Federalism at the Enforcement Boundary: Who Can Act Inside a State, and Who Decides the Limits?

Federalism is usually imagined as a question of who makes the law.

But some of the most consequential federal disputes begin after the law has already been made.

An investigation enters a State. A Union agency seeks information from a State government. A constitutional body requisitions State officials. A Governor holds up a Bill passed by an elected legislature. A court then intervenes and decides whether the action can continue.

At that point, the question is no longer simply whether the Centre or the State has a particular power.

It becomes a more difficult question:

When an institution empowered at the Union level exercises authority inside a State, where does that authority stop—and who gets to decide where the boundary lies?

That is where the deeper problem of Indian federalism appears.

Federalism is also about institutional boundaries

The Constitution divides legislative and executive responsibilities between different levels of government. But institutions do not always remain neatly within those boundaries.

Central investigative agencies may operate within State territory. The Election Commission may require State administrative machinery to conduct elections. Governors appointed by the Union may perform constitutional functions affecting State legislation. Courts may intervene when disputes between these institutions become constitutional questions.

This means federalism is not only a division of subjects. It is also a division of institutional authority.

The existence of a Union power does not automatically answer every question about its exercise inside a State. The harder questions concern the route through which that power is exercised, the safeguards surrounding it, and the institution that has the final word when another level of government objects.

The constitutional framework itself reflects these different routes. Article 131 provides the Supreme Court with original jurisdiction over specified disputes between the Union and States, while Article 226 gives High Courts broad writ jurisdiction. Article 200 governs the Governor’s constitutional role when a State Bill is presented, and Article 324 entrusts the Election Commission with superintendence, direction and control over elections.

The resulting chain is often:

Union authority → action inside State institutional space → State objection → constitutional dispute → judicial boundary-setting.

The significance of the chain lies in its final step. The court does not merely decide whether one government has exceeded its authority. In doing so, it can itself change the distribution of institutional power.

When Union agencies enter State space

The Enforcement Directorate illustrates why the distinction between power and jurisdictional route matters.

The ED derives its investigative authority from the Prevention of Money Laundering Act. The law gives its officers statutory powers relating to summons, searches, seizure, arrest and attachment of property. The Prevention of Money-Laundering Act, 2002 provides the statutory foundation for those powers.

But the exercise of those powers can intersect with institutions controlled by State governments, particularly when a State government itself becomes part of the dispute.

In Kerala, for example, the ED challenged a State government notification establishing an inquiry commission. The State questioned whether the ED had the legal capacity to maintain a writ petition against it, arguing that the agency was essentially a Union government department and that a dispute between the Union and a State belonged under Article 131 of the Constitution rather than Article 226 before a High Court.

The Kerala High Court rejected that objection. It held that the ED was a statutory body whose officers exercised statutory powers under the PMLA and that its ability to seek relief under Article 226 could not be dismissed as a mere technical defect.

The State challenged that reasoning before the Supreme Court. The question therefore remains a live one rather than a settled constitutional rule.

The significance of the dispute goes beyond the ED. When a Union institution acts against a State government, the forum and constitutional route through which that action is challenged can themselves become part of the federal dispute.

Federalism often operates through procedure. Who can approach which court, under which constitutional provision, can determine who gets to contest an exercise of power and how that contest is framed.

The CBI reveals the other side of the problem

The same boundary becomes visible from the opposite direction.

The CBI is a Union investigative agency, but policing and public order fall primarily within the State domain. This creates an obvious institutional tension whenever a State investigation is transferred to the CBI.

The Delhi Special Police Establishment Act, 1946 also makes the ordinary position explicit: Section 6 requires the consent of the State government for members of the Delhi Special Police Establishment to exercise powers and jurisdiction in that State.

The Supreme Court has the constitutional power to order such transfers even without the consent of the State government. But that power has repeatedly been accompanied by judicial caution.

That constitutional override is deliberately narrow. The Court’s cases treat a transfer as an intervention for situations in which the existing investigation cannot credibly perform its function—for example, where the material points to systemic failure or serious doubts about neutrality, or where the complexity or wider ramifications of a case make central investigative expertise relevant.

The reason for that caution is straightforward.

If a judicial transfer became a routine response to allegations against State police, the constitutional position of State investigative authorities would depend too heavily on case-by-case judicial substitution. Yet the reverse cannot be the rule either: federal autonomy cannot by itself settle a dispute when the integrity of the investigation is genuinely in question.

The practical position is therefore narrower than either extreme. State control of investigation remains the ordinary arrangement, while judicial transfer to a central agency operates as an exceptional constitutional intervention where the existing process cannot adequately command confidence or protect the integrity of the investigation.

The Karur stampede investigation illustrates the tension. In its October 2025 judgment in the Karur stampede case, the Supreme Court transferred the investigation from the State-appointed SIT to the CBI and directed the relevant State authorities to hand over the investigation material. Yet the broader judicial doctrine surrounding such transfers continues to emphasise that the power should be exercised sparingly and only when circumstances justify it.

A central intervention, therefore, is not automatically an assault on State autonomy. Sometimes the judiciary may conclude that central intervention is necessary precisely because another constitutional value—such as an impartial investigation—cannot otherwise be protected.

Federalism cannot be reduced to State control versus Union control. The relevant question is whether the institution exercising power has crossed the constitutional boundary, and whether the institution intervening to correct that breach is itself acting within its own boundary.

The Court can protect a boundary—and move it

This is where the judiciary becomes more than a referee.

Consider the constitutional dispute over Governors and Bills passed by State legislatures.

