Constitutional Law

State of Bihar v. Charusila Dasi

AIR 1959 SC 1002

Citation: AIR 1959 SC 1002
Court: Supreme Court of India
Date: 15 April 1959
Bench: Sudhi Ranjan Das C.J.; S.K. Das; P.B. Gajendragadkar; K.N. Wanchoo; M. Hidayatullah

Facts

Charusila Dasi created a religious and charitable trust through a deed executed in 1938.
Temples were constructed at Deoghar in Bihar, where deities were installed.
The trust also contemplated charitable activities, including a hospital and dispensary.
Some trust properties were situated in Bihar, while other properties were situated outside the State.
The Bihar State Board of Religious Trusts initiated proceedings under the Bihar Hindu Religious Trusts Act, 1950.
Charusila Dasi argued that:
the trust was private; and
Bihar could not regulate trust property located outside its territorial boundaries.
The Patna High Court accepted her challenge and restrained the Board.
The State appealed to the Supreme Court.

Whether the Bihar Legislature could apply the Act to a trust owning property outside Bihar.
Whether the law had impermissible extra-territorial operation.
Whether a sufficient territorial nexus existed between the trust and Bihar.
Whether the statute could control outside property through regulation of trustees situated within Bihar.

A State Legislature may make laws for the whole or any part of its State under Article 245.
A State law may incidentally affect persons, property or transactions outside the State where a real and substantial territorial connection exists.
The territorial nexus must satisfy two requirements:
the connection with the State must be real and not illusory; and
the liability or regulation imposed must be relevant to that connection.
Courts should presume that a Legislature intended to act within its constitutional competence and, where possible, interpret the statute accordingly.
A State may exercise control over persons within its territory even where that control indirectly affects property located elsewhere.

The central seat and religious institutions of the trust were situated in Bihar.
The temples, deities and principal charitable purposes were connected with Deoghar.
At least part of the trust property was also situated in Bihar.
Trustees and persons responsible for administering the trust could be regulated within Bihar.
These facts created a strong territorial connection between the trust and the State.
The Court interpreted the Act as applying to public religious trusts situated in Bihar where at least some trust property was located within the State.
It did not interpret the Act as purporting to regulate every trust merely because a minor asset happened to be in Bihar.
Regulation of the administration of a Bihar-based trust could necessarily affect how trustees dealt with property located outside the State.
That incidental effect did not make the statute extra-territorial.
The law operated primarily in personam upon the trustees and administrators connected with Bihar.
The Court also examined the trust deed and found that the endowment was not confined to private family worship.
Public religious and charitable objects demonstrated its public character.
Because the trust was public and substantially situated in Bihar, the statutory proceedings were within the Board’s authority.