacture, transport & distribution of gas. It includes gas produced by carbonization by total gasification & by reforming &simple mixing of gases and air 2 In the Oil Industry Development Act 1974 Natural Gas is defined to mean as gas consisting primarily of hydrocarbons obtained from oil or gas wells.3 Natural Gas is defined as a naturally occurring mixture of hydrocarbon and non-hydrocarbon gas found in the porous geologic formations beneath the earth surface often in association with petroleum. To obtain a marketable product, the raw natural gas flowing from gas or oil wells

1 2

Halsburys Law of England volume 19(2): In part I of the Gas Act 1986 OECD energy statistic 1999-2000 3 S 2 (i) of the said Act

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must be processed to remove water vapour poisonous constituents and condensable hydrocarbons.4 'Natural gas' has been defined in the Webster's new 20th Century dictionary, unabridged second edition as follows : "Natural Gas : A mixture of gaseous hydrocarbons, chiefly methane, occurring naturally in the earth in certain place, from which it is piped to cities etc., to be used as a fuel." . Natural gas is made up of just two elements - carbon and hydrogen. It is part of a family of chemicals known as hydrocarbons, which also includes oil and gasoline. As its name suggests, natural gas comes out of the ground as a gas; oil, gasoline and other hydrocarbons are recovered mixed together in a liquid called crude oil.5 Natural gas is a mixture of various hydrocarbon gas known in scientific names i.e. methane, ethane, propane,and butane. Over 70% of natural gas is formed by methane, the major Component and the rest 20% is formed by propane. Natural Gas is thus composed 90% of just gas as Methane is a simple chemical compound and is a gas at its normal temperature and pressure and so is propane.6 If 90% of a chemical compound is a gas then natural gas as a whole too should be termed as a gas. In reference to the above definitions it can be seen that Methane is a primary component of Natural Gas and as per the definition of Gas , which includes methane, ethane, etc. Natural gas can be construed to be a gas .Thus it falls within the ambit of the Legislative powers of the State. While examining the legislative competence of Parliament to make a law all that is required to be seen is whether the subject matter falls in List II which Parliament cannot enter for in view of the residuary power vesting in Parliament other matters are not outside the legislative competence of Parliament.7

4 5 6 7

Kirk Othmer, Encyclopedia of Chemical Technology (3rd Edn, Vol 17) American Petroleum Institute Enclyopedia of Earth Naga Peoples Movement of Human Rights v. Union of India,AIR 1998 SC 431(para 20)

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As per Article 246(3) Subject to clause (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule The legislative competence of the State legislature can only be circumscribed by the express prohibition contained in the Constitution itself. Unless there is any expressly prohibiting legislation on the subject either absolutely or conditionally, there is no fetter or limitation on the plenary powers which the legislature enjoys to legislate on the topics enumerated in the list 2 and 3 of the Seventh Schedule.i Thus the State Legislature has exclusive power to legislate on List II.

Under Entry 53 of List I in the VII Schedule, Constitution of India,1950 states that Regulation and development of oil fields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable.

The term Petroleum means rock oil is applied to the deposits of oily material found in the upper strata of the earths crust. Petroleum was formed by a complex and incompletely understood series of chemical reactions from organic material laid down in previous geological eras. 8 Petroleum is an oily, inflammable, liquid made up mostly of hydrocarbons - compounds containing only hydrogen and carbon. The hydrogen content of petroleum ranges from 50 per cent to 98 per cent. The rest is made up chiefly of organic compounds containing oxygen, nitrogen, or sulphur.9 In India, Petroleum was defined for the first time in the Petroleum Act of 1934 as meaning liquid hydrocarbon or mixture of hydrocarbon and any inflammable mixture, liquid, viscous or
8

Halsbury law of India volume 21: Fuel and Energy-II (Petroleum and Natural Gas) 'The New Book of Popular Science' Vol. 2

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solid, containing any liquid hydrocarbon.10 The same meaning was reiterated in Petroleum and Natural Gas Pipelines Acquisition Act 1962.11 Although the definition of petroleum has been expressly mentioned nowhere is petroleum products defined. On what basis does one classify a chemical substance as a petroleum product. It maybe postulated on the premise of similar chemical composition or being co-existive in nature. Although Natural gas is mostly found in petroleum fields.It is not always necessary that they are found together.12 My learned opponent might assume from the above definitions of petroleum that since the chemical composition, although distinctly different, has similarities that natural gas is a petroleum product and thus comes within the purview of the Union list . But on the same argument even coal is found underneath the Earth and is made up primarily of hydrocarbons yet it does not fall under the ambit of petroleum products.

