Name: Sojan Paul Puthussery

Roll No: 8029

SUBJECT: JURISPRUDENCE

TOPIC 1: Status of Unborn, Minor, Lunatic, Drunk and Dead Persons.

I. Introduction:
i. According to the law, a person is anyone who has certain legal rights and is bound by
some legal duties. This person may be real or even imaginary. Under the eyes of the law,
there are two types of legal entities viz., human and non-human. So a person will be a
human legal entity. But a company or corporation, on the other hand, is a judicial (non-
human) person or entity. It still has legal rights and duties just like a human entity.
ii. The law of status concerns itself with the status of a man in the society. It governs the
natural, domestic and the extra domestic status of such a man in the society as a whole.
The extra domestic status covers the relations and interactions of the man apart from
those with his family.
iii. Thus, the law of status will deal with those persons that do not enjoy the privilege of
being legal entities, i.e. have no distinct legal personalities. But yet the society has a duty
towards them and their wellbeing. These include an unborn child, a minor, a lunatic or a
drunk person and even a dead person.
iv. According to ‘positivists’, legal rights are essentially those interests which have been
legally recognized and protected. John Austin made a distinction between legal rights
and other types of rights such as Natural rights or Moral rights. By legal rights, he
meant rights which are creatures of law, strictly or simply so called. He said that other
kind of rights are not armed with legal sanction and cannot be enforced judicially.
v. On the other hand, Salmond said that a legal right is an interest recognized and protected
by rule of law and violation of such an interest would be a legal wrong.

II. Legal Status of an Unborn Child:

i. A child that is still in the womb of its mother is still not technically a person. But by legal
fiction, an unborn child is considered already born. i.e. he/she is granted a certain legal
personality. If the child is born alive he/she will then enjoy legal status.
Certain provisions made for the unborn child under the Indian law are as follows:
 Name: Sojan Paul Puthussery
Roll No: 8029

 As per the Transfer of Property Act, we can transfer property for the benefit of the
unborn child. This is done via a trust.
 As per the Indian Succession Act, we can create an interest in the name of the
unborn child in a property. But the interest of the property can only be vested after
the child is born alive.
 In a HUF as per Mitakshara Law, an unborn child will have an interest in
coparcenary property.
 Criminal Procedure states that if a female inmate sentenced to death is found to be
pregnant, the execution is postponed till the child has a chance to be born.

III. Legal Status of a Minor, Lunatic and Drunkard:

i. The legal status of Minor, Lunatic and Drunkard have some special consideration. These
people are all obviously natural persons and all have a legal identity. However, they are
considered incapable to enter into a contract.
ii. As per the law, every person who has attained majority is considered capable of entering
into a contract. This obviously means a minor is incapable of doing so. Other than that,
there are certain persons who are also incapable of entering into a contract.
iii. So any person who is mentally afflicted (includes lunatics and drunk persons) at the
time of entering into a contract is incapable of doing so.
iv. Crimes & Punishments in Indian Penal Code:
 Section 82: Act of a child under seven years of age – Nothing is an offence which
is done by a child under sever years of age.
 Section 83: Act of a child above seven years and under twelve of immature
understanding – Nothing is an offence which is done by a child above seven years
of age and under twelve, who has not attained sufficient maturity of
understanding to judge the nature and consequences of his/her conduct on that
occasion.
 Section 84: Act of a person of unsound mind – Nothing is an offence which is
done by a person who, at the time of doing it, by reason of unsoundness of mind,
is capable of knowing the nature of the act, or that he/she is doing what is either
wrong or contrary to law.
 Name: Sojan Paul Puthussery
Roll No: 8029

 Section 85: Act of a person incapable of judgement by reason of intoxication

caused against his/her will - Nothing is an offence which is done by a person
who, at the time of doing it, by reason of intoxication, incapable of knowing the
nature of the act, or that he/she is doing what is either wrong, or contrary to law;
provided that the thing which is intoxicated him/her was administered to him/her
without his/her knowledge or against his/her will.
 Section 86: Offence requiring a particular intend or knowledge committed by
one who is intoxicated – In cases where an act done is not affected unless done
with a particular knowledge or intend, a person who does the act in a state of
intoxication shall be liable to be dealt with as if he/she had the same knowledge as
he/she would have had if he/she had not been intoxicated, unless the things which
intoxicated him/her was administered to him/her without knowledge or against the
will.

