Indian companies are formed and incorporated according to the provisions given under the Companies Act, 2013. All Indian companies are registered under the Companies Act of 2013 and work according to the procedure provided under this Act.

In this law note, you will learn about the nature and characteristics of a company. This will give you a basic understanding of what a company is and its existence.

What Is a Company

In simple words, a company is a business organization formed by an individual or group of individuals who work jointly to achieve a common goal or objective.

Nature and Characteristics of a Company

A company incorporated under the Companies Act, 2013 has certain nature and characteristics, which make it a separate entity and also help us to understand the concept of a company, its functions and its features in society.

The characteristics of a company are:

Let us learn more about these 13 characteristics of a company.

1. Voluntary association.

A company is a voluntary association formed by an individual or group of individuals. Most companies are formed with the motive of profit-making except the section 8 companies (NGO). Profit earned is divided among the shareholders or saved for the future expansion of the company.

2. Company is an artificial person created by law.

A company is an artificial person created by law. It is regarded as a legal person capable of entering into contracts, owning property in its name, suing, and being sued by others.

Case Law: Union Bank of India vs Khader International Constructions and others: The Supreme Court held that the word ‘person’ mentioned in Order 33, Rule 1 of Civil Procedure Code, 1908, includes any company. Thus, a company may also file a suit as an indigent (poor) person.

Info: Order 33, Rule 1 of CPC permits a person to file suit under the code as an indigent person if they cannot bear the cost of litigation.

3. Company is not a citizen.

In State Trading Corporation of India Ltd. vs CTO (Commercial Tax Officer), the Supreme Court held that the State Trade Corporation, although a legal person, is not a citizen and can act only through a natural person.

Certain fundamental rights provided by the Indian Constitution to protect a person are also available to a company. For example – The right to equality (Article 14).

4. Separate legal entity.

A company incorporated under the Companies Act, 2013, is treated as a separate person distinct from its members under the law. Therefore, the company will be liable for all the acts of the company except any illegal act done by the directors of the company.

Case Law: Salomon vs Salomon: Salomon had a business in leather and shoe manufacturing. Due to some circumstances, he created his own company and sold his previous business of shoe manufacturing to this company. Salomon gave one share each to his wife, daughter, sons, and the rest of the company’s shares were held by him. After a few years, the company was wound up and had some existing liabilities but did not have enough assets to pay off the liabilities. Unsecured creditors sued Salomon for repayment of their money, but the court held that the company was not an agent or a trustee for Salomon. The company is entirely different from the individual, and hence, the contentions of the creditors could not be upheld.

5. Company has limited liability.

The liability of a company may be limited either by Shares or Guarantee.

• Company limited by Guarantee: Liability of shareholders is limited to a certain amount of guarantee mentioned in the memorandum payable only at the time of wind up and losses occurred by the company.
• Company limited by Shares: Liability of the members shall be limited to the extent of unpaid money or shares held by them.

6. Company has a perpetual succession.

A company can come to an end only by the process of winding up. The death or retirement of a person does not affect the life of a company.

7. Transferability of shares.

There are three types of companies under the Companies Act:

1. Public company.
2. Private company.
3. One Person company.

A public company is free to transfer its share from one person to another, whereas, in a private company, the right to transfer shares is restricted. And in One Person Company (OPC), the transferability of shares is not allowed.

8. Separate property.

As we have already studied, a company is a separate artificial person created by law, and a company is different from its members. Therefore, a company has its separate property and can own, enjoy, and dispose of properties in its name.

Case Law: In RF Perumal vs H. John Deavin, it was held that no member can claim themselves to be the owner of the company’s property during its existence or its wind up. A company cannot even have an insurable interest in the property of the company.

9. Capacity to sue and be sued.

A company can sue and be sued in its name and may even sue its members. It also has a right to seek damages where a defamatory matter is published about the company, which affects its business.

Case Law: Abdul Haq vs Das Mal: In this case, Das Mal was an employee in the company and was not paid a salary for several months, and therefore, he sued the directors. The court held that the remedy lies against the company and not against the directors or members of the company.

10. Contractual rights.

A company can enter into contracts for the conduct of business in its name.

