The bench of Justice Indira Banerjee and V. Ramasubramanian held that there can only be one domicile and that is the domicile of the country and there is no separate domicile for a state and State Reorganization Act cannot take away this right of a citizen to reside and settle anywhere in the Country.

The issue arose out of the bifurcation of the erstwhile state of Andhra Pradesh into two states "Telangana and Andhara Pradesh". B. Subba Rayudu member of Schedule Tribe held the State cadre post of Joint Director Class-A in the Animal Husbandry Department of the undivided State. His wife was also working in the same department as Asst. Registrar. Central Govt. notified Andhra Pradesh Reorganization Act, 2014 bifurcating the state. Section 80 of the Act laid down guidelines for the allocation of employees to both states. As per the guidelines "No allocable posts to be committed while disturbing the cadre strength between both the states. Govt. of AP circulates approved guidelines. The sanctioned strength of the posts of Joint Secretary Class-A in the Department was 23, out of which 13 posts were allotted to AP and 10 posts were allotted to Telangana, Rayudu opted for the State of Telangana when he was working as Project Director, ATMA, Ranga Reddy District on deputation but the respondent was allotted to the State of AP. Respondent made a representation that he be considered a local candidate of the State of Telangana but the representation was not considered.  

This important observation of the Supreme Court came in a case challenged before this court against the order and judgment of Telangana High Court and the Supreme Court held the order of the High Court to be correct and pronounces the law as under:-

59. Under the Constitution, India is a Union of States. Every part of every State is an integral and inseverable part of India.   Admittedly, the Respondent was born in India.  He has his domicile in the territory of India. As held by this Court in Dr. Pradeep Jain v. Union of India, under the Indian Constitution, there is only one domicile i.e. domicile of the country and there is no separate domicile for a State.

60. The power to admit and include States into the Union under Article 2 of the Constitution, and to form new States and/or reorganize State, is in its very nature of the power, wide and its exercise necessarily guided by political issues  of  considerable  complexity, many of  which  may  not  be judicially manageable.  

61. Article 3, empowers Parliament to enact law and form a new State by separation of territory from any State or by granting two or more States or parts of States or by uniting any territory to a part of any State. The principles relating to change of sovereignty in international law are not applicable to re­organisation of the territory of the State under Article 3 of the Constitution of India.

62. When such an adjustment or reorganisation of territory takes place, the existing law as well as administrative orders in a particular territory continue to be in force and continue to be binding upon the successor State so long as they are not governed, changed or repudiated by the successor State.

63. It is not in dispute that the respondent has his domicile in the Territory of India and was born in the territory of India.  Admittedly, he is a citizen of this country. As a citizen of India, the respondent has a fundamental right under Article 19(1)(e) to reside and settle in any part of the territory of India.

64. Under Article 13 (2) of the Constitution of India prohibits the State from making any law which takes away or infringes the rights conferred by Part III of the Constitution of India and any law made in contravention of Article 13(2), to the extent of the contravention would be void.