PERSON

1. Meaning:-
Generally, the rights and duties are vested in person, so there cann’t
be rights and duties witout a person. In this context, the concept of person
or personality becomes very important.
The word ‘person’ is derived from the Latin word “persona”. The term
‘persona’ has a long history. At earlier, it simply meant a mask worn by
actors playing different roles in a drama. Later on, it was used to denote
the part played by a man in life. Lastly and in modern times the term is
used in the sense of living being capable of having rights and duties.

2. Definitions:-
Many jurists have attempted to define the term person. E.g.

(a) Gray: according to him, “a person is an entity to which rights and

duties may be attributed”.

(b) Salmond: “a person is any human being whom the law regards as
capable of rights and duties. Any being that is so capable is a person,
whether a human being or not, and no being that is not so capable is a
person, even though he may be a man. Persons are the substances of
which rights and duties are the attributes. It is only in this respect that
persons possess juridical significance.”

(c) Section 11 of IPC,1860: the word person includes any company, or

association or body of persons whether incorporated or not.

3. Kinds of Person:-
Persons are of two kinds:
1. Natural Persons
(i) A natural person is
a human being
capable of rights
and duties. They are
2. Legal(artificial/juristic/fictitious
Persons
(i) Legal persons are juristic or
imaginary beings to whom
personality is attributed by law
by way of fiction where it does
 real human beings not exist in fact. A fictitious
to whom law thing is that which does not
attributes the exist in fact but which is
personality in deemed to exist in the eye of
reality and truth. law.

(ii) According to (ii) According to Salmond, “legal

Holland, “a persons are beings, real or
natural person is imaginary, who for the purpose
such a human being of legal reasoning are treated
as is regarded by in greater or less degree in the
the law as capable same way as human beings”.
of rights and duties-
in the language of (iii) Requisites or essentials of a
roman law, as legal person:-
having a status”. (a) Corpus: the corpus is the
body or entity.
(iii) Requisites or (b) Animus: it is the will or
essentials of a intention.
natural persons:- Thus, the law infuses the animus or will
(a) He must be or intention of a fictitious personality
alive. into corpus. This is known as
(b) He must possess personification of the beings which are
essentially not in fact human beings. (however, it is
human to be remembered that mere
characteristic. personification does not make the thing a
(c) He must be juristic person. Legal personality is
recognised as reached only when the law recognises the
possessing a associated individuals as a single entity
sufficient status which represents them but is not identical
to enable him to with them). E.g. when we say that ‘the
possess rights court passed the judgment’, we are
and duties. (e.g. personifying the court. In fact it is the
a slave in judges who have passed the judgement.
Roman law But court is not a juristic person, it can’t
didn’t possess a be sued, it can’t hold property or assign
personality it.
sufficient to
sustain legal (iv) Legal persons are persons in
rights and the eyes of law only and not
duties). persons in fact.
 (iv) They are both (v) Kinds of Legal Persons:-
persons in fact and there are 3 kinds of legal
persons in law. persons

(a) Corporations: a
corporation is a group or
series of persons which, by
a legal fiction, is regarded
and treated as a person. E.g.
companies.
(b) Institution: in this class,
the object selected for legal
fiction is not a group of
persons, but an institution,
viz. A church or university,
hospital.
(c) Fund or Estate: in this
class, the corpus is some
fund or estate devoted to
special uses, viz. A
charitable fund or a trust
estate.

3. Legal Status of Lower Animals:-

The only natural persons are human beings.

Salmond says that beasts are not persons, either natural or legal.
They are merely things-often the objects of legal rights and duties but
not the subject of them.

Interests of Animals are not recognised by Law:-

People who own the animals may possess rights in respect of
them. For example: if ‘A’ horse suffers injuries because of ‘B’s negligence,
‘A’ will be entitled to claim damages from ‘B’. But it is no legal wrong to
the beast. It hurts the animal physically, but the legal wrong is done to ‘A’.
Animals have interests like men but their interests are not recognised and
protected by law the way in which the interests of the men are protected.
The acts of animals are neither lawful nor unlawful. This is because they
can’t distinguish between right and wrong, just and unjust.
No duties to be discharged:-
Animals have no duties to be discharged. They have only
certain functions which are assigned to them by nature.

