Legal Personality

The word person comes from the Latin persona, the mask worn by actors in the Roman theatre, hence a role or character played in the legal drama. In law, a person is any being, real or imaginary, to which the law attributes legal rights and duties. Legal personality is the capacity to be the holder of rights and duties.

• 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.

• John Chipman Gray: a person is an entity to which rights and duties may be attributed.

• Kelsen: the legal person is not a real entity; it is the personification of a unity of legal norms (a complex of rights and duties), an auxiliary concept of legal thinking.

• Paton: legal personality is a technique to attribute rights and duties to a subject.

Two classes of persons:

• Natural persons: human beings. Not every human being has been a legal person in history (slaves in Roman law were things, not persons, and the 'civil death' of convicts existed in old English law). Today all human beings are persons, but capacity may vary (minors, persons of unsound mind).

• Legal (juristic, artificial) persons: entities other than human beings which the law treats as persons: corporations, institutions, funds, idols, and, in some recent decisions, rivers and animals.

The unborn child (nasciturus):

• Salmond says an unborn child is not a person in the full sense, but the law protects the child's contingent rights, for example, in property and inheritance. A child en ventre sa mere is regarded as born for the purposes of beneficial rights, if it is subsequently born alive.

• Indian law: Section 13 of the Transfer of Property Act, 1882 (a transfer for the benefit of an unborn person, with a prior life interest in a living person, is valid, subject to conditions); Section 20 of the Hindu Succession Act, 1956 (a child in the womb who is later born alive has the same right of inheritance as if born before the death of the intestate).

• Tort: Montreal Tramways v Leveille (1933, Supreme Court of Canada) and the Congenital Disabilities (Civil Liability) Act 1976 (UK) allowed claims for pre-natal injury once the child was born alive.

• Salmond's classic approach is that the unborn child's rights are suspended until birth; an unborn child cannot sue in its own right but its interests can be protected by trustees or guardians.

The dead person:

• Salmond and Austin say that a dead man has no legal personality, though the law respects wishes expressed in a will (the 'posthumous' will); the dead have an interest in reputation (Explanation 1 to the defamation provision allows prosecution if the imputation would harm the reputation of the deceased if he were living and hurts the feelings of his family) and in decent burial.

• Pt. Parmanand Katara v Union of India (1989): the right to dignity and fair treatment under Article 21 extends not only to a living man but also to his body after death.

• Ashray Adhikar Abhiyan v Union of India (2002): the dignity of the dead extends to the homeless dead, who are entitled to a decent funeral.

Minors, persons of unsound mind, convicts, alien enemies: have personality but limited capacity (see the Indian Contract Act, 1872, Section 11, and the Indian Majority Act, 1875: majority at 18). A minor's agreement is void ab initio (Mohori Bibee v Dharmodas Ghose, 1903, Privy Council).

(a) Corporations

• Corporation aggregate: a body of persons united to form a single legal person (a company, a registered society, a university or a municipal body). The members change but the corporation continues, with perpetual succession.

• Corporation sole: a series of successive individuals holding an office, treated as a single person (the Crown, a bishop, the President of India, the Administrator-General, the Official Trustee, the Public Trustee). The office, not the individual, is the person.

• Salmond's conception: a corporation is a group or series of persons which is treated by law as a person.

(b) Institutions: a charitable fund, a hospital, a church or a temple endowed with property may be treated as a legal person, for example the idol in Hindu law.

(c) Funds and estates: a trust fund, the estate of a deceased person or a bankrupt's estate may be treated as juristic person for purposes of administration (in India, the trust is not a person; the trustee holds the property).

(d) The State: the Union and the States are juristic persons capable of suing and being sued (Article 300). Local authorities and statutory corporations are also persons (for example, LIC, SBI, Municipal Corporations).

(e) Entities that are not legal persons in India: a partnership firm (it is not a separate legal entity under the Partnership Act, 1932, although it is recognised as a unit under some statutes, such as Income Tax), a Hindu undivided family (HUF), a trust, and an unregistered association. By contrast, a company (Companies Act, 2013; Section 9 deals with the effect of registration: the company is a body corporate with perpetual succession and a common seal) and a limited liability partnership (LLP Act, 2008, Section 3: an LLP is a body corporate and a legal entity separate from its partners) are legal persons.

