Category: Laws Doubts

  • Construction Lawyers’ Professional Ethics in China

    Construction Lawyers’ Professional Ethics in China

    Professional Ethics of China Construction Lawyers; The concept of ruling the country by law is deeply rooted in the hearts of the people and the progress of the rule of law in china is accelerated, which makes the status of lawyers in the legal profession improve, and the status of lawyers in the process of rule of law in china is also more prominent From the ecological perspective of ruling the country by law, the social responsibilities and work responsibilities undertaken by lawyers have changed.

    Here are the articles to answer, the doubts about the Professional Ethics of China Construction Lawyers’

    How to properly protect the interests of clients and regulate their own words and deeds with professional ethics is a major issue that lawyers need to think about at this stage. Based on the perspective of ruling the country by law, this paper comprehensively considers lawyers’ practice ability, moral cultivation and ideals, and beliefs, and puts forward opinions on standardizing lawyers’ professional ethics, to help promote the strategy of ruling the country by law. What is the Definition and Meaning of Juristic Personality?

    An overview of the basic theory;

    In the process of engaging in legal activities and performing their duties, lawyers should abide by certain codes of conduct and believe in certain morality, which is the professional ethics of lawyers. A lawyer’s professional ethics is also a comprehensive reflection of a lawyer’s integrity, political quality, disciplinary style, service awareness, and ideological quality. In the new era, lawyers’ professional ethics cover six levels of content.

    First, for the people. The people are the directors of the state, and any practice that lawyers engage in must not deviate from the interests of the people. They must have the courage to assume social responsibilities and safeguard the interests of the people. For example, lawyers should actively participate in legal aid, social law popularization, and social welfare activities, and truly become qualified lawyer who defends the interests of the people.

    Second, loyalty. Lawyers must be loyal to the socialist legal cause and establish socialist ideals and beliefs. Lawyers should also be loyal to their clients, guide them to move forward along the legal and correct route, protect their legitimate rights and interests, and refrain from false promises and false propaganda.

    Third, justice. Lawyers should be based on their work, treat their clients fairly, and spread positive energy in society. For example, lawyers should not coax their clients to spread rumors in society for financial gain.

    Fourth, is dedication. After accepting the entrustment of a client, a lawyer must be dedicated to his job, complete the work assigned by the client within the scope of the law, establish a correct practice concept, and enhance the image of the lawyer in the public mind.

    Fifth is the rule of law. In the process of practicing law, lawyers must defend the dignity of the Constitution and the law, properly handle the relationship with administrative and judicial organs, guide the masses to abide by discipline and law and take the lead in abiding by the Constitution and laws, and promote the process of ruling the country according to law.

    Sixth, integrity. Lawyers must prevent perjury and induce witnesses to collude in the practice process, and the privacy and secrets known in the practice process must also be kept strictly confidential.

    The performance of lawyers’ professional ethics anomie;

    (1) Compete with each other and pursue fame and fortune;

    Every lawyer is a part of the legal profession community, and the image of every lawyer is related to the overall image of the legal profession. At this stage, to pursue economic interests, some lawyers undertake cases by derogating other lawyers, making false promises, and false propaganda to the parties.

    First of all, when lawyers carry out publicity and promotion, they do not focus on the case itself. They publicize their social background to the client, belittle other lawyers, and exaggerate the number of cases they handle and their past performance, but in the end, they do not complete the client’s entrustment.

    Secondly, in the stage of charging fees, lawyers take advantage of the fact that the parties do not understand the law to increase the case-handling procedures, teach the complexity of the case in disguise, and then charge additional fees. Some lawyers even bypass law firms and collect fees privately by falsifying letters.

    Finally, some lawyers slandered the lawyers of the first-instance case in the second-instance case, which intensified the vicious competition within the legal profession. All in all, the practice of lawyers who look down on their peers and pursue fame and fortune not only affects the sustainable development of the legal profession but also causes the industry’s profits to be completely lost.

    (2) Insufficient literacy and poor business;

    In the era of the knowledge economy, the speed of knowledge change is accelerated, and many laws and regulations are updated quickly. Only by constantly updating their knowledge structure and transforming from generalization to refinement can lawyers adapt to changes in the legal market environment. At this stage, some lawyers rely on their peers’ experience in handling cases or have a solid foundation to handle legal affairs, and do not actively learn the latest legal knowledge and practice skills. Inefficiency.

    In addition to the professional level, some lawyers do not pay attention to speech manners & dress. For example, after losing the case, a lawyer in Northeast China arbitrarily accused the judges of unfair treatment without evidence, and even put on a printed T-shirt and stood at the door of the court after the event, which hurt the society and seemed to harm the lawyer. the overall image of the industry. Explain the Negotiable Instruments Act 1881!

