Module I: CONCEPT OF LAW

MEANING OF LAW- NATURE AND SCOPE OF LAW

 Two primary kinds => To achieve (i) Justice and (ii) Control.
 “Might is right”. Retribution instead of restoration.
 “Let justice be done, though the sky falls” (Fiat justitia ruat caelum)
 Social control mechanism to define and guide human behaviour.
 Maintain peace and order. Establish standards. Protects rights of people.

DEFINITION OF LAW

 Austin – “Law is the aggregate of rules set by men as politically superior, or sovereign, to men as
politically subject.” Law is a command of the sovereign, imposes a duty and is backed by a sanction.
(Command, Duty and Sanction)
 Salmond – “Law may be defined as the body of principles recognised and applied by the State in the
administration of justice.”
 Savigny – “Law is the rule whereby the invisible borderline is fixed within which the being and the
activity of each individual obtains a secure and free space.”

KINDS OF LAW

i. IMPERATIVE LAW
 Salmond – “Imperative law means a rule which prescribes a general course of action imposed by
some authority which enforces it by superior power either by physical force or any other form of
compulsion.” Two characteristic of imperative law according to him are: (i) Command of sovereign
must be in general form, and (ii) Should be enforced by some authority.
 Chief advocate was Austin – “Law is a command which obliges a person or persons to a course of
conduct.”
 It is the very nature of law to be imperative, otherwise it’ll just be a rule which may or may not be
followed.
 Classified on the basis of origin of authority: (i) Divine or (ii) Human.
 Divine laws are the commands of God upon men, enforced by threats of punishment in this world or
the next.
 Human laws are imperative laws imposed upon men and are of three kinds:
(i) Civil law: Commands issued by State, enforced by physical power.
(ii) Law of Positive Morality: Rules imposed by society, enforced by public censure or
disapprobation.
(iii) Law of Nations/International Law: Rules imposed upon States by society of States, enforced
by international opinion/diplomacy and threat of war/economic sanctions.

ii. PHYSICAL OR SCIENTIFIC LAWS

 Salmond – “ Physical laws or the laws of science are expression of the uniformities of nature,
general principles expressing the regularity and harmony observable in the activities and the
operations of the universe”
 Example: Various natural phenomenons like law of tides, life and death, etc.
 Also called natural laws or law of nature
 The laws are uniform and regular and are cannot be controlled by man.
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  Human laws differ from country to country, this remains unchanged
 Hooker – Compares it to God’s laws.

iii. NATURAL LAW OR MORAL LAW

 Salmond – “ By natural law and moral law is meant the principle of natural right and wrong- the
principles of natural justice if we use the term justice in its widest sense to include all forms of
rightful action”
 It is called command of God imposed upon men
 Unwritten law, not recorded in brazen tablets or stone pillars but engraved in the hearts of men
 Universally obeyed, all places by all people
 Unwritten law, embodies principles of morality
 Groitus based his principles of international law on the law of nature.
 Slavery was justified as right of property being natural right in the USA. Natural law had a big
influence in law making in the US and UK, and most democracies in general.

iv. CONVENTIONAL LAW

 Salmond – “Conventional law is any rule/system of rules agreed upon by persons for the regulation
of their conduct towards each other.” Eg:- Laws of football, cricket, any voluntary society, Articles
of association of a company, etc.
 It is a form of special law that governs parties that subscribe to it and becomes part of Civil Law
when it is enforced by the State (like it is in some cases).
 Some consider international law/law of nations to be an example of conventional law.

v. CUSTOMARY LAW
 Salmond – “Customary law is any rule/action which is actually observed by men- any rule which is
the expression of some actual uniformity of some voluntary action.
 When a custom is firmly entrenched in the culture and society, it is enforced by the State. Customary
law is an importance source of law, especially in conservative places.
 Customs are basically practices that get general approval and have been in existence for a long time.
They become part of Civil law when they are recognised by the State.
 Some say customs are valid laws while others say customs are simply a source of laws. However, it
is actually a synthesis of both; customary law is a special kind of law, different from civil law.
 Customs can never override state law.
 Eg:- Hindu law prior to 1955 was fully based on custom. Hindu marriage Act came in 1955 and
further statutes regarding succession, adoption, maintenance, etc. were codified.

vi. PRACTICAL OR TECHNICAL LAW

 These are laws consisting of rules for attainment of certain, specific ends. Eg:- Laws of health, Laws
of architecture, etc.

vii. INTERNATIONAL LAW

 Salmond – International law is essentially a species of conventional law and has its source in
international agreement. It consists of those rules which the sovereign States have agreed to observe
in their dealings with one another.
 Two types: (i) Express (Treaties and conventions), and (ii) Implied (Custom and practice of States)

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  Oppenheim – International law is a law in the true sense of the word and has been constantly
growing as a result of centuries of relations/conduct between the States. It is also true that since there
is no central Government/Authority above the governments of individual States capable of enforcing
these rules presently, these rules are less effective/weaker than municipal and other local laws. The
respect given by individuals to municipal laws is also more than the respect/fear international laws
command from States.

viii. CIVIL LAW

 Salmon – “Civil law is the law of the State or of the land, the law of lawyers and the law courts.”
 It is basically the law as it exists, the positive law of the land. It has legal sanction and is uniform,
consistent and territorial, enforced by the State.
 It creates legal rights, fundamental and primary, along with secondary rights.
 Other names - Positive law, Municipal law
 The general law of England is divided into 3 parts: (i) Statute Law, (ii) Equity, and (iii) Common
law.
 Statute law is made by the legislature and Equity was developed by the Court of Chancery. [The
Court of Chancery was a court of equity in England and Wales that followed a set of loose rules to
avoid the slow pace of change and possible harshness of the common law.]
 Salmond – “The common law is the entire body of English law with 3 exceptions i.e. (i) Statute law,
(ii) Equity and (iii) Special laws.”
 The term Common law is still used to refer to the whole of the law of England, even though portions
of Common law are also slowly being transformed into Statute law through codification.
 Equity: Acc. to Salmond, the term “equity” has 3 distinct, albeit related, meanings:
(i) Morality, Honesty and uprightness.
(ii) The Principles of Natural law which temper the fixed rules of law wherever the law is
inadequate, rigid or technical. Principles of justice, equity and good conscience are applied in such
situations.
(iii) In the third sense, equity is also a set of fixed rules. It is not really left to the good sense of the
Judge; rather it is a well-formulated set of rules. It is used in a narrow, restricted sense in English
law.
 CONSTITUTIONAL LAW:
- Dicey: “Constitutional law includes all rules which directly or indirectly affect the distribution or
exercise of the sovereign power of the State.”
- Salmond – “Constitutional law is the body of those legal principles which determine the
Constitution of the State.” The more important, fundamental and far-reaching principles/practices are
likely to be classified as Constitutional (rather than Ordinary law).
- Amendment – Every written constitution should, and has, a provision for its amendment. Article
368 of the Indian Constitution deals with Amendments. In USA, the method is much more rigid and
complicated, while the English Constitution is unwritten and flexible.
 ADMINISTRATIVE LAW:
- Dr. Jennings – “Administrative law in the law relating to the administration. It determines the
organisation, powers and duties of administrative authorities.”
- Prof. Rene David – “Droit Administratif (French for Administrative Law) is the body of rules which
determine the organisation and the duties of public administration and which regulate the relations of
the administrative authorities with the citizens of the State.”

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 Constitutional Law vs Administrative Law (Holland):
Deals with various organs of sovereign power as Deal with them as in motion.
at rest.
Deals with the structure of the State. Deals with the functions.
Deals with the general principles relating to Administrative law is that part/aspect of
organisation and powers of the State and their Constitutional law which deals in detail with the
relations with the citizens. powers and functions of administrative
authorities.
 General and Special Laws
- Salmond: The test of distinction between General and Special laws is Judicial Notice.
Judicial notice means the knowledge which any Court, ex officio, possesses and acts upon as
contrasted with the knowledge which a court is bound to acquire on the strength of evidence
produced for the purpose.
General Laws are those legal rules which are taken judicial notice of by Courts whenever there is any
occasion for their application.
Special laws are legal rules which Courts do not recognise and apply as a matter of course but which
must be specially proved and brought to the notice of the Court by the parties interested in their
recognition.
- Special laws eg:- Tamil Nadu Gambling Act, Maharashtra Ownership of Flats Act, Kerala Police
Act, etc. General laws will be IPC, CPC, CrPC, etc.
 Kinds of Special Laws
a) Local Law
- Law of a particular locality, not the general law of the whole country.
- Eg:- Madras City Improvement Trust Act, 1950 applies only to Madras (Chennai).
b) Foreign Law
- Ignorance of law of the land is not an excuse, but ignorance of foreign law is like ignorance of fact
and may be excused.
- In some cases like where a contract has been entered into in a foreign country) it is necessary to
consider foreign law to ensure justice.
- The rules which regulate application of foreign law are known as the Conflict of Laws or Private
International Law and vary from State to State.
- Robinson v. Bland [A contract to pay gambling debt was entered into in France between
Englishmen and made payable in England. However, since the act was illegal in England (it was
legal inn France), it was held that English Courts were not bound to enforce the Contract.
c) Conventional Law
- Conventional law has its source in the agreement between parties who are subject to it.
- Eg:- Treaties, Articles of Association of companies, Rules governing football, etc.
d) Autonomic Law
- Autonomic law is a type of enacted law that has its source in various forms of subordinated and
restricted legislative authority possessed by private persons and bodies of persons. In other words,
autonomic law is an internal regulation or rule imposed by a private entity.
- Eg:- Bye laws made by Railway company to regulate its traffic (not in India ofc), University statutes
for the government of its members, etc.
e) Martial Law
- Law administered in Military Courts.
- Of 3 kinds: (i) For discipline and control of Army (also known as Army law),
(ii) For governance of foreign land occupied by military in times of war.
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 (iii) For governance of own territory during times of war, in derogation of Civil law if required, to
ensure safety of public or due to military necessity. Establishment of military rule and government is
known as ‘proclamation of martial law’. Protection from Courts.
f) International Law as administered in Prize Courts (Prize law)
- Prize law is that part of international law which regulates the practice of capture of ship and cargos
are sea in time of war. If the seizure is lawful, it is held to be lawful prize of war. If not, the property
hs to be returned to the foreign nation.
g) Mercantile Customs
- “Mercantile” meaning: relating to, or characteristic of trade or traders; commercial
- Special kind of law consisting of body of mercantile usage known as the Law Merchant. Eg:- Whole
of Indian laws relating to hundis is derived from mercantile customs.

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 Module II - SOURCES OF LAW

LEGISLATION
DEFINITION

 Salmond: “Legislation is that source of law which consists in the declaration of legal rules by a
competent authority.”
 Gray: “Legislation is the formal utterances of the legislative organs of the society.”
 Austin: “There can be no law without a legislative act.”

LEGISLATION AS SOURCE OF LAW

 Analytical School – A typical law is a statue and legislation is the normal process of law-making.
Do not accept Custom as a source of law. Do not approve the judiciary usurping legislative
functions. Attaches too much importance to Legislation.
 Historical School – Legislation is the least creative source of law. It has no independent creative
role and its only purpose is to give a better form to and make more effective the customs
spontaneously developed by the people. Does not regard legislation as a source of law.

SUPREME AND SUBORDINATE LEGISLATION

 Salmond – Legislation is either Supreme or Subordinate.

Supreme legislation proceeds from sovereign power of the State and cannot be
repealed/annulled/controlled by any other legislative authority.
Subordinate legislation proceeds from any authority other than the sovereign power. It is dependent
on some superior authority for validity and continued existence.
 SUBORDINATE LEGISLATION
Salmond referred to 5 kinds of subordinate legislation:
i. Subordinate legislation in the colonial field: Powers of self-governance entrusted with colonies were
subjected to control of the imperial legislature which could repeal, alter or supersede any colonial
enactment. Not case anymore, since the passing of Statute of Westminster of 1931, as every
dominion legislature has the power to repeal or amend any law.
ii. Judiciary: Judiciary also has certain legislative powers and can make rules for regulation of their
own procedure. It is a true form of legislation, but cannot create new laws by way of precedent.
iii. Municipal authorities are empowered to make bye-laws for limited purposes within their own
areas.
iv. Private parties like Universities and Companies can make autonomic bye-laws that are recognised
and enforced by Courts, for government of its members, regulation of undertakings, etc.
v. Delegated Legislation
- Also called executive legislation. While the main function of the executive is to enforce laws, in
some cases the power of making rules is delegates to various government departments.
- Used to deal with the high workload of Parliament. The Parliament passes skeleton bills and leaves
the details to concerned departments. This is done because legislations are getting more complicated,
detailed and technical every day and Parliamentarians generally do not have the time or expertise to
frame them. Specific departments will have more expertise about the issue and local conditions.
- Delegated legislation gives flexibility to law and there is ample scope of adjustment based on
experience gained during implementation of particular legislations.
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 - Ways of controlling delegated legislation:
a) Parliamentary Control: Parliament always has general control to modify, amend or refuse bills
presented before it.
b) Parliamentary Supervision: Laws made under delegated legislation should be presented before the
legislature for approval. It may approve, amend or repeal the law post examination.
c) Judicial Control: Parliamentary control is direct, while control of courts is indirect. Courts cannot
annul subordinate enactments, but they can declare them inapplicable in particular cases. Judicial
control operates on the doctrine of ultra vires; all delegated legislations have to undergo a test to see
whether it falls within the periphery of power conferred. Courts also possess certain direct power
over the acts and procedures of public authorities, like writs, injunctions, declarations, etc.
d) Trustworthy Body: Internal control of delegated legislation can be ensured only of the power is
delegated to a trustworthy person or body of persons.
e) Publicity: Public opinion is a good check on arbitrary exercise of delegated statutory powers.
Antecedent publicity of delegated laws will heighten the impact of public opinion.
f) Expert’s Opinions: In technical matter, expert opinion must be taken to minimise dangers of vague
and blanket legislations.

