LEGAL ASPECTS OF BUSINESS

UNIT-I
NOTE:

This is for reference only. Recommended books should be read for better
understanding.

Syllabus

Law: Concept, Definition, Scope, Rule, Society and Law, Mercantile or Business Law.

LAW
In the words of Salmond,” Law is the body of principles recognized and applied by the
state in the administration of justice.”

Woodrow Wilson has defined law as “that portion of the established habit and thought of
mankind which has gained distinct and formal recognition in the shape of uniform rules
backed by the authority and power of the government.”

• Law is not static

• laws are changed to fit the requirements of the society.

• Law prevailing in a society at any point of time must be in conformity with –

-the general sentiments

- customs and

-aspirations of its people.

• It is a real phenomenon having a real existence in relation to the facts of human affairs.

Before learning the meaning of the term 'Law' one needs to know as to why we need law. No
civilized society can exist without law. It is required for the preservation of peace and
orderliness in every society. Without law, no person will care for others and their dealings
may not materialize. With the growth of society and the concept of welfare state, it became
necessary to regulate the conduct of people and protect their property and contractual rights.
Hence, each country enacted laws suited to its several needs and the value system it
cherished.

It is imperative that we should know the law to which we are subject, because ignorance of
law is no excuse. For instance, if a person is caught traveling in a train without ticket, he
cannot plead that he was not aware. Of the rule concerning the purchase of ticket and so he

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may be excused. Hence, in our own interest, we should be conversant with the laws that are
applicable to us.

Law means a 'set of rules'. Broadly speaking, it may be defined as the rules of conduct
recognized and enforced through the state to manage and regulate people's behaviour with a
view to securing justice, peaceful livelihood, and social security. Some of the significant
definitions of the term “law‟ are as follows:

"Law is a rule of civil conduct, prescribed through the supreme power of stale, commanding
what is right and prohibiting what is wrong.” — Blackstone.

'Law is the body of principles recognized and applied through the state in the management of
justice." — Salmond.

SCOPE OF BUSINESS LAW

The scope of mercantile law is very wide and varied. It includes law relating to contracts,
partnership, sale of goods, negotiable instruments, companies, insolvency, insurance, carriage
of goods, etc.

Mercantile law is concerned with the study of rights and obligations arising out of mercantile
transactions between mercantile persons. Mercantile persons are persons who carry on
commercial transactions. They may be individuals, partnership concerns or joint stock
companies.

Knowledge of mercantile law is essential to merchants. It helps the merchants to avoid

conflicts with the persons with whom he comes into business contacts.

Main sources of Mercantile Law

Indian mercantile law is based largely upon the English mercantile law. Prior to the
enactment of the various Acts constituting mercantile law, the personal laws of the parties to
suit regulated mercantile transactions. The rights of Hindus were governed by the Hindu Law
and that of Muslims by the Mohammedan Law.

In case of persons other than Hindus and Muslims, the Courts applied the principles of
English Law. Further, where laws and usage of Hindus or Muslims were silent on any point,
the principles of English Law were applied.

The first efforts to pass an Act constituting mercantile law in India were made in 1872 by the
passing of the Indian Contract Act. From that time a large number of statutes have been
enacted concerning matters coming within the purview of mercantile law. For example, the
Sale of Goods Act, 1930, the Partnership Act, 1932, the Companies Act, 1955, etc.

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The main sources of Indian Mercantile Law are:

 English Mercantile Law.

 Statute Law.
 Judicial Decisions.
 Customs and Usage.

1. English Mercantile Law

The English law is the most important source of Indian mercantile law. Many rules of English
law have been incorporated into Indian law through statutes and judicial decisions. The
sources of English law are:

Common Law

This law is known as judge made law. It is based upon customs and practices handed down
from generation to generation. It is the oldest unwritten law. The English Courts developed
these over centuries.

Equity

Equity is also unwritten law. It is based upon concepts of justice developed by the judges
whose decisions become precedents. It grew as a system of law supplementary to the
common law and covered the deficiencies of the common law. Its rules were applied in cases
where the rules of common law were considered harsh and oppressive.

The Judicature Acts of 1873 and 1875 abolished the distinction between Common Law and
Equity so that they are now applied to all cases.

Statute Law

Statute law is one, which is laid down in the Acts of Parliament. Hence, it acts as the most
superior and powerful source of law. It overrides any rule of common law or Equity.