As a company is not a trustee for its shareholders, a shareholder cannot enforce a contract established by his company because he is neither a party to the contract nor entitled to any benefit from it.

11. Limitation of action.

A company cannot go beyond the power stated in its Memorandum of Association. The Memorandum of Association regulates the power and fixes the objects of the company. Acts done beyond the powers given in the Memorandum of Association are ultra-vires and hence treated void.

12. Separate management.

Members may derive profits without being burdened with the management of the company.

Must See: 9 Types of Directors in a Company

13. Termination of existence.

A company is created by law; throughout its life, carries on its affairs according to the law; and is ultimately wind up by law. A company can be terminated only by the procedure of winding up.

Must Read:
1. What Is the Articles of Association of a Company?
2. Types and Classification of Company under the Companies Act
3. Types of Prospectus Under the Companies Act, 2013

13 Characteristics of a Company Under the Companies Act
Anushka Saxena

Lee v Lee’s Air Farming Ltd
[1961] UKPC 33, [1961] AC 12

A company is a separate legal entity that can operate in its own name. In order to completely understand this concept, you must study the case of Lee vs Lee’s Air Farming Ltd.

Introduction

According to the Companies Act of 2013, a company registered as a non-profit organisation, private limited company, public company, government company, or chit fund company will have a separate legal identity, legal rights, and treatment from its shareholders. This is referred to as a separate legal entity.

Furthermore, the separate legal entity can enter into contracts with third parties, hold property in its own name, and sue or be sued in its own name.

A distinct legal entity is a barrier between a firm and its members. This implies that the business’s assets should only be used to fulfil the goals outlined in the memorandum of association and that the corporation should be responsible for paying its debts independently rather than using the personal assets of its members.

Facts of the Case

The Lee family established Lee’s Air Farming Ltd. in 1945. The firm he founded has Mr Lee as its only managing director.

As the firm’s managing director, Lee chose himself to be its chief pilot and was hired by the company for the role.

Lee passed away in a plane accident in March 1956 while en route to a corporate business.

Lee made all decisions about the company’s contracts and had total control over the company’s operations.

The company engaged in several agreements with insurance companies for employee insurance.

The personal insurance policies that Lee purchased in his name, some of the payments were paid from business bank accounts but afterwards disputed in Lee’s account in the company book. (In other words: Some of the purchases of personal insurance policies in the name of Lee were disputed in the company book as the payments of those purchases were made from business bank accounts.)

Under the New Zealand Worker Act of 1922, Mrs Lee filed a claim for damages on behalf of the deceased worker. She said Lee worked for an organisation.

Issues

Whether Lee, who is the majority shareholder and the controlling owner of the business, be granted compensation under the Workmen Compensation Act?

Whether he (Lee) can be refused remuneration since he was also the managing director, or will he be recognised as an employee in the firm for the purposes of grant of compensation?

Does a master-servant relationship exist between Lee and his business, Lee’s Air Farming Ltd.?

Arguments Before the Court

The insurance company stated that because Mr Lee was the firm’s managing general director and owned the most significant number of shares, he was ineligible to work for the business.

Respondent (insurance company) claimed that everyone who has signed a contract of employment or is employed by a corporation qualifies as a worker, but Mr Lee served as the organisation’s director.

Mrs Lee argued that the New Zealand Worker Act of 1922 entitles her to compensation. She also stated that her husband passed away while en route to work for the company.

In support of the respondent, the appellant added that, as per the Workers Act of 1922, Mr Lee is also a corporate employee.

Governing Principles

This instance demonstrates the practical application of the rules established in the famous Salomon vs Salomon and Co Ltd decision. Salomon’s lawsuit is renowned for creating the corporate entity. A business becomes a legal person apart from its members after it has been adequately and legally established.

According to the corporate personality concept, a company established in accordance with the Companies Act has a separate corporate personality that entitles it to use its own name, operate in its own name, have its own seal, and own assets independent of its members. It stands apart from the individuals that make up its “person.”

As a result, it has the same rights as an individual to own property, incur debts, borrow money, maintain a bank account, employ personnel, enter into contracts, and bring or defend legal actions. Its members are both its owners and potential creditors. A shareholder cannot be held responsible for the company’s decisions, even if he controls almost all of the share capital.