CODIFICATION

 Oxford Dictionary - “Code is a systematic collection of statutes, body of laws, so arranged as to

avoid inconsistency and overlapping.”
 Codification is the systematic process and reduction of the whole body of law into a code in the form
of enacted law. It implies the collection, compilation, methodical arrangement, systematization and
reduction to coherent form the whole body of law on any particular branch into a systematic, clear
and precise statement of general principles and rules.
 Codes have existed since ancient times. Eg: The Codes of Manu, Brihaspati, Narada, Yajnavalkya,
etc., Code of Justinian in Roman law, the Code of Napoleon, etc.
 Kinds of Codification:
i. Creative Code: Makes a law for the first without referring to any other law. Law making by
legislation. Eg:- IPC.
ii. Consolidating Code: Consolidates the whole law – statutory, customary and precedent- on a
particular subject and declares it. Eg:- Code of Justinian, Transfer of Property Act of 1882, etc.
iii. Both Creative and Consolidating: Makes a new law as well as consolidate the existing law on a
particular subject. Eg:- Legislation on Hindu law in India.
 Merits of Codification:
i. Law can be known with certainty.
ii. Necessary to avoid evils of judicial legislation.
iii. Necessary to protect customs which are suited to the people of a country.
iv. Necessary to bring about a sense of unity in the country.
 Demerits of Codification:
i. Brings rigidity into the legal system.
ii. Results in uniform regimentation of lives of people across the whole country by ignoring differences
in customs, traditions, sentiments, aspirations, etc. Liberty and individuality are sacrificed for
uniformity.
iii. Since codes are created by many persons working together, some provisions might be incoherent.
This demerit can be largely addressed by employing competent persons.

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iv. Savigny – A code makes the defects of law obvious and thereby encourages the knaves to take
advantage of them.
v. Might disturb the fabric of existing legal order and create confusion by creating new rights and duties
in place of old ones.
vi. Codes of France and Germany have failed. Indian codes have, however, been hailed as being
“triumphantly successful” with almost unanimous support in its favour.
vii. No code can be complete and self-sufficing. There is always an accumulating mass of comments and
decisions. This demerit can be addressed by revising the code from time to time.

RULES OF INTERPRETATION

 Salmond – “By interpreting or construction is meant the process by which the courts seek to
ascertain the meaning of legislation through the medium of the authoritative forms in which it is
expressed.”
 Two kinds of interpretations: Grammatical and Logical.
1. Grammatical Interpretation
 In Grammatical interpretation, only the verbal expression of law is taken into consideration and the
courts do not go beyond the litera legis. In Logical interpretation, the courts are allowed to depart
from the letter of the law to try and find out the true intention of the legislature.
 It is the duty of courts to act upon the true intention of the legislature and, in ordinary cases, the
grammatical interpretation is accepted as the true intention. It is to be taken for granted that the
legislature meant what it said and the judges are not at a liberty to modify the letter of the law, in
ordinary cases.
 Sussex Peerage case – “if the words of the state are in themselves precise and unambiguous, then no
more can be necessary than to expound words in their natural and ordinary sense. The words
themselves alone do, in such cases, best declare the intention of the law giver.”
 Salmond – 3 defects affecting grammatical interpretation:
(i) Ambiguity, (ii) Inconsistency, and (iii) Incomplete law
 Golden rule:– While literal interpretation must be followed, it must be applied very cautiously. It
should not be followed if the law is defective. The objective of literal interpretation is to ascertain the
intention of the legislature and ratio legis. In difficult cases, the court may beyond the letters of the
law and seek help from other sources.
- Additional Commissioner of Income Tac v. Surat Art Silk Cloth Manufacturer’s Association
– beneficient construction of states – “...if the language of a statutory provision is ambiguous and
capable of two constructions, that construction must be adopted which will give meaning and effect
to the other provisions of the enactment, rather than that which will give none.”
- However, penal statutes must be always construed strictly i.e. in terms of offences and
punishments. If a penal statute provides two reasonable interpretations, the court must lean towards
the one which exempts the person from a penalty, rather than one which imposes penalty.
 The Mischief Rule:- Takes origin from Heydon’s case.
- When the true intention of the legislature cannot be determined by literal interpretation, the Court
may consider the historical background of the relevant statute. The judges may look at the law before
the Act to find out the mischief in the law which the statute was intended to remedy.
- The statute is to be construed in such a manner as to suppress the mischief and advance the remedy.

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2. Logical interpretation
 Logical interpretation is to be applied only when literal/grammatical interpretation is not
adequate/possible.
 In case of ambiguous words or alternative interpretations, the interpretation which fulfils the object
of the law is to be upheld.
 Takes into consideration the historical facts and the needs of society.
 Gray – “Logical interpretation calls for the comparison of the statute with other statutes and with the
whole system of law and for the consideration of the term and circumstances in which the statute was
passed.”
3. Strict and Equitable Interpretation
 When the litera legis suffers from ambiguity and the interpretation that is more obvious and
consonant with the popular use of the language, it is called strict or literal interpretation.
 When the court rejects this for another interpretation which conforms better to the intention of the
legislature, in spite of not being consonant with popular use of the language, it is called equitable
interpretation.
4. Restrictive and Extensive Interpretations
 Equitable interpretation can be either restrictive or extensive, depending on its comparison with the
literal interpretation of the statute.
 Rule of restrictive interpretation is applied to penal and fiscal statutes because these laws impose
restrictions on the liberty of an individual or his enjoyment of property. In such cases, Courts are
against such an interpretation imposing a greater burden on the subject than is warranted by the
literal interpretation.
 Nisbet v. Rayne and Burn – Cashier at a coalmine was robbed and murdered while doing his job.
Widow claimed damages under the Workmen Compensation Act, 1906. The Judge accepted that the
murder did not fit the description of ‘death by accident’ given in the Act. However, he said it was his
duty to stretch the interpretation to a wider, more reasonable meaning and granted the widow
compensation.
5. Historical Interpretation (Same as mentioned in mischief Rule)
 Takes origin from Heydon’s case.
 When the true intention of the legislature cannot be determined by literal interpretation, the Court
may consider the historical background of the relevant statute. The judges may look at the law before
the Act to find out the mischief in the law which the statute was intended to remedy.
 The statute is to be construed in such a manner as to suppress the mischief and advance the remedy.
6. Sociological Interpretation
 Sociological school jurists give Judges a lot of freedom in interpreting statutes.
 Kohler – For determination of correct interpretation, the Courts may refer to the history of social
movements and enquire into the social needs, objects and purposes which were agitating the society
at the time of the legislation and which the statute had in view.
7. Equity of a statute
 Coke – “Equity is construction made by the judges that cases out of the letter of a statute yet being
within the same mischief or cause of making the same, shall be within the same remedy that the
statute provideth; and the reason thereof is for that the law makers could not possibly set down all
cases in express terms.”
 Riggs v. Palmer – Held that murderer could not be permitted to inherit under the will of his victim
and transmit rights to his own heirs, although literal interpretation of statutes did not prohibit it.

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 8. Rule of Casus Omissus
 The rule of casus omissus provides that omission in a statute cannot, as a general rule, be supplied by
construction.
 Parkinson v. Plumpton – Catering Wages Act of 1943 prescribed minimum wages for workers in
the industry. Schedules of the Act also specified minimum wages in cases where the employer
supplied workers with full board and lodging and in cases where nothing was provided.
A female worker in a catering establishment claimed that she was paid less than the minimum wages
prescribes because she was provided with full board, but not lodging.
Judge held that there was a casus omissus when it came to a situation where board is provided, but
not lodging as within the meaning of the schedule and thus, gave a judgement in favour of the
defendant because he “can’t rewrite the legislation.”

PRECEDENT
PRECEDENT AS SOURCE OF LAW

 Keeton – “A judicial precedent is a judicial decision to which authority has in some measure been
attached. It must be noted at once, however, that partly because of the high status which judges
occupy in political and social organization and partly because of the importance of the issues which
they decide, judicial decisions have at all times enjoyed high authority as indications of law.”
 Blackstone – “For it is an established rule to abide by former precedents, where the same points
come again in litigation: as well as to keep the scale of justice even and steady and not liable to
waver with every new judge’s opinion, as also because the law in that case being solemnly declared
and determined, what before was uncertain, and perhaps indifferent, is now become a permanent
rule, which it is not in the breast of any subsequent judge to alter or vary from, according to his
private sentiment.”

NATURE OF PRECEDENT

 Precedent is purely constitutive and in no degree abrogative i.e. a judicial decision can make a law
but cannot alter it.
 When there is a settled rule of law, the judges are obliged to follow the same and cannot substitute it
for their personal opinions.
 The function of precedents is limited to filling vacancies of the legal system and supplementing the
imperfectly developed body of legal doctrine.

AUTHORITY OF PRECEDENT

 The reason why a precedent is recognized is that a judicial decision is presumed to be correct. That
which is delivered in a judgement is taken to be the established truth and the practice of following
precedents creates confidence in the minds of litigants. Law becomes certain and known. It is
conducive to social development and makes administration of justice even-handed and fair.
 Circumstances which destroy or weaken the binding force of precedent:
i. Abrogation of the decision – A decision ceases to be binding when it has been reversed or
overruled by a higher court, or if a statute/statutory rule inconsistent with it is subsequently enacted.
Eg:- 24th Amendment of the Constitution of India was passed to nullify the SC decision in Golak

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 Nath case. Similarly, the 25th Amendment was passed to nullify the SC decision in the Bank
Nationalisation case.
ii. Affirmation or reversal of the judgement on a different ground – Sometimes a decision is
affirmed or reversed on appeal, on a different point. This deprives it of the absolute binding force it
might have otherwise had, but it still may be followed by Courts with regards to the particular point.
iii. Ignorance of statute – A precedent is not binding if it was rendered in ignorance of a statute or
delegated legislation. Even lower courts can refuse to follow precedents on this ground.
iv. Inconsistency with earlier decisions of Higher Court – A precedent loses it binding force if the
court that decided it had overlooked an inconsistent decision of a higher court. Such a decision is
said to be per incuriam and is not binding on any lower court.
v. Inconsistency with earlier decisions of the same rank – A court is not bound by its own previous
decisions that are in conflict with one another. The court of appeal and other courts are free to choose
between conflicting decisions. Where authorities of equal standing are irreconcilably in conflict, a
lower court may choose to follow the latter decision on the ground that it is the latest decision or it
may refuse to follow the latter decision on the grounds that it was arrived at per incuriam.
vi. Precedents sub-silentio or not fully argued – When a particular point involved in a decision is not
taken notice of and is not argue by a counsel, the court may decide in favour of one party, whereas if
all the points had been put forth, the decision may have been in favour of the other party. Such a case
cannot be an authority on the point which was not argued and this point is said to have passed sub-
silentio.
vii. Decisions of Equally Divided Courts – When an appellate court is equally divided, the practice is
to dismiss the appeal.
viii. Erroneous decisions – Decision founded on wrong principles or in conflict with fundamental
principles of law do not have binding force. However, due to practical considerations, the rule, that
courts are bound by decisions of higher courts and in some cases by their own decision, even though
wrong, must stand as authority until overruled by a higher authority, is followed. This is because
many people might have entered into contracts and deals involving property on the basis of the
previous long standing judgement and it would be unfair to punish them without the ruling of a
higher court.
 Circumstances which increase the authority of a precedent:
i. Number of judges who delivered the judgement.
ii. Eminence of the lawyers who argued the case.
iii. Unanimity of the decision.
iv. Affirmation by a superior court.
v. Older judgements that have not been overruled, are more authoritative.
DO JUDGES MAKE LAW?

1. YES
 Everything discussed above.
2. NO
 Declaratory theory – Judges are no more than discoverer of law. They discover the law on a
particular point and declare it.
 Just wrong.

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METHODS OF JUDICIAL DECISION

 Two methods of judicial decision: Deductive and Inductive.

 In deductive method, the general rule is already fixed and certain. The judges are not required to be
creative, they just apply the clearly laid down law.
 In inductive method, the judge has to start from a particular case and come to the general principle of
law. The process is from the particular to the general.

DEFECTS IN JUDICIAL LEGISLATION

i. Decisions of judges are not intelligible to the common man. Finding out the ratio decidendi requires
a highly trained mind.
ii. They create an atmosphere of uncertainty.
iii. Natural justice principles demand that the law should be known before it is enforced. Precedent
violates this by operating only retrospectively.

KINDS OF PRECEDENTS

There are four kinds of Precedent it may be classified under the following heads:-

1. AUTHORITATIVE PRECEDENTS
According to Salmond, an authoritative Precedent is one which Judges must follow whether they
approve it or not. Authoritative Precedents are the legal sources of law. Authoritative Precedents
establish law in pursuance of definite rule of law which confers upon them that effect. The
authoritative Precedents must be followed by the Judges whether they approve of them or not.
Authoritative Precedents are of two kinds, Absolute and Conditional.
i. Absolute:
In case of absolutely authoritative Precedents, they have to be followed by the Judges even if
they do not approve of them. They are entitled to implicit obedience.
ii. Conditional:
In the case of authoritative Precedents having a Conditional authority, the Court can disregard
them under certain circumstances. Ordinarily they are binding but under special
circumstances, they can be disregarded.
2. PERSUASIVE PRECEDENTS
A Persuasive Precedent is one which the Judges are under no obligation to follow but which they
will take into consideration and to which they will attach great weight as it seems to them to deserve.
Persuasive Precedents are merely Historical. If Persuasive Precedents succeed in establishing law at
all, they do indirectly by serving as the Historical ground of some later authoritative Precedent. They
do not have any legal force or effect in themselves. The Persuasive Precedents can merely persuade
the Judge but it is up to the judge to follow them or not.
3. ORIGINAL PRECEDENTS
According to Salmond, an original Precedent is one which creates and applies a new rule. In the case
of Original Precedent, it is law for the future because it is now applied. The number of original
Precedents is small but their importance us very great, they alone develop the law of the
country. They serve as good evidence of law for the future.
4. DECLARATORY PRECEDENTS
According to Salmond, a declaratory precedent is one which is merely the application of an already
12
 existing rule of law. In the case of declaratory precedent, the rule is applied because it is already law.
In case of advanced countries, declaratory Precedents are more numerous. A declaratory precedent is
good as a source of law as an original Precedent.
The legal authority of both is exactly the same. An original Precedent is an authority and source of
law but both original and declaratory Precedents have their own value.