Case Law

This is also an important source of the English mercantile law. It is built upon the decisions
of the Judges. It is based on the principle that what has been decided in earlier case is binding
in similar future case also unless that there is a change in the circumstances of the case.

2. Statute Law
A Bill passed by the parliament and signed by the President becomes a “Statute” or an Act.
Most of the Indian laws are embodied in the various Acts passed by the Central as well as
State legislators. The Indian Contract Act, 1872, the Sale of Goods Act, 1930, the Companies
Act, 1956 are some of the examples of the statute law.

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3. Judicial Decisions
Judicial decisions are also called as case laws. They referred to as precedents and are binding
on all Courts having jurisdiction lower to that of the Court, which gave the judgement. The
Courts in deciding cases involving similar points of law also follow them.

4. Customs and Usage

Customs and usage plays an important role in regulating business transactions. A well-
recognized custom or usage can even override the statute law. Most of the business customs
and usage have been already codified and given legal sanctions in India. Some of them have
been ratified by the decisions of the competent Courts of law.

RULE OF LAW
To simply understand the meaning of rule of law, it means that no man is above law and also
that every person is subject to the jurisdiction of ordinary courts of law irrespective of their
position and rank.

The term ‘rule of law’ is originated from England and India has taken this concept. The
concept of rule of law further requires that no person should be subjected to harsh or arbitrary
treatment. The word ‘law’ in rule of law means that whether he is a man or a society, he must
not be governed by a man or ruler but by law. In other words, as per Article 13 of the Indian
Constitution rule of law means law of land.

According to Black’s Law Dictionary: “Rule of Law” means legal principles of day to day
application, approved by the governing bodies or authorities and expressed in the form of
logical proposition.

According to Oxford Advance Learner’s Dictionary: “Rule of Law” means the situation in
which all the citizens as well as the state are ruled by the law.

Postulates of Rule of Law

In 1885, Professor A.V Dicey developed this concept of Coke and propounded three
principles or postulates of the rule of law in his classic book ‘Law and the Constitution.’
According to Professor A.V Dicey, for achieving supremacy of law three principles of
postulates must be followed which are as follows:

·Supremacy of law,

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·Equality before law and

·Predominance of Legal Spirit

1. Supremacy of law

As per the first postulate, rule of law refers to the lacking of arbitrariness or wide
discretionary power. In order to understand it simply, every man should be governed by law.

According to Dicey, English men were ruled by the law and the law alone and also where
there is room for arbitrariness and that in a republic no less than under a monarchy
discretionary authority on the part of the Government must mean insecurity for legal freedom
on the part of its subjects. There must be absence of wide discretionary powers on the rulers
so that they cannot make their own laws but must be governed according to the established
laws.

2. Equality before law

According to the second principle of Dicey, equality before law and equal subjection of all
classes to the ordinary law of land to be administered by the ordinary law courts and this
principle emphasizes everyone which included government as well irrespective of their
position or rank. But such element is going through the phase of criticisms and is misguided.
As stated by Dicey, there must be equality before law or equal subjection of all classes to the
ordinary law of land. French legal system of Droit Administrative was also criticized by him
as there were separate tribunals for deciding the cases of state officials and citizens
separately.

3. Predominance of Legal Spirit

According to the third principle of Dicey, general principles of the Indian Constitution are the
result of the decisions of the Indian judiciary which determine to file rights of private persons
in particular cases. According to him, citizens are being guaranteed the certain rights such as
right to personal liberty and freedom from arrest by many constitutions of the states
(countries). Only when such rights are properly enforceable in the courts of law, those rights
can be made available to the citizens. Rule of law as established by Dicey requires that every
action of the administration must be backed and done in accordance with law. In modern age,
the concept of rule of law opposes the practice of conferring discretionary powers upon the
government and also ensures that every man is bound by the ordinary laws of the land as well
as signifies no deprivation of his rights and liberties by an administrative action.

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Rule of Law Under Indian Constitution

In order to develop Indian democracy, rule of law has played a great role. At the time of
framing of Constitution, the framers had two options i.e. USA and England. Some of the
provisions were adopted from USA and some of them were adopted from England. Rule of
law was adopted from England by our constitutional fathers and many provisions were
incorporated in the Indian Constitution. Indian Constitution is considered to be supreme and
no one is above Indian Constitution. Rule of law is also given impliedly in the preamble and
such concept is enshrined in Part III of the Indian Constitution.