Punishment to Animals:-
Although beasts are incapable of legal rights and duties and
their interests are not recognised by law, legal history reveals that there
were provisions regarding punishment to animals if they were found guilty
of homicide.
In ancient Hindu jurisprudence, killing of harmless animals like swans,
pigeons, cows, etc. was made punishable with fine.
Today, however, an animal can’t be punished but if it is extremely
dangerous then only certain laws allow shooting down. In modern law, a
trespassing animal may be under distress damage feasant kept distrained
until its owner or someone else interested in the animal pays compensation.
Similarly, in India, the Cattle Trespass Act has been passed for trespassing
animals.

Two cases where beasts or animals may possess legal rights:-

Generally, a beast in incapable of legal rights
and legal duties, for its interests receive no recognition from the law.
However, there are two cases in which beasts may possess legal rights.
(a) Cruelty to animals is a criminal offence. (under the Prevention of
Cruelty to Animals Act, 1960.)

The Prevention of Cruelty to Animals Act, 1960 was enacted with a

view to ensure animals are treated without cruelty, free from infliction
of unnecessary pain and suffering. (however, the Act is considered not
a right based legislation but only a animal welfare legislation).
In the case of Animal Welfare Board of India v. A. Nagaraja (2014
SC), in this case, the Supreme Court recognised the right to dignity and
live lives free from cruelty of animals.
In this case, use of bulls and bullocks in multiple events across the
country, notably bullock racing in Goa and Karnataka and Jallikattu bull
fighting in Tamil Nadu was challenged on the ground that it amounts to
cruelty to animals.
 The S.C. held the practice of bull racing as against the Article 21 of the
Constitution and against the section 3 r/w section 11 of the revention of
Cruelty to Animals Act, 1960.

(b) A trust for the benefit of particular classes of animals. (e.g. a

provision can be made for the establishment and maintenance of a
home for stray dogs or cows or horses.)

Trust for individual animals (can’t be enforced):-

In the case of Re Dean, Cooper Dean v. Stevens (1889), a
testator vested his property in trustees for maintenance of his horses.
The Court held that it was not a valid trust and not enforceable in any
way on behalf of horses. The court further said that the trustees are free
to spend money in the manner indicated by the testator if they so
pleases, but even if they did not apply the money for this purpose, it
would not amount to breach of trust.
Therefore, it is clear that animals and beasts are incapable of having a
legal personality.

However, in the case of Narayan Dutt Bhat v. Union of India (2018

Uttarakhnad High Court), declared the ‘entire animal kingdom
including avian and aquatic’ as legal entities with a distinct persona and
corresponding rights, duties and liabilities of a living person.
The court observed – ‘the corporations, hindu idols, holy scriptures,
rivers have been declared legal entities and thus, in order to protect
and promote greater welfare of animals including avian and aquatic,
animals are required to be conferred with the status of legal entity/legal
person. The animals should be healthy, comfortable, well-nourished,
safe, able to express innate behaviour without pain, fear and distress.
They are entitled to justice’.

5. Legal Status of Unborn Persons:-

(i) Unborn person has legal personality:-
The law attributes legal personality to
unborn persons. A child in mother’s womb is by legal fiction
considered as already born and regarded as person for many
purposes.
For example: A gift may be made to a child who is still in the
mother’s womb.

Under Hindu Law:-

The Hindu law has for many purposes equated
‘person in womb’ to a ‘person in existence’. For example: The Hindu
law of partition requires that if at the time of partition, pregnancy is
known then the partition should be postponed till the birth of child,
but if other coparceners don’t agree to this, then a share equal to
share of a son should be reserved for child in the mother’s womb. If
the child is born, he takes it and in case the child does not take birth
alive, his share may be equally divided between the surviving heirs.
In those cases, where no share is reserved for a child in the womb,
he can, after his birth, demand reopening of the partition.

Under Criminal Law:-

Under Indian Penal Code, abortion is a criminal
offence under Section 312 of IPC. It provides for causing
miscarriage in following words:-
“whoever voluntarily causes a woman with child to miscarry,
shall, if such miscarriage be not caused in good faith for the
purpose of saving the life of the woman, be punished with
imprisonment of either description for a term which may extend to
three years or with fine or with both; and if woman be quick with
child, shall be punished with imprisonment of either description
for a term which may extend to seven years and fine.”

Further, section 416 of Code of Criminal Procedure provides for

postponement of Death sentence on pregnant woman. It says as
follows:-
“If a woman sentenced to death is found to be pregnant, the High
Court shall commute the sentence to imprisonment for life”.