    (3) The relationship is complicated and lacks principles;

    Typical manifestations are that some lawyers fail to properly control their relationships with judicial and administrative staff, submit to judicial and administrative powers too much, secretly collude with relevant personnel, and artificially manipulate the outcome of cases, undermining judicial credibility and fairness, and harming others. the legitimate rights and interests of a party. Some lawyers won the case by offering bribes, forging evidence, etc., losing the justice and professional ethics that they should uphold, and finally going to the road of crime.

    For example, in the Shanxi “Hao Jianhua” case, the Beijing “Ma Yuhong” case, and the Kunming “Deng Hua” case, the lawyers involved in the case solicited the source of the case by offering bribes and other means and disrupted the normal trial of the case by offering bribes. The above-mentioned improper behavior not only degrades the majesty of the legal profession but also tramples on the dignity and bottom line of the rule of law, which is contrary to our country’s strategy of governing the country by law.

    (4) Lack of integrity and indifference to ideals;

    On the one hand, some lawyers lack integrity, avoid talking about the key issues of the case, and blindly evade when encountering difficulties, which damages the interests of the parties. For example, after a lawyer in Shandong charged lawyer fees, he avoided the client by refusing to answer the phone when he encountered difficulties in handling the case and did not refund the lawyer fee, which finally caused the client to report to the Lawyers Association.

    In addition, some lawyers did not consider their case-handling ability and serviceability when undertaking cases and even made promises to the parties to “win the case”, which led to the miscalculation of the lawyer’s ability to the parties. On the other hand, lawyers, as part of the big social family, should be concerned about national interests, social public interests, and people’s interests. However, some lawyers only focus on their interests, have weak ideas on the rule of law, and are unwilling to assume corresponding social responsibilities.

    For example, in legal aid cases, some lawyers handle the case with a “perfunctory” mentality due to the low cost. They do not pay any attention to the interests of the parties to the case. Interests. Another example is that some lawyers are not keen to participate in legal popularization activities and other public welfare activities, and they are dismissive of social construction and the interests of the people, which violates the professional ethics of lawyers.

    Suggestions on Strengthening the Construction Lawyers’ Professional Ethics;

    (1) Improve professional ethics;

    The All-China Lawyers Association has paid great attention to the problem of anomie of lawyers’ professional ethics in practice. In 2011, it issued relevant industry regulations, stipulating lawyers’ practice discipline, professional ethics, and code of conduct. However, this provision is too general and has weak operability, making it difficult to meet the needs of governing the country by law in the new era.

    Therefore, it is necessary to revise the relevant industry regulations, further refine the behavior of lawyers’ professional ethics anomie, stipulate corresponding responsibilities, get rid of the idea of ​​empty words and formalities, ensure that industry regulations are feasible, and truly implement industry regulations into real life. middle. In addition, when revising or promulgating industry regulations, it is necessary to avoid principled content and focus on the specificity of regulatory provisions.

    (2) Improve legislation;

    First of all, to target the black sheep in the team of lawyers and play a warning role in the team of lawyers, it is necessary to amend the Lawyers Law and improve the content of the law on punishment for violations and legal liabilities. Lawyers’ violations and typical violations that are common in real life should be incorporated into the Lawyer’s Law.

    Secondly, when revising the Lawyers Law, we should pay attention to the connection between this law and the Administrative Punishment Law and the Criminal Law, coordinate the relationship between the laws, and prevent the occurrence of “substituting punishment for punishment”.

    Third, it is necessary to strengthen the management of law firms, refine the legal responsibilities of law firms from the legal level, and supervise the bad behavior of law firms.

    Finally, extreme measures are taken to prevent lawyers from being denied access to their rights. This article argues that when the Lawyers Law is revised, attention should also be paid to the field of lawyers’ rights and remedies so that powers and responsibilities are unified.

    All in all, the revision of the Lawyers Law should be adapted to the situation of social development. In particular, attention should be paid to the areas with high incidence in real life but there are legislative gaps, to make up for the shortcomings of legislation.

    (3) Focus on education and training;

    At this stage, the focus of lawyer training in different regions is different. Some regions focus on practicing skills, while others may focus on laws and regulations. This article believes that the first thing that lawyers should focus on in vocational training is professional ethics education. It is necessary to enhance lawyers’ understanding of the Lawyer’s Law and other industry regulations and to include normative documents related to practice discipline and professional ethics into the key learning content. Raise lawyers’ awareness of practice discipline and professional ethics.

    In addition, the Lawyers Association should also pay attention to the assessment of practice discipline and professional ethics when assessing trainee lawyers. For those who fail to pass the assessment in this field, ideological education should be strengthened to ensure high moral quality, strong ideological and political awareness, and service. Persons with strong consciousness enter the team of lawyers, and those with low moral literacy, weak ideological and political awareness, and a weak sense of service are excluded from the team of lawyers.

    (4) Improve the supervision mechanism;

    To regulate the practice of lawyers and improve the ability of lawyers to serve, we should not only start from the aspects of legislation and education and training, but also improve the punishment mechanism for violations, urge lawyers to develop a sense of responsibility, and prevent lawyers from touching the red line of violations of laws and regulations.