IV. Legal Status of a Dead Man:

i. A dead person is no more a legal entity. As soon as a person dies, he becomes incapable
of enjoying rights or performing his duties. So the legal personality of a person ends with
their death.
ii. However, the law does take into account the wishes and desires of the deceased person.
And it also ensures that there is no false harm to the reputation of the deceased.
Therefore, as per the Indian Law:
 Every person has the legal right to a decent burial as per their religious faith. Any
act that amounts to the indignity of the corpse is punishable by section 297 of the
Indian Penal Code. This also applies to any homeless person without any family.
 The wishes of a dead person regarding his property must also be fulfilled. This is
done for the benefit of the living who are benefitting by such wishes or will.
 The defamation of a dead person is punishable by section 499 of the Indian Penal
Code. This includes anything that harms the reputation of the person with the
intention to hurt family members and close relatives.
V. Conclusion: The above explained is the legal status of Unborn, Minor, Lunatic, Drunk
and Dead Persons.
 Name: Sojan Paul Puthussery
Roll No: 8029

TOPIC 2: Corporate Personality:

I. Introduction:
i. As per the law, a corporation is an artificial person. It has the ability to enjoy rights,
fulfill its duties and hold property in its own name. Hence, the concept of corporate
personality is a singular creation of the law. The best example of this is the corporate
personality of a company under the Companies Act, 2013.
ii. Such a corporation under the law has a legal identity of its own. Such a corporation is
represented by its members and agents. However, unlike a natural person, these
corporations have a perpetual existence.
iii. Such companies and corporations can sue and even be sued upon. Other such examples
of institutes with corporate personalities include banks, universities, corporate bodies,
colleges, an association of persons, etc.

II. Concept of Corporate Personality:

i. Corporate personality is the creation of law. And as per the law, a corporation is an
artificial person created by the personification of a group of individuals. The theory of
corporate personality mainly states that a company has a legal identity different from its
member. Both English and Indian laws follow the concept of corporate personality.
ii. The creditors of the company can recover their money only from the company and they
cannot sue individual members. In the same way, the company is not in any way liable
for the individual debts of its shareholders/members and the property of the company is
only used for the benefit of the company.
iii. It enjoys certain rights and duties such as the right to hold property, right to enter into
contracts, to sue and be sued in the name of the company. The rights and liabilities of the
members are different from the company.
iv. In short, corporate/legal personality, which the company acquires on incorporation,
confers legal personality and independent status to the company.

III. Types of Corporate Personality:

 Name: Sojan Paul Puthussery
Roll No: 8029

There are two types of corporations:

Sr.
No CORPORATE SOLE CORPORATE AGGREGATE
.
1 Corporate sole is an incorporated series of Corporate aggregate is a group of
successive persons. It has one member at a coexisting members who are united to
time, who deals in a legal capacity and has promote their common interest.
rights and duties.
2 This type of corporation has perpetual Their liability is different from that of the
succession. The corporation sole continues company i.e it has limited liability. It has
to exist though the human being changes. personality of its own, which is different
from its members.
3 Eg: The President of India, Controller and Eg: All bodies/associations incorporated
Auditor General, Governor of RBI etc. under Statute of Parliament/ State
Legislature.

For the first time, this concept was recognized in the year 1867 in the case of Oakes v. Turquand
and Harding. But it was approved and firmly established in the leading case of Salomon vs.
Salomon in which it was held that a company has its own personality which is different from the
personalities of the individuals.

IV. CASE STUDIES: 

A. SALOMON V A SALOMON & CO LTD [1897] AC 22

FACTS:
1. Mr. Aron Salomon was a businessman who specialized in manufacturing leather boots.
After a few years, he incorporated a limited company known as Salomon and Co. Ltd.
2. In order to meet the requirement to incorporate a company, he needed at least seven
members/ shareholders so he decided to make his family members his business partners
by giving one share to each of them.
3. He sold his business to the limited company for $39000 out of which $10000 was a debt
to him. He was then the company’s principal shareholder and principal creditor.
 Name: Sojan Paul Puthussery
Roll No: 8029

4. After one year, the company went into liquidation. The assets realized were $6000 while
the liability was debentures held by Salomon $10000 and unsecured creditor $7000.
5. An unsecured creditor challenged the right of Salomon to have preference as debenture
holder over unsecured creditors.

ISSUE:
Was the formation of Salomon’s company a fraud intended to defraud the creditors?

