Explanation:

Article 245 in The Constitution Of India 1949
245. Extent of laws made by Parliament and by the Legislatures of States

• (1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State
• (2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation

Hence option 1st is correct.