    On the one hand, it is necessary to improve the supervision mechanism, strengthen the supervision of social citizens (especially the parties) over lawyers, broaden the channels for public complaints, timely detect the violation of laws and regulations in the practice of lawyers, and eliminate the black sheep hidden in the legal team. Create a good practice atmosphere in the market. At the same time, it is possible to consider setting up a supervisory committee to supervise lawyers’ service work to improve the professionalism of supervision work.

    The Supervisory Committee is mainly responsible for the supervision of lawyers and law firms and has the right to disclose the bad behavior of lawyers. The supervisory committee should also regularly give material and spiritual rewards to the public welfare models and moral models among lawyers. While rectifying the discipline, they should also play the role of lawyers as role models and spread positive energy in the legal market.

    (5) Implementing a regular assessment mechanism;

    Judicial and administrative organs regularly assess lawyers, refine the content of assessments, improve assessment procedures, and avoid the formalization of regular assessments. This article believes that when assessing a lawyer, not only the professional level and professional ability of the lawyer should be assessed, but also the professional quality and personal integrity of the lawyer should be assessed, and the public should be publicized to prevent the public from being deceived when entrusting lawyers.

    In addition, judicial and administrative organs should also conduct regular assessments of law firms, assessing the supervision mechanism, social reputation, and financial capacity of law firms, and improving the management and service capabilities of law firms.

    Conclusion;

    Lawyers are not only defenders of the rights and interests of clients, but also an important part of the national judicial system, shouldering the important mission of resolving social disputes and safeguarding the legitimate rights and interests of the people. The construction lawyers’ professional ethics is the proper meaning of comprehensively promoting the rule of law, it is a necessary guarantee for establishing the awareness of the rule of law in the society and enhancing the status of lawyers, and it is also an inevitable requirement for promoting the construction of a legal professional community.

    However, due to the short period of construction of the professional ethics system for lawyers in my country, there is still a large gap compared with the international level. Therefore, in the future, it is necessary to start from the level when promoting the construction of professional ethics for lawyers. Governing the country by law is a long-term and systematic project, and the construction lawyers’ professional ethics, as an important part of it, has received extensive attention from all walks of life. This paper pays close attention to the proposition of lawyers’ professional ethics and analyzes this field by using the theoretical theories they have learned, hoping to inject fresh theoretical vitality into the construction lawyers’ professional ethics.

    Construction Lawyers' Professional Ethics in China Image
    Construction Lawyers’ Professional Ethics in China; Photo by Bram Naus on Unsplash.
  • Definition and Meaning of Juristic Personality

    Definition and Meaning of Juristic Personality

    What is the Juristic Personality Definition and Meaning? The term juristic people, also used as persona Ficta or Personne morale are the terms most generally employed to designate the organization through which corporate action is effected. Those which exist to administer governmental powers are known as public corporations. Those which are conducted to enrich private individuals are known as private corporations. For the present inquiry, the distinction is not important, our problem is to determine the nature of the person, being, or group, through which the will of the collection of members of the corporation finds expression.

    Here are the articles to answer, What are the doubts about the Definition and Meaning of Juristic Personality?

    Personality is considered, therefore, an attribute not only of men but of groups of men, acting as a unit for the attainment of a common end. This person, which is not a human being, is called technically, a juristic person to distinguish it from the physical personality of mankind. The collective will of a group of men so acting and holding property when recognized as a subject of law, or as having legal subjectivity, or more plainly, when recognized as capable of holding definite legal rights, is no more fiction than is the personality of any human being.

    This juristic person or the collective will of the group is endowed with definite legal capacity. It is capable of exercising rights, capable of committing wrongs; the former, it may vindicate; the latter it must pay for. This most important feature of the juristic or corporate personality is known in legal terms as the ‘body corporate’, and in the Indian Companies Act, 1956 we see that this term has been defined in Section 2(7) where it has been specified what can be included under the term ‘body corporate’. What exactly is the body corporate we will see later in this paper.

    Research Process;

    Now that we have a more or less fair idea about the basic conception of a ‘juristic person’, it is safe to say that the exploration of the legal properties of a juristic person would be the chief aim of this paper. Here the researcher would like to state the methodology adopted for writing this paper. The concept of body corporate is fairly well-dealt within most books on Company Law, and especially so in Ramaiya’s ‘Guide to the Companies Act’. Apart from this, the researcher consulted a few more textbooks on the matter.

    Individual articles published in various law journals and available on a few legal databases namely Hein Online and Westlaw have been useful, as these articles not only deal with the definitional aspect but also the new horizons it opens up, namely the level of criminal charges that can be put up against a company as compared to a natural person. The Companies Act, 1956, and the decisions of the cases referred have been used as primary sources.

