Legal Realism

Submitted by :
Saket Subham
DIVISION B
BBA LLB (2018-2023)
PRN : 18010224103

Symbiosis Law School, NOIDA

Symbiosis International (Deemed University), PUNE

August 29, 2018

Under the guidance of

Meera Mathew
Assistant Professor, Symbiosis Law School Noida
 CERTIFICATE
The project entitled “Legal Realism” submitted to the Symbiosis Law School, NOIDA for
Jurisprudence as part of Internal assessment is based on my original work carried out under the
guidance of Meera Mathew from July 30, 2018 to August 29, 2018. The research work has not
been submitted elsewhere for award of any degree. The material borrowed from other sources and
incorporated in the project has been duly acknowledged. I understand that I myself could be held
responsible and accountable for plagiarism, if any, detected later on.

Date: August 29, 2018

Acknowledgements

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I would like to express my sincere gratitude to Symbiosis Law School, NOIDA and our
project guide Ms. Meera Mathew , for giving the opportunity to work on this project of
‘’Legal Realism ’. It was simply impossible for the me to work on this project and achieve
the results without his guidance, active support and encouragement. I would also like to
acknowledge the support received from my friends and family by the way of sharing their
opinions about the said topic. Also most heartfelt gratitude towards the seniors who gave the
basic guidelines which helped in completing this project well in time.

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 JURISPRUDENTIAL THEORY

THE OWNERSHIP THEORY

Oliver Wendell Holmes Jr.,an American jurist in 1881 discovered the theory of ‘Legal
Realism’. This theory was later talked about by Justice Benjamin N. Cardozo who was a jurist
as well as served as Associate justice of Supreme Court of the United States. He
characterised judges as legislators in robes. It were realist such as Justice Cardozo who
questioned the assumptions of the formalist whether law could be autonomous and
objective and wrote a book named ‘In The Nature of the Judicial Process’ in 1921 to argue
that law is an instrument which is malleable which allows judges to use words like
reasonable care to justify the outcome of their choice. It was Cardozo who observed that
words such as undue influence and duress are subject to interpretation. It was Cardozo who
explained that the law often presents courts with contradictory principles to apply. Legal
Realism had its share of heyday from 1920’s to 1940’s. In 1961 a book named as,”The
concept of Law” by British legal theorist H.L.A Hart criticised the theory of legal realism for
the predictive nature of the theory.

CASE STUDY

FOREIGN CASE
Hynes v. New York Central Railroad Co.
FACTS : “ A sixteen year old boy named Harvey Hynes along with two other boys had
swum across the ship canal from Manhattan Bank. He had climbed upon the defendant’s
wooden fenced bulkhead and finally walked on spring board projecting over the water. As he
was about to jump from the board, a wire came down and struck him and he was thrown into
the water and died. The action was for negligence for causing death of the plaintiff by being
struck by electric wires which fell from pole maintained by the defendant”

ISSUES : “The issues in the above case were that whether or not the court should consider
the plank strictly private property. The court also had the issue whether or not Hynes was a
trespasser and if Hynes was a trespasser, New York Central Railroad Co. owed any duty of
care towards them. The court also had to decide whether the landlords are bound to regulate
their conduct in accordance to the presence of travelers upon the adjacent public ways.
Another issues as identified by the court was whether the defendant was under a duty to use
reasonable care to the bathers and people standing in the river from being electrocuted.”

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CASE JUDGEMENT : “The court of Justice Cardozo held that the wires were not
stayed by the presence of the plank but rather followed the plaintiff in his fall and
overwhelmed him in the waters. The judge also stated that the owner of a premise own a duty
of care to travellers on the adjacent public way. The court held New York rail road liable as
even though Hynes and the other two boys were trespassers, the defendant owed a duty of
care towards them as they failed to keep proper maintenance of the poles which led to falling
of the wire which resulted in drowning of the plaintiff. The defendant was under a duty to use
reasonable care that bathers swimming or standing in the water should not be electrocuted by
wires falling from its right of way.”

INDIAN CASE
Securities and Exchange Board of India v. Sahara India Real Estate Corpn.
Ltd. and Ors.

FACTS : “ This case deals with an IPO which was made by the two subsidiaries of
respondent co. namely Sahara India Real Estate Corporation Limited (SIRECL) and Sahara
Housing Investment Corporation Limited (SHICL) where they had collected deposits from
the general public by issue of debentures in OFCD (Optional Fully Convertible Debentures).
SEBI found that issue of OFCD was not legally permissible and orders were passed to refund
the money back to the public. The order to deposit the money within three months in a
nationalised bank to earn interest was passed but this was not fulfilled within the given time.
The Supreme Court of India issued non-bailable warrants to Subrata Roy Sahara along with
three other directors and they were sent to judicial custody for contempt of court.