In case of violation of such rights, one can approach Supreme Court or High Court under
Article 32 and 226 of the Indian Constitution. The Constitution of India is enriched with the
principles of law i.e. justice, equality and liberty. Any law made by the Central government
or State government must be complied in accordance with the Constitution of India. If any
law made by the legislature contravenes with the provisions of the Constitution then such law
will be declared void.

LAW & SOCIETY

Law and Society emerges from the believe that legal regulations and decisions must be
understood in its context. Both law and society have common understanding. They are never
autonomous in their context. In other words, law is deeply embedded within a society. It
therefore implies that law is socially and historically constructed to become legally
recognized procedures and institutions and besides that, law needs a society for its
effectiveness and usefulness.

This essay is meant to focus at the history of law and society, relationship of law and society,
different branches of law in the society together with its associates which leads to highlight
the key characteristics of law and society perspectives with reference to other research
contributions of the same field that hold promise for scholars of law and politics. Importance
of law in the society is one of the areas that will be discussed in this essay with challenges
and control measures hence end up with a conclusion.

Law is a guiding principle for the society to ensure achievement of happiness without
bloodshed, peace and harmony restraining people from getting beyond guidelines hence
breaches set regulations, rules, policies or norms.

Society is referred to human beings who can be described as weak animals who can easily be
swayed by the slightest sight or sniff of materialistic gains like power, financial, luxuries etc
leading to unwanted acts causing creation of restrictions.

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The above definitions conclude with the fact that law and society rests on the belief of legal
rules and decisions that must be understood in the context of inseparable. Both are not
autonomous from each other but imbedded deeply within each other. During creation
according to the biblical history (Genesis 2:15-17), then the Lord God took the man and put
him into the garden of Eden to cultivate it and keep it. And the Lord God commanded the
man saying, “From any tree of the garden you may eat freely, but from the tree of knowledge
of good and evil you shall not eat, for in the day that you eat from it you shall surely die”.
This means as mankind was created, laws started whereby man couldn’t live without laws
governing him in the garden of Eden. In other words, today laws are made based on mankind
actions and that’s why it’s hard to separate law from society. It’s like society is main engine
for laws. However, the relationship of law and society can also be viewed at ways in that
laws are socially and historically established and both reflect and impact on cultural aspect,
ways on how society bridges the gap of inequalities through different ways of enforcement
which is more related to legal procedures and traditional norms in cultural institutions.

The process of law formulation emerges from disagreement where one or two disagree in any
area hence mediators intervene in developing agreed ways of controlling reoccurrence of
disputes in a society, decision making are ideas reached leading to agreement and legal
ideological consciousness is formalization of decisions through recording that aims at
balancing and serenities to people’s lives. Creating an environment of self-governance.
Imagining an example of living without law in our society where unlawful actors are brought
to justice, this would suit the quote that ‘survival of the fittest’. The absence of law in the
society would provide an opportunity for lifeless foundation of the society.

Today’s realities on society is heterogeneous systems of all kinds of people who destabilize
the balance of the natural society and this is where the law find its strength in restoring the
tenderness of disobedience in societies and making people live together cohesively. It’s here
that the law helps to maintain the morality of individual personalities as well as society. In
other words, law is determined by society actions which determine establishment of laws.

Law has different branches in modern judicial systems which govern the society at all levels.

a. Public Law

This is part of the law which governs the relationships between individuals and government
with direct concern to society. It also comprises of constitutional, administrative, tax and
criminal laws as procedural law where in public law mandatory rules prevail and of which
laws concerning relationships between individuals are mainly considered private law. In other
words, public law in relationships governing systems are systematic and unequal government
bodies (Central and local) that can make guidance on the rights of individuals. Rule of law
ideology where authorities must act within the law. Sighting an example of citizens being

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unhappy with a decision of administrative authority can ask court for judicial review hence
change of laws to suit society despite dictatorial systems that have always affected public law
like in African government systems where change of public laws is always based on
individual’s interest. Given Uganda as an example where article 102b change was influenced
by payment of legislatures to lure the public to consent with change of the article to pass it
which escalated nationwide public protests where arrests and use of force was enacted by
military officials and police hence intimidated nationals hence passed the proposal based on
individual interest (The politics of article 102b, Daily Monitor, September 24 th , 2017 by
Timothy Kalyegira).