    Examination Questions;

    • What are the chief features of a corporate or juristic personality and how do they stand out in contrast to those of a natural person?
    • How have these features been interpreted and modified by the landmark decisions of the judiciary both in India and abroad?
    • How can the juristic person be made liable in tort or crime and how is it different from liability incurred by a natural person?

    Body Corporate-Aiming Towards A Definition;

    As mentioned earlier, the core of the corporate or juristic personality is the body corporate. But what exactly is it? It is very difficult to find an exact definition for body corporate as there is controversy entangled with the very term, with differences of opinion existing on whether it has a real personality or is its juristic personality a mere legal fiction. What are the Types of Business structures in Business Law?

    Broadly speaking, in the Indian context the term while not including any of the bodies expressly excluded by Sec. 2(7) of the Companies Act, 1956, may include an aggregate of persons who have been or is incorporated under some statute of this or any foreign country and which exists as a legal entity distinct from the members constituting it and having perpetual succession and a common seal. We will delve deeper into the concept of perpetual succession but let us pursue the definition for now.

    In Halsbury’s Laws of England, we find it defined as, a collection of individuals into one body under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law with the capacity of acting in several aspects as an individual, particularly of taking and granting property, of contracting obligations and of suing and being sued, of enjoying privileges and immunities in common and of exercising a variety of political rights, more or less extensive, according to the design of its constitution or the powers conferred upon it, either at the time of its creation or any subsequent period of its existence.

    Thus all these properties of a body corporate mentioned in this definition are the chief features that a body with a juristic personality possesses, and these properties define such a body. The members of a corporate body need not necessarily or only be individuals. Other bodies corporate may be members. The essential characteristic of a corporation is that it has a distinct legal personality and existence, which we call for this paper the juristic personality, as distinguished from its members, whoever they may be.

    All these features of corporate personality in the above definition are recognized by Sec. 34(2) of the Companies Act. In this context, it can be mentioned that the Supreme Court of India in State Trading Corporation of India v. CTO has elaborately discussed the nature of a corporation and held that it cannot have the status of a citizen under the Constitution of India. What is the Negotiable Instruments Act 1881?

    Salomon v. Salomon and Company-the judiciary interprets the company as having a separate legal personality;

    Salomon v. Salomon and Co. is a very important case in the context of understanding what can constitute a corporation or corporate personality. Salomon was a boot and shoe manufacturer in England who took over his own business by establishing a company namely Salomon & Salomon. There were seven subscribers to the memorandum of the company, including himself and his family members. Two of his sons and himself were on the Board of Directors. The business was transferred to this company with Salomon taking the majority of the shares and debentures. A charge was created on the company assets for the debentures held by Salomon.

    Within a year the company went into liquidation with some assets, debentures, and unsecured creditors. The liquidation of the company’s assets could not provide the amount that was required to meet the different debts. Since there was a charge on the company’s assets to the debentures held by Salomon the amount realized on assets was paid to Salomon. Nothing was left to the unsecured creditors to be paid who being aggrieved by this brought up litigation before the court of law.

    They contended that the company was created by the family members of Salomon with the sole purpose to take over the existing business and defrauding the creditors It was contended that since Salomon had the vast control over the affairs of the company is the managing director, and with other directors being his sons the company was never in existence. Rather it was solely his business and the company was a defrauding organization.

    The Court after much deliberation opined that a company is at law a different person altogether from the subscribers of the memorandum and its members, thus laying the seeds for the firm conception of juristic personality. When a memorandum is signed and duly registered the subscribers are a body corporate irrespective of their status and influence on the company, which again we have seen mentioned in the definitions referred to earlier in this paper. Salomon and Company was not a myth or fiction; rather it was a real company fulfilling all the legal requirements according to the Court.

    No provision in the existing law precluded the members from being related to each other. While the Court accepted the contention that the other six members were mere puppets in the hands of Salomon, it also observed that such a practice, while it might result in certain undesirable outcomes, was in no manner whatsoever violating any existing statutory provision.

    The contention that the company was defrauded into the purchase of Salomon’s business, was also rejected on the ground that the decision was taken in a meeting of the Directors of the company and the fact that such Directors, being the nominees of Salomon, must have been influenced by him, did in no way detract the legality and propriety of the transaction.

    The company is at law a different person altogether from the subscribers to the Memorandum and, although it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands receive the profits, the company is not in law the agent of the subscribers or trustee for them. Nor can subscribers as members be made liable.

    The Salomon decision to this day remains a landmark one for defining the personality of a company and has influenced many subsequent decisions made on the subject. Now we focus on a couple of important Indian decisions on corporate personality.

    Separate Legal Personality Of The Company As Interpreted By The Judiciary In India;

    The courts in India while determining the characteristic of corporate personality have been influenced by the Salomon decision and we see it reflected in a couple of very important decisions, the first one being Kandoli Tea Company Limited, Re. In this case, a tea estate was taken over by the persons running the estate by the establishment of a company.