(Textbooks differ somewhat on exact labels, but for exam purposes: Fiction: Savigny/Salmond; Concession: Savigny/Dicey; Realist: Gierke/Maitland; Bracket: Ihering; Purpose: Brinz; Normative: Kelsen.)

Key points:

• Gierke (Das deutsche Genossenschaftsrecht) argued that a group has a Gesamtperson with its own will; F.W. Maitland translated part of his work and popularised it in England. Realist theory supports the claim that associations (such as trade unions) have rights independent of the State's grant, and was used in discussing the Taff Vale case (1901).

• Salmond's view: for the sake of convenience law treats the corporate body as a person, even though it is only a fiction; the rights and liabilities belong to the corporation, which are quite distinct from those of its members.

• Duguit denies the reality of personality of corporations, but he did not espouse the fiction approach either: he thought the idea of 'person' was metaphysical, and replaced it by 'social function'.

• Separate legal entity from its members: Salomon v A. Salomon & Co Ltd (1897, House of Lords): a company is a separate person, even if one man holds virtually all its shares, and the shareholder-creditor Salomon was not liable to the company's creditors.

• Perpetual succession: the death, insolvency or retirement of members does not affect the existence of the company.

• Common seal and capacity to sue and be sued in its own name.

• Limited liability (for companies limited by shares).

• Separate property: Macaura v Northern Assurance Co (1925): a shareholder has no insurable interest in company property.

• Capacity limited by its objects (the ultra vires doctrine, Ashbury Railway Carriage Co v Riche, 1875), though the Companies Act, 2013 has diluted its effect.

• Rights of a corporation: a company is a person under Article 14 but is not a citizen and so cannot claim Article 19 rights (Tata Engineering and Locomotive Co v State of Bihar, 1964). In R.C. Cooper v Union of India (1970) (the Bank Nationalisation case) and Bennett Coleman v Union of India (1973) the Court allowed shareholders to challenge the infringement of their own rights when the company's action also affected them.

Courts sometimes disregard the separate personality of the company and look at the real persons behind it (lifting the veil).

Grounds (judicial and statutory):

• Fraud or improper conduct: Gilford Motor Co v Horne (1933) (a company formed to evade a restrictive covenant was a mere cloak); Jones v Lipman (1962) (a company was a 'device' or 'sham' to avoid specific performance).

• Determination of character (enemy character): Daimler Co v Continental Tyre & Rubber Co (1916): a company registered in England but controlled by enemy aliens was regarded as an enemy.

• Tax evasion: Juggilal Kamlapat v CIT (1969); Dinshaw Maneckjee Petit (1927) (a person who made himself a company to evade super-tax).

• Agency or trust and Group enterprises: DHN Food Distributors v Tower Hamlets (1976), later qualified, Adams v Cape Industries (1990), which narrowed veil lifting.

• Protection of revenue and public interest: State of UP v Renusagar Power Co (1988); Life Insurance Corporation of India v Escorts Ltd (1986) (the court may look behind the corporate form where necessary to see the real transaction); Delhi Development Authority v Skipper Construction Co (1996) (fraud; the court lifted the veil to reach the property of directors and their families).

• Corporate groups and Foreign investment: Vodafone International Holdings BV v Union of India (2012) (the Supreme Court respected separate corporate personality and looked at the 'substance' of the transaction as a whole).

• Prest v Petrodel Resources (2013, UK Supreme Court): distinguishes concealment from evasion principles; veil piercing is available only when a person is under an existing legal obligation or liability which he deliberately evades by interposing a company.

• Statutory instances under the Companies Act, 2013: Section 7(7) (incorporation by false information), Section 34 and 35 (misstatement in the prospectus), Section 339 (fraudulent conduct of business) and Section 447 (punishment for fraud), and Section 2(60) (officer in default). Also 'trading with fewer than the statutory minimum members' (earlier legislation).

Alter ego: Bacha F. Guzdar v CIT (1955): a shareholder is not the owner of the corporation's assets; the shareholder has only a right to a share of profit in the form of dividend.