On the other hand, rights can be divided in two parts that include; private and public rights
where public rights cover the aspect of welfare benefits which rights are awarded through an
administrative decision out of government budgets while private law covers the aspect of
relations between individuals or institutions rather than relations between
individuals/institutions and government.

- Constitutional law.

This is the foundation of democratic nations that postulates the supremacy of law in the
functioning of law in the society which is termed as rule of law. Constitutional law is one of
the branches of law in the society which sets up governments with its different branches of
work like Ministries that stipulates how they are elected or appointed and division of powers
with responsibilities between them. In prior dominant traditional systems, the basic
government systems include executive, legislature and the judiciary which still exists as
governing body for the society.

Constitutional law provides understanding of basic human rights which must be protected for
everyone and further civil and political citizens poses. It establishes fundamental borders to
what any government systems must and must not do which limits roles and responsibilities
hence its enshrined in a written document that’s the constitution. Amendments are made
based on unanimous acceptance by the society or public. For reasons of political history,
some countries may not have documented some of the constitutional information. In other
words, constitution is not a single document but based on custom and precedent as expressed
in the statutes and judicial decisions. For example, unlike other modern countries, Britain’s
constitution is not codified but unwritten one formed of acts of parliament, court judgements
and conventions (Magna Carta today by Robert Blackburn, 13, March 2015).

- Criminal Law.

This is where the state enforces sanctions on the defined crimes committed by individuals or
businesses for the sake of society justice and peaceable social order. It’s a body of laws that

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apply to acts of criminal where in circumstances where individuals fail to condone to specific
criminal statutes by breaking or doing actions contrary to agreed laws. In other words,
criminal law penalties involve the forfeiture of one’s rights and imprisonment which
conversely relate to the resolution of legal controversies and involve financial damages. The
reason behind criminal law includes deter crime, reform perpetrators, prevent reoccurrence of
crime and provide retribution for the act.

- Administrative law

This is the body of law that governs areas of administration in government. Government
departments or ministries actions can include; decision making, enforcement of specific
regulatory policies or laws. Administrative law therefore is considered a branch of public
law. The team involved of decision making of the administrative units of government that
includes tribunal, boards or commissions. They are part of state regulatory body such as
police law, immigration, transport, communication etc. Many countries established
diversified legislative bodies worldwide with different agencies that control the social aspect
of society, economic regulations and political systems.

b. Substantive and Adjective Law.

This are laws of procedure or practice as opposed to the body of law that courts are
established to administer that may include rules of civil procedure. It involves law that
provides a method for enforcement or maintain rights or obtaining redress for their invasion
for effectiveness.

Substantive laws

Substantive laws define the rights and responsibilities in civil law and crimes and
punishments in criminal law. Substantive laws are codified in legislated statutes or may be
practised or modified through precedent, especially in the common law system. These laws
can also be enacted through the initiative process. Substantive laws refer to the actual claims
and defences to refer to in any particular case.

Nature of substantive laws

 Substantive laws deal with those areas of law which establish the rights and
obligations of the individuals and what individuals may or may not do.
 These laws have independent power to decide any case.
 Substantive laws dictate the legal context of any crime such as how the case will
be handled and what specific punishments to be given for any crime.

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 Statutory laws or precedents in the common law system are substantive laws. 
 Substantive laws deal with the legal relationship between individuals or the legal
relationship between an individual and the State. 
 Substantive laws are the statutory laws which define and determine both the rights
and obligations of the citizens to be protected by law and the crimes or wrongs and
also their remedies.
 Substantive laws determine the subject matter of litigation pertaining to the
administration of justice.
In the case of Thirumalai Chemicals Ltd. v. Union of India and others (2011), the Supreme
Court ruled that substantive laws are a body of rules that “creates, defines and regulates rights
and liabilities”. On the other hand, procedural laws establish “a mechanism for determining
those rights and liabilities and a machinery for enforcing them”. 

Sources of substantive laws

The Substantive Laws are usually derived from: 

I. the principles in Common laws which already exist, codified statutory laws 

II. Constitution 

III. judicial precedents in cases with similar facts and circumstances. 

Substantive laws are also derived from various treaties that dictate the conditions of the law.
One such example is the regulations and directives of the European Union followed by trade
treaties, rules of the WTO and bilateral treaties.