Under the Transfer of Property Act:

 The unborn person can own property. Section 13 of the
TPA provides for the transfer for benefit of unborn person. However,
this is subject to the section 14 which provides for the rule against
perpetuity, which seeks to ensure that property does not remain
without vesting (full owner) in a living person for too long.
However, his ownership is contingent depending upon his born
alive. When his birth takes place, the ownership becomes vested.
This is dealt under Section 20 of TPA.

So, the rights of unborn person can be concluded as follows:-

(a) Right to compensation:-

An unborn person is entitled to compensation for the
death of his father, wilful or negligent injury inflicted on a child
in the womb.
(b) Right to be born:-
An unborn person has a right to be born. Thus, abortion
and child destruction are declared crimes to protect his right.
Further, the execution of death sentence on pregnant woman
can’t be performed until she has been delivered of her child.
(c) Right to inherit:-
The unborn child may inherit, but if he dies in the womb
his inheritance fails to take effect.
(d) Beneficiary of Trust:-
An unborn child may be made beneficiary of trust
and such trust can’t be varied without obtaining the consent of
the court on their behalf.
(e) Right to own:-
There is nothing in law to prevent an unborn from owning
property. His ownership is contingent as it depends upon his born
alive. Once he born alive, his contingent ownership will become
vested.
(f) Right to Gift:-
A direct gift may be made to the child in the womb.
(g) Right to partition:-
In Hindu law, if a partition is made then a share
should be allotted to the child in the womb. In those cases, where
 no share is reserved for the child in the womb, he can demand re-
opening of the partition after his birth.

6. Legal Status of Dead Men:-

(i) Dead men are no longer person in eyes of law (they are only
things):-
It is said that the personality of a human being
commences with his birth and ceases with his death. Therefore,
dead men are no longer persons in the eyes of law. They are
regarded as things. They have no rights and duties.

(ii) Law recognises 3 things in respect of which anxieties of living

men extend beyond the period of their death, i.e. his body, his
reputation and his estate.
(a) The Body:-
Earlier view:- The corpse (dead body) is the
property of no one. It can’t be disposed of by Will or other
instrument. A dead body is supposed to belong to nobody and
can’t be the object of theft. Earlier, it was held that a person
can’t during his lifetime; make a Will disposing of any part or
organ of his body.
Modern view:-
However, under the Human Organs Transplantation
Act, 1994 in India detailed procedures are laid down for
human organ transplantation; the whole body also can be
dedicated to a hospital for the purpose of research after his
death for the benefit of humanity. Hence in the modern days,
in order to keep in tune with the progress in medical science
even a Will to such an effect can be given effect to by the heirs
of the deceased or else a person can donate his organs or body
as the case may be during his lifetime itself and his wish has
to be obviously given effect to after his death.
 Decent Burial or Cremation of Dead body:-
Further, the law ensures decent burial or cremation of
the dead man’s corpse. The Supreme Court in the case of
Ashray Adhikar Abhiyan v. Union of India (2002), held
that even a homeless person when found dead on the road, has
a right of a decent burial or cremation as per his religious faith.

(b) Reputation:-
The reputation of a dead man is also protected by
law to some extent. It is based on the maxim:- De mortuis nul
nisi bonum which means one must not speak anything but
good about a dead person.
Explanation 1 of Section 499 makes the defamation against
a dead person a punishable offence when it affects the
interests or feelings of his family and relatives.

(c) Estate:-
Any testamentary dispositions of the property made
by the dead are carried out by law. A person can, by will make
a valid trust for the repairs and maintenance of the graveyard
because it amounts to a public or charitable trust. The law of
succession permits the desires of the dead man to regulate the
action of his successor.

7. Legal Status of Idol:-

In the case of Pramatha Nath Mullick v.
Pradyumna Kumar Mullick (1925), the Privy Council held that idol is
a juristic person and such it can hold property. Its position is, however,
like that of a minor because the priest, i.e., Pujari acts as a guardian to
look after the interests of the idol.
Similar view was reiterated by the Supreme Court of India in Yogendra
Nath Naskar v. Commissioner of Income Tax (1969), wherein it was
held that an idol is a juristic person capable of holding property and of
being taxed through its shebaits who is entrusted with the possession
 and management of its property. An idol can be treated as a unit of
assessment for assessing its liability under the Income Tax Act.
In the case of Devkinandan v. Muralidhar (1955) and Shri Adi
Visheshwara of Kashi Vishawanath Temple, Varanshi v. State of U.P.
(1997 SC), the Supreme Court held that the property of Hindu temple
or idol vests in the idol itself while its possession and management vests
in shebait as manager of the estate.