In April 2025, the Supreme Court intervened in the Tamil Nadu Governor case after prolonged delays in dealing with Bills passed by the State legislature. The Court directed action on the Bills and laid down a framework concerning the Governor’s constitutional responsibilities under Article 200.

The intervention immediately raised a deeper constitutional question.

If the Governor’s inaction can prevent legislation passed by an elected State legislature from taking effect, judicial intervention can protect the legislative process.

But if the Constitution itself does not prescribe a specific timetable, how far can a court go in creating one?

That question eventually reached a Constitution Bench through a Presidential Reference under Article 143.

In its November 2025 advisory opinion, the Supreme Court held that the Governor has three constitutional options under Article 200 and that the exercise of the Governor’s function is generally not subject to merits review. At the same time, the Court retained a limited judicial power to issue a direction where inaction is prolonged, unexplained and indefinite. The Supreme Court’s Special Reference No. 1 of 2025 thus altered the legal position that had emerged from the April 2025 judgment and is important to the present understanding of Article 200.

The contrast is revealing. The Court can intervene to prevent constitutional inaction from paralysing another institution, while also having to determine the limits of its own intervention.

That is the same structural problem appearing in the agency cases.

Who can act? Who can challenge the action? Who can review it? And how far can the reviewer go?

The boundary is therefore not fixed by one institution alone. It is continuously worked out through interaction among constitutional actors.

The administrative boundary is just as important

The issue does not arise only when agencies investigate or courts issue judgments.

It can also arise when Union constitutional institutions depend on State administrative machinery.

The Election Commission is a useful example.

Article 324 gives the Election Commission broad powers of superintendence, direction and control over elections. The Supreme Court has described those powers as extensive, particularly where legislation is silent.

But that power has a limit.

The Court’s jurisprudence has also recognised that where Parliament or a State legislature has enacted a valid law governing an electoral matter, the Commission must act consistently with that law rather than use Article 324 as a licence to override it.

The institutional problem becomes visible because the Election Commission does not operate through an entirely separate permanent administrative apparatus. The Election Commission of India’s own administrative material explains that election work involves personnel drawn from State and other government machinery, with officers such as Chief Electoral Officers, District Election Officers, Electoral Registration Officers and Returning Officers performing election functions under the Commission’s constitutional framework.

That arrangement creates a peculiar federal dependency.

The institution responsible for ensuring electoral neutrality may require personnel whose ordinary administrative accountability lies elsewhere. The question, then, is whether the exercise of the Commission’s authority can alter the functioning of State administration beyond what the constitutional and statutory framework permits.

Again, the boundary is institutional rather than merely territorial.

The danger of turning every dispute into politics

Federal disputes often acquire political meaning because Centre and State governments may be controlled by different parties.

But politics cannot substitute for constitutional analysis.

There are legitimate reasons for central institutions to operate across State boundaries. Organised crime, money laundering, inter-State offences, national elections and constitutional violations can create problems that cannot always be contained within one State’s administrative machinery.

At the same time, the existence of a legitimate Union function does not make every exercise of that function legitimate.

Nor does State control automatically guarantee impartiality.

The evidence therefore does not support two easy conclusions: that central agencies uniformly violate federalism, or that State institutions are inherently more trustworthy.

The more useful distinction is between authority and accountability.

An institution may possess significant statutory or constitutional authority and still remain subject to procedural, constitutional and judicial limits.

That is precisely what makes federalism workable.

The judiciary faces the same test

There is a temptation to think of courts as standing outside federal disputes.

They do not.

When the Supreme Court transfers an investigation from State machinery to the CBI, it changes which institution exercises investigative authority.

When a court intervenes in the relationship between a Governor and a State legislature, it changes the practical balance between constitutional actors.

When it decides whether a Union agency can approach a High Court against a State government, it determines the legal route through which Centre-State disputes themselves will be fought.

The judiciary can therefore protect institutional boundaries while simultaneously reallocating institutional power.

That does not make judicial intervention illegitimate. It makes judicial restraint essential.

The CBI jurisprudence captures this principle particularly clearly: extraordinary judicial intervention is justified only in exceptional circumstances. The same logic applies more broadly. A constitutional court must be able to correct institutional failure without turning every disagreement between constitutional actors into an invitation to redesign the federal balance.

The legitimacy of judicial intervention therefore depends not only on what problem the Court is solving, but also on how far the Court moves the institutional boundary while solving it.

Federalism is ultimately a system of bounded power

This changes how Indian federalism should be understood.

The most visible federal disputes are often about legislation, money or political representation. But another layer operates beneath them: who has the institutional capacity to act inside another government’s domain.

An agency can enter State territory because Parliament has given it statutory authority.

A court can transfer a State investigation because the Constitution gives courts extraordinary powers of judicial review.

The Election Commission can requisition administrative machinery because the Constitution entrusts it with responsibility for elections.

A Governor can participate in the legislative process because Article 200 creates a constitutional role.

None of these powers exists in isolation. Each is accompanied by boundaries.

Those boundaries matter because federalism is not simply a contest between two governments. It is a system in which multiple constitutional institutions must exercise power without permanently displacing one another.

That is the deeper enforcement boundary.

The difficult question is not merely whether the Union or the State should have more power.

It is whether the institution exercising power can explain where that power comes from, what procedure authorises its use, what limits constrain it, and which institution has the authority to review the exercise.

Once that becomes the organising principle, the apparent collection of disputes over the ED, CBI, Election Commission, Governors and constitutional courts begins to reveal a common structure.

Indian federalism is sustained not simply by dividing powers between the Centre and the States.

It is sustained by ensuring that every institution that crosses an administrative boundary remains inside a constitutional one.