HELD:
The court said that on incorporation, the company became an independent legal person
and not an agent of Salomon. Salomon, as a debenture holder of the company was ought
to get priority in payment over the unsecured creditor.

IMPORTANCE OF THIS JUDGEMENT:

The decision in this case established the concept of separate legal personality of a
company which allowed shareholders to carry on trading with minimal exposure to the
risk of personal insolvency in the event of a collapse. There are 2 principles laid down in
the Salomon’s case:
(a) Artificial Person: Company is an artificial person created by law. Artificial in the
sense, it has no body/soul like a natural person. Created by law means formation of a
company requires fulfilment of so many legal formalities.
(b) Limited Liability: The liability of the members is limited to the extent of the face
value of the shares, where the company is limited by shares. Then, the shareholder is
liable to the extent of the unpaid capital on his shares and his personal assets will not be
affected in the event of winding up of the company.

B. LEE V. LEE’S AIR FARMING LTD. (1961) AC 12

FACTS:
1. This case is concerning about the veil of incorporation and separate legal personality. In
this case out of the 3000 shares in Lee’s Air Farming Ltd., L held 2999 shares. He made
himself the Managing Director and was also the chief pilot on a salary. 
2. While working for the company he was killed in an air crash. Since his death was in the
course of employment, his widow claimed for compensation. She claimed £2,430
compensation for   herself and her four infant children and she also claimed a sum for
funeral expenses. 
 Name: Sojan Paul Puthussery
Roll No: 8029

3. The respondent company denied that deceased was a “worker” of the company and
alleged that at the time of the accident the deceased was the controlling shareholder and
governing director of the respondent company.

ISSUE:
Was there a separate legal entity? Whether Mrs. Lee can claim compensation?

HELD:
(a) The Lee Air Farming case confirmed the Salomon principal. The Privy Council allowed
Mrs Lee’s claim and said that Lee might have been the controller of the company in fact
but in law, they were separate distinct persons and the concept of separate legal entity
was explained. Mr. Lee could therefore enter into a contract with the company, and could
be considered to be an employee. His wife was therefore entitled to an award in respect
of workmen’s compensation.
(b) Judicial Committee of the Privy Council also said that a company is a separate legal
entity, so that a director could still be under a contract of employment with the company
he solely owned.

V. Conclusion:
In summation, there has been no theory which encompasses all the aspects of the problem
of juristic personality. The theories that have been propounded are philosophical, political
or analytical. But it must be borne in mind that functional basis of the law cannot be
ignored. Thus, common law has not committed to any one single theory of corporate
personality. In India, following the common law principles, these theories have not
gained immense foothold in practical corporate governance, rather they have a strong
theoretical position.
 Name: Sojan Paul Puthussery
Roll No: 8029

SUBJECT: CONTRACT - II

TOPIC 1: What is Pledge and rights of a Pawnee.

I. Meaning, Definition and Nature of Pledge:

i. The Indian Contract Act 1872 defines the Contract of Pledge as:
Section 172: Pledge, Pawnor and Pawnee defined as the bailment of goods as security for
payment of a debt or performance of a promise is called pledge. The bailor is in this case
called the pawnor. The bailee is called pawnee.
ii. From the definition of the term pledge in the given section, it is clear that pledge is also a
type of bailment due to the fact that a contract of pledge to come into existence, delivery of
goods is requisite. A pledge can also be defined as, Pledge is the transfer by one person to
another of the possession of certain goods to be held by the latter as security for the
performance by the former of some obligation to pay or perform, which being performed,
the pledge must be restored.
iii. The Supreme Court of India has defined pledge as, ‘Pawn or pledge is a bailment of
personal property as a security for some debt or engagement’. A pawnor is one who being
liable to an engagement gives to the person to whom he is liable a thing to be held as
security for payment of his debt or the fulfilment of his liability.
iv. There are three categories in which security is provided, namely- (1) lien, (2) mortgage
and (3) pledge. Under a contract of pledge, any good or the title of the good is pledged by
one party to the other as collateral for the money advanced by the later party. Thus making
of pledge is a condition precedent for advancing money. Pledge may also be defined as
delivery of goods by the debtor to the creditor for a debt or for any other contractual
obligation and the object herein delivered shall be returned to the pledgor when the debt
money has been repaid or the obligation has been performed.
v. A valid contract of pledge involves the bailment of goods, as defined under section 148[6]
of the Act as security for the debt. There is no difference regarding the concept of pledge in
both Indian and Common Law system of England. The nature of the contract is one of
security where this security is liable in case of default by the debtor.
II. Rights Of The Pawnee under Contract of Pledge:
 Name: Sojan Paul Puthussery
Roll No: 8029