    The affected persons initiated court proceedings by contending that it is the owners of the estate who themselves are party to the company and the subsequent takeover, therefore it is a transfer of property among themselves under another name and thus it is a case of fraud. The Calcutta High Court opined that a company once formed is a separate entity from its members and the status of the members before and after its formation does not matter.

    The transfer is valid as if the members of the company had been different persons altogether. According to S. 34(2) of the Companies Act, 1956 the incorporation transforms a company into a body corporate capable of functioning as an institutionalized entity. Thus the independent corporate personality of a company makes it the owner of its assets and the bearer of its liabilities. This is the very essence of the juristic personality of a company.

    This line of reasoning was followed in the important case of Praga Tools Corporation v. C.V. Manual. The Supreme Court further added in this case that even if the affairs of the company are controlled by one person that company is a legal entity and it is irrelevant if the directors or members belong to the same family. Unlike a partnership, the members in a company have a liability restricted to the nominal value of the shares owned by them or the sum guaranteed by them.

    There is nothing in the Companies Act that prohibits such one-man companies and the great majority of them are bona fide. The law recognizes the existence of the companies irrespective of the motives, intentions, schemes, or conduct of the individual shareholders and members. In Pattinson v. Bindhya Debi, it was further stressed that two companies that are incorporated with the same set of shareholders are nevertheless distinct and separate entities.

    A Few Other Important Features Of Juristic Personality – Perpetual Succession;

    Section 34 lays stress upon the fact that the body corporate which emerges from registration shall have perpetual succession. The element of perpetual succession prevents the dislocation of a company and the death or bankruptcy of any of its members. If a partner of a partnership firm dies or becomes bankrupt, the firm is dissolved, and if the surviving or continuing partners go on with the business, they in law constitute a new firm.

    But in the case of a company, the death or bankruptcy of a member does not have any such effect, for the company is a separate juristic person and it continues to exist as one until it is not only wound up but dissolved in the manner specified in the Companies Act. This point was well illustrated in the Australian case of Re Noel Tedman Holdings Pty. Ltd. In this case, a man and his wives were sole shareholders and directors of two companies.

    They both died in a road accident. Their deaths however were held not to cause the termination of the companies’ legal existence. The companies continued as owners of property and parties to uncompleted contracts. The personal representatives of the deceased shareholders were allowed by the court to appoint new directors of the companies to realize their property for the benefit of the deceased’s estates.

    The advantage of incorporation is that the company never dies. It has perpetual succession and remains in existence however often its members change until it has dissolved by liquidation. In Gopalpur Tea Co. Ltd. v. Peshok Tea Co. Ltd., it was held that the company has an identity and existence independent of the estate and undertakings owned by it, and so even if the estate is taken over by the Government, that does not constitute a taking over of the management of the company.

    Dealing Capacity Of The Company As Distinct From Its Shareholders;

    By its separate existence, it is legally empowered to execute dealings in its capacity. The company can deal, acquire or dispose of the property in its name and under a common seal. Assets and properties of the company are not of the shareholders but of the company itself. Along similar lines, it can execute legal proceedings in its legal capacity being recognized as a separate legal person, albeit a juristic one. There is nothing in the Indian law to warrant the assumption that a shareholder who buys shares buys any interest in the property of the company which is a juristic person entirely distinct from its shareholders.

    According to the Court in Bacha F. Guzdar v. CIT, the true position of a shareholder is that on buying shares he becomes entitled to participate in the profits of the company in which he holds shares, if and when the company declares, subject to Article of Association, that the profits or any portion thereof should be distributed by way of dividends among shareholders. Otherwise, he cannot participate in the profits of a company.

    Further, no shareholder can lay any claim to the rights vested in the company or be bound by any obligations, duties, or liabilities unless it can be shown that he was using the company as his agent. This was laid down in J.H. Rayner (Mincing Lane) Ltd. V. Dept. of Trade and Industry. In Daimler Co. Ltd. v. Continental Tyre & Rubber Co. (Great Britain) Ltd., it was emphasized by Lord Parker that the fact the members exert some manner of influence over the affairs of the company or they are the ultimate beneficiaries of the companies’ activity is not sufficient in itself to constitute the company as an agent of its members.

    Liability In Tort And Crime;

    ‘A company can be guilty of acting with intent to deceive and making a statement which it knows to be false or be indicted for conspiracy to defraud. It can also be guilty of and be fixed for contempt of Court. Notwithstanding its impersonal nature, it may sue for an injury done to its reputation in the way of its business by a libel, slander, or by the imputation of insolvency, and may be sued for malicious prosecution, maintenance, infringement of copyright, molesting a person in the exercise of his calling or negligence, and may be guilty of malicious libel’.

    A company cannot personally commit any tort or crime. It cannot even authorize any tort or crime because its authority always remains circumscribed by the objects clause of its memorandum and that clause cannot contain anything unlawful. Questions have, therefore often arisen as to the extent to which a company can be held liable for any tort or crime committed by those working for it.