STARE DECISIS

 “to stand by things decided.” The principle that a question once considered by a court and answered
must elicit the same response each time the same issue is brought before the courts.
 The doctrine of stare decisis has been recognised by CoI and Article 141 provides that the law
declared by the SC shall be binding on all courts in India.
 Bengal Immunity Co. Ltd. v. State of Bihar – “all courts” doesn’t include the SC itself and it is
free to depart from previous decisions if valid reasons exist.
 Mahadeolal v. Administrator-general of West Bengal – The SC held that judges of coordinate
jurisdiction should not set aside one another’s judgements. Eg:- When a single HC Judge is of the
opinion that the previous decision of another single Judge of the same HC is erroneous, he should
refer the matter to a larger bench and should not himself hold the previous decision to be wrong.
 Under the stare decisis rule, the principle of law which has become settled by a series of decisions is
generally binding on the courts and should be followed in similar cases. This rule is based on
expediency and public policy. This is the general, there are, of course, exceptions.

DOCTRINE OF PROSPECTIVE OVERRULING

 In the Golak Nath case, the SC adopted the Doctrine of Prospective Overruling.
 In this case the validity of the First, Fourth and Seventeenth Amendments of the Constitution was
challenged and the amendments were held to be invalid by a 11 Judge SC Bench by 6 to 5 majority.
 However, the SC had previously held the amendments to be valid in Shankari Prasad case and
Sajjan Singh case and on the basis of those verdicts the government had put an end to the zamindari
system and distributed land among peasants.
 If the verdict in Golak Nath, that the amendments were in violation of the Fundamental right to
property, was implemented retrospectively it would have created many complications and upset the
developments made in the agrarian field. Thus, the SC restricted the effect of its decision to future
cases. It was laid down that fundamental rights could not be breached by constitutional amendments
in the future, but whatever had already been done under the 1 st, 4th and 17th Amendments were not to
be disturbed. This is called Doctrine of Prospective overruling.

RATIO DECIDENDI

 "rationale for the decision." or “the rule of law on which a judicial decision is based.”
 Salmond – “A precedent is a judicial decision which contains in itself a principle. The underlying
principle which thus forms its authoritative element is often termed the ratio decidendi. The concrete
decision is binding between the parties to it but it is the abstract ratio decidendi which alone has the
force of law as regards the world at large.”

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OBITER DICTUM

 All that is said by the court by the way or the statements of law which go beyond the requirements of
the particular case and which lay down a rule that is irrelevant or unnecessary for the purpose in hand
are called obiter dicta.
 They only have the force of persuasive precedents and judges can take advantage of them but are not
bound by them.
 Obiter dicta help in the growth and reform of law. Judges are expected to know the law and their
opinions carry weight with the government. The judges can highlight defects in the legal system,
even though it might not be relevant to the case in question.
 Dicta of the highest degree of persuasiveness may often, for all practical purposes, be
indistinguishable from pronouncements treated as ratio decidendi.
 Dr. Goodhart – “Obiter dictum is a conclusion based on a fact, the existence of which has not been
determined by the court.”

CUSTOM
DEFINITION

 Salmond: Custom is the embodiment of those principles which have commended themselves to the
national conscience as principles of justice and public utility.
 Carter: Custom is the uniformity of conduct of all persons under like circumstances.
 Holland: Custom is a generally observed code of conduct.
 Keeton: Customary laws may be defined as those rules of human action, established by usage and
regarded as legally binding by those to whom the rules are applicable, which are adopted by the
courts and applied as sources of law because they are generally followed by the political society as a
whole or by some part of it.

ORIGIN OF CUSTOM

 Vinogradoff: “Social customs themselves obviously did not take their origin from an assembly or
tribunal. They grew up by gradual process in the households and daily relations of the clans, and the
magistrate only came in at a later stage, when the custom was already in operation, and added to the
sanction of general recognition the express formulation of judicial and expert authority.” (Historical
Jurisprudence)

BINDING FORCE OF CUSTOM

i. Customs are the embodiment of those principles which have commended themselves to the national
conscience as principles of truth, justice and public policy.
ii. The observance of certain customs may not be ideal or reasonable, but its continuance ensures
stability and certainty in the legal order.
iii. Observance by a large number of people in society might give a custom the force of law.
iv. Custom rests on popular conviction that it is in the interests of society and this conviction is usually
so strong that it is undesirable to go against it.

14
 v. Paton – Customs benefit the law-givers and codifiers in 2 ways: (i) It provides the material out of
which the law can be fashioned, instead of creating law de novo, and (ii) Psychologically, it is easier
to command reverence of the general public to the law when it can be claimed that it is based on
ancient Customs.

THEORIES REGARDING TRANSFORMATION OF CUSTOM INTO LAW

Two theories: Historical Theory and Analytical Theory.

1. Historical Theory
 Custom is derived from the common consciousness of the people.
 The growth of law does not depend upon the arbitrary will of any individual or any accident; it grows
as a result of the intelligence of the people.
 Savigny – “Law, like language, stands in organic connection with nature or character if the people
and evolves with the people.” “The foundation of the law has its existence, its reality in the common
consciousness of the people….We become acquainted with it as it manifests itself in external acts, as
it appears in practice, manners and custom. Custom is the sign or badge of positive law and not its
foundation or origin.”
 Savigny basically believed that Custom is the law and law is valid only if it promotes, in concrete
form, the true legal instinct of the community it seeks to govern.
2. Analytical Theory
 Advocated by Austin, Holland, Gray, Vinogradoff, etc.
 Austin – Custom is a source of law and not law itself. Customs are not positive laws until their
existence is recognised by the decisions of the courts i.e. Customs only have persuasive value till
they get recognised by courts and become law. Only those customs which satisfy the judicial test can
be enforced by the State and become law.
“A customary law may take the quality of a legal rule in two ways. It may be adopted by a sovereign
or subordinate legislature and turned into a law in the direct more (statute law) or it may be taken as
a ground of a judicial decision, which afterwards obtains as a precedent and in this case it is
converted into law in the judicial fashion. In whichever of these ways it becomes a legal rule, the law
into which it is turned emanates from the sovereign.”
 Holland – Customs are not laws when they arise, but they are largely adopted into laws by State
recognition. The existence of a custom must be proved along with it its reasonability. The legislature
can abrogate customs whether partially or wholly.
 Gray – The law is what the judges declare. Custom is a source of law, along with statutes,
precedents, morality, expert opinions, etc. Custom is not the sole source of law.

KINDS OF CUSTOMS

1. LEGAL CUSTOM
 A legal custom is one whose legal authority is absolute. It possesses the force of law proprio vigour
(by its own force independently).
 The consent of parties concerned is not relevant in legal customs because everyone is bound by it
irrespective of whether they agree to it or not.
 Legal customs are of two kinds, local customs and general customs.
 Local Custom
15
 - Prevails only in some particular, defined locality such as Village, District, State, etc.
- Eg:- A custom for the inhabitants of a parish to enter on certain land for the purpose of dancing,
games and recreation.
- Same requisites as below.
 General Custom
- A general custom in that which prevails throughout the country and constitutes one of the sources of
the law of the land.
- Requisites are same as below.
2. CONVENTIONAL CUSTOM OR USAGE
 A conventional custom is one whose authority is conditional on its acceptance and incorporation in
the agreement between the parties to be bound by it.
 It is an established practice which is legally binding because it has been expressly or impliedly
incorporated into a contract between the concerned parties.
 Same requisites.
 Distinction between Custom and Usage: A usage is binding only when it is not expressly excluded
by the terms of the agreement entered into by the parties while a custom is binding irrespective of
consent of parties. Customs have to be in existence since ancient times/immemorial but usages can
be of recent origin.

REQUISITES OF A VALID CUSTOM

1. Must be proved to be Immemorial

- Blackstone – “A custom, in order that it may be legal and binding, must have been used so long that
the memory of man runneth not to the contrary. SO, if anyone can show the beginning of it, it is no
good custom.”
- English law places a limit to legal memory and fixes 1189 A.D. as enough to constitute the antiquity
of a custom.
- In India, all that is required is to prove the ancient origin of the custom.
- Baba Narayan v. Saboosa – “In India, while a custom need not be immemorial, the requirement of
long usage is essential since it is from this that custom derives its force as governing the parties’
rights in place of the general law.”
2. Must be Reasonable
- Must be useful and convenient to society.
- Reasonableness can be ascertained by looking back at its origin.
- Unreasonableness of custom must be proven, not reasonableness. The unreasonableness must be so
great that its enforcement will result in greater harm than not following it.
3. Must have been Continuously Observed without any interruption from time immemorial.
4. Conformity with Statute Law
- Coke – “No custom or prescription can take away the force of an Act of Parliament.”
- A State can abrogate a custom and not vice versa.
5. Must be Certain and Definite, not vague and indefinite.
6. Observance is Compulsory
- Optional observance does not make a valid custom. It is the duty of the Court to satisfy itself that the
custom is observed by all concerned and not just by anyone who pleases to do so.
7. Must be peaceful in its practice
- If the enjoyment of a custom is not peaceful, then consent is presumed to be wanting in it.
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 8. Must not be opposed to Public Policy or Principles of Morality
9. Must be Universal or General
- Carter – “Custom is effectual only when it is universal or nearly so. In the absence of unanimity of
opinion, custom becomes powerless, or rather does not exist.”

CUSTOM AND PRESCRIPTION

 Custom is an old practice operating as a source of law; Prescription is an old practice operating as a
source of rights.
 When a course of conduct is practiced for a time it gives rise to a rule of law known as custom, but if
it gives rise to a right, it is called prescription.
 Custom is based on long usage, but prescription is based on lost grant and operates as a source of
right.
 A custom must be reasonable and conform to justice, public policy and utility, but that is not
necessary in the case of prescription.
 Prescription was considered to be similar to local custom (not interchangeably usable, just similar).
Prescription was considered as a particular custom confined to an individual.
Local custom relates to a particular locality of members of a particular class (lex loci).
Now they are properly distinguished. Prescription means the acquisition of a right or title by user or
possession in the manner laid down by law.
 The rule regarding time immemorial has been replaced in case of prescription. Uninterrupted
enjoyment for 20 years is considered to be enough to acquire a right to light and air. Custom must be
ancient.

RELATIVE MERITS AND DEMERITS

1. LEGISLATION AND CUSTOM
 Legislation grows out of theory while customary law grows out of practice. Legislation has de jure
existence, while customs have de facto existence.
 Legislations are the newest source and form of law, while customs are the oldest. Legislation is a
characteristic mark of mature legal systems, the final stage in development of law-making
expedients. Customary law is the mark of a primitive society and an undeveloped legal system.
 Legislation expresses a relationship between men and the State, while Customary law expresses the
relationship between man and man.
 Legislations are complete, precise and easily accessible. Customs, not so much.
 Legislation is the result of a deliberate positive process but customary law is the outcome of
necessity, utility and imitation.

2. LEGISLATION AND PRECEDENT

 Legislation has its source in the law-making will of the State, while Precedent has its source in the
ratio decidendi and obiter dicta of judicial decisions.
 Legislations are imposed by courts by the legislature, while precedents are created by the Courts
themselves.

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  Legislation is the formal and express declaration of new rules by the legislature and Precedents are
created by recognition and application of law by Courts in the administration of justice. Legislation
creates Statute law and Precedent cerates Judge-made law.
 Advantages of LEGISLATION OVER PRECEDENT:
i. Legislation is both constitutive and abrogative, while precedent is merely constitutive i.e.
Legislation is a source of law as well as the most effective instrument for abolishing existing law. It
contributes towards growth as well as reform of law.
ii. Legislation is based on the principle of division of labour and thus, is more efficient. Legislative
and judicial functions are separated in this case. In case of precedents, however, functions of
legislation and interpretation are undesirably combined.
iii. Legislation satisfies the requirement of natural justice that laws shall be known before they are
enforced. Laws are declared in the form of legislations to the people and later enforced in the form
of punishment. This is not the case with precedents, as they are created and declared in the very act
of applying and enforcing them.
iv. Legislation is ordinarily prospective, while precedent is retrospective only. Precedent is
dependent on the accidental course of litigation while legislation is independent of it and can move at
once to fill a vacancy or doubt in the legal system. Legislations can make rules for cases that have
not yet risen, while precedents have to wait till an actual incident comes before a Court.
v. Legislation is superior in from to precedent because it is more brief, clear, easily accessible and
knowable. Case-law is buried from sight and knowledge and is a huge, ever growing mass of
litigation records. Legislation is expressed in a general and comprehensive manner.
 Advantages of PRECEDENT OVER LEGISLATION:
i. Dicey – “The morality of courts is always higher than the morality of politicians.” Courts are
impartial and fearless.
ii. Salmond – Statute law suffers from rigidity because Courts are bound by the letter of the law, while
case laws enjoy more flexibility because analogical extension of precedents is allowed.
iii. Legislation might be abstract but precedent is definite.
iv. Amos – Law based on precedents is not more uncertain that that based on enacted law. Matter of
fact, codified French law is much more uncertain than the un-codified English law. Neither
legislation nor precedent alone can completely meet all eventualities; a mixture of both is needed.
Gray – Case law is superior to statute law and all law is judge-made law. “The Shape in which a
statute is imposed on a community as a guide for conduct is that statute as interpreted by the courts.
Courts put life into the dead words of the statute.”

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 MODULE III: CONCEPT OF PERSON

PERSON- DEFINITION AND NATURE OF PERSONALITY

Being who is capable of sustaining rights and duties.