Other sources of substantive laws include:

 The writings of legal scholars: In civil laws, academic writings which explain or
interpret the Constitution or laws influence the decisions of the courts.
 Edicts from a king/ ruler;
 “Sharia law” in religious books and edicts in the case of some of the Islamic
countries.
Indian Penal Code, Indian Contract Act, 1872, Transfer of Property Act, 1882, Specific
Relief Act, 1963 etc., are some of the examples of substantive laws in India. 

Types of substantive laws

The substantive laws define both the rights and the wrong and the punishment or remedy for
it. The laws include all categories of Public and Private law also including both substantive
civil and criminal laws.

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Substantive civil laws

Substantive civil laws are the laws which deal with disputes between any individuals,
organisations or between both of them where the victim is entitled to compensation. Using
substantive civil laws, the courts find out whether the legal rights of the plaintiff have been
violated or not. 

The plaintiff should have to prove that he/ she has gone through damages or has suffered
injury by using the relevant substantive civil laws. If the plaintiff is successful in proving his/
her point before the court by himself/ herself or through his/ her attorney, substantive civil
laws would be used to compensate the plaintiff for any injury or harm caused accordingly.

Substantive civil laws do not provide any constitutional protection to any of the parties but
provide the right to appeal to both the parties.

Examples

Some examples and functions of substantive civil laws in India include:

 Law of Contracts such as the Indian Contract Act, 1872 defines what are the
essential elements and conditions required to enter into any contract. The broader
category of the laws related to the contract also includes the Sale Of Goods Act,
1930 for the sale of goods and the Partnership Act, 1932 for the law related to the
formation and registration of partnership firms and businesses.
 The Indian Succession Act, 1925 is an Act dealing with the substantive laws of
testamentary and intestate succession concerning the persons who follow any
forms of Christianity in India. 
 Other substantive civil laws in India are the Transfer of Property Act 1882; Indian
Trust Act, 1882; Maternity Benefit Act, 1961; The Factories Act, 1948; Industrial
Disputes Act, 1947 etc
 Substantive civil laws also include any private wrong caused to anyone or ‘Tort’.
The Law of Torts is also an example of substantive civil laws. However, the law of
Tort in India has evolved from that of its English counterpart and is not codified.

Substantive criminal laws

Substantive criminal laws deal with criminal offences and the punishments to be awarded for
each of these criminal offences. 

A criminal prosecution starts after the defendant violates any criminal statute. The primary
purpose of substantive criminal laws is to provide punishment to the convict while
compensation may be provided to the victim depending on the situations.

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Using substantive criminal laws, the court finds out whether the accused is guilty or not and
if found guilty, what should be the punishments for the criminal offence.

Unlike substantive civil laws, substantive criminal laws offer constitutional protections to the
accused from the very beginning of the trial. However, here only the defendant can appeal
instead of both the parties as in the case of substantive civil laws.

Examples

Various penal offences and their respective punishments have been described in the Indian
Penal Code (IPC). It also defines the conditions for various penal offences such as ‘Murder’,
‘Rape’, ‘Abduction’ etc.

Apart from IPC, Domestic Violence Act, 2005; the Juvenile Justice (Care and Protection of
Children) Act,2000; the Sexual Harassment Of Women At Workplace (Prevention,
Prohibition And Redressal) Act, 2013 are some of the substantive criminal laws in India.

Limitations of substantive laws

 Elements of substantive laws sometimes act as an obstacle to access to justice.

Some elements of substantive laws which are unfavourable to any litigant will
constitute an impediment to justice.
 Substantive laws can be used to limit and restrict the power and freedom of any
individual.
 The State possesses the uncontrolled and unlimited power to frame laws according
to its own will which the judiciary is bound to follow. 
However, in India, the judiciary may strike down any law if it is unconstitutional.

For example, the Supreme Court of India struck down the Constitution (Ninety-Ninth
Amendment) Act, 2014, which established the National Judicial Appointment Commission
(NJAC) for the appointment of judges instead of the traditional collegium system of
appointment of judges, in the case of Supreme Court Advocates-on-Record Association and
another v. Union of India (2016).

Procedural laws

In contrast to substantive laws, procedural laws, also known as Adjective Laws, are the laws
which act as the ‘machinery’ for enforcing rights and duties. Procedural laws comprise the
rules by which a court hears and determines what happens in civil, criminal or administrative
proceedings, as well as the methods by which substantive laws are made and administered.
The rules are designed to ensure a fair and consistent application of due process and
fundamental justice to all cases before any particular court.