Judgement

The Court determined that Lee was a different person with a personality independent from the business he founded. Lee and his firm, who were both separate legal entities, went into contractual arrangements via which Lee became the company’s principal pilot and an employee.

The Privy Council noted that he might issue orders to himself (in his other pilot position) on the corporation’s behalf while serving as its managing director. He and the firm had a master-servant relationship in his capacity as a pilot.

As a result, he was entitled to compensation for the loss he sustained while working. Under the Workmen Compensation Act, his widow was able to obtain the compensation.

Lee was able to serve as both the master and the servant simultaneously and still got the rewards of both because of the corporate personality concept.

The Court additionally ruled that a shareholder of a corporation may enter into a contract with that firm. A member and a business can engage in legal service contracts since they both function as independent legal entities.

Regardless of Lee’s influence on the firm’s business, Lee and the business had a legal service agreement in place. Lee was, therefore, considered to be an employee. Additionally, Mrs Lee had a right to compensation.

Conclusion

A distinct legal entity is a crucial feature for businesses since it helps to distinguish the identities of the company and its members. Thus, it may be inferred from the previous explanation that the corporation is a distinct legal person.

A corporation’s single owner, shareholder, and director may also be an individual employed by the firm who has engaged in a contract with it as an owner, director, or shareholder. The company is a different legal entity.

In my opinion, the Separate Entity Principle has greatly aided in the growth of contemporary capitalism and has produced enormous amounts of social and economic value. The Separate Entity Principle should remain a cornerstone of company law in perpetuity.

Read Next: Salomon vs Salomon – Case Explained in Easy Words

Lee vs Lee’s Air Farming Ltd – Case Explained
Anushka Saxena

The Indian Evidence Act helps us understand what counts as a “fact” in the legal world. It doesn’t just include physical things; it also looks at what happens in the world and what people think and feel inside their minds. In simpler terms, it sets the rules for considering different types of information in legal matters.

This law note will help you understand the concept of relevant facts under the Indian Evidence Act.

What Is Relevancy?

Relevancy is the broader scope. The facts must connect in a way that makes sense and helps the court conclude the case. Facts might be linked by:

• Cause and effect: A witness sees Z arguing with B, and B is found injured – relevant!
• Common experience: Someone buys life insurance a week before dying – suspicious and relevant!
• Correlation: Sales of raincoats increase when the weather forecast predicts rain – not necessarily relevant to a specific lawsuit.

The court has some discretion in judging relevancy, like deciding which boxes in the attic to open first.

Related: Difference Between Relevant Facts and Relevancy of Facts

Act Influenced in Relevancy

Section 3 of the Indian Evidence Act of 1872 defines “evidence.” It includes remarks or documents produced before the court by witnesses addressing the main issue under investigation. The Indian Evidence Act does not distinguish between admissibility and relevancy.

Section 5 of the Indian Evidence Act states that evidence may be used in any judicial matter to demonstrate the presence or absence of facts in dispute and additional facts deemed significant as described below, but not beyond. The decision of relevance is based on logic and likelihood considerations, which guide the admissibility of evidence.

Section 6 of the Indian Evidence Act states that facts that are not directly under examination but are connected with a relevant fact to the extent that they form part of the same transaction, whether they occurred concurrently or at various times and places, are likewise relevant. This includes actions and omissions, which do not have to be continuous but should add to the overall context of the transaction.

Section 6 of the Act defines “Res Gestae” as a legal notion that denotes an action or event.

Sections 6 to 16 cover facts related to the topic, such as causality, motive, and direct significance.

Sections 17 to 31 of the Act govern confessions, whereas sections 40 to 44 govern the applicability of court rulings.

Sections 45 to 51 discuss when third-party opinions are relevant.

Sections 52 to 55 of the Act further identify scenarios in which a person’s character is significant.

If a link between the facts does not exist, as stated above, the fact is regarded as irrelevant. A court may, however, reject relevant evidence if the possible hazards outweigh the probative value of the evidence. Such hazards include unfair bias, confusion of issues, misleading the jury, unnecessary delays, or inappropriate inclusion of cumulative evidence.