ISSUES : “The court had to rule whether or not the defendant had issued the debentures
which were not legal and when asked the directors of the company to appear before the court,
the directors did not come to the court in person. So the issue whether the directors not
coming to court in person amounts to contempt of court and if it was then are the proceedings
of contempt of court sustainable. Another issue which needed to be addressed by the court
was whether the defendants should be given more time to deposit the balance amount in the
bank account”

CASE JUDGEMENT : “The Supreme Court ruled that the issue of OFCD was illegal
as ruled by SEBI and the defendant has to return the money so called by issue of such
debentures to the public which would be collected by SEBI on behalf of the public. The court
also ruled out that the absence of directors of the company from the court when asked to
appear before it amounts to the contempt of court and hence the issue of non-bailable
warrants is sustainable. The court ruled that the directors of the company to be taken into
judicial custody and the bank accounts of the group to be sealed. The court laid down the
condition that interim bail will be granted to the directors only if they deposit a sum of ten
thousand crore in the SEBI-SAHARA joint account”

REFRENCES

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 ➢ MANU/SC/0714/2015
➢ Securities and Exchange Board of India (SEBI) and Ors. vs. Sahara India Real Estate
Corp.. Ltd. and Ors. (19.06.2015 - SC) : MANU/SC/0714/2015Pandey, A. ( August
2017). Advantages and Disadvantages of Incorporation of company. Retrieved from
https://blog.ipleaders.in/incorporation-of-a-company/

➢ 231 N.Y. 229 (N.Y. 1921) https://casetext.com/case/hynes-v-nycrr-co

➢ http://cstl-cla.semo.edu/hhill/ui305/jurisprudence%20notes/cardozo%20and%20cohen
%20on%20realism.html

ANALYSIS OF THE CASES WITH THE THEORY

Hynes v. New York Central Railroad Co.

The founders of ‘Legal Realism’ saw that the law should rely on empirical evidence and
should not merely be guided by the theories of natural school, that sets up a benchmark in
fixing the liability of ‘The New York Central Railroad Co.’ in “Hynes v. New York Central
Railroad Co.” . The main issue that was addressed was whether or not ‘The New York
Central Railroad’ was liable and owed a duty of care towards Hynes and the other two boys
who had trespassed into the property of the defendant. Justice Benjamin N. Cardozo held
that the owner of a premise own a duty of are towards travellers on the adjacent public way
even if they are trespassers. Justice Cardozo states that according to one interpretation of
law, the boy was a trespasser and his mother is not liable to any claim whereas on the other
hand he says that on consideration of analogy, of convenience ,of policy and of justice
makes the railroad liable.

Securities and Exchange Board of India v. Sahara India Real Estate Corpn.
Ltd. and Ors.
One of the most high profile case in Indian court regarding the juristic principle of ‘Legal
Realism’ was ‘Securities and Exchange Board of India v. Sahara India Real Estate Corpn.
Ltd. and Ors.’ wherein the Supreme Court of India ordered the arrest of three directors of
the company along with Subrata Roy Sahara. In this case a non bailable warrant was issued
against four people for contempt of court after they failed to appear in court and were soon
put under judicial custody. Justice TS Thakur stated that this decision was ‘ unprecedented
situation of personal liberty on one hand and majesty of law on the other that compelled
the court to take an extreme step’. Justice Thakur said that even though the decision was
unprecedented but was justifiable and he commented that it was one of the cases where
the principle of ‘Legal Realism’ was used as he felt the necessity of making the law work so

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that people take orders of the courts seriously and not mock around when asked by the
court to be present in person.

CONCLUSION

The researcher during his research found out that the ‘Legal Realism’ as originated from the
American school of jurisprudence The researcher believes that the aforementioned cases
both in the foreign and Indian context are the typical landmark cases to comprehend the
essence of the theory. In “Hynes v. New York Central Railroad Co.” the theory dealt with
answers pertaining to the contradiction between two laws. Justice Cardozo states that when
he interprets law in one sphere then it makes Hynes and his friend guilty of tort of trespass
and on the other hand when he analyses the case keeping in mind the theory of legal
realism then he feels that New York Central Railroad Co. was liable as they owed a duty of
care towards Hynes Whereas in “Securities and Exchange Board of India v. Sahara India
Real Estate Corpn. Ltd. and Ors” the Court identified and used the Principe of legal realism
and as cited by the then chief justice that though the punishment given to the defendant for
contempt of court was too harsh, it was not illegal and such an extreme move by the court
could be justified in the court of law.

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