Will is the essence of personality. A legal person is one capable of will. (Why slaves are not persons)
Not restricted to individuals. Under IPC, includes any company or association or body persons,
whether incorporated or not.
 Salmond – “A person is any being whom the law regards as capable of rights or 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 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 and this is the exclusive
point of view from which personality receives legal recognition.”
LEGAL STATUS OF UNBORN CHILD

Unborn persons have legal personality and are capable of real and present ownership property before
birth. They are capable of inheriting property, via wills as well as in case of intestate father, subject
to certain restrictions. (Eg:- Testator cannot direct fortune to be accumulated for a century and then
be distributed amongst his descendants.)
 A child in the womb practically has the same rights as a living person for many purposes. A
posthumous child is entitled to receive compensation for death of his father and wilful or negligent
injury inflicted on him, leading to his death, amounts to murder or manslaughter. A pregnant women
sentenced to death cannot be executed till she gives birth.
 The anticipatory proprietary and personal rights of an unborn person are contingent on his birth as a
living human being. Upon failure to be born alive his legal personality will fall away ab initio.
 A posthumous child may inherit, as long as he does not die in the womb or is still born. Unless he’s
alive after birth, even if it’s just for an hour, inheritance fails to take effect.
 When beneficiaries of a trust include unborn persons, the trust cannot be varied without consent of
the Court on behalf of unborn persons.
LEGAL STATUS OF DEAD PERSONS

 Personality of human being ceases to exist upon death in the eyes of law. Dead persons are no longer
legal personalities and have no rights or liabilities. They do not own property anymore, passed on to
successors or the Court/Government in case of intestate dead persons.
 Law does not grant rights to dead persons, but it does recognise desires/interests of dead persons
with respect to 3 things:
i. Body – A corpse is no one’s property. Directions in a man’s will regarding disposal of his
body are not legally binding. The law secures a decent burial for all dead persons and
violation of a grave is a criminal offence. However, the law provides people the power to
protect their own corpses from the indignity of anatomical uses.
Williams v. Williams – Old English case, held that one cannot make a will regarding disposal
of his own body (to a museum, medical college, etc.). No longer relevant.
A trust to maintain all the graves in a graveyard is valid as it would amount to a
public/charitable trust. However, one cannot make trusts for the upkeep of his own and/or his
ancestors/descendants’ graves as it would be a private trust and infringe the rule against
perpetuity.

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 Advocate-general v. Yusufah – Gift for perpetual upkeep of a Saint’s tomb was held to be a
charitable gift and thus, valid, in spite of being perpetual.
Jamshedji v. Soonabai – Muktad ceremonies of Parsis promote the religion and its practices
and thus, trusts for such ceremonies are valid.
ii. Reputation – Dead persons are provided protection against damage to their reputation to
some degree. However, this right is practically that of his living descendants, because a libel
upon a dead person is punishable as a misdemeanour only when its publication affects the
rights of living persons.
iii. Estate – Laws of succession allows desires of dead persons to regulate their property and
actions of living descendants. The law respects and enforces the wishes of dead persons to
distribute assets as gifts or charity, long as it is laid down in a proper document (will).
LEGAL STATUS OF ANIMALS

Only human beings are natural persons. Animals are neither natural nor legal persons. They are often
the objects of legal rights and duties, but never the subjects. No act of an animal is explicitly
permitted or prohibited i.e. their acts are neither lawful nor unlawful.
 Beasts have no legal rights or duties and hurting a beast is not a wrong to the beast itself but rather
the owner of the beat or society of mankind.
 Some writers argue that since the laws prohibiting cruelty towards animals co-relate with rights
vested in them and thus, animals are persons.
 Keeton – Animals and trees were tried for offences against humans under Greek law. Thus, they
were considered to have duties without any rights. This continued in the Middle Ages as well (the
cock in Germany, caterpillars in France). In all these cases, beasts were considered capable of
sustaining duties and to be a person to that extent. Similar to Jewish law of “the ox that gores must
not be eaten.”(it must be stoned and flesh not to be eaten)
 Even though charitable trusts are generally meant for advancement of human beings, trusts to protect
animals that contribute towards moral growth of society or promotes religion (cows, buffalos, etc.)
are valid.
 Cases where beasts possess legal rights:
i. Cruelty to animal – Criminal offence
ii. A trust for benefit of a class of animals, not individual animals, is valid and enforceable as
public and charitable trust.
 Salmond – Duties towards animals are duties towards society itself. It is not a matter of private
rights of the animals, but the public rights of the community at large and the community’s interest in
the well-being of even dumb animals belong to it. However, when there is a conflict between the
interests of humans and animals, human interests should always be preferred.
LEGAL STATUS OF IDOL

 Idols are juristic persons capable of holding property, but similar to Minors as somebody else
(Priests, Pujaris) acts on their behalf as guardians.
 Pramatha Nath Mullick v. Pradyumna Kumar Mullick – Held that idols are juristic persons and
will of the idol as to its location must be respected.
 Yogendra Nath Naskar v. Commissioner of Income Tax – SC held that Hindu idols are juristic
persons capable of holding property and being taxed (through shebaits entrusted with its possession
and management) as an individual under the Income Tax Act. Gods or other supernatural beings are
not persons in law, but when the deity/idol is a symbol of a particular purpose indicated by donor,

20
 it’ll be a legal person in that capacity alone. Since an idol can own property, it is allowed to be taxed
as well.
 Mosques are not artificial persons in the eye of law and thus, cannot be sued. Question regarding
juristic personality of mosques is not clarified.

LEGAL STATUS OF MINOR

 The legal status of the minor under the Indian Contract Act, 1832. According to the Indian Majority
Act, 1875; a minor is a person below 18 years of age. A minor is considered a natural person and has
a legal identity.
 Similar to idols.

KINDS OF PERSONS:

1. Natural Persons – Human beings regarded to be capable of rights and duties. Excludes slaves,
convicts, still born babies.
2. Legal Persons – Real or imaginary beings to whom personality is attributed by way of legal fiction.
Two essentials (double fiction) of legal persons: Corpus (body) and Animus (personality/will). Eg:-
Institutions, groups of human beings, mass of property.

KINDS OF LEGAL PERSONS:

1. Corporations – An artificial/fictitious person constituted by the personification of a group or series

of individuals i.e. corps is a group or series of individuals (called members). Two types –
Corporation aggregate and Corporation sole. 3 conditions for existence of corporations: (i) Must be a
group of human beings associated for a certain purpose. (ii) There must be organs through which the
group/body acts. (iii) A will/personality, which is distinguished from the individual members, is
attributed to the corporation by legal fiction. (Eg:- Members can be perfectly solvent but the
corporation may still become insolvent. Death/change of members has no impact. No shareholder
can claim a particular part of the corporation as belonging to him nor can the corporation lay any
claim to properties of shareholders.)
A corporation can sue and get sued by others. It can have its own property and rights and duties. It is
not affected by changes in members.
2. Institutions – The corpus or the object personified is not a group of individuals but an institution
itself. Eg:- College, Church, Hospital, etc.
3. Fund or Estate – The corpus/object personified is a fund/estate reserved for a particular cause. Eg:-
Fund for charity, an estate under a trust, property of a dead man, estate of an insolvent, etc.

KINDS OF CORPORATION:

i. Corporation Aggregate
 This is a normal corporation where the corpus is a group/body of individuals incorporated for a
specific purpose.
 Same features as discussed above.
ii. Corporation Sole
 Corporation sole is an incorporated SERIES of successive persons.
 This type of corporation has only one member at a time and has perpetual succession (still there
might be periods of vacancy or when there is no one to discharge the duties)

21
  The single person has the capacity to take, purchase, hold and dispose land and hereditaments. He
can also sue for injuries to the property under his care.
 A corporation sole does not require a seal, unlike corporation aggregate, because there is no need to
show evidence of incorporation.
 Main purpose is to ensure uniformity and continuity.
 It is also an example of dual personality as the person may enter into a legal relation with himself in
another capacity. Eg:- The King of England confers rights and duties on himself also, as an
individual. Same with President of India.
 Eg:- The President of India, the Comptroller and Auditor-General of India, Cabinet Ministers,
Secretaries of State, etc.

DIFFERENCES

CORPORATIONS FIRMS
Has an existence and legal personality of its Not a legal person.
own, separate from its members or
shareholders.
Possible to enter into contracts with its Cannot enter into contracts with its members.
members, due to its separate personality.
Can possess property and have its own rights Property of the firm is the property of the
and duties different from it members. members.
Can exist with just 1 sole member. Requires more than 1 member.
Has permanent existence. Partnership firms come to an end with death
of the partners.

CORPORATIONS NATURAL PERSONS

Corporation are created artificially through a Birth and death as a result of the working of
process laid down by law. Same for law of nature.
dissolution.
It is absolutely essential that a corporation A natural person can act himself i.e. not
must act through its agents. required to get work done through agents.
Powers of a corporation are defined inn There are no restrictions on what a natural
instruments of incorporation (MoA and person can do.
AoA). Even in full consensus, the members
cannot go beyond the Memorandum of
Association, even though the MoA itself can
be amended. (Ashbury Railway Carriage
and Iron Co. v. Rich, L.R,)

THEORIES OF CORPORATE PERSONALITY:

1. FICTION THEORY:
 Propounded by Savigny.
 Personality is attached to corporations/Institutions/Funds by pure legal fiction.
 There is double fiction in case of corporations (i. Given legal entity, ii. Clothed with will of an
individual person.)
 The fictitious personality is different from that of the members and has a will of its own, based on the
essence and unity of the ideal whole that is not affected by change of one or more (even all) of the
members. It is a fictitious creature of law.
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  Sir Frederick Pollock – English Common law does not recognise fiction theory. Unincorporated
bodies are not legal persons in English law. Incorporation is necessary for a body of individuals to
have collective liabilities and powers (corporate character). Mere ordinary social clubs are not legal
persons and cannot sue or get sued.
2. REALISTIC THEORY:
 Propounded by Gierke (German Jurist).
 This theory has another name also i.e., organic theory. This theory says that every group has a real
will, real mind, and a real power of action. A corporation has all the characteristics which a natural
person has. Therefore, juristic person are real in the same sense in which human beings are. Legal
personality is not fictitious, nor does it depend upon state's recognition. The emphasis, in this theory
on corporate life contains elements of reality (at least in the modern age), but to attribute real will to
the corporation and to compare it with biological organism leads the theory to absurdity.
3. CONCESSION THEORY:
 Legal personality is conferred only by law and the only realities are the sovereign and the individual.
Other groups are treated as persons merely by a concession on the part of the sovereign.
4. BRACKET THEORY:
 Propounded by Ihering (German Jurist).
 Members of a corporation, who are the actual bearers of rights and duties, are placed under the
bracket of the “corporation” because it is not practical to always refer to the innumerable individual
members of the corporation.
 Hohfeld (American jurist who advocated a variant of the Bracket theory) – Corporate personality is
the creation of arbitrary legal rules to facilitate proceedings initiated by or against corporations in
Courts. The jural relations actually decided by the Courts are those which relate to the members of
the corporation and only they are real persons.
5. PURPOSE THEORY:
 Propounded by Brinz (German Jurist).
 Purpose theory says that only human beings have personality. Juristic persons are no persons at all.
They are simply subject less properties' meant for certain purposes. This theory was formulated
mainly to explain the stifung (foundations) of German law and hereditas jacens of Roman law. The
theory has no application to English or Indian law where judges have repeatedly held that
corporation is persons.
 Hohfeld's theory: Hohfeld has also given a theory about corporate personality. His theory is closely
related to the Bracket theory. He says that only human beings have rights and duties and corporate
personality is merely a procedural form, which is used to work out in a convenient way for
immediate purpose, a complex class of jural relation.

NATIONALITY OF CORPORATION

 The nationality of a corporation has come into question many times because of its lack of physical
existence.
 Generally, a company incorporated in accordance with Indian law is an Indian corporation and if it is
a foreign nation, it will be a foreign corporation.
 Only Indian companies can se and get sued in Indian courts.
 Normally, place of incorporation is enough to settle the question of nationality. However, it gets
more difficult during times of war. The Courts have to decide whether the corporation is an enemy
one or a friendly one.

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  The general principle regarding domicile is that the corporation is domiciled wherever its office/head
office is registered, provided that it carries on business there.
 In the Daimler case (1916) [Daimler company ltd. v. Continental Tyre and Rubber Co. Ltd.],
the corporation was held to be an enemy corporation with enemy domicile in spite of it being
registered in and carrying on business in England, because all of its shareholders were German. The
argument that the nationality of the corporation is different from that of its members was not
considered and the court decided that since the persons in control of the company were residing in or
adhering to an enemy state, the corporation would also be an enemy.
 A corporation may also have more than one domicile. Like one domicile where its registered office
is situated and one domicile where the corporation has controlling influence. (Swedish Central Co.
v. Thompson)

LIABILITIES OF CORPORATION

 A corporation owes both civil and criminal liability for acts committed by its agents.
 Civil liability – (i) Torts - A corporation is liable for tortious acts of its agents/servants, long as the
act was done in the course of employment and within the powers of the corporation (Vicarious
liability).
(ii) Contracts – General rule is that a corporation contracts under a seal and the seal is evidence of
assent of the corporation. There are exceptions to this rule.
The relation between corporation and agent is the same as master and servant and thus, the agent has
to act within the scope of his authority if he wishes to bind the corporation. The capacity of a
corporation to act is limited/regulated by the terms of its charter (MoA) and the statute creating it. If
the act committed is beyond these powers, it would be ultra vires and not binding on the corporate.
 Abrath v. North Eastern railway Company – Railway Company prosecuted a doctor for giving
fake injury certificate to victim in a railway accident case. He was acquitted and proceeded to sue the
railway company for damages for tort of malicious prosecution. However, it was held that the
corporation was not criminally or tortuously liable because only those acts that fall within the scope
of the charter of incorporation can be attributed to the corporation, and such illegal acts are ultra
vires and beyond the capacity of the corporation.
 Citizens Life Assurance Company v. Brown – A superintendent of the company circulated a letter
containing allegations against an ex-employee to insurance policy holders. The ex-employees
brought a suit against the company for damages. The Corporation was held liable for the tort of
defamation because the act was committed by the servant in course of his employment.

CRIMINAL LIABILITY OF A CORPORATION

 Since a corporation does not have a mind of its own it cannot have a guilty intention necessary for a
crime. This is why, initially, corporations were exempted from criminal liability. Now they can be
punished for nonfeasance or misfeasance (not performing or wrongly performing statutory duties).
Punishment is usually in the form of fines.
 Keeton – 3 elements necessary for criminal liability of corporation:
(i) Must be a crime where guilty state of mind need not be proved,
(ii) Must be an offence where the act/omission of the agent is equivalent to an act/omission of the
corporation, and
(iii) Punishment must be a fine, at least as an alternative, or something that can be inflicted on the
corporation.