Difference Between Relevancy and Admissibility

This section examines the distinctions between admissibility and relevancy, highlighting some of their distinctive features.

Definition of Relevancy and Admissibility

• Relevance: The logical and consequential connection between facts is referred to as relevance, and the existence or non-existence of one set of facts is most likely dependent on the regular course of events or human behaviour. It is based on the intrinsic relationship of facts, emphasising their logical connectedness.
• Admissibility: On the other hand, admissibility refers to the legal significance of facts proclaimed under the Indian Evidence Act. It refers to the admissibility of evidence in court, which is established by obedience to legal norms rather than inherent logical links.

Case – Ram Bihari v State of Bihar [(1998) 4 SCC 517]: The Supreme Court noted that while admissibility and relevancy are synonymous in this instance, their legal meanings differ, and the admissible facts might not be relevant.

Basis of Relevancy and Admissibility

• Relevance: The basis for determining relevancy is reasoning and human experience. It is founded on the connection of facts and the awareness that certain facts increase or decrease the likelihood of the existence of others.
• Admissibility: Legal principles govern admissibility. It is assessed by their compliance with the legal requirements stated in the Evidence Act rather than their inherent link between facts.

Legal Framework

• Relevance: Provisions related to relevancy are covered in detail in sections 5 to 55 of the Indian Evidence Act. These sections describe the many ways in which facts can be related and serve as the foundation for determining relevance.
• Admissibility: Section 56 of the Indian Evidence Act primarily discusses the legal context for admissibility. This section defines the standards determining whether evidence is legally admissible in a court of law.

Conclusion

The judiciary uses the law of evidence as a crucial instrument to help it filter through and weave together the large amount of information that each case offers. Evidence that is admissible and has evidentiary value is limited to that which is covered under the Indian Evidence Act of 1872.

In addition to saving the court’s time, this enables the court to obtain the pertinent and accurate evidence it needs to decide a matter easily. The Indian Evidence Act contains an interpretation and definitions in section 3 that explains words and ideas important for understanding the Act and evidence law.

Relevant Facts Under the Indian Evidence Act
Anushka Saxena

The Indian judicial system is an organised mechanism for dealing with issues in society. It gives the young generation a wide range of opportunities to get involved in this system and contribute to the best possible service to the country.

Law graduates are eligible to hold positions in all three branches of government: legislature, executive, and judiciary. Other graduates may hold positions in the legislature and executive branch but not in the judiciary. Due to this reason, it is rightly said that a law degree can open the door to a wide range of careers that other degrees may not.

Many statutes, including the Code of Civil Procedure, the Indian Penal Code, and the Code of Criminal Procedure, define the term “judge”.

Judges ensure a fair trial and pronounce the verdict after the case. Judges safeguard the court’s dignity in society without being biased or putting themselves in a risky position.

Let us discuss whether becoming a judge will be a fruitful career for you or not.

Positive and Negative Aspects of a Career as a Judge

Judges are very reputed in the Indian judiciary system. But everything present on this planet has both negative and positive aspects.

The pros and cons of being a judge are listed below that can help you identify whether this career option suits you or not:

Advantages of Career as a Judge

• It is a job with a high level of responsibility and is a very reputed position.
• You can serve the nation by becoming a judge.
• A career as a judge will surely give you financial and job security.
• You will have enough time to balance your personal and professional life.
• It is a powerful job with lots of perks.
• It gives the power to erode the evils existing in society. A power that can protect people.

Disadvantages of Career as a Judge

• It requires a lot of hard work to become a judge.
• It is a sitting job, and you’ll be doing the same work every day.
• Massive competition for growth.
• Mental pressure or stress will be quite often due to different reasons.
• There can be threats if the decision by a judge is not favourable for a party or section of people. Any seat in a high position carries risk. But things can be handled with courage and determination to do good for society.
  

Eligibility for Becoming a Judge

Indian judiciary follows the three-tier structure, i.e., the union judiciary (Supreme Court), state judiciary (High Courts and courts subordinate to it), and subordinate judiciary (District Courts).