8. Legal Status of Mosque:-

The courts have expressed conflicting views
regarding the legal personality of mosque.
In the case of Maula Bux v. Hafizuddin (1925 Lahore), the Lahore
High Court held that a mosque was a juristic person capable of being
sued.
But the Privy Council in the case of Masjid Shahid Ganj v. Siromani
Gurudwara Prabandhak Committee, Amritsar (1940), held a contrary
view and observed that mosques are not artificial persons in the eyes of
law and therefore, no suit can be brought by or against them.

9. Legal Status of Guru Granth Sahib:-

The Supreme Court in the case of Sriomani
Gurudwara Prabandhak Committee (SGPC), Amritsar v. Somnath
Das (2000), held that ‘Guru Granth Sahib’, the holy Granth of Sikhs is
a legal person.
The Court further made it clear that Guru Granth Sahib stands on
altogether different footings than the Holy Books of other religions,
namely, Holy Quran of Muslims or Bible of Christians or Ramayana
and Bhagwat Gita of Hindus because the latter are not treated as legal
persons while Guru Granth Sahib is revered like a ‘Guru’ by sikh
community.
The Court observed that the last living Guru, i.e. Guru Gobind Singh
told the Sikhs that henceforth Guru Granth Sahib would be your Guru
from which you will get all your guidance and answers. He gave it
recognition of a living Guru. It is with this faith that it is worshipped
like a living Guru by sikh community and considered as the soul and
heart of Gurudwara.
10. Legal Status of Rivers:-
In the year 2017, 5 rivers have been given the status of
legal person in the world. These rivers are:-
(a) The Whanganui River in New Zealand;
(b) The Ganga and Yanuma Rivers in India;
(c) The Rio Atrato in Colombia and
(d) The Yarra River in Australia.

While the Whanganui river and the Yarra river was granted the status
of legal person by passsing the Act in respective countires by their
legislature, the Rio Atrato was granted by the Columbian Constitutional
Court.

Similary, the rivers Ganga and Yamuna are granted status of legal
person by the Uttrakhand High Court on March 20, 2017 in the case of
Mohd. Salim v. State of U.K. (2017).

The court declared that the rivers Ganga and Yamuna are legal persons
with correponding rights and duties of a living person. The court
observed that –

These rivers are central to the existence of half the population and their
heath and well being. They have provided both physical and spritual
sustenance to the people from time immemorial. People have deep faith
in both the rivers. But both the rivers had become heavily polluted due
to industrialisation and rapid urbanisation. So in order to protect the
recognition and faith of the people in these rivers, they need to be
declared as the legal person.

11. Corporate Personality: Its Nature

Corporate personality is a creation of law. Legal
personality of corporation is recognised both in English and Indian law.
A corporation is an artificial person enjoying in law capacity to have
rights and duties and holding property. Corporation is distinct from its
individual members. It has the legal personality of its own and it can
sue and be sued in its own name. It does not come to an end with the
death of individual members and, therefore, has a perpetual existence.

Legal personality of corporations pre-supposes 3 conditions:-

 Juristic personality of
corporations pre-supposes the existence of three conditions.
(a) There must be a group or body of human beings associated for a
certain purpose.
(b) There must be organ through which the corporation functions.
(c) The corporation is attributed Will (animus) by legal fiction.

One man Company

There can be a one man company as held in the
historic case of Saloman’s case (1887). The court also
established the principle of corporate personality.

Facts: One Saloman was carrying the business of boot and shoe
manufacturing. He incorporated a company named, “Saloman &
Co. Ltd.” with seven shareholders consisting of himself, his wife,
four sons and one daughter. The company took over the personal
business assets of Saloman for £ 38,782 and in turn Saloman took
20000 share of £ 1 each, debentures worth £ 10000 of the
company with charge on the company’s assets and the balance in
cash. His wife, four sons and a daughter took £ 1 share each.
Subsequently company went into liquidation due to general trade
depression. There were various unsecured creditors, who
contended that Saloman could not be treated as a secured creditor
of the company in respect of the debenture held by him, as he was
the managing director of one man company, which was not
different from Saloman.

Held: The Court held that a corporate body has its own existence
or personality separate and distinct from its members and
therefore, a shareholder can’t be held liable for the acts of the
company even though he holds virtually the entire share capital.