    In criminal law, though there has been a necessary preoccupation with a fundamental dividing line that recognizes that certain acts, which only a natural person can perform, lie beyond a company’s vicarious liability. In Richmond London Borough Council v. Pin and Wheeler Ltd., a statutory order stated that ‘no person shall drive or cause or permit to be driven’ a prescribed vehicle, the Divisional Court Quashed a company’s conviction on the basis that the act of driving the goods vehicle in question is a physical activity which can be performed only by natural persons and not a company.

    The statutory offense of ‘permitting’ cannot be committed vicariously by a company although direct liability may well accrue on the basis that the act and the men’s rea of a directing mind and will of the company can be identified as that of the company, as laid down in Manga Plant Ltd. v. Mitchell. Accordingly, caution is required in choosing an appropriate offense with which a company may be charged where vicarious liability appears to be the foundation of the case.

    However, the constitutionality of the application of the principle of faultless liability in the corporate context must be decided on a case-by-case basis, taking into consideration the reasonableness of applying this doctrine in light of the objectives sought to be achieved by the statute. Even if the objectives are found to be of sufficient importance, a less restrictive means of limitation would, in the author’s view, be required where the offense carries a stigma and a severe penalty is prescribed.

    Conclusion;

    The concept of corporate personality has been subjected to acute and searching analysis by jurists during the last century. The debate on whether a group or association of human beings has a ‘fictitious’ or ‘real’ personality has attracted protagonists on both sides, each pressing its view with vigor. The crucial question that this discussion has thrown up is: to what extent has the law given recognition to such groups?

    Pursuing this discussion we find that the law has ascribed a personality to these groups, one that is exclusive to the group and distinct from each of the members of this group. This personality is called juristic personality or corporate personality and it can be traced to the common law principles or even is S. 34 (2) of the Companies Act, 1956 when viewed in the Indian context.

    The originally pragmatic device of legal technique to refer to the corporation or the juristic person by way of calling it a fictitious person or persona Ficta had become obsolete and began to create confusion in certain fields of law, especially in American constitutional law and in international law, rather than to promote the sound legal development. Correctly understood, ‘Persona Ficta’ or ‘juristic person’ can nowadays hardly be anything else than a synonym for ‘corporate person’, and keeping that in mind has the author dealt with the concept of juristic personality in this article.

    Definition and Meaning of Juristic Personality Image
    Definition and Meaning of Juristic Personality;
  • Explain the Negotiable Instruments Act 1881

    Explain the Negotiable Instruments Act 1881

    What is the Negotiable Instruments Act 1881? Negotiable instruments are seen to have great significance in the modern business world. It has to be noted that these instruments have gained significant prominence as the principal instruments for paying and discharging business obligations. So what essentially is a negotiable instrument? A negotiable instrument is any transferable document that satisfies certain conditions. These instruments pass freely from hand to hand and thus form an integral form part this modern business instruments.

    Here are the articles to answer, What are the doubts about Define and Explain the Negotiable Instruments Act 1881?

    It also has to be noted that in our country, the law relating to negotiable instruments, is governed by the Negotiable Instruments Act 1881. How to define the Consideration in Contract Law? This Negotiable Instruments Act 1881 does not in specific define what a negotiable instrument is, it merely states that a negotiable instrument means “a promissory note, bill of exchange or cheque payable either to the bearer”.

    Section 13 of the Act, does not indicate the characteristics of a negotiable instrument but only states that three instruments-cheque, a bill of exchange, and a promissory note, are negotiable instruments act 1881. Thus these three instruments are therefore negotiable instruments as per the statute. But it has to be noted that S.13, does not prohibit any other instrument which satisfies the essential features of negotiability, to be treated as a negotiable instrument.

    Thomas defines the negotiable instrument as an instrument is negotiable which it is, by a legally recognized custom of trade or law, transferable by delivery or by endorsement and delivery, without notice to the party liable, in such a way that a. a holder of it may for the time being may sue upon it in his name. The property in it passes on to a bonafide transferee for value-free from any defect in the title of the person from whom he obtained it. What is the objective of the Minimum Wages Act?

    A negotiable instrument is a transferable document either by the application of the law or by the custom of the trade concerned.

    Thus it has to be noted that a negotiable instrument, firstly is easily transferable from person to person and the ownership of the property may be passed on by mere delivery. Secondly, a negotiable instrument confers absolute faith and good title on a transferee, provided that he takes it in good faith for value and without notice of the fact that the transferor had defective title thereto.

    It is seen that the negotiable instruments can be essentially classified into two major types of Negotiable instruments by statute: The three instruments, cheque, bill of exchange, and promissory notes are negotiable instruments by statute

    Negotiable instruments by custom or usage: Some instruments have acquired the character of negotiability by custom or usage of trade. Section 137 of the Transfer of Property Act, 1882, also recognized that an instrument might be negotiable by law or custom. Therefore we have cases of promissory notes, delivery orders, and hundreds being held as negotiable instruments act 1881.