A graduate can become a judge by taking the Civil Judge exam conducted by the Public Service Commission. This exam is conducted state-wise. Moreover, the states decide the eligibility and time for conducting the judge exams according to the vacancies available.

Union Judiciary

The Supreme Court of India comprises one Chief Justice of India and 33 other judges. The appointment of judges depends upon the vacancies available.

The eligibility criteria for becoming a Supreme Court judge in India are:

• A person appointed as a judge of the Supreme Court must be a citizen of India and possess a degree of Law from a recognised university.
• He must have served as a judge of a High Court for at least five years or two or more High Courts in a row, or
• He must have worked as an advocate in a High Court or two or more High Courts in a row for at least ten years.
• He shall be a respected jurist, according to the Indian president.
• The individual appointed as a Supreme Court Judge will remain in office until he reaches the age of 65.

State Judiciary

Every High Court consists of one Chief Justice and other judges as may be required from time to time.

The eligibility criteria for becoming a High Court judge in India are:

• The person must be an Indian citizen.
• He or she must have previously worked in a judicial capacity in India for at least ten years, or
• He or she must have experience working as an advocate in two or more such courts consecutively for a period of at least 10 years.
• The person appointed as a High Court judge can serve as a judge until he attains the age of 62 years.

Subordinate Judiciary

There are mainly two types of judges in district courts – District Judge/Sessions Judge and Civil Judge (i.e., the magistrate). The appointment procedure or eligibility criteria for a District Judge and a Civil Judge are different.

The eligibility criteria for becoming an Additional District Judge in India are:

• The person must be an Indian citizen.
• For at least seven years, the person must be an advocate.
• The individual must be at least 35 years old (age differs from state to state).
• The person must pass the test administered by the judicial service.

The eligibility criteria for becoming a Civil Judge or a magistrate are:

• The person must be an Indian citizen.
• He or she must be in the age group between 21 and 35 years (age differs from state to state).
• The person must pass the state judicial service test.

Judicial Service Examination

The judicial service examination is an entry-level exam for Civil Judges organized by every state public service commission and High Court for law graduates. Students can directly take the judicial service exam after graduation to become a member of the subordinate judiciary.

Eligibility Criteria for Judicial Service Examination

There are two categories of judicial service exams, and the eligibility criteria for both are different.

• Lower Judiciary Services: To appear for the judicial services examination, you must have a bachelor’s degree in law. Under the Advocates Act of 1961, the person must have enrolled or qualified to be enrolled as an advocate. It does not require any prior experience, and even students studying in the final year of their law schools can apply for the same as some states allow appearing in exams in the final semester of law. Moreover, it is the state that determines the age limit, and it is usually between the ages of 21 to 35.
• Higher Judiciary Service: Candidates for the higher judiciary services must be law graduates with a minimum of seven years of litigation experience.

Stages of Judicial Service Exam

The judicial service exam has three phases, i.e., preliminary, mains, and interview.

The preliminary examination is an MCQ-based paper, and the person qualifying for this exam will be entitled to appear for the mains examination.

Mains examination is a subjective paper. There are three to four papers in this exam, and the candidates selected in this exam shall be called for an interview round. The number of candidates selected in this round depends upon the vacancies available at that time. Candidates called for interviews are three times the number of vacancies available.

Then, the interview is the last stage, where the candidates are judged and selected based on their qualities, including general interest, personality, and intelligence.

Must See: How to Write the Best Answer in Judiciary Mains Exam

All India Judicial Services Examination

The AIJS exam is a step in which the exam for the recruitment process of additional judges and district judges will be held at the central level. As the UPSC exams are conducted for the whole country, AIJS will be conducted for the judges on the central level in the same way.

In the government’s view, a properly framed All India Judicial Service will significantly strengthen the overall justice delivery system. This will offer an opportunity to select suitable, qualified, fresh legal talent through a proper all-India merit selection system. It shall also address the key issue of social inclusion by enabling suitable representation to marginalised and deprived sections of society. The exam will promote the right talent from lower levels to higher levels.