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  Agents of a corporation are in fact agents of the beneficiaries and there is nothing wrong if the
beneficiaries are made to suffer for the act/omissions of their agents. Thus, the argument that
corporations should not be held criminally liable because the beneficiaries suffer for the acts of the
agents do not hold strong.

LEGAL PERSONALITY OF STATE

 The state is a legal person in international law. This personality maybe conferred on a state by
international formal recognition by the United Nations (also a legal personality itself).
 In USA, the State is recognised as a person, the federation as well as the individual states. Legal
proceedings are started in the name of “the people” or “the State of New York (for example)”.
 In India, the state is a juristic person. It can sue and can be sued. Article 300 of the Indian
constitution provides for the same. The Civil Procedure Code also has provisions for the same.
 For a long time, English law did not recognise the State as a corporation or a legal person due to the
monarchical government. The King was like a corporation sole and held all powers of the
government and public property.
 Holland – The State is a greater juristic person and enjoys many quasi-rights against individuals and
is liable to many quasi-duties in their favour. It is usually a great landed proprietor.

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 MODULE IV: RIGHTS AND DUTIES

WRONG
Salmond – “A wrong is simply a wrong act – an act contrary to the rule of right and justice.”
-
-
Two types: Legal (violation of justice acc. to the law) and Moral (might or might not be a violation
of the law.)
DEFINITION OF LEGAL RIGHTS

 Holland – “A right is a capacity residing in one man of controlling, with the assent and assistance of
the State, the actions of another.”
 Justice Holmes – “A legal right is nothing but the permission to exercise certain natural powers and,
upon certain conditions, to obtain protection, restitution, or compensation by the aid of public force.”
 Gray – “A legal right is that power which a man has to make a person/persons do or refrain from
doing a certain act/acts, so far as the power arises from society imposing a legal duty upon a
person/persons.
 Austin – “A party has a right when another/others are bound or obliged by the law to do or forbear
towards or in respect of him.”

ESSENTIAL ELEMENTS OF LEGAL RIGHT

According to Salmond, every legal right has 5 essential elements:

i. There must be a person who is the owner of the right i.e. subject of the legal right, person of
inherence, etc. The person need not be a determinate (society at large) or an ascertained (unborn
child) person.
ii. A legal right accrues against another person/persons who are under a corresponding duty to respect
that right. They are called subjects of the duty or persons of incidence.
iii. Content/substance of the legal right: It may either be an act which the subject of incidence I bound
to do or it may be a forbearance on his part.
iv. Object of the right: Also called subject matter of the right i.e. thing over which the right is
exercised.
v. Title to the right: Facts must show clearly how the right has been vested in the owner of a right i.e
via purchase, gift, inheritance, etc.

THEORIES OF LEGAL RIGHTS

1. WILL THEORY
 Exponents are Austin, Holland, Pollock, etc.
 Acc. to this theory, a right is an inherent attribute of human will and is derived from the exercise of
this will.
 The Will theory was inspired and extended by the doctrine of natural rights, which considers the
function of law to be the conferring of certain powers and freedoms to individuals in the form of
legal rights. A legal right is a power conferred by law.
 Holland – “A legal right is the capacity residing in one man of controlling, with the assent and
assistance of the State, the actions of another.”

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  Justice Holmes – “A legal right is nothing but the permission to exercise certain natural powers and,
upon certain conditions, to obtain protection, restitution, or compensation by the aid of public force.”
2. INTEREST THEORY OF RIGHTS
 Main advocate is Ihering, along with Salmond, Buckland, etc.
 Ihering – “A legal right is a legally protected interest.”
 He puts emphasis on the material element of interest, instead of will.
 Buckland – “A legal right is an interest or an expectation granted by law.”
 Salmond – “A legal right is an interest recognised and directed by rule of right.”
 Allen – Tried to find common ground between Will and Interest theories. ‘The essence of a legal
right is not legally guaranteed power by itself nor legally protected interest by itself, but the legally
guaranteed power to realise an interest.’ A correct theory of legal rights must take both elements
(Will and Interest) into consideration.
3. THEORY OF DUGUIT
 Acc. to Duguit, the basis of law is social solidarity.
 Will is not as essential element of law or right as emphasis on will is anti-social and shows men as
being in conflict with each other.
 Duguit also rejected the whole concept of legal rights because there is no conflict of interest between
society and individuals. He was so against the idea that he said the term ‘right’ should be removed
from legal vocabulary.
4. TOTALITARIAN VIEW
 Whole concept of legal rights is wrong.
 Only the State is real and not much importance is to be attached to individuals.
 The State is omnipotent and all-embracing, and individuals have no existence independent of the
State.
 All rights belong to the State and individuals cannot claim anything.

HOHFELD’S ANALYSIS OF RIGHTS

 ‘A right is a legal interest that imposes a correlative duty.’

 The term ‘right’ was frequently used to refer to other legal interests like powers, privileges and
immunities, so Hohfeld proposed to make the distinctions by using correlatives and opposites.
 Based on Salmond’s earlier system which had 3 categories of rights:
i. Rights in the strict sense i.e. interests protected by the law by imposing duties with respect
to the rights
ii. Liberties are defined as “interests of unrestrained activity.”
iii. Powers are “when the law actively assists me in making my will effective.”

Jural relations

 Hohfeld’s dissatisfaction with all legal relations being classified into just rights and duties led to the
creation of eight fundamental concepts: Right, Duty, Privilege, no-Right, Power, Liability, Immunity
and Disability.

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 
 Vertical arrows connect Jural Correlatives i.e. ‘two legal positions that entail each other.’
Diagonal arrows connect Jural Opposites i.e. ‘two legal positions that deny each other.’
 If X has a power, Y has a liability. They are, therefore 'jural correlatives'. A liability in Y means the
absence of immunity in him. Therefore, immunity and liability are jural opposites.
 A right is an affirmative claim against someone else, whereas a privilege is someone’s exemption
from someone else’s right claim.
 Power is someone’s affirmative control over a specific jural relation about another, whereas
immunity is someone’s independence from another’s legal power or control over some jural
relations.
 JURAL CORRELATIVES:
i. Rights and Duties
- A legal position deriving from the imposition of responsibility on someone else is known as a right
or claim. Legal rights are always accompanied by legal obligations. If necessary, state coercion is sed
to enforce valid rights/claims. (Hohfeld preferred ‘claim’ as a more accurate and adequate term over
‘right’)
- The example of X having a right against Y to keep off of X’s land. The invariable corollary of this is
that Y has a duty to X to keep off X’s territory.
ii. Privileges/Liberties and No-Rights
- Privileges are permissions to act in a given way without being held liable for the harm caused to
others who, at the same time, are unable to ask the authorities to intervene. “To the degree that the
defendants have privileges, the plaintiffs have no rights”
- Hohfeld preferred ‘privilege’ over ‘Liberty’.
- For example, the fundamental rights mentioned in Part III of the Indian Constitution, are in fact the
‘privileges’ mentioned by Hohfeld as they provide that the State has a correlative ‘no-right’ to
interfere in the exercise of these freedoms.
iii. Powers and Liabilities
- Power is someone’s affirmative control over a specific jural relation about another.
- Liability is defined as susceptibility to someone exercising power.
iv. Immunity and Disability
- Immunity refers to the state of being protected from having one’s rights altered by another. Disability
is the lack of power to change legal entitlements.
- Eg:- (i) Citizens are guaranteed freedom of speech by the Constitution. The Legislature is disabled
and cannot wield any power in this regard, the people have immunity rights to freedom of speech.

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KINDS OF LEGAL RIGHTS

1. Perfect and Imperfect Rights

 Salmond – A perfect right is one which corresponds to a perfect duty. A perfect duty is one that is
recognised as well as enforced by law. Imperfect rights are those which do not correspond to perfect
duties.
 Imperfect rights eg:- Claims barred by lapse of time.
2. Positive and Negative Rights
 Salmond – A positive right corresponds to a positive duty, which entitles its owner to have
something done for him, without the performance of which the right is imperfect and incomplete.
Negative rights correspond to negative duties and enjoyment is complete until interference takes
place. Negative rights are mostly in rem.
 Eg:- My right to money in my own wallet is a negative right because enjoyment is complete unless
some interference takes place. If another man owes me money, my right to his money is a positive
one because enjoyment is not complete till I receive it.
3. Real and Personal Rights
 Salmond – Real rights correspond to duties imposed upon persons in general. Personal rights
correspond to duty imposed upon determinate individuals.
 Real rights are rights in rem, while personal rights are in personam.
 Real rights are negative rights, but personal rights are generally positive rights.
4. Rights in rem and Rights in personam
 A right in rem is available against the whole world. It means a right against or in respect of a thing.
These rights are almost always negative i.e. rights to be left alone.
 A right in personam is a right available against particular individuals only. It means a right against or
in respect of a person. These rights are usually positive (negative only in exceptional cases).
5. Proprietary and Personal Rights
 Proprietary rights of a person include his estate, his assets and his property in many forms.
Proprietary rights have some economic or monetary value. These are valuable rights and are
elements of a man’s wealth. Has both judicial and economic importance. Eg:- right to debt, right to
patent, etc.
 Personal rights are merely elements in a person’s well-being. Has only judicial importance.
6. Inheritable and Un-inheritable Rights
 A right is inheritable if it survives its owners. Un-inheritable rights die with the owners.
7. Rights in re propria and rights in re aliena
 Salmond – A right in aliena or encumbrance is one which limits or derogates from some more
general right belonging to some other person in respect of the same subject matter. Eg:- Right of way
across land owned by another person in a right in re aliena.
All other rights are rights in propria.
 4 main classes of encumbrances: (i) Leases, (ii) Servitudes (right to limited usage of land, either
possession or ownership will be absent), (iii) Securities, and (iv) Trusts
8. Principal and Accessory Rights
 Principal rights exist independently of other rights.
 Accessory tights are appurtenant to other rights and have a beneficial effect on the principal rights.
Dominant rights are usually accessory rights (except in case of leases).
 Eg:- X owes Y money and executes a mortgage deed in favour of Y. The debt is the principal right
and the security in the form of mortgage is the accessory right.
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 9. Legal and Equitable Rights
 This distinction is not recognised anymore by Courts.
 An equitable right is a legal right guaranteed by equity as opposed to a legal right which derives
authority from a legal source. An example of an equitable right could be seen in Land law, where
mention is made of a beneficial interest i.e. vested interests in an estate which are protected by
equity. In essence, a contributor to the purchase of a property has an equitable right to that property
albeit not being the registered proprietor.
10. Primary and Secondary Rights or Antecedent and Remedial Rights
 Primary rights are those rights which are independent of a wrong having been committed, i.e. they
are antecedent to the wrongful act and exist for their own sake. Also called antecedent, sanctioned or
enjoyment rights. Eg:- Right of reputation, rights in respect of one’s person, etc.
 Secondary rights are part of the State machinery to redress wrongs/injury done to primary rights.
They are remedial rights and their use arises only after primary rights have been violated. Also called
remedial, sanctioning or restitutory rights.
11. Public and Private Rights
 A Public right is one possessed by every citizen/member of public. The two parties to such rights are
the State and private individuals. (Eg:- Fundamental rights)
 A private rights is concerned with individuals only i.e. both are private parties. (Eg:- Entering into
contracts)
12. Vested and Contingent Rights
 A vested right is a right which is fully vested in the owner i.e. all necessary events/conditions have
taken place/been satisfied. In case of contingent rights, not all necessary events have taken place and
thus, it is contingent on those events taking place in order to be fully vested in the owner.
 Example of contingent right;- Property transferred to a person on the condition that he will be
entitled to take possession of it only after turning 21. The rights fails if he passes away before turning
21.
13. Servient and Dominant Rights
 A servient rights is one which is subjected to an encumbrance. The ‘encumbrance’ which derogates it
is called the dominant right.
 Eg:- X and Y are neighbours and X has a right of way over Y’s property and discharges water from
his roof onto Y’s grounds. X is the dominant owner and his house is the dominant heritage, while Y
is the servient owner and his house is the servient heritage.
14. Municipal and International Rights
 Municipal rights are conferred by the law of a country while International rights are conferred by
international law.
 Municipal rights are enjoyed by all citizens of the country while the subjects of international rights
are those persons recognised as such by international law.
15. Rights at Rest and Rights in Motion
 Holland – When a right is stated with reference to its ‘orbit’ and its ‘infringement’, it is a Right at
rest i.e. extend of the advantages conferred by the rights are defined.
 ‘Rights in Motion’ discusses causes by which rights are either connected or disconnected with
persons.
16. Ordinary and Fundamental Rights
 Fundamental rights include right to life and equality, right to freedom, right against exploitation, etc.

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  Was held in Golaknath case that Fundamental rights cannot be curtailed even by constitutional
amendments. However, presently the Constitution has been so amended that fundamental rights can
be restricted through constitutional amendments.
17. Jus ad rem
 A jus ad rem is a right to a right. The jus ad rem is always a right in personam, whether the right to
be transferred is a right in personam or right in rem.
 Eg:- The person inheriting a property also has the right to have the property transferred to himself.

MEANING OF LEGAL DUTY

 Salmond – “A duty is an obligatory act, that is to say, it is an act opposite of which would be a
wrong. Duties and wrongs are correlatives. The performance of a wrong is the breach of a duty and
the performance of a duty is the avoidance of wrong.”
 Keeton – “A duty is an act or forbearance compelled by the State in respect of a right vested in
another and the breach of which is a wrong.”

KINDS OF DUTIES

i. Legal and Moral duties

 Legal duties are those the opposite of which are legal wrongs; recognised as duty by law.
 Moral duties are those the opposite of which are moral/natural wrongs; not necessarily enforced by
State.
ii. Positive and Negative duties
 Positive duties are those in which the law obliges us to do an Act.
 Negative duties are those in which the law obliges us to forbear from doing an act.
iii. Primary and Secondary
 Primary duties are duties that exist per se, independent of other duties.
 Secondary duties are duties which have no independent existence; exists only for enforcement of
other duties. Also called remedial, restitutory or sanctioning duties.
iv. Absolute and Relative duties (Hibbert)
 Absolute duties are owed only to the State. The breach of absolute duties is generally a crime and the
remedy is punishment of the offender, not payment of any compensation to injured parties.
 Relative duties are owed to a person, other than the one imposing them. The breach of a relative duty
is called a civil injury and remedy is compensation or restitution to the injured parties.
v. Absolute and Relative duties (Austin)
 Absolute duties are enforced criminally and do not correspond with rights.
 Relative duties correspond to rights. It is a duty to be fulfilled towards a determinate superior.