2.

WHETHER NATURAL GAS UNION

IN WHICHEVER PHYSICAL FORM IS A

SUBJECT AND WHETHER

UNION

HAS EXCLUSIVE POWER TO

ENACT LAWS ON ALL ITS FORMS.

NATURAL GAS,

INCLUDING

NATURAL GAS

IN

Natural Gas is substance which is available in many diverse forms ranging from dry gas and wet gas to coal bed methane and shale gas.

10 11 12

Petroleum Act 1934 s 2(a) S 2 of the said act Encylopedia of Chemical technology, kirk-othmer

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Liquefied natural gas or LNG is another form of natural gas (predominantly methane, CH4) that has been converted temporarily to liquid form for ease of storage or transport. 13 This shows that LNG is a natural gas only but in liquid forma instead of gaseous form as it is found originally. According to the Encyclopaedia Natural gas is classified in several broad categories based on the chemical composition, which are : (1) wet gas contains condensable hydrocarbons such as propane, butane, and pentane; (2) lean gas denotes an absence of condensable hydrocarbons; (3) dry gas is a gas whose water content has been reduced by dehydration process; (4) sour gas contains hydrogen sulfide and other sulfur compounds; and (5) sweet gas denotes an absence of hydrogen sulfide and other sulfur compounds. Natural gas sold to the public is described as lean, dry and sweet.14 It can be seen from the above statements that all forms of natural gas do not consists of hydrocarbons similar to that of petroleum and thus it would be exaggeration to perceive them all to be petroleum products. Natural Gas as per the facts of the case is very diverse in nature and is found in nature in the form of coal bad methane, shale gas , tight gas , Methane clathrate, etc.15 In Petroleum and Natural Gas (Amendment) Rules, 2003 coal bed methane has been defined as natural gas obtained from bore holes occurring in coal or lignite seams and consisting primarily of hydrocarbons. Raw natural gas can also come from methane deposits in the pores of coal seams, and especially in a more concentrated state of adsorption onto the surface of the coal itself. Such gas is referred to as coalbed gas or coalbed methane. Coalbed gas is a form of natural gas that is has being extracted from coalbed. Coal bed Methane is a form of natural gas formed from coal beds.16 The presence of this gas is well known from its occurrence in underground coal mining. Thus this proves that coal bed methane is not obtained from the petroleum reservoirs but from coal mines. Hence it can not be deemed to be a petroleum product.

13 14 15 16

Encyclopaedia on Mines and Minerals. Edn. 3 Kirk- Othmer, Encyclopedia of Chemical Technology (3rd Edn, Vol 17) US Geological survey Kansas Geological Survey to Coalbed Methane

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Shale gas is natural gas produced from shale. The shale acts as both the source and the reservoir for the natural gas. Shales ordinarily have insufficient permeability to allow significant fluid flow to a well bore. Although Coal bed methane is a Natural Gas it is not extracted from petroleum oil field and thus can not be classified as a petroleum product. Tight gas refers to natural gas reservoirs locked in extraordinarily impermeable, hard rock, making the underground formation extremely "tight." Tight gas can also be trapped in sandstone or limestone formations that are atypically impermeable or nonporous, also known as tight sand.ii Tight gas is also found trapped in coal deposits.17

3.WHETHER
AND

THE

KHAMBAT GAS (REGULATION

OF

TRANSMISSION, SUPPLY

DISTRIBUTION) ACT, 2010

IS ULTRA VIRES TO THE CONSTITUTION

BEING ENACTED WITHOUT THE LEGISLATIVE COMPETENCE.

Ultra Vires being a Latin legal term and has been defined below. The word ultra means beyond and vires means powers.A simple meaning of the term is beyond powers; in a strict sense, therefore the expression is used to mean any act performed in excess of powers of the authority or the person performed in excess of powers of the authority or the person who performs the act. Prof. Wade 18 observes, The ultra vires doctrine is not confined to cases of plain excess of power; it also governs abuse of abuse of power, as where something is done unjustifiably, for the wrong reasons or by the procedure. In the first issue the competence of the States legislative powers were proved by Art. 246 (3)

17 18

Gas Processes 2002, Hydrocarbon Processing Wade,H.W.R :Administrative Law, ELBS, Oxford University Press,Oxford, 1982