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The validity of the substantive laws is tried and tested through the procedures of the
procedural law. In the context of procedural laws, the rights may not exhaustively refer to the
rights to information, rights to justice, rights to participate and general civil and political
rights. For example, in the sphere of environmental law, these procedural rights have been
considered in the UNECE Convention On Access To Information, Public Participation In
Decision-Making And Access To Justice In Environmental Matters, also known as the
Aarhus Convention.

Procedural laws are made to ensure the best distribution of judicial resources. All procedural
laws are made following the due process of the law. A court cannot impose a civil or criminal
penalty on any individual who has not received any notice of the case filed against him/ her
or has not got a fair opportunity to present evidence or defend himself/ herself. The
standardisation of the procedural laws depends on how any case is filed, parties are informed,
evidence is presented and the facts are determined to maximise the fairness of any legal
proceeding.

Nature of procedural laws

 Procedural laws lay down the ways and means substantive laws can be enforced.
 They do not carry any independent powers to decide any case.
 These laws are applied in the legal procedure which sometimes may be used in
non-legal contexts, such as filing any suits or the manner any case will proceed.
 These laws are enforced by the Acts of Parliament or implemented by the
government.
 Apart from prescribing ways and means of enforcing rights, procedural laws also
redress for the infringement of rights, also describe the machinery for proceedings
of any suit.
 In the opinion of Holland, although procedural laws are concerned with the rights
and acts of private litigants, it also describes the organisation of Courts and the
duties of judges.
 A procedural law should always follow substantive law. The Madhya Pradesh
High Court held the decision in Farookh Mohammed v. the State of Madhya
Pradesh (2015). The Himachal Pradesh High Court held that procedural law
should not ordinarily be considered “mandatory” in the case of Gurudwara Bei
Sehjal v. Nanhku And Others (2022).

Sources of procedural laws

Procedural laws are extremely important in the administration of justice. They function as the
means by which substantive laws should be implemented. 

The primary source of procedural laws is the Constitution. Other sources of procedural laws
include: 

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 Statutes enacted by the legislature; 

 Written regulations for employees of various law enforcement agencies. These
regulations cannot be considered as laws but violating them results in taking
internal actions.
 Various rules, procedural guidelines and rulings of cases laid down by the
Supreme Court. 

Types of procedural laws

Different legal systems have different procedural laws. Some of the procedural laws may
primarily look for the truths or fairness between the parties and some procedural laws target a
speedy resolution of disputes. Other procedural laws may also consist of a proper and
thorough application of legal principles. Procedural laws are the means to enforce substantive
laws. Hence, there exist different types of procedural laws depending on the characteristics of
substantive laws. 

Based on these, the procedural laws are primarily of two types:

1. Civil procedural laws or laws of civil procedure and 

2. Criminal procedural laws or laws of criminal procedure

Laws of Civil Procedures

Laws of Civil Procedures comprise the rules, regulations and standards for the courts to
follow during the cases relating to civil matters and various civil trials. 

These procedural laws govern how a civil suit or case should commence and the procedures
to be followed during the case. They also dictate:

 the nature of pleadings and statements of case, motions or applications;

 available remedies for civil cases; 
 the orders to be passed in civil cases; 
 the limiting time for appeal and the manners of how the cases are to be disposed
of; 
 the conduction of civil trials; 
 the process for passing judgement, and 
 how the courts, judicial officers and clerks must function. 
Civil procedural laws determine the parties of any civil case. The parties for claims
concerning the civil actions by private individuals or groups, companies, organisations or
institutions against one another and in addition. The government in power or any of the

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subdivisions or agencies of the government may also be parties to civil suits filed by private
individuals or groups. 

Examples

One of the major civil procedural laws in India is the Code of Civil Procedure which governs
the administration of civil proceedings and implementations of civil orders and justice.

Laws of Criminal Procedures

While substantive criminal laws deal with punishment for criminal offences against public
and private individuals. The laws of criminal procedure can be termed corollary where these
laws lay down the criminal procedures. These laws describe how criminal law should be
applied and its procedures. 

Judicial proceedings intend to find out the true facts and establish guilt or innocence by
making the best use of the available pieces of evidence. Hence, criminal procedural laws also
govern the presentation of evidence, becoming witnesses for the criminal offence committed
and the documentation and establishment of offences through physical proof.