RELATION BETWEEN RIGHTS AND DUTIES

 FIRST SCHOOL: Every right has a corresponding duty. There can be no duty unless there is
someone to whom it is a right.
- Holland – Every right implies the active or passive forbearance by others of the wishes of the party
having the right. This forbearance is called a duty. Moral duties are those demanded by public
opinion of society, while legal duties are those enforced by the State.

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- Keeton – A duty is an act of forbearance which is enforced by the State in respect of a right vested in
another and the breach of which is a wrong. Every right implies a co-relative duty and vice versa.
- Salmond – Rights and duties are co-relative. If there are duties towards the public, there will be
rights as well and there cannot be a duty unless there is someone to whom it is a right. Every right or
duty involves a bond of obligation.
- Minerva Mills Ltd. Union of India – “…A rule imposing an obligation would not, therefore, cease
to be a rule of law because there is no regular judicial or quasi-judicial machinery to enforce its
command. Such a rule would exist despite any problem relating to its enforcement.”
 SECOND SCHOOL: Represented by Austin.
- Austin – Duties are of 2 kinds: Absolute and Relative duties.
- Relative duties correspond to rights. It is a duty to be fulfilled towards a determinate superior.
- Absolute duties are enforced criminally and do not correspond with rights. Absolute duties occur in 4
cases: (i) Duties not regarding persons (Eg:- those owed to Gods and lower animals), (ii) Duties
owed to persons indefinitely (Eg:- those owed towards the community), (iii) self-regarding duties,
and (iv) Duties owed to sovereign.
Absolute duties are commands that an act shall be done or forbidden in respect of parties to whom
the command is directed.
- Criticisms – The absolute duties listed by Austin are not duties in the legal sense. Eg:- Duty towards
God is not a legal duty unless it is embodied in some statute, and if it is embodied in a statute, then it
is a duty towards the State, not God.
According to Austin, a right-duty relationship can exist between two parties only when there is
apolitical superior to protect and enforce it, but in the right-duty relationship between State and
individual, there is no other political superior. The sovereign commands and the citizens obey. The
power of the State is not co-relative to legal duty against citizens.
It is not correct/relevant in modern times because citizens have rights against the State, and vice
versa, in modern democracies. It is dependent on the nature of the State and in constitutional
democracies; the co-relative duty binds the State until it changes the law.

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 Module V - OWNERSHIP AND POSSESSION
OWNERSHIP

 Concept of ownership arose when human beings shifted from pastoral/hunter gatherers to
agricultural.
 English notion of ownership is similar to “Dominium” (absolute right to a thing) in Roman law.
“Possessio” (Possession) implies only physical control over a thing.

NATURE/ESSENTIALS OF OWNERSHIP

 It is indefinite in point of user i.e., the user may use the thing owned in any way he so desires and is
in no obligation to not to use it. The user is at liberty to use it.
 It is unrestricted at point of disposition. The owner may transfer or dispose of the property by
conveyance either during his lifetime or even after his demise by way of will.
 The owner has the right to possess the thing owned although if he actually possesses it or not is
immaterial.
 The owner has the right to exhaust the thing owned while using it if the nature of the thing is so.
 It is residuary in nature. Even if some rights to a certain property may be given to someone else in
way of lease or rent, still the owner remains to be the owner due to the residuary characteristics to it.
 The owner has the right to alienate (gifts, wills and mortgage) the property as well as the right to
destroy it.

SUBJECT MATTER OF OWNERSHIP

 Primary subject matter of ownership consists of material objects like land and chattels. Wealth of a
man may also include objects like debts due to him, interests in others’ properties, shares in
companies, patents, etc. that have no physical or material existence.
 Salmond – The true subject matter of ownership has to be a right in call cases.

RIGHT OF OWNERSHIP AND OWNERSHIP OF A RIGHT


Corporeal ownership is the right to the entirety of the lawful uses of a corporeal thing. Corporeal
ownership or right of ownership is a bundle of rights, liberties, powers and immunities.
 ‘Ownership of a right’ describes the jural relation between a person and a right. It denotes that the
person is neither a possessor nor an encumbrancer, but the owner of the right. Also called incorporeal
ownership.
INCIDENTS OF OWNERSHIP

i. Right to possess – Ownership entails the right to possess the thing owned even if there is no actual
possession of it, only the right is of the essence.
ii. Right to use – Ownership implies that the owner can use or enjoy the thing owned in any manner he
thinks fit without injuring others and within the limits of the law.
iii. Right to manage – Ownership contains within it the right to manage the property. It means that only
the owner can decide what to do with it, how to do and by whom it is to be done, to transfer or to
alienate or to destroy.

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 iv. Right to income – Ownership also entails the income generated out of it is owned by the owner. All
benefits attached to the thing owned is the right of owner.

AUSTIN’S DEFINITION OF OWNERSHIP:

Austin defined Full Ownership as “a right indefinite in point of user, unrestricted in point of disposition and
unlimited in point of duration.” It is a right in rem against the whole world.

Features:

i. - “indefinite in point of user” means the owner can do whatever he may wish to do with his
property, subject to restrictions imposed by law and agreements.
- Two relevant restriction maxims are “So use your property as not to injure your neighbour’s” and
“It is not lawful to build upon your to the injury of another.”
- Case: Crowhurst v. Amersham Burial Board (Burial board was held responsible after horse in
neighbouring farm died after eating poison leaves of a yew tree planted in the Board’s land.)
ii. – “unrestricted in point of disposition” means the owner can transfer/sell the property however he
wishes. However, practically there are several restrictions imposed on this right of disposal.
iii. – “unlimited in point of duration” refers to permanence of the right of ownership. The right exists
till the thing is destroyed. Ownership is inherited by successors.
Criticisms:

i. Ownership isn’t a single right, it is a bundle/sum of rights.

ii. Ownership isn’t just a right, it is also a relationship between the right owned and the person owning
it.
iii. Many limitations are, in practical real life situations, imposed on the right of indefinite user.

SALMOND’S DEFINITION OF OWNERSHIP:

According to Salmond, ownership is a relation between a person and any right that is vested in him. That
which a man owns is a right and not a thing. To own a piece of land means to own a particular kind of right
in the land.

Criticisms:

i. What is owned is a thing and not a right.

ii. To use the term “owner” to refer to the relationship between a person and a right is unnecessarily
confusing. Ownership is a bundle of rights.
iii. Ownership is a relationship between owner and a right to a thing which can be economically
enjoyed. The right of ownership is a matter of legal protection.

MODES OF ACQUISITION OF OWNERSHIP

 There are two modes of acquiring ownership: Original and Derivative.

 Original mode when things which had not been owned before and can be acquired by possession.
 The things owned before ownership over that thing is by acquired in derivative mode.

KINDS OF OWNERSHIP

i. Corporeal and Incorporeal Ownership

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  Corporeal Ownership – Ownership of material things. (House, land, book, etc.)
 Incorporeal Ownership – Ownership of right. (Patent, copyright, trademark, etc.)
ii. Trust and Beneficial Ownership
 Trust ownership is an instance of duplicate ownership. Trust property is that which is owned by two
persons at the same time. The relationship between the two owners is such that one of them is under
an obligation to use his ownership for the benefit of the other.
 The ownership of the person enjoying the benefits (the beneficiary), even though the title of property
is in another name, is called beneficial ownership.
 The ownership of a trustee is nominal and not real, but in the eye of law the trustee represents his
beneficiary. Ownership of the trustee is called Trust ownership.
 If property is given to X on trust for Y, X would be the trustee and Y would be the beneficiary or
cestui que trust. X would be the legal owner of the property and Y would be the beneficial owner. X
is under an obligation to use the property only for the benefit of Y.
 A trustee has no right of enjoyment of the trust property. His ownership is only a matter of form and
not of substance. It is nominal and not real. In the eye of law, a trustee is not a mere agent but an
owner. He is the person to whom the property of someone else is fictitiously given by law. The
trustee has to use his power for the benefit of the beneficiary who is the real owner. As between the
trustee and the beneficiary, the property belongs to the beneficiary and not the trustee.
iii. Legal and Equitable Ownership
 Legal rights are those which have their origin in the rules of common law. Equitable ownership is
that which proceeds from the rules of equity. Equity recognises ownership where the law does not
recognise ownership owing to some legal defect.
 Legal rights may be enforced in rem but equitable rights are enforced as equity acts in personam.
 No distinction between legal and equitable estates in India.
iv. Vested and Contingent Ownership
 Vested ownership is when the title of the owner is already perfect. In contingent ownership, the
title of the owner is yet imperfect but is capable of becoming perfect on the fulfilment of some
condition.
 Vested ownership is absolute while contingent ownership is conditional.
v. Sole Ownership and Co-ownership
 Sole Ownership – Right of ownership is vested exclusively in one person.
 Co-Ownership – The title of one is rendered consistent with that of others by the existence of the
reciprocal obligations of restricted use and enjoyment.
vi. Common and Joint Ownership (kinds of co-ownership)
 Common Ownership – Eg:- Rights of a dead man are inherited by successors.
 Joint Ownership – Ownership dies with him; survivor becomes sole owner by virtue of jus
accresendi (Right of survivorship).
vii. Absolute and Limited Ownership
 Absolute Ownership – All rights over the property are vested in the owner. No other person has any
claim whatsoever. Restrictions are imposed on the owner by law and voluntary agreements only.
 Limited Ownership – Limitations exist on the user, duration and disposal of rights of ownership.

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 POSSESSION
 Possession is the prima facie evidence of ownership.
 Possession cannot be defined absolutely and perfectly.
 Transfer of possession is one of the chief modes of transferring ownership.
ELEMENTS OF POSSESSION

There are two elements of possession: Corpus of possession and Animus (intention) of possession. Bothe
elements should be present in case of possession.

 Corpus of Possession
- By corpus is meant that there exists such physical power or physical contact of the possessor in
relation to the thing possessed so as to give rise to the reasonable assumption that other people will
not interfere with it. The corpus of possession is looked at in the aspect of relation of possessor with
other persons as well as the relation of the possessor to the thing possessed.
 Animus of possession
- Animus possidendi or the subjective element in possession is the intent to appropriate to oneself the
exclusive use of the thing possessed. The animus possidendi is the conscious intention of the
individual to exclude others from the control of an object.

THEORIES OF POSSESSION

 Savigny – Both the corpus and animus must be present to constitute possession.
- It is necessary that in every acquisition of possession there must exist in the possessor a physical
power of dealing with the subject immediately and of excluding others. However, immediate
physical power over the thing is not necessary.
- “Animus possidendi must be explained by animus domini, and he only is to be looked on as in
possession who deals as owner with the subject of which he has the detention. That is to say, he must
contemplate dealing with it practically just as an owner is accustomed to do by virtue of his right and
consequently not as one recognising anybody better entitled than himself.”
 Ihering – Sociological view – Persons who hold property re in majority of the cases the owners and
possession is attributed to them. Whenever a person looks like an owner in relation to a thing, he has
possession of it, unless possession is denied to him by rules of law based on practical convenience.
Animus element is simply an intelligent awareness of the situation.
 Markby – “Possession is the determination to exercise physical control over a thing on one’s own
behalf coupled with the capacity to do so.” Focussed on physical aspects and only material objects.
 Salmond – “The possession of a material object is the continuing exercise of a claim to the exclusive
use of it.” “it is a continuing de facto relation between a person and a thing which is known as
possession.” Possession is a relation of fact and not one of right. It may be a title of right, but it is not
the right itself.
 Pollock – “In common speech, a man is said to possess or to be in possession of anything of which
he has the apparent control, or from the use of which he has the apparent power of excluding other.”
Gave more importance to de facto control or physical control over animus.

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METHODS OF TRANSFER OF POSSESSION

Transfer or acquisition of possession can be done in 3 ways: By taking, By delivering and By the operation
of law.

1. By taking
 Done without consent of previous possessor.
 Two types: Rightful (bank foreclosure) and Wrongful (stealing) taking of possession.
 Some acts like capturing a wild animal (legally) not belonging to anyone is called Original
possession.
2. By delivering
 Possession acquired with consent and co-operation of previous possessor.
 Two types: Actual and Constructive.
 Actual delivery: Immediate possession is given to the transferee. Further two types: (i) Holder
retains mediate possession, and (ii) Holder doesn’t retain mediate possession.
 Constructive delivery: Delivery that is not direct or actual. Used in cases where the object cannot
actually be transferred by the owner to the purchaser or by the transferor to the transferee. 3 types:
(i)tradition brevi manu (Possession is surrendered to one who already has immediate possession),
(ii) constitutum possessorium (only mediate possession is transferred and transferor retains
immediate possession), and (iii) attornment (eg:- Sold car but retains possession, on behalf of
owner, for some time in spite of receiving full payment)
3. By the operation of law
 When possession changes hands as a result of law. Eg:- When a person dies, his property is
transferred to successor and legal representatives.
 Res nullius – According to this principle, the first finder of a thing has a good title to that thing
against all but the true owner. It is immaterial if the thing is found on another’s property. Certain
exceptions are applicable, like: Rule doesn’t apply if the possession of the thing was got through a
wrongful act, or if the finder found the thing as another person’s servant/agent, etc.

KINDS OF POSSESSION

1. IMMEDIATE AND MEDIATE POSSESSION

 Immediate possession is also direct possession because there is a direct relationship between the
possessor and the thing possessed. Mediate possession is also called indirect possession because the
relation between the possessor and the object is brought about by the intervention or agency of some
other person. Eg:- Buying something on my own is immediate possession and sending an agent to
buy it results in mediate possession till he hands the object over to me.
 3 categories of mediate possession: (i) Owner has possession through agent/servant who acquires and
retains possession of the object without claiming any interest for himself.
(ii) Immediate possession is with a person who holds whose goods on his own behalf and on my
behalf and who is bound to hand over the direct possession of the same whenever I desire.
(iii) Immediate possession is with one person who is bound to return it after a certain period or
fulfilment of certain conditions.
2. CORPOREAL AND INCORPOREAL POSSESSION
 Corporeal possession is the possession of a material object and incorporeal possession is the
possession of anything other than a material object.