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Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated List II in the seventh Schedule (state list). So the legislation can not be declared to be ultra vires. My learned counsel would most likely like to establish the Centres exclusive power to prove that natural gas is a petroleum product and thus comes under the Union List but if this is to be agreed to by the Court then there will be an overlap of two entries in two different lists Entry 25 in list II and Entry 53 in List I. It has already been seen that a statue must be read as whole and one provision of the Act should be construed with references to other provisions in the same Act so as to make consistent enactment of the whole statue.iiiThe rule of construction is well settled that when there is an enactment two provisions which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This is what is known as the rule of harmonious construction.iv It has been further stated that a conflict between two entries , the true character of the impugned enactment as a whole including its object, scope and effect should be examined and the principle of pith and substance should be applied.19The language of an entry should be given the widest meaning fairly capable to meet the need of the Government envisaged by the Constitution. Each general word extends to all ancillary or subsidiary matters which can be comprehended within it. When the vires of an enactment is impugned , there is an initial presumption of its constitutionality. If there exists any difficulty in ascertaining the limits of the legislative power, it must be resolved, as far as possible , in favour of the Legislature putting the most liberal construction on the legislative entry so that it is intra vires. Narrow interpretation should be avoided and the construction should be adopted which must be beneficial and cover the amplitude of the power.v In accordance with this argument I humbly submit before this court that they interpret the terms gas and gasworks to include Natural Gas in all its forms i.e. coalbed methane and tight gas. This Doctrine of Pith and substance means that if an enactment substantially falls within the powers expressly conferred by the Constitution upon the Legislature which enacted it, it cannot be held to be invalid , merely because it incidentally encroaches on the matters assigned to
19

Union of India v. Shah Goverdhan L. Kabra Teachers College, AIR 2002 SC 3675

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another Legislature.vi In reference to this the Khambat Act can not be held to be ultra vires if it incidentally encroaches on Entry 53 of list I. As it primarily deals with Natural gas which has been proved in the previous contention to be a Gas and just because natural gas may also fall within the ambit of petroleum product and if so there is only incidental encroachment. As the express words employed in an entry necessarily include incidental and ancillary matters so as to make the legislation effective.vii The issue that all forms of Natural gas are not petroleum products can be included to interpret that Natural Gas falls exclusively under the States purview. It is the function and power of the court to interpret an enactment and to say to which entry an enactment relates. The opinion of the Government in this regard is but an opinion and not more.viii The question of invasion into the territory of another Legislature is to be determined not by degree but by substance. Once the pith and substance of the legislation is determined and is found to be within the powers of the legislature,the extent of the invasion into the other sphere cannot invalidate the law. The Khambat Act has to be interpreted by court in its entirety and its pith and substance is to be determined by the courts regardless of how much it is encroaches the law making domain of the union. While making legislations the State does not have a right to make extra-territorial laws i.e. laws which relate to people and property outside the state boundaries.The Khambat Gas regulatory Act will invariably effect the people and property outside of Khambat as Natural Gas is the primary source of power and 80% of it is produced within the State of Khambat. Although if the State can prove that it has territorial nexus it can make laws which effect people outside the state boundaries. To prove that territorial nexus exists there are two pre conditions (a) The connection must be real and not illusionary (b) The liability sought to be imposed under the Act must be pertinent or relevant to the connection As mentioned in the facts the State of Khambat has 80% of the Natural Gas reserves also most of the industries using natural gas as their energy source are also present in

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Khambat. So the link between Khambat and the natural gas is real and not something concocted up. Thus the State of Khambat should have territorial nexus with regard to this Act. Laws of a Local Legislature can have extra territorial operation and can effect persons and property outside the Stateix Thus the Khambat Act is not ultra vires The fact that Parliament has given with one hand what it took away with the other.x

20

AIR 1959 Punj 8 (13,14)(FB) US Energy Information Administration iii Chapter1 title 3,`statue must be read as a whole in its context p.35 iv Venttaramana Devaru vs. state of Rajasthan AIR 1992 SC 225 v P.N. Krishna Lal v. Government of Kerala(1995) Suppl. 2 SCC 187 (held headnote) vi K.S.E Board v. Indian Aluminium Co. AIR1976 SC1031 vii Hindustan Lever v. State of Mahrashtra (2004)9 SCC 438 (para 34) viii Goodricke Group Ltd. v. State of Bengal (1)SCC 707 ix AIR 1956 Cal 216(218)(DB) x Talishdar Singh v. State of U.P. AIR 1959 SC 1012
ii

4.WHETHER
LIMITS.