The legal status and position of company has been well explained
by the Supreme Court of India in case of Tata Engineering &
Locomotive Company Ltd. v. State of Bihar (1965), wherein the
Court held that the corporation in law is equal to a natural person
and has a legal entity of its own.

Lifting or Piercing the Corporate Veil

Corporation being an artificial
person, can’t act on its own, it can act only through the natural
persons. The separate personality of the company should be used
for legitimate business purposes only. Where the legal entity of
the company is being used for fraudulent or dishonest purpose,
the individuals concerned (who incorporated the company) will
not be allowed to take the shelter behind the corporate
personality. The court, in such cases, shall break through the
corporate shell and apply the principle of what is known as
“lifting or piercing the corporate veil”.
The circumstances under which the courts may lift corporate veil
may be broadly be grouped under the following heads: (A) under
statutory provisions; (B) under Judicial interpretations.
(A)Under Statutory provisions:-
The corporate veil may be lifted or pierced
under circumstances which are explicitly given within the
statutes enabling the courts to do the same. For example, the
Companies Act, 2013 provides for the following provisions
enabling courts to lift the corporate veil.
Section 7(7) of the Act provides one such provision. Where
the incorporation of a company is effectuated by way of
furnishing false information, the court may fix liability and
for this purpose, the veil may be lifted.
Section 34&35 also enables the courts to lift the veil of
incorporation to fix liability. When prospectus of the
company includes misrepresentations, the courts may impose
compensatory liability upon the one who misrepresented.
Besides the Companies Act, 2013, certain provisions of
Income Tax Act and Foreign Exchange Regulation Act,
1973 enables the lifting of corporate veil.

(B) Under Judicial Interpretations:-

 The principle of corporate veil as a concept got
evolved post Saloman under the Common law.
(i) To prevent Fraud or Improper Conduct:-
Where the corporate personality has
been used for fraud or improper conduct, the courts have
lifted the veil.
The High court of Delhi in the case of P.N.B. Finance Ltd.
v. Shrti Sital Prasad Jain (1983), held that the doctrine
of lifting the corporate veil may be invoked whenever
necessary by the Court in the interest of justice, to prevent
the corporate entity from being used as an instrument of
fraud.
The Supreme Court of India in the case of Life Insurance
Corporation of India v. Escorts Ltd. (1986), observed
that the corporate veil of a corporation may be lifted where
the statute itself provides the lifting the veil or fraud or
improper conduct is intended to be prevented.
The case of Jones v. Lipman (1962) is best example of
this point. In this case, A agreed to sell certain land to B.
Pending the completion of formalities of the said deal, A
sold and transferred the land to a company which he had
incorporated with a nominal capital of £100 and on which
he and a clerk were the only shareholders and directors. B
filed a suit against A. The Court held that the corporation
was incorporated in order to escape the decree of specific
performance which may be passed against A. Thus, the
court lifted the corporate veil and ordered the A to
complete the contract with B.

(ii) Where Corporate Facade is only as agency:-

The corporate veil of the company
may be lifted where its corporate facade is in reality
only an agency. For example:
In Re R.G. Films Ltd. (1953), An American company
produced film in India technically in the name of a
British company, 90% of whose capital was held by the
President of the American Company whch financed the
 production of the film. The Board of Trade refused to
register the film as a British film and stated that English
company acted merely as the nominee of the American
Company. The true character of the company was
American and not British.
(iii) Where the activities of the company are against
public policy:-
Corporate veil may be lifted where the company
is engaged in activities which are against the public
policy.

(iv) For Determining the real character and status of the

company:-
The courts may lift the corporate veil in order to
determine the real character or status of the company.

(v) Where corporate facade of the company has been

used for evasion of taxes:-
In Commissioner of Income Tax v. Meenakshi
Mills Ltd. (1967,SC), the Court held that in cases
where it is found that the sole purpose of incorporation
was to evade taxes, the court would ignore the concept
of separate entity and lift the corporate veil to look into
the real transaction.
In Vodafone International Holdings v. Union of
India (2012, SC), the court held that once the
transaction is shown to be fraudulent, sham or intended
to defeat the interests of shareholders and also for tax
evasion, the court can always lift the corporate veil and
examine the substance of the transaction.
Commissioner of Central Excise v. Detergents India
Ltd. (2015, SC), the Court again observed that
corporate veil may be lifted by the courts in order to
see behind the legal facade to observe the evasion or
avoidance of tax.