37
  Eg:- Corporeal – Cars, books, etc. and Incorporeal – patents, copyrights, etc.
3. REPRESENTATIVE POSSESSION
 Representative possession is when the owner has possession of a thing through an agent or servant.
The real possession continues to be that of the owner and he has the animus to exercise to control
over the thing in the hands of his agent/servant.
 Eg:- Money put into the servant’s pocket to but something from the market.
4. CONCURRENT POSSESSION
 In concurrent possession, possession of a thing maybe in the hands of two or more persons at the
same time.
 Claims which are not mutually adverse or mutually destructive admit of concurrent realisation.
 Similar to Duplicate possession.
5. DERIVATIVE POSSESSION
 In derivative possession, the holder of the thing combines in himself both the physical and mental
elements which constitute legal possession. The title of the holder of the thing is derived from the
person who entrusts the thing.
 Eg:- A watchmaker has derivative possession of a watch entrusted to him for repairs till he’s paid the
repair charges fully. If the owner takes the watch away forcefully, he’ll be guilty of theft.
6. CONSTRUCTIVE POSSESSION
 Constructive possession is not actual possession i.e. it is possession in law and not in fact.
 Eg:- Handing over keys of a building to tenant gives the tenant constructive possession of the
building.
7. ADVERSE POSSESSION
 To be adverse, possession of a property must be an invasion of the ownership of another.
 It should be actual, exclusive and adequate in terms of continuity and publicity.
 It should be exercised without violence, without stealth and without permission.
8. DUPLICATE POSSESSION
 Possession is a right to exclusive use and it is not possible for two persons to have independent and
adverse claims to possession of the same thing at the same time. Possession of same object by
multiple persons is possible only when the two claims are not mutually adverse. Claims to possession
which admit of concurrent realisation give rise to duplicate possession.
 Eg:- Co-owners, cases where corporeal and incorporeal possession may coexist in respect of the
same object (one possessing a land and another having right of way over the land), mediate and
immediate possession (tenants, bailees and servants have immediate possession while landlord,
bailor and master have mediate possession), etc.

CASES

 Hannah v. Peel
- Plaintiff, while serving in the Royal Artillery, found a brooch in a room occupied by him in a house
requisitioned by the government.
- Handed the brooch over to the police; they couldn’t find the real owner, so returned it to the
defendant, owner of the house. Defendant sold the jewel. Plaintiff claimed the brooch as the finder.
- The argument that the defendant was entitled to it as the owner of the property was rejected because
he didn’t have necessary de facto control or animus regarding the brooch. Held that the plaintiff was
entitled to the brooch, or its value since it had been sold, as the rightful owner.

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  Bridges v. Hawkesworth
- Plaintiff fond a bundle of banknotes dropped on the floor of a shop by a stranger who could not be
found.
- Held that the plaintiff, as the finder, had good title over the notes against everyone except the true
owner.
 South Staffordshire Water Co. v. Sharman
- Defendant found two rings while cleaning out a pool under the orders of the plaintiffs. He declined to
deliver them to the plaintiffs but also failed to find the true owners. Plaintiffs brought action for
recovery of the rings.
- Held that the defendant good title over the rings, except the true owners, as the finder.
 Merry v. Green
- Plaintiff purchased a bureau at an auction and got possession of it. Later discovered a secret drawer
with money belonging to the vendor in it. The plaintiff appropriated the money.
- Held that the plaintiff had committed the offence of larceny or theft because he unlawfully deprived
the vendor. The plaintiff had no animus regarding the money when he bought the bureau and thus,
the vendor still had rightful possession.

DISTINCTION BETWEEN POSSESSION AND OWNERSHIP

 Ihering – “Possession is the objective realisation of ownership.” It is an external realisation of

ownership and a valuable proof of ownership.
 Possession is in fact, while ownership is in right. Possession is the de facto exercise of a claim while
ownership is the de jure recognition of that claim.
 It is not necessary that the owner of the corpus should enjoy all the rights or uses all the time or even
at all; he may choose to lock it away, exclude outsiders from using it, gift it, etc. This is not the case
with Possession as active enjoyment of the property is necessary.
 Transfer of possession is comparatively easier and less technical than transfer of ownership.

PROPERTY
MEANING

i. In the widest sense, property includes all the legal rights of a person of whatever description. The
property of a man is all that is his in law.
ii. In a narrower sense, property includes the proprietary rights (regarding estate or property) of a
person and not his personal rights (life, liberty, reputation, etc.).
iii. In another sense, the term property includes only those rights which are both proprietary and real.
iv. In the narrowest sense, property includes nothing more than corporeal property or the right of
ownership in material things. “Property is a material object subject to the immediate power of a
person.”

39
 v. Austin – Sometimes the term property is sometimes used to denote the greatest right of enjoyment
known to the law excluding servitudes. Sometimes, life interests are described as property. Even
servitudes are described as property in the sense that there is a legal title to them. Sometimes,
property means the whole of the assets of a man including both the rights in rem and rights in
personam.

KINDS OF PROPERTIES

 Property is essentially of two kinds: Corporeal and Incorporeal. Corporeal property can be further
divided into (i) Movable and Immovable property, and (ii) Real and Personal property. Incorporeal
property is of two kinds: (i) Rights in re propria and (ii) Rights in re aliena or encumbrances.
 Corporeal Property
- The other name for the corporeal property is tangible property because it has a tangible existence. It
relates to material things. The right of ownership of a material thing is the general, permanent and
inheritable right of the user of the property or thing. Further corporeal property can be divided into
two categories-
- Movable
Chattels, for example, leases, to cows, to clothes etc are movable property. It simply includes all
corporeal property which is not immovable.
- Immovable
Land, for example, is an immovable property. According to Salmond, an immovable piece of land
has many elements attached to it. It is inclusive of the ground beneath the surface down to the centre
of the world. Interestingly, it also includes the column of space above the surface ad infinitum.
According to the German Civil Code, the owner of a particular piece of land owns the space above it
as well. The right of free and harmless possession of space at a reasonable height over the land is
secured and governed by the Air Navigation Act, 1920.
According to the General Clauses Act 1897, “Immovable property includes land, benefits arising out
of the land and things attached to the earth.”
- Real and Personal Property
The difference between real and personal property is similar to the difference between movable and
immovable property. The little connection that is, is historical and not based on the logic. Real
property means all rights over land recognized by law. However, personal property means all other
proprietary rights whether rights in rem or rights in personam.
 Incorporeal Property
- Incorporeal property is intangible property. The other terms frequently used are intellectual or
conventional property. It includes all those valuable interests which are and can be protected by law.
The need to recognise and protect incorporeal property has been recognised in recent times. The
scope of the term property has widened and it has come to include virtual property as well. In

40
 modern times, a large share of a country’s property can be found in the form of shares of a company.
Further incorporeal property is of two kinds- rights in re propria and rights in re aliena.
- Rights in re propria
Under this form of right, the right of ownership in one’s property is not exercised over material
objects. Generally, the law of property deals with material objects. However, there are exceptions to
this in the form of non-material things produced by human skills and labour. The most important of
these are patents, trademarks, artistic copyright, commercial goodwill etc.
Holland added a new type of intangible property to the list. To quote him: “With such intangible
property should probably also be classified those royal privileges subsisting in the hands of a subject
which are known in English law as franchises, such as rights to have a fair or market, a forest or free
fishery.”
- Rights in aliena
- These rights are known by the name of encumbrances.in simpler words, these are rights in rem over
areas of property owned by another person. Such rights run parallel to res encumbered. They bind the
res in whosoever hands it may pass. These prevent the owner from exercising some definite rights
concerning his property. The main kinds of encumbrances are lease, servitude, security and trusts.
i. Lease- it is an encumbrance giving a right to the possession and use of the property of
another person. It is the transfer of a right to enjoy a certain property.
ii. Servitude– it is that kind of encumbrance which consists of a right to limited use of land
without having the possession of it. Examples of servitudes are- right of a way across the land
of somebody, the right of light and air etc.
iii. Security– Lord Wrenbury has defined security as “a possession such that the grantee or
holder of security holds against the grantor a right to resort to some property or some fund for
the satisfaction of some demand, after whose satisfaction the balance of the property or funds
belongs to the grantor.” Securities are of two kinds- mortgage and lien.
Where a mortgage is the transfer of an interest in specific immovable property for the purpose of
securing payment of money advanced by way of loan. A lien is the right to hold the property of
another person as a security for the performance of an obligation.
Trust- An obligation annexed to the ownership of property. The persons in whose favour the trusts
are advanced are infants, lunatics, unborn persons etc.

MODES OF ACQUISITION OF PROPERTY

1. Possession
2. Prescription – Prescription may be defined as the effect of lapse of time creating and destroying
rights; it is the operation of time as a vestitive fact. Positive (lapse of time results in creation of right)
and Negative (lapse of time results in destruction of time).
3. Agreement
4. Inheritance

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THEORIES OF PROPERTY

1. Natural law theory

 Proponents include Grotius, Locke and Blackstone.
 Property is based on the principle of natural reason derived from the nature of things. Property was
acquired by occupation of an ownerless object and as a result of individual labour.
 All things were originally without an owner or belonged to people as a whole, without individual
ownership, till whosoever occupied/captured them became their owners.
2. Metaphysical theory
 Proponents are Kant and Hegel.
 Hegel – “Property makes objective my personal individual will.” Property is the objective
manifestation of the personality of an individual and that it is an object on which a person has the
liberty to direct his will.
3. Historical theory
 Private property had a slow and steady growth through many stages. Natural possession independent
of law or state >> Juristic possession (both fact and law) >> Ownership (purely legal concept).
4. Positive theory
 Propounded by Spencer.
 Based on fundamental law of equal freedom. Property is the result of individual labour and no man
has a right to a property which he has not acquired by his personal effort.
5. Psychological theory
 Bentham
 Property came into existence on account of the acquisitive instinct of man. Every individual desires
to own things and that brings into existence property.
 Similar to metaphysical theory.
6. Sociological theory
 Property should not be considered in terms of private rights but should be considered in terms of
social functions.
 Property is an institution which secures a maximum of interests and satisfies the maximum of wants.
7. Property was the creation of State
 Rousseau – “It was to convert possession into property and usurpation into a right that law and State
were founded. The first man who enclosed a piece of land and said ‘This is mine’ was the real
founder of civil society.”

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 Module VI: OBLIGATION AND LIABILITY

OBLIGATION
MEANING

 Obligations are merely a class of duties which is correlative of rights in personam. Right in personam
gives the person rights against one person or party to the contract. It generally will correspond with a
duty imposed on the said person or party.
 It is a bond of legal necessity (vinculum juris) binding 2 or more parties together. From the point of
view of the person bound, it is a duty and it is a right for the other party.
 Includes duty to pay debts, perform contracts, pay damages for torts, etc.
DEFINITION

Salmond – “An obligation maybe defined as a proprietary right in personam or a duty which
corresponds to such a right.”
 Savigny – “An obligation is the control over another person, yet not over this person in all aspects
(in which case his personality would be denied), but over single acts of his which must be conceived
or subtracted from his free will and subjected to our will.”
CHOSE IN ACTION and CHOSE IN POSSESSION

 ‘Chose in Action’ is a technical synonym for obligation. It means a proprietary right in personam. No
actual possession. Eg:- Money due to a creditor by a debtor.
‘Chose in Possession’ is a right accompanied by possession. It is tangible, capable of physical
possession and delivery. Eg:- Money in a man’s wallet.

SOLIDARY OBLIGATIONS

 Normal obligations involve one creditor one debtor.

 Salmond – “A solidary obligation may be defined as one in which two or more debtors owe the
same thing to the same creditor.”
 Eg:- When a debt is owed by a firm or partners, each debtor is liable for the whole amount due.
There is no obligation on the creditor to divide the amount between the partners and claim it. He may
claim the whole amount from one partner and leave him to recover the amounts from the other
partners/co-debtors.
 It is called ‘solidary’ because each debtor is bound in solidum instead of pro parte.
 The three kinds of Solidary Obligations are (i) Several, (ii) Joint, and (iii) Joint and Several.
- (i) Solidary obligations are several when there are as many distinct obligations and cases of
actions as there are debtors, although the thing owed in the same in each case. The only
connection between the debtors is the subject matter of the debt. They all have independent and
distinct vinculum juris binding them to the creditor. Eg:- (a) Liabilities of individual wrong doers
whose acts cause the same damage, (b) Liability of two or more co-sureties who guarantee the
same debt independently of each other. (c) The liability of a principal debtor and that of a surety,
provided that the contract of suretyship and creation of the debt do not have the same origin/are
independent of each other.
- (ii) Solidary obligations are joint when there are two or more debtors but one common debt or
cause of action. The vinculum juris is single and binds all the debtors to the creditor. Eg:- Debts
of partners in a firm.
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 - (iii) Some solidary obligations are both joint and several. The law treats them as joint for some
purposes and as several for other purposes. Under Section 43 of the Indian Contract Act, the
liability is joint and several unless there is an agreement to the contrary. Eg:- All contractual
obligations which are expressly made joint and several by the agreement of the parties, Liabilities
of those who commit a tort or perhaps a breach of trust, etc.