    Liabilities of Parties;

    The main aim of this project would essentially be to look into the liability of parties to a Negotiable Instruments act 1881. But before moving on to the liabilities, a brief on the parties and their capacity to capacity parties to contract is required. The parties to a negotiable instrument, namely, the maker, drawer, drawee, and the payee, enter into a contract among themselves.

    It is therefore very essential that they should have the capacity to enter into valid contracts. Section 26 of the Negotiable Instrument Act, states that

    “Every person capable of contracting, according to the law to which he is subject, may bind himself and be bound by the making, drawing, acceptance, endorsement, delivery, and negotiations of a promissory note, bill of exchange, or a cheque”.

    S.11 of the Indian Contract Act, states the requirements of parties to contract. Thus as per this section, any person who is of a sound mind, above the age of majority, and not disqualified from entering in to contract by any Act, is competent to enter into a valid contract.

    Liability of drawer of the bill or a cheque;

    Essentially the liability of the parties to a ‘negotiable instrument’ has its statutory provisions under Sections 30, 32, and 35 of the Negotiable Instruments Act 1881.

    The first section in this aspect to be analyzed would be S.30 of the Act, which provides for the Liability of the drawer of the bill or a cheque.

    The ‘drawer’ of the cheque, essentially, as defined by S.7 of the Act, is “The maker of a bill of exchange or Cheque”

    Thus Section 30 of the Act, goes on to define the liability of the drawer of a bill or cheque

    “The drawer of a bill of exchange or cheque is bound in case of dishonor by the drawee or acceptor thereof, to compensate the holder, provided due notice of dishonor has been given to or received by, the drawer as hereinafter provided”

    The critical thing to be noted here is that the liability of the drawer here arises only in case of dishonor of the cheque or a bill of exchange and nothing before it. A bill of exchange is seen as dishonored by non-acceptance or by non-payment, but on the other hand, a cheque is dishonored by non-payment only.

    As soon as this bill or exchange or a cheque has been dishonored by non-acceptance by the drawee, it is seen that the holder of the has the right to recourse against the drawer. The drawee, as per Section 7 of the Act, is “the person directed to pay”

    It also has to be noted that the drawer, becomes liable only when the drawee has dishonored the bill of exchange or the cheque.

    But unlike the bill of exchange, it has to be noted that in case of dishonor of a cheque, the drawer remains liable thereto, even if the cheque is not presented by the holder to the drawer bank. This was held by the Supreme Court, in Harish Chander v. M/s. Ganga Singh and Sons and others. Here again, the relevance of Sections 72 and 84, were looked into. These sections essentially deal with the discharge of the liability of the drawer, in case he suffers damage as a result of the presentment of the cheque

    Another aspect that needs to be looked into before the drawer can be held liable, is the fact that ‘due and sufficient prior notice of dishonor’, has been given.

    But again taking Section 98 into consideration, no notice is required if the provision of this section is being taken into consideration. It has to be noted that the service of this notice, may be oral or written or may even be faxed, but it is a must.

    V.V.L.N.Chary and Others v. N.A.Martin and others is another case, which needs to be looked into. The issue here was whether a post-dated cheque for payment of goods is only a promise to pay on a future date or not?. The court, held in the affirmative and stated that it is but a promise.

    It further held that if this promise is broken by the dishonor of the cheque, it will enforce a civil liability only. The liability of proving the dishonest intention of the drawer was put on the shoulders of the holder, as the court stated that only if prior knowledge was present on the part of the drawer that he intended to dishonor the cheque, can he be convicted.

    This case essentially put the drawer in a rather better position, by ensuring that unnecessary accusations and liabilities would not be enforced on him.

    So then would a drawer ever be criminally liable?. The answer to this came later on in the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act 1988, which was further modified by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 As per this act, the dishonor of cheques due to the insufficiency of funds, was deemed to be an offense for which the drawer could be punished with imprisonment for a term up to a year or with a fine up to twice the amount of the cheque or with both. More specifically Sections 138-142, were inserted which deal with these offenses.

    Another section to be noted here is Section 31 of the Act, which deals with the liability of the drawee of the cheque. As per this section, “The drawee of a cheque having sufficient funds of the drawer in his hands properly applicable to the payment of such cheque must pay the cheque when duly required so to do, and, in default of such payment, must compensate the drawer for any loss or damage caused by such default”.

    Section 32 of the Act, deals with the liability of the maker of the note and the acceptor of the bill. As per this section, “In the absence of a contract to the contrary, the maker of a promissory note and the acceptor before the maturity of a bill of exchange are bound to pay the amount thereof at maturity according to the apparent tenor of the note or acceptance respectively, and the acceptor of a bill of exchange at or after maturity is bound to pay the amount thereof to the holder on demand.

    In default of such payment as aforesaid, such maker or acceptor is bound to compensate any party to the note or bill for any loss or damage sustained by him and caused by such default”.