(vi) Cases of Economic offences:-

 A court is entitled to lift the veil of corporate
entity and pay regard to the economic realities behind
the legal facade. In Santanu Ray v. Union of India
(1989 Delhi HC ), the company was alleged of
violation of section 11 of Central Excise and Salt Act.
the court held that corporate veil could be lifted to
know which of the directors was concerned with
evasion of excise duty for reason of fraud, concealment
or wilful misrepresentation or suppression of facts.

(vii) Avoidance of Welfare Legislation:-

Where the sole purpose of formation
of new company is to reduce the amount to be paid by
way of bonus to workmen. Thus, where the company
is avoiding the welfare legislaiton for employees, the
court may lift the corporate veil.

Kinds of Corporations:

Corporation Aggregate Corporation Sole

(a) It is an incorporated (a) It is an incorporated
group of co-existing series of successive
persons. persons.
(b) It has several members (b) It has only one member
at a time. at a time. It is the
(c) E.g. a registered successive holders of
company with some public office who
shareholders as its constitute the legal
members; the property person.
of the company is not (c) E.g. the Prime Minister
the property of the in India, President of
shareholders; India, the Comptroller
shareholders are not General of India etc. On
bound by the debt and the death of PM – his
liabilities of the personal property
company. passes to his heirs;
when he vacates his
office, the property held
by him as corporation
 sole passes to his
successor in office.

12. Liability of Corporations:-

Can sue and be Sued:-
A corporation is not a natural person so it neither has a
body nor brain or soul of its own. It has to act through its agents,
employees, and other personnel. It is, therefore, follows that a
corporation don’t have its own will. Despite this reality, the law confers
a fictitious legal personality on corporations which vests rights, duties
and property in them. Consequently, a corporation can sue or can be
sued and owes both Civil and Criminal liability for the acts done by
it. A corporation can’t be sued unless the act done was within the scope
of the agent’s authority and within the purpose of its incorporation.
The Memorandum of Association lays down the purpose of the
company and the limits within which its representatives must act. An
act done by the representatives within the limits so laid down and for
the purposes and those incidentals thereto are binding on the
corporation. Thus, it can be said that a corporation is not liable if the act
of its employee or servant or agent is not authorised by the
Memorandum of Association.

(i) Civil Liability:-

A corporation can’t personally commit a tort. It is an
artificial person having no brain and body of its own. It may,
however, be held liable for the wrongful acts committed by its
agents or employees during the course of their employment. This
liability is based on the principle of vicarious liability. The
company is therefore, liable for the torts of its employees and
agents just as master is held liable for the wrongful and negligent
acts of his servants.
Regarding whether the company may be sued for malicious
prosecution, deceit or defamation which involves malice as an
essential element, the position was settled in the case of
Citizen’s Life Assurance Company v. Brown (1904), where
the court held that a company can be held liable for the torts
involving malice such as defamation.
(ii) Criminal Liability:-
Earlier it was believed that a body corporate
can’t be held criminally liable for the criminal acts of its
employees because of few reasons:-
(a) Criminal act involves two elements, i.e. actus reus (physical
commission of act) and mens rea (guilty mind). It is not
possible to prove mens rea in relation to corporation as they
are intangible legal entities.
(b) Sanction. It is not possible to punish corporations with
imprisonment and death penalty.

But this view has been abandoned now and a corporation can be
held criminally liable for the criminal acts done by its
representatives provided following conditions are fulfilled:-
(a) Act of the employee must be within the scope of employment.
(b) Act of the employee must have benefited either directly or
indirectly to the corporation.
(c) The company knowingly turn a blind eye to the criminal act
of the employee. This is called the doctrine of wilful
Blindness.

Thus, it is now well settled that a corporation may incur criminal

liability in cases involving malice, fraud or other wrongful
motives. A company may be held liable for libel, malicious
prosecution.
The practical difficulty as regards imposition of criminal
liability on corporations arises in respect of punishing them
for their guilt.
In Assistant Commissioner v. Velliappa Textile Ltd. (2003
SC)
The SC held that since corporations could not be imprisoned,
they could not be prosecuted for an offence where IPC mandates
an imprisonment and fine.
But this decision was overruled in the case of Standard
Chartered Bank v. Directorate of Enforcement (2005 SC), in
which the court held that where the offences mandate both
 imprisonment and fine, the corporation should be punished with
fine.
The decision was reiterated by the SC in the case of Iridium
India Telecom Ltd. v. Motorola Inc. (2010 SC) and the Court
observed that-
‘companies and corporations can no longer claim immunity from
criminal prosecution on the ground that they are incapable of
possesing the necessary mens rea for the commission of criminal
offence’.