i. The pawnee or the pledgee under a contract of pledge gets no absolute title at law he is a
mere possessor of the property or good pledged to him. This is known as Special Property.
In this kind of property, the ownership rights including rights of its enjoyment remains with
the pledgor while what is actually transferred is only possession.
ii. However, the pawnee does have one right in this situation, namely the right to sale the
thing pledged in case of default by the debtor. But this is not the only right which the
pawnee under pledge is entitled to. The following sections deals with the rights of the
pawnee as has been provided under the Indian Contract Act 1872:
(a) Right to retain- until and unless the loan has been repaid or the obligation has been
performed, the pawnee has the right to retain the goods. This is illustrated in section 173
of the Indian Contract Act 1872:
Section 173 - Pawnees right of retainer: The pawnee may retain the goods pledged, not
only for payment of the debt or the performance of the promise, but for the interests of
the debt, and all necessary expenses incurred by him in respect of the possession or for
the preservation of the goods pledged.
Thus a pawnee can retain the goods for-
(1) payment of the debt or performance of the promise;
(2) interests on the debt; and
(3) all other expenses incurred by him in respect of the pledged goods.

III. Case Study:

i. The pawnee can hold or retain the goods only for the payment of that debt for which the
particular goods have been pledged. Unless a pledgees claim under pledge has not been
satisfied, another creditor can not take away the pledged goods from his possession. A
case here in point is ‘Bank of Bihar v State of Bihar’ where the pledgee bank advanced
loan to the pledgor on the pledge of sugar bags whose constructive delivery was made by
handing over of the key of the godown where these were stored. However these were
then seized by the state of Bihar through rationing officer and district magistrate.
Thereafter the pledgee, the Bank, filed a suit for the recovery of the sugar bags. It was
held that the act of the State of seizing the goods will not deprive the pledgee of his rights
of the pledge and that he was still liable to the amount he advanced.
 Name: Sojan Paul Puthussery
Roll No: 8029

ii. Thus the State had the responsibility to indemnify him. The Bank had the special property
right over the sugar bags which will not extinguish until the debt amount has been paid
back to him. Thus the State had to reimburse the bank after realising the sale of the pledged
goods on default of pawnor in making repayment of the debt.

IV. Rights of a Pawnee:

i. Right to retain for subsequent advances- Section 174 provides that the pawnee is not
entitled to retain the goods for debt or promise other than that for which goods for
pledged for.[16] However it is presumed that the pawnee has the right, if he makes
subsequent advances to the pawnor, to retain the goods unless it is otherwise provided in
the contract. Thus it is the terms of the contracts which decides the rights of the pawnee
in this case.
ii. Right to extraordinary expenses- the pawnee has further rights of claiming form the
pledgor extraordinary expenses as provided under section 175.
Section 175 - Pawnees right as to extraordinary expenses incurred.-The pawnee is
entitled to receive from the pawnor extraordinary expenses incurred by him for the
preservation of the goods pledged.
This includes the expenses which the pledgee has incurred by virtue of preserving the
goods under his possession by way of pledge. The pertinent thing to note here is the
usage of the word receive which states the position that the pledgee cannot retain the
goods for the extraordinary expenses. In other words it can be said that his lien over the
pledged goods does not extend to cover the rights of extraordinary expenses. Thus what
the pledgee has is the right of action for recovering these expenses.

iii. Pledgees rights in case of default- the pawnee is entitled to the exercise of this right
when there is a default from the side of the pawnor or the debtor.
The pawnees rights are contained in section 176 of the act which reads as follows:
Section 176 - Pawnees right where pawnor makes default.-If the pawnor makes default
in payment of the debt, or performance; at the stipulated time or the promise, in respect of
which the goods were pledged, the pawnee may bring a suit against the pawnor upon the
debt or promise, and retain the goods pledged as a collateral security; or he may sell the
 Name: Sojan Paul Puthussery
Roll No: 8029

thing pledged, on giving the pawnor reasonable notice of the sale. If the proceeds of such
sale are less than the amount due in respect of the debt or promise, the pawnor is still
liable to pay the balance. If the proceeds of the sale are greater than the amount so due,
the pawnee shall pay over the surplus to the pawnor.
iv. Thus section 176 vests in the pawnee two distinct rights in case of default namely:
(a) To sue the pawnor upon the debt and retain the goods or collateral as security and;
(b) To sell the thing which has been pledged after a proper notice of such a sale has been
transmitted to the pawnor.