    Here, it has to be noted that the maker of a promissory note and the acceptor of a bill of exchange are the principal debtors and their liability on the instrument, is absolute and unconditional. The first part of this section deals with the liability of the maker of a note and the second part with the consequences of default.

    The crux of this section can be summed up as. This section essentially puts the maker of the note and the acceptor of the bill on the same footing. It makes both liable as principal debtors. Besides this, it can be seen that a bill may be accepted before maturity or at or after maturity. An acceptor of the bill, it is seen before maturity is bound to pay the amount at maturity and an acceptor at or after maturity shall have to pay the amount to the holder on demand.

    It is however not that there is o difference between the liability of the maker of the note and the acceptor of the bill. The maker of the note, it is seen is bound to pay the amount according to the apparent tenor of the note. That he, as he makes it himself, he cannot change its terms and shall have to abide by the tenor of the note.

    But on the other hand, it is seen that the acceptor of the bill, is liable to pay the amount according to the apparent tenor of his acceptance. That is to say, if the acceptor accepts the bill, he is required to honor the bill as per his qualified acceptance and not according to the tenor of the bill.

    This cane very simply is illustrated by the following example. If A, draws a bill of Rs.10,00 on B, to be paid after a year, and B, gives his acceptance to pay the amount after 18 months, B is liable to pay after 18 months and not a year.

    It has to be noted that in case of a promissory note signed by two or more promisors and the consideration has been received by only one of them, irrespective of any reason, all the promisors shall be equally liable for the amount of the promissory note.

    It also has to be noted that Sections 78, 41 42, and 88 of the Act, also deal with the liability of the maker of the note and the acceptor of a bill

    Liability of the endorser;

    This is provided for under Section 35 of the Act, which states that

    “In the absence of a contract to the contrary, whoever endorses and delivers a negotiable instrument before maturity, without in such endorsement, expressly excluding or making conditional his liability, is bound thereby to every subsequent holder, in case of dishonor by the drawee, acceptor or maker, to compensate such holder for any loss or damage caused to him by such dishonor, provided due notice of dishonor has been given to or received by, such endorser as hereinafter provided. Every endorser after dishonor is liable as upon an instrument payable on demand.”

    Before moving on further, it is pertinent to study Section 15 of the Act in relevance to the term ‘endorsement’ and define an ‘endorser’. As per Section 15 of the Act, which defines endorsement,

    “When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for negotiation, one the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to endorse the same and is called the endorser.”

    It is seen that to invoke Section 35, firstly and most importantly, there has to be an endorsement of an instrument, which has to be delivered to the endorsee. It has to be noted that if either of these acts does not occur, the liability of the endorser does not arise.

    Secondly, this section again puts the endorser of the cheque on the same footing as the drawer of a bill/cheque or maker of a note. In the sense that it confers upon him the same levels of liability.

    This concept of endorsement is based on the belief that the bill, cheque, or note, will be duly accepted or honored by the drawee or the maker. On the failure of this event happening, the liability of the endorser occurs. So essentially, it is seen that the role of the endorser is pretty much equivalent to that of a surety, who undertakes the performance by the acceptor of the bill.

    It is seen that immediately on the dishonor of an instrument, the older of the instrument, gets an inherent right to sue the endorser at once, which can in no way be challenged. The holder stands in a rather advantageous position as he is in a better position to sue either party, the drawer for non-compliance or the endorser for failure to ensure compliance on the part of the drawer

    Then again it has to be noted that the liability of an endorser arises only when there is an absence of a contract to the contrary. As mentioned in the section itself, the endorser may save himself from liability by either excluding his liability thereon by endorsing sans recourse or by making his liability conditional. If these acts have been adhered to, the endorser would save himself the trouble of being liable.

    An aspect that needs to be looked into is when the endorser’s liability is discharged?. To answer this, Section 36 of the Act which deals with the liability of prior parties to the holder in due course, needs to be looked into first. This Section states that “Every prior party to a negotiable instrument is liable thereon to a holder in due course until the instrument is duly satisfied.”

    Section 40 of the act also needs to be looked into, which states that “Where the holder of a negotiable instrument, without the consent of the endorser, destroys or impairs the endorser’s remedy against a prior party, the endorser is discharged from liability to the holder to the same extent as if the instrument had been paid at maturity.”

    Conclusion;

    Negotiable Instruments Act 1881; The essence of these liabilities being imposed upon the parties is nothing by an act to being upon a greater sense of responsibilities on the part of the parties. The Sections provided here, are rather comprehensive and cover a relatively broad range of parties to a negotiable instrument, and also impose penal sanctions on them, if they turn into offenders. Although before the various amendments, there was no criminal liability imposed on parties, the amendment of 2002, imposed a greater sense of responsibility as it brought upon more stringent measures to counter the offending parties.

    Explain the Negotiable Instruments Act 1881 Image
    Explain the Negotiable Instruments Act 1881; Image by Mohamed Hassan from Pixabay.