THE STATES UNDER THE

UNION

OF

INDICANA

ARE

SOVEREIGN

ENTITIES ENTITLED TO USE THE NATURAL RESOURCES WITHIN THEIR TERRITORIAL

The facts clearly mention that the Republic of Indicana has a fedral structure. Having adopted the Constitution of India Article 1 talks of India as a Union of India which clearly lays down that India has a fedral setup. Furthermore the VII schedule which talks of the three lists demarcating the legislative fields of the different levels of government. This also proves that India has a federal constitution which gurantees the powers of the state government is not infringed upon by the Union. Art246 (3) is a provision which backs this argument. Soverignity as defined by Blacks Law dictionary is The Supreme political authority of an independent state. Soverignity of state as also defined by Black as

A State that possesses an independent existence, being complete in itself, without being merely part of a larger whole to whose Government it is subject; a political community whose members are bound together by the tie of common subjection to some central authority, whose commands those members must obey. The Constitutional position of India approximates more closely to the American model than to the English model. As the American model is a Federal Structure . So it can be inferred that India too is federation. The essence of a federal government is a central government with sovereign state governments. As per Honourable Justice Pershad Federalism connotes , among other things, the supremacy of a written Constitution setting up a Central government , clothed with legislative , executive and judicial powers, which are exercised within the limits of authority prescribed by the Constitution . But in the federation neither the legislature of the Central Government nor the legislature of any component entity is supreme. Each such legislature can only assert its supremacy within the limits assigned by the Constitution. According to this statement the Parliament does not have an inherent right to legislate arbitrarily but is restricted by the limitations laid down by the Constitution like the Lists. Further the reiteration of India being a federal government is done in the landmark judgment of Kesavananda Bharti Case which laid down that the federal structure as well as the principles of separation of powers, is a part of the basic structure of the Constitution. Intern it is neither permissible for the Central Government to encroach upon the legislative powers of a State in respect of the matters specified in List II of the Seventh Schedule Article 246 (3) lay down the principle of federal supremacy viz. that in case of inevitable conflict between Union and State powers, the Union power as enumerated in List I shall prevail over the State power as enumerated in Lists II and III and in case of an overlapping between Lists II and III, the latter shall prevail. Though, undoubtedly, the Constitution exhibits supremacy of Parliament over State Legislatures, yet the yet the principle of federal supremacy laid down in Article 246 of the Constitution cannot be resorted to unless there is an irreconcilable direct conflict between the entries in the Union and the State Lists principle of federal supremacy laid down in Article 246 of the Constitution cannot be resorted to unless there is an irreconcilable direct conflict between the entries in the Union and the State Lists. As per Garners Political Science and government there are various characteristics of a sovereignty they are permanence, elusiveness, and all-comprehensiveness.

The state is permanent in nature although the governments keep changing the state remains there, it is elusive as it only has one authority within the state, it is all- comprehensive as it is universal in nature and stretches to all persons and associations within its territorial limits. In the S. R . Bommai case honorable Justice Jeevan Reddy observed The fact that under the scheme of our Constitution , greater power is conferred upon the Centre vis-vis the States do not mean the state are mere appendages of the centre . Within the sphere allotted to them , States are supreme . The Centre can not tamper with their powers. More particularly, the courts should not adopt an approach, an interpretation, which has the effect of or tends to have the effect of whittling down the power reserved to the States. To back this argument of federalism ,would like to put forward the speech of Dr Ambedkar in the constituent assembly I think it is agreed that our constitution , notwithstanding the many provisions which are contained in it whereby the centre has been given powers to override the provinces ,nonetheless is a fedral constitution it means this , that the provinces are as sovereign in their field which is left to them by the constitution as the centre is in the field which is assigned to it. In other words, barring the provisions , which permit thee centr to override any legislation that may be passed by the provinces , the provinces have a plenary authority to make any law for the peace ,order and god government of that province. Now when once the constitution makes the provinces sovereign and gives them plenary powers, the intervention of the centre or any other authority must be deemed to be barred , because that would be an invasion of the sovereign authority of the province .That is a fundamental proposition, which we must accept Thus the State can be defined as sovereign and has powers to use the natural resources within its territories.

PRAYER

For the reasons stated above, The State of Khambat RESPONDENT 1 requests that the Honble Court find that: 1. The PETIONER have violated the provisions of the CONSTITUTION OF INDIA,1950. 2. The Petioner has violated the federal structure of the constitution by acting arbitrarily

And: 1. To declare an injunction the regulatory power /functions increased the transportation and basic prices of Natural gas supplied by various Companies throughout Indicana. 2. Natural Gas and all its derivatives should be declared to be exclusively under the States subject.