Duties of a Judge

These are the essential duties of a judge:

• A judge must be fair and impartial, doing everything for the sake of justice and nothing for the benefit of friends or family.
• When addressing a counsel, litigant, or witness, a judge should avoid using a controversial tone or attitude.
• A judge must hear both the parties (prosecution and defence).
• A judge must determine the guilt or innocence of criminal defendants in criminal court and impose punishments on those found guilty.

Benefits and Allowances of a Judge

Apart from the monthly salary, a judge is entitled to a lot of monthly allowances given below:

• House rent allowance
• Travel allowance
• Electricity bill
• Phone bill
• Vehicle maintenance
• Pension after retirement

Executive Magistrate vs Judicial Magistrate

The executive magistrate is the district magistrate of a particular area. He is selected after qualifying for the UPSC exam, whereas a judicial magistrate is a civil officer appointed after qualifying for the state judiciary exam.

The primary difference between a judicial magistrate and an executive magistrate is that a judicial magistrate can handle all the cases and grant punishment for up to 3 years. In contrast, an executive magistrate can take matters related to public peace, maintaining law and order, etc.

Conclusion

I want to state that being a judge is an excellent career option for law graduates. It gives power, reputation, a chance to serve the nation, and various monetary and non-monetary benefits. Still, on the other hand, this profession requires a lot of hard work and dedication, from preparing for the judicial examination to becoming a judge.

Read Next:
1. Best Answer Writing Tips for Law Exams
2. How to Study and Prepare for Judiciary Exam
3. 10 Legal Jobs and Career Options After Law

Career as a Judge – Eligibility, Benefits, Allowances, and More
Anushka Saxena

Protest petitions were a novel concept until a decade ago. However, they are becoming more critical in protecting victims’ rights and providing them a voice in the criminal process. It is essentially a representation given to the court by the victim/informant while or after the police investigation is completed.

It is an opportunity given to the victim/complainant to raise objections against the police’s investigation is complete. It is commonly filed when the police present the final report under section 173 of the CrPC, wherein the police conclude that the allegations against the accused are not made out.

What Is a Protest Petition?

When an aggrieved person or complainant is dissatisfied with the police report filed before the relevant court, he or she may file a protest petition against the unfavourable police report. In simple terms, a protest petition is a submission made by the victim to the court during or after the conclusion of the police investigation.

Related: FIR and Charge Sheet – Section 154 and Section 173 CrPC

Procedure to File Protest Petition

The procedure to file a protest petition is mentioned below:

First, the officer-in-charge must submit a police report to the magistrate so that the magistrate can take care of the case. If the magistrate wishes to reopen the investigation, the magistrate can interrogate the victim or witness under section 200 of CrPC. Here, one gets the opportunity to relate their case.

To achieve the aims of justice, victims might pursue this remedy in cases where prior investigations incorrectly released the offender. Once the magistrate determines that this was not a fraudulent complaint and that the victim is legitimately dissatisfied, he/she can undertake the investigation himself/herself or order an inquiry by an officer-in-charge to whom the complaint is referred.

The main elements of the complaint must, however, be satisfied in the protest petition before the magistrate takes cognizance under section 190 (1)(a) of the Code of Criminal Procedure.

When the police present their final report, and the protest petition is filed, the magistrate has three alternatives:

1. The magistrate may accept or reject the final report and the protest petition.
2. He may accept the final report but consider the protest petition a complaint and proceed in line with sections 200 and 202 of the Criminal Procedure Code, 1973.
3. Under section 190 (1)(b) of the law, he may accept the protest petition, reject the final report, and take cognizance.

The correct legal position is that the magistrate is not required to accept the police authorities’ final report. The magistrate may disagree with that report and take cognizance even if no police files are filed with the police report. As a result, where a protest petition is submitted, the method prescribed for trial of the complaint case must be followed, and the protest petition must be dealt with in accordance with the law. The magistrate may review the protest petition before taking cognizance of the Closure Report.

After receiving a protest petition, the magistrate has the right to direct further investigation under section 156(3) CrPC. Similarly, it is decided that if the magistrate decides to take cognizance of the protest petition, it must satisfy the requirements of a ‘complaint’ under section 2(d) of the CrPC, and the complainant must be examined under oath before summons are issued.