• A corporation has no body to imprison or a mind to be guilty, yet it may be liable for crimes under the doctrine of identification (the 'directing mind and will' of the company is the company). See Lennard's Carrying Co v Asiatic Petroleum Co (1915); Tesco Supermarkets v Nattrass (1972); H.L. Bolton (Engineering) Co v T.J. Graham & Sons (1957) (Lord Denning's 'brain and nerve centre' analogy).

• Indian position: Standard Chartered Bank v Directorate of Enforcement (2005): a company can be prosecuted even for offences that require mandatory imprisonment, and fine can be imposed in such cases. Iridium India Telecom Ltd v Motorola Inc (2011): a company can be liable for offences requiring mens rea (cheating), the knowledge of the directing officers being attributed to it. Sunil Bharti Mittal v CBI (2015): the principle of attribution; directors are not automatically liable for the company's acts and a company can be liable only under the 'alter ego' principle.

Idols and religious texts

• Pramatha Nath Mullick v Pradyumna Kumar Mullick (1925, Privy Council): a Hindu idol is a juristic person capable of holding property; the shebait acts as its manager and representative. The idol's ownership is ideal, the shebait's powers are real.

• Yogendra Nath Naskar v Commissioner of Income Tax (1969): the idol, a juristic person, is assessable to income tax as an 'individual'.

• Shiromani Gurdwara Parbandhak Committee, Amritsar v Som Nath Dass (2000): the Guru Granth Sahib is a juristic person; the Court recognised it as a legal entity capable of owning property.

• The Ram Janmabhoomi (Ayodhya) judgment (M. Siddiq v Mahant Suresh Das, 2019) also discussed the deity as a juristic person that can sue through a next friend; read its treatment of the deity and the 'asthan' carefully before relying on it in an exam.

• A mosque is not a juristic person in Indian law.

Rivers and natural entities

• Mohd. Salim v State of Uttarakhand (2017): the Uttarakhand High Court declared the rivers Ganga and Yamuna and their tributaries as legal and living entities with the status of a legal person, and appointed the Director NAMAMI Gange, the Chief Secretary and the Advocate General as 'persons in loco parentis' to protect them. The Supreme Court stayed the decision in State of Uttarakhand v Mohd. Salim (2017) on grounds of practical difficulties (for example, liability for floods).

• Lalit Miglani v State of Uttarakhand (2017): the same High Court extended this status to the Himalayan glaciers (Gangotri and Yamunotri), streams, rivulets, lakes, air, meadows, dales, jungles, forests and springs.

• Sukhna Lake case (Court on its Own Motion v Union Territory of Chandigarh, 2020): the Punjab and Haryana High Court declared Sukhna Lake a 'living entity' with legal personality.

• Foreign comparisons: the Whanganui River in New Zealand (Te Awa Tupua (Whanganui River Claims Settlement) Act, 2017) and Te Urewera Act 2014; the Constitution of Ecuador (2008) recognises the rights of nature (Pachamama); Bolivia's Law of Mother Earth (2010); and the Atrato River case of Colombia (2016).

Animals

• Animal Welfare Board of India v A. Nagaraja (2014): the Jallikattu case: the Supreme Court held that animals have a right to live with dignity, extended the idea of Article 21 'life' to animals, and listed the 'five freedoms' of animals: freedom from hunger, thirst and malnutrition; from fear and distress; from physical and thermal discomfort; from pain, injury and disease; and freedom to express normal patterns of behaviour. It also invoked Article 51A(g) (compassion for living creatures) and the Prevention of Cruelty to Animals Act, 1960.

• Narayan Dutt Bhatt v Union of India (2018): the Uttarakhand High Court declared the entire animal kingdom, including avian and aquatic species, as legal entities having the status of legal persons, and citizens as their guardians.

• Karnail Singh v State of Haryana (2019): the Punjab and Haryana High Court declared the animal kingdom a legal entity (the Supreme Court stayed this in 2019).

• Comparative note: in the US, the New York Court of Appeals (2022, Nonhuman Rights Project v Breheny, the elephant 'Happy') refused to treat an elephant as a legal person for habeas corpus.

Artificial intelligence and other emerging entities: in 2017 the European Parliament debated a proposal on 'electronic personhood' for sophisticated autonomous robots, which many criticised; Saudi Arabia symbolically granted 'citizenship' to the robot Sophia in 2017. Indian law has no concept of AI personhood. The debate centres on liability gaps and whether legal personality is a pragmatic device.