Procedural Criminal Law can further be divided into two stages or phases: 

1. the investigatory stage; and 

2. the adjudicatory stage. 
In the investigatory stage, the investigation mainly consists of;

1. confirming facts and circumstances of the case by investigating police officers or

by the investigative agency and; 
2. arresting the suspect based on circumstantial evidence. 
The adjudicatory stage starts with the trial of the suspect for the accusations of the criminal
offence committed in the court.

Examples

In India, the Criminal Procedure Code, 1973 describes the processes of getting the

prosecution of various types of criminal offences and the punishments to be awarded by the
criminal courts. It also lays down the details of the procedures regarding the steps to follow
during any criminal offence. These include the processes of the arrest of the accused,
investigation of the alleged crime committed, granting of bail, the jurisdiction of the courts,
filing of criminal appeals, and revisions and compounding of offence etc with regards to the
various criminal offences.

Systems of procedural laws

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There are two of the most widely used procedural legal systems in the world that have
developed based on the different ways of implementing legal rules and choices. These
systems are i. Civil law procedures and ii. Criminal law procedures. Besides advantages and
strengths, both the civil and common law procedures have their fair share of weaknesses. 

Civil law procedures

Historically, civil law procedures have originated from the ancient Roman legal system. This
system gives importance to the responsibility for the development and deciding disputes and
maintains consistency in following the legal rules. The primary responsibility to decide the
cases and disputes is given to the state officials, here being the judiciary. It is often associated
with Roman law. 

Civil law procedures stress the responsibility of a judiciary in a professional manner. The
judiciary thoroughly sees the matters of disputes and then decides the final outcome. The
system helps in reducing the possibility that the outcome of lawsuits will favour one of the
parties. It ensures that outcomes and legal rules will remain consistent throughout the
proceeding.

However, it may make the parties feel that they were not given any opportunity to be heard
properly and that the facts of the dispute were not adequately probed. 

Countries such as France, Germany, Greece, Italy, Japan, Mexico, Russia, Spain etc follow
the civil law procedures.

Common law procedures

The common-law procedure has its root in the English legal system. Common law procedure
is also found in the countries which were once English colonies and have followed or derived
their legal system from the legal systems of England. 

Unlike the civil law procedure where the judiciary has the primary responsibility, the
common law procedures give the primary responsibility to the parties and their legal
representatives to present factual evidence and legal arguments in their own favour
respectively to a judge or, in some cases, before the jury. The role of the judge or the jury is
restricted in the common law procedures to decide which party has presented the better and
most valid argument. A favourable judgement or order is usually given depending on the
strength of the arguments.

Common law procedure allows the parties to control the flow of the litigation and it allows
the winning party to be satisfied with the outcome of the particular dispute. The parties are
given enough opportunity to be heard before any well-trained judiciary. However, the system
leads the parties to spend huge sums as expenses on litigation. The common law system also
sometimes results in legal rulings that are inconsistent and bad in law.

16 Prof. Raj Kiran Syam

 LEGAL ASPECTS OF BUSINESS

Countries such as the United States, Canada and most of the Commonwealth countries
including India follow common law procedures.

Limitations of procedural laws

Procedural laws have certain drawbacks and limitations. 

 Some of the procedural laws may impose strict time limitations which may either
hasten or slow down the speed of the legal proceedings.
 Any party who is unfamiliar with procedural laws may breach the guidelines.
Though they may not affect the merits of the case, the failure to follow these
guidelines may severely damage the chances of the party.
 Procedural laws are constantly torn between arguments that judges should have
greater discretion to avoid the rigidity of the rules. While the other argument is that
the judges should have less discretion in order to avoid a result based more on
personal preferences than the laws or the facts.

Topic Substantive laws Procedural laws

Substantive laws deal with the legal rights and
Subject
obligations of the individuals among
matter
themselves and towards the state.
Procedural laws describe the ways and
methods following which substantive
law is enforced.

Procedural laws exclusively deal with

These laws control and govern the rule of law
Objective the proceedings in the court and the
as a whole.
methods to start a legal case.

Procedural laws are applied in both

Context of Substantive laws are applied only in legal
legal and non-legal contexts including
application contexts.
proceedings of litigation.

Substantive laws are regulated by the Acts of Procedural laws are regulated by
Regulation
Parliament or governmental implementations. statutory laws only.

Procedural laws only can dictate the

Substantive laws have individual capacities to
Capacity paths any legal proceeding should
decide the course of any legal proceedings.
follow.

17 Prof. Raj Kiran Syam