Constitutional Approach in Protest Petition

Article 14 of the Indian Constitution guarantees equality before the law to all citizens. One of the primary principles of the “Rule of Law” is “Equality before the law,” as stated by Professor A.V. Dicey when discussing the rule of law. As a result, the Indian Constitution implicitly invites the rule of law into its constitutional machinery.

The Constitution, in Part III, read along with Part IV, subsequently empowers every citizen to seek remedies for violations of their constitutional rights for the omission of an act that would have led to proving the FIR was justifiable and cognizable but was marked closed for some valid reason at the discretion of the police officer-in-charge. This type of petition against the unfavourable complaint of the police is known as a protest petition.

Opportunities and Obstacles of Protest Petition

The concept of protest petition is helpful for the complainants, but there are certain obstacles to this concept as it is nowhere directly mentioned in Indian law. Thus, it’s important to understand the opportunities and obstacles of the protest petition.

Opportunity

The protest petition is significant for a victim’s rights since it can be delivered directly to the magistrate without police participation. It also widens a victim’s legal remedies and aids in giving justice to the victim. The protest petition can also be a double-edged sword in that it may compromise the accused’s rights.

For example, the magistrate cannot order further inquiry or re-investigation, but he or she can order it based on a protest petition, causing the accused to be held.

Obstacles

Aside from its absence in statutory language, it lacks certainty due to the small number of case laws accessible that separate it from confusion. Allowing magistrates to act as prosecutors, rejecting closure reports, and re-investigating cases might compromise justice.

For example, if the same case is heard by the same magistrate’s court, their prior beliefs may influence the proceedings.

Conclusion

The protest petition is a requirement for judicial innovation. Its presence and development in India during the last century immediately challenged the concept that the victim’s involvement was unnecessary. Its presence has highlighted significant considerations about the distinction between investigation and trial. This primarily regional judicial procedure has gained national recognition in the current circumstances.

The federal legislature should codify the protest petition and include it in the Criminal Procedure Code to overcome the ambiguities that have evolved during this transformative process.

What Is Protest Petition in India Under CrPC?
Anushka Saxena

The local governments were not much strengthened at the time of their formation. Therefore, the 73rd and 74th Constitutional Amendments were brought, and things drastically changed after the enactments of these amendments.

This law note will mainly discuss the changes brought in the Constitution after enacting the 73rd and 74th Constitutional Amendments.

What Is the Panchayati Raj System?

Panchayati Raj is a local government formed at the village level where each community has different functions to perform. The Panchayati Raj system aims to develop local self-governments in districts, zones, and villages.

The Panchayati Raj system helps to build the basis of Indian democracy. It recognises the women and members of Scheduled Tribes, Scheduled Castes, Other Backward Classes, and other socially marginalised groups.

The drainage system, street lights, village wells, tanks, and pumps are all maintained by the Gram Panchayat.

Meaning of Municipalities

A municipality is simply an urban local government. It is often a single administrative subdivision with corporate status and the authority to govern itself under local, state, and federal laws.

Constitutional Amendments Related to Local Self-Government

The 73rd and 74th Constitutional Amendments were brought into the Indian Constitution, which relates to the local self-government. These amendments were brought in 1992 and came into force in 1993.

It is crucial to understand that the 73rd Constitutional Amendment deals with the Panchayati Raj System, whereas the 74th Constitutional Amendment brought changes to the municipality’s system. Let’s now discuss both amendments in detail.

73rd Constitutional Amendment

This amendment brought changes to the rural local government that is on the village level. Furthermore, a three-tier system was formed that is:

• Zilla Panchayat, which covers the entire rural area of the district;
• Then comes the intermediary level, which is not needed in small states; and at last comes the Gram Panchayat, which covers a village or group of villages.

Changes brought by the 73rd Constitutional Amendment

The 73rd Constitutional Amendment brought changes in various subjects. We will now study each of them one by one:

Three-tier system

• The creation of a Gram Panchayat was made necessary.
• The amendment further added that the Gram Sabha would include all adult members who are registered voters in the Panchayat area.
• The state legislation will decide the role and functions of the Gram Sabha.