V. Conclusion:
The above mentioned can be concluded by stating that it has dealt with and analysed what
a contract of pledge means and what is the nature of it. The features of pledge along with
various rights, duties and obligations it creates has also been mentioned in detail. The rights
which the pawnee possess, the duties which the pawnor has and other features of pledge
has been explained with giving due considerations to the relevant case laws.
 Name: Sojan Paul Puthussery
Roll No: 8029

TOPIC 2: What is agency and creation of agency.

I. Meaning, Definition, Types, Duties and Rights of agency:

i. Contract of the agency is a legal relationship, where one person appoints another to
perform on the transactions on his behalf. The person who appoints the other to take care
of his transactions is the principal. Whereas, the person who looks after the transaction of
the principal is the agent. The Contract of the agency is a special contract under
the Indian Contract Act, 1872.
ii. Essential Requirements of Agency:
There are certain requirements that are necessary for an agency. The following are the
requirements:
(a) Principal Must be Competent to Contract:
Any person of sound mind and with the age of majority by law can employ an agent.
(b) Competence of Agent is not Mandatory:
Any person can become an agent between the principal and the third person. Generally,
an agent does not have any personal liabilities towards the principal while contracting.
Therefore the agent doesn’t need to be competent to contract.
(c) No Consideration is Necessary:
No remuneration is necessary while appointing an agent. The agent receives payment by
the way commission for the rendered services.

iii. Creation of Agency:

The following are the ways to create an agency:
(a) Expressed:
Any competent principal person can appoint an agent as his representative through a
contract. The appointment contract can be in oral or also in written form.
(b) Implied:
The principal person can appoint an agent indirectly, and an implied agency will be
created. The formation of the implied agency can be through relationships or certain
situations.
(c) By Subsequent Ratification of Unauthorised Act
 Name: Sojan Paul Puthussery
Roll No: 8029

If the principal does not authorise the act of the agent initially bu later the agent
authorises it, then the principal accepts the act as done on behalf of him. Such
authorisation is the ratification.

iv. Types of Agent:

The word agent describes many kinds of activities. There are certain types of agents in
the business world. A Broker is a mercantile agent. The principal appoints him to make
contracts by negotiating for the purchase and sale of the property. However, the does not
receive the possession. The Factor is also a mercantile agent. But he receives the
possession to sell the goods. Del credere is a special type of mercantile agent. The agent
agrees for extra commission for him to be liable to the principal if the third party fails to
perform the contract. But in general, an agent drops out after negotiating the principal and
the third party. He will not be liable for the third party’s failure to perform.

v. Duties of an Agent:
The agent has to fulfil certain duties in the contract of agency. The following are the
duties of an agent:
(a) Conduct the Principal’s Business:
The agent must conduct his principal’s business. He should conduct it according to the
directions of the principal. If the agent contradicts by not following the directions of the
principal, then he must make it good with the principal. If any profit comes from
contradicting the principal, then he must account it to the principal.
(b) Reasonable Skill and Diligence:
The agent has to act diligently and skillfully if not he has to compensate to the principal
for his negligence and want of skill. The compensation does not include the damage or
loss caused by the negligence.
(c) Communicate with Principal:
Communicating with the principal and acting according to his directions is one of the
most important duties of the agent.
(d) Render Accounts
When the principal demands for the accounts, the agent has to render the proper accounts.
 Name: Sojan Paul Puthussery
Roll No: 8029

(e) Avoid Conflict of Interest:

If the agent deal on his own without the consent of the principal and gives the material
circumstances from such a deal, then the principal can reject the transactions for certain
reasons. The following are the reasons:
 If the agent has given the materials in a dishonest way
 If the principal has a disadvantage of such a dealing
(f) Not to Make Secret Profit
The principal can claim the benefit arising for the dealings, which he acts without the
consent of the principal.
(g) Remit Sums
The agent must remit all the sums received on behalf of the principal. However, he has
the right to deduct his lawful charges from the sum.

vi. Rights of Agent.

https://www.indiafilings.com/learn/contract-of-agency/
https://www.toppr.com/guides/business-laws-cs/indian-contract-act-1872/creation-of-
agency/