SOURCES (KINDS) OF OBLIGATION

i. Arising from Contracts/Contractual obligations

 Created by contracts/agreements.
 These obligations create rights in personam between the parties.
 Rights creates are generally proprietary rights. Sometimes they are not proprietary but in personam
(eg:- Promise of marriage).
ii. Arising from Torts/Delictal obligations
 Delictal obligations are those in which a sum of money is to be paid as compensation for a tort.
 A tort has a penal element and a remedial element. The same act may be a crime and a tort.
 A tort is a special kind of civil wrong and its proper remedy is damages, not civil remedies like
injunction, restitution of property, specific performance, etc. No civil wrong is a tort if it is
exclusively breach of contract.
CONTRACTUAL OBLIGATIONS DELICTAL OBLIGATIONS
Based on consent Inflicted against a person, no consent
Privity between parties is implied and only Not the case in torts. In torts, there is a breach of
parties to the contract can seek enforcement. general law and consequently anybody suffering
from the act can file a suit.
A breach of contract is a violation of a right in A tort is mostly a violation of a right in rem.
personam.
Motive is not considered/relevant Motive is taken into consideration
Amount of damages can be fixed according to Not possible to fix damages with precision.
terms of contract.

iii. Arising from Quasi-Contracts/Quasi-contractual obligations

 Quasi contractual obligations are considered to be contractual by law even though really aren’t.
 Salmond called it “contracts implied in law” because, in these cases, the law departs from actual
facts and implies a contract by fiction.
 However, not all implied contracts are quasi contracts. Implied contracts may either be (a) “implied
in law” (regarded as contractual obligation) or (b) “implied in fact” (not regarded as contractual)
 In certain torts, it is possible to waive the tort and sue instead on the basis of a fictitious contract.
Eg:- A wrongfully sells goods of B. B can sue A for damages in tort, or instead, he may sue A on a
fictitious contract and demand payment of money from A as if he were B’s agent.
 Sections 68 to 72 of Indian Contract Act deal specifically with quasi-contracts which are not
founded on actual promises but where the law presumes a contract between the parties.
iv. Innominate obligations
 All other obligations other than those falling under Contracts, Torts and quasi-contracts.
 Eg:- Obligations of trustees towards their beneficiaries.

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 LIABILITY
MEANING/DEFINITION

 Liability arises from a wrong or the breach of a duty. It is the ultimatum of the law and has its source
in the supreme will of the State.
 Salmond – “Liability or responsibility is the bond of necessity that exists between the wrongdoer
and the remedy of the wrong.”
 Austin used the term ‘imputability’ instead of ‘liability’: “Those certain forbearances, commissions
or acts, together with such of their consequences, as it was the purpose of the duties to avert, are
imputable to the persons who have forborne, omitted or acted. Or the plight or predicament of the
persons who have forborne, omitted or acted, is styled imputability.”

KINDS OF LIABILITY

1. CIVIL LIABILITY AND CRIMINAL LIABILITY

 Civil liability is the enforcement of the plaintiff’s rights against the defendant in civil proceedings.
Eg:- Actions for recovery of debt, restoration of property, specific performance of contract, etc.
Criminal liability is the liability to be punished in criminal proceedings.
 It is possible for one wrong to lead to both criminal and civil proceedings. Eg:- Defamation,
malicious injury to property, theft, assault etc. The wrongdoer may be sentenced to imprisonment as
well as made to pay compensation.
 In civil cases, the remedy is in the form of damages, a judgment for payment of debt, specific
performance, injunction, etc. In criminal cases, the redress is punishment in the form of
imprisonment, fine or death. In some cases, just fines may be imposed for criminal offences and in
some cases; imprisonment may be awarded for civil wrongs.
 Civil liability is measured by the magnitude of the wrong. For measuring criminal liability motive,
intention, character of offender and magnitude of offence are considered.
2. REMEDIAL LIABILITY AND PENAL LIABILITY
 Remedial liability:
- There is no concept of punishment in the theory of Remedial liability. The theory states that, if an
injury is caused by the violation of a right, the law should remedy the same by compelling the person
bound to comply with it.
- The general rule is that ‘a man must be forced to do by the force of law what he is bound to do by a
rule of law.’ There are 3 exceptions to this general rule:
i. Imperfect obligation/duty. Breach of imperfect duty doesn’t give rise to a cause of action. Eg:-
Time barred debt.
ii. Specific enforcement of duty is impossible. Eg:- Specific enforcement is not possible after
libel/defamation has been committed. The mischief cannot be undone.
iii. Specific enforcement of duty in expedient or inadvisable. Eg:- Law doesn’t enforce specific
performance of promise of marriage, but it may award damages.
 Penal liability:
- Theory of penal liability deals with the punishment of wrongs. Can arise from civil or criminal
wrongs. Two necessary requirements: Guilty act (Actus reus) and guilty mind/intention (mens rea) or
negligence.
- 4 kinds of punishment: (i) Deterrent (primary objective), (ii) Preventive, (iii) Retributive, and (iv)
Reformative.

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 - In case of wrongs of absolute liability, person can be punished without mens rea.
- An attempt to commit a crime itself is a punishable offence.
- Where the law presumes that cannot be any will at all, no penal liability can be imposed. Eg:- Insane
person, minor (under 7), etc.
- ‘Mistake’ maybe admitted as a ground of exemption from liability, but it has to satisfy 3 conditions:
(i) Should be such a mistake that, if the supposed circumstances were real, it would prevent any guilt
from being attached to the wrongdoer.
(ii) Should be reasonable.
(iii) Should be related to a matter of fact, not of law.
3. VICARIOUS LIABILITY
 Vicarious liability is when one person is made liable for the wrong committed by another.
 Criminal liability is never vicarious, except in very special, rare circumstances. (Riots under Sec. 155
of IPC).
 Civil law has two main classes of vicarious liability:
(i) Master-Servant relationship. (Master liable for servant’s actions done in the course of duty), and
(ii) Legal representatives of dead persons. (Only in civil cases)
 Refer to cases in ‘Liability of Corporation’, Module III.
4. ABSOLUTE LIABILITY AND STRICT LIABILITY
 Usually, in both civil and criminal law cases, mens rea is a necessity to hold a person guilty.
However, there are certain cases of exception where the person is held responsible irrespective of
existence of mens rea. The law presumes the presence of formal conditions of liability is such cases,
This is called Strict liability.
 Rylands v. Fletcher – [Were neighbours. Rylands owned a coal mine and Flecher owned a mine.
Fletcher hired independent contractors to construct a water reservoir on his land. Contractors failed
to detect old, unused shafts under the site and ended up flooding Rylands’ mine, causing huge losses.
Ryland sued Fletcher. Fletcher (defendant) blamed the contractors and denied knowledge about
cause of damage. Fletcher was held to be strictly liable because he kept a dangerous thing on his
land, which escaped to cause damage.]
 Most important wrongs of absolute liability are:
(i) Mistake of law [Ignorance of law is not an excuse, except when it comes to foreign laws and
special laws. Applicable only to general laws.]
(ii) Mistakes of fact [It is a good defence against absolute liability in criminal cases. In civil law,
however, mistake of fact involves absolute liability.]
(iii) Accidents – Accidents may be culpable or inevitable. Culpable accidents are due to negligence
and cannot be an excuse. Inevitable accidents are those which require a degree of care exceeding the
standard demanded by law to avoid. Inevitable accident is commonly regarded as a ground of
exemption from liability.
 Difference between Absolute and Strict liability from MC Mehta v. UoI (CJI P.N. Bhagwati
introduced concept of “Absolute liability”)


ABSOLUTE LIABILITY STRICT LIABILITY

Hazardous or inherently dangerous activities Any other activities

46
Escape not necessary – liability within and
Escape necessary
outside premise

No exceptions to the rule Provides for exceptions

Applies to Non-Natural and Natural uses of

Applies only to Non-Natural use of land
land

Simply put, absolute liability is the application of strict liability, but without the exceptions.

GENERAL CONDITIONS OF LIABILITY

 Act
- Two types- Internal/Inward act (will) and External/Outward act (physical action)
- Jurisprudence considers outwards acts only.
- Acts may also be Positive (Something is actually done. Acts of commission) or Negative
(Something is refrained from being done. Forbearances.)
- Intentional (foreseen and desired by doer) and Unintentional (not foreseen/desired) Acts.
- Factors of an Act: (i) The mental and bodily activity of the doer, (ii) The circumstances, and
(iii) The consequences
- Juristic Act – Act done with the intention of producing a legal result.
- Wrongful Act – Acts that are mischievous in the eyes of the law. Two types: (i) Wrongful actions
which are actionable per se without proof of actual damage, and (ii) Acts where actual damage has to
be proven before punishing the offender.
- Damnum sine injuria – Damage is cased, but no legal injury. Not actionable.
- Injuria sine damnum – No actual proof of damage, but legal right is violated. Actionable. (Ashby
v. White; qualified voter not allowed to vote in election.)
 Mens rea (guilty mind):
- Guilty mind consists of either intention or negligence.
- Mens rea must extend to all 3 parts of the Act: (i) the physical doing/not doing, (ii) the
circumstances, and (iii) the consequences. If it doesn’t extend to any part, there is no guilty mind.
- Importance of circumstance example: Section 456 of IPC considers housebreaking at night as an
aggravated offence, while mere housebreaking, not at night, is a lesser offence.
- Srinivas Mall Bairoliya v. Emperor – Privy council held that Courts should always bear in mind
that, unless the statute, either clearly or by necessary implication, rules out mens rea as a necessary
part of the crime, an accused cannot be found guilty of the crime under criminal law unless mens rea
is present. This is of utmost importance for protection of the liberty of the person.
- There is no general doctrine of mens rea in the IPC, instead all the offences have been sufficiently
defined.
- Mens rea is assumed to be absent in cases of persons who are permanently or temporarily incapable
of guilty mind. Eg:- Drunkenness, insanity, child under 7 years of age (between 7-12, child will be
guilty only if he has attained sufficient maturity and understanding of the consequences of his
actions.), etc.
- In cases of absolute or strict liability, mens rea is not considered at all.
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- When is mens rea not essential:
(i) Where a statute imposes absolute liability in the interest of public safety or social welfare,
presence of mens rea is irrelevant. Eg:- Licensing of hotels and pharmacies, cases under Motor
Vehicles Act, etc.
(ii) Where it is difficult to prove mens rea and penalties are petty fines. Statute may do away with
mens rea as a necessity, on the basis of expediency.
(iii) Cases of public nuisance. Strict liability is imposed in cases affecting public safety.
(iv) Cases which are criminal in form but are in fact only a summary mode of enforcing a civil right.
Bradford v. Pickles – “No use of property which would be legal if due to a proper motive can
become illegal because it is prompted by a motive which is improper or malicious.”
- Wrongful motive is generally immaterial in civil wrong cases, the exceptions being:
(i) Malicious prosecution, (ii) Injurious falsehood, (iii) Defamation on a privileged occasion, and
(iv) Conspiracy.
 Transferred Malice
- It is a general rule of criminal law that no act is intended unless all 3 aspects of the act are intended.
An exception to this rule are cases of transferred malice.
- Eg:- X intends to kill Y and while attempting to cause Y’s death, kills Z. Even though he did not
intend to kill Z, he would still be guilty of murder under Section 301 of IPC (Culpable homicide by
causing death of person other than person whose death was intended.) because it states “..causing
death of any person, whose death he neither intends nor knows himself to be likely to cause,..”
 Presumption of innocence
- This rule means that everyone is presumed to be innocent until proven guilty.
- However, when the defence of the accused is that he falls within one or more the General Exceptions
(intoxication, insanity, self-defence, etc.) of the IPC, the burden of proof is on him to prove it.
- In certain offences under the IPC relating to trade mark, property mark and currency notes, the
burden of proof of innocence is shifted on to the accused.
 Stages in the commission of a crime:
(i) Intention to commit it,
(ii) Preparation for its commission,
(iii) Attempt to commit it (direct movements towards commission after preparation), and
(iv) Its commission.
 Jus Necessitatis
- ‘Necessity knows no law’
- When an act is done under dire necessity in circumstances where no fear of punishment would deter
the person from so acting, he would not be punished severely or at all.
- Eg:- The case of 3 men stuck on a boat at sea cannibalising (R. v. Dudley), act committed under
legitimate fear/threat of death, etc.
 The mens rea essential to constitute a liability takes two forms: Wrongful intention and Culpable
negligence.
 Intention: Salmond – “Intention is the purpose or design with which an act is done. It is the fore-
knowledge of the act, coupled with the desire of it, such fore-knowledge and desire being the cause
of the act.”
An act may be done with immediate intent and another ulterior intent. The ulterior intent is called
motive.

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 Malice: Malice implies wrongful intention. An act is done maliciously when there is a bad intention
of bad motive. It includes both immediate and ulterior intention. Eg:- Malicious prosecution is
prosecution inspired by motive, not approved of by law.
 Negligence
- Salmond –“Negligence is the state of mind of undue indifference towards one’s conduct and its
consequences.”
- Negligence is of 2 types: Advertent and Inadvertent
- Negligence and Inadvertence: Negligence is called wilful if it is advertent. It is also called
recklessness. In this kind of negligence, the harm done is foreseen as possible of probable but it not
willed. In the case of an inadvertent negligence, the harm is neither foreseen nor willed.
- Negligence and Intention: Both are subjective and internal states of mind. In case of intention, the
consequences of the act are known and desired by the doer, while in negligence, the consequences
are neither known nor desired.
- Culpable Negligence: Carelessness becomes culpable when law imposes a duty of being careful.
Civil liability exists for negligence for most cases, while criminal liability exists only in exceptional
cases. Degree of carelessness is measured by taking into consideration the seriousness of the
consequences of the act and the probability of the act leading to those consequences.
- Duty of care: Donaghue v. Stevenson (ginger beer manufacturer, decomposed remains of snail in
opaque bottle)
- Standard of care: The standard of care cannot be predetermined and it varies from case to case.
The two standards of care usually followed are highest degree of care of which human nature is
capable and the amount of care which would be reasonable in the circumstances of the particular
case.
Two factors to be considered by measuring standard of care are: (i) Magnitude of risk to which
others are exposed, and (ii) Amount of benefit derived from the act.
- Theories of Negligence:
(i) Austin – Negligence consists essentially of inadvertence i.e the failure to be alert, circumspect or
vigilant.
(ii) Holland – Negligence if of two kinds, Gross and Simple Negligence. Old view, not recognised
by English law.
(iii) Subjective theory of negligence (Salmond) – Negligence is purely subjective. It is purely
internal to the concerned individual, his state of mind, mental condition, etc. and it is the attitude of
indifference to consequences of an act. Negligence is culpable carelessness.
(iv) Objective theory of negligence – Negligence is not subjective, it is not a state of mind, rather it
is a particular kind of conduct. It is external and is conduct resulting in breach of duty to take care.
- Contributory Negligence – Contributory negligence is negligence in not avoiding consequences
arising from the negligence of another person, when means and opportunity are afforded to do so.

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