Election

• After this amendment, the elections of all three levels of the Panchayati Raj system will be done directly by the people.
• The elected Panchayat will have a tenure of 5 years.
• In case the Panchayat is dissolved before the completion of its tenure, then fresh elections shall be held within the period of six months.

Reservations

• The one-third position was reserved for women in the Panchayat.
• States may provide reservations for the other backward classes (OBC).
• The reservations listed in the amendment will apply to ordinary members and also the chairperson of all three levels.

Transfer of Subjects

• All the 29 subjects present in the state list are transferred to the Eleventh Schedule of the Constitution so that the Panchayati Raj institutions can also make laws on those subjects.
• Moreover, the actual transfer of these functions lies in the state legislature.

74th Constitutional Amendment

All the changes brought in the 73rd Constitutional Amendment were the same as those brought in the 74th Constitutional Amendment. The only difference is that this amendment dealt with urban local bodies or Nagarpalikas.

A Nagarpalika, also known as a town municipality, is an urban local body that administers a city with a minimum population of 100,000 but less than 1,000,000.

Relation Between the 73rd and 74th Constitutional Amendments

• The 74th Amendment is the same as the 73rd Amendment; the only difference is that the 74th Amendment applies to urban areas, and the 73rd Amendment applies to local areas.
• All provisions or changes brought by the 73rd Constitutional Amendment are in the same way applied to the 74th Amendment, and therefore, it also applies to the Nagarpalikas or urban bodies. (In other words: The changes brought by the 73rd Constitutional Amendment in the case of the Panchayati Raj system are the same as the changes brought in the municipality system by the 74th Constitutional Amendment.)
  
• The Constitution makes it mandatory that the list of functions that come under the State List will be transferred from the state government to the urban local bodies so that the urban local bodies can make laws on those subjects.
• These functions have been listed in the Twelfth Schedule of the Indian Constitution.

Conclusion

India has progressed as a nation due to these constitutional changes or amendments brought by the union and state governments.

Previously, before the 73rd and 74th Amendments, the Indian political system consisted of the two Houses of Parliament, State Assemblies, and certain union territories. In contrast, now, the municipality and Panchayat are also part of the Indian political system. Although the system brought by these amendments could solve the problems at the grassroots level, many issues still persist in the system that require solutions.

Read Next:

• Amendment in the Indian Constitution – Procedure, Modes, and Types
• All Amendments of the Indian Constitution – Briefly Explained

Amendments in Indian Constitution for Local Self-Government
Anushka Saxena

India’s substantive criminal law comprises the Indian Penal Code, 1860 (IPC), and other penal acts. However, it is unable to work alone. The Code of Criminal Procedure, 1861, was enacted as a follow-up to the IPC. A new Code of Criminal Procedure (CrPC) was adopted in 1974 to replace the 1861 Code and administer and enforce substantive criminal law.

The CrPC also governs the system for investigating and prosecuting crimes. Under the CrPC, criminal trials are divided between session trials and magistrate trials. In this law note, you will understand all about Sessions Court and its functions.

What Is a Sessions Court?

A Sessions Court is the highest criminal court in a district and the court of first instance for serious offences, those punishable with more than seven years of imprisonment, life imprisonment, or death. The state government is given the authority to create a Session Court for each session division under section 9 of the CrPC.

In the hierarchy of courts in India, the Supreme Court is placed at the top, then comes the High Courts, and Session Courts (and Metropolitan Courts) are the courts below the High Courts.

The High Court chooses the Session Court judge. The High Court may also appoint additional session judges and assistant session judges to serve in Session Courts.

This court handles theft, murder, dacoity, and other connected matters. The court has the authority to sentence a criminal offender to death and to pay a fine.

The High Court may appoint the sessions judge of one division to serve as an additional sessions judge of another division. The High Court has the authority to make arrangements for handling urgent cases when the position of session judge becomes empty for one cause or another.

If a case is pending before the Sessions Court, the additional or assistant sessions judge will have the authority to handle it. If no additional or assistant sessions judge is available, the Chief Judicial Magistrate in the sessions division will have the authority to handle the application.

Functions of a Sessions Court

1. When an accused enters a guilty or not guilty plea, the trial before a