Theories of Corporate Personality

Jurists have expressed conflicting views regarding the

exact nature of corporate personality. These views find expression
through different theories of corporate personality. It is believed that
while each theory contains elements of truth but none by itself
sufficiently interpret, the phenomenon on juristic personality.

There are 5 theories of corporate personality:-

(i) Fiction Theory:-

(a) Promulgated:
This theory was promulgated by King Innocent IV.

(b) Expounder and Supporter:-

This theory was expounded by Savigny, Salmond,
Blackstone and Holland.
(c) Basis of theory:-
According to this theory, the legal personality of
entities other than human beings is the result of fiction. This
theory believes that the corporations have no real personality
but they have personality in the eyes of law. In other words,
a corporation is only clothed with a legal personality.
(d) View of Jurists:-
According to Savigny, a personality is attached to
corporations, institutions by a pure legal fiction.
 According to Salmond, Corporation is nothing more than the
outcome of the metaphor or fiction.

(ii) Realist Theory or Organism or Group personality Theory:-

(a) Founder/ Promulgator:-
The founder of this theory was the noted German
jurist Johannes Althusius.
(b) Supportor/Propounder:
The main supporters of this theory were Gierke,
Dicey, Pollock and Maitland.
(c) Basis of theory:-
This theory believed that a corporation (group of
persons) has a real personality as the personalitiy of an
individual. A corporation has a real personality irrespective
of the fact whether it is recognised by the State or not.
This theory is also called organism theory because it
asserts that corporation is like an organism and it has (limbs
in the form of members) and head (top authorities) and
other organs. Further corporate has its own will and body
like any other person. (the collective will of individual
members is called the will of the corporation)
(d) View of Jurists:-
According to Gierke, corporation is a real but
mysterious entity, every group has a real mind, a real will
and real power of action.
Dicey contends that the personality of a corporation is a
reflection of its consciousness or will.

(iii) Bracket Theory or Symbolist Theory:-

(a) Founder of theory:-
This theory was propounded by well known German jurist
Ihering.
 (b) Basis of theory:-
This theory is based on the assumption that just as a
synonymous word is put within brackets to give an equivalent
meaning, so also collective form of a group of different
individuals is expressed through a corporation and their separate
identities are given a unified form. Thus, incorporation is done
merely for the sake of convenience
(c) Views of Jurist:-
According to Ihering, the juristic personality is only a
symbol to facilitate the working of the corporate bodies. Only the
members of the corporation are persons in real sense and a
bracket is put around them to indicate that they are to be treated
as one single unit when they form themselves into a corporation.
.

(iv) Concession Theory:-

(a) Supporter of theory:-
This theory is often regarded as offspring of
Fiction theory and Salmond, Savigny and Dicey are the
main supporters of this theory.
(b) Basis of theory:-
This theory believes that corporate personality
is nothing but a concession given to a group or body of
individuals by law to act as one body.
(c) View of Jurists:-
According to the supporters of this thoery, the
only real persons are sovereign and individuals. The
other groups (corporations) can’t claim recognition as
persons. They are treated as persons merely by a
concession granted by the State. It is entirely at the
discretion of the State to recognise or not to recognise
a juristic person.

(v) Purpose Theory:-

(a) Supporters of this theory:-
The main exponent of this theory was the noted German
jurist Brinz. Bekker, Aloys also supported this theory.
 (b) Basis of this theory:-
The theory is founded on the view that corporations
are treated as persons for certain specific purposes.
(c) Views of Jurists:-
The supporters of this thoery held that the assumption
that only living persons can be the subject matter of right and
duties, would have deprived imposition of rights and duties
on corporations which are non-living entities. It therefore,
became necessary to attribute personality to corporation for
the purpose of being capable of having rights and duties.

Conclusion:-
Dr. Friedman analysed the different theories of juristic
personality and concluded that almost all of them had a political
significance and their role in attending to the legal problems has rather
been secondary.
Expressing their views about the theories of legal personality, Dias and
Hughes observed that there is no single theory which takes into account
all the aspects of the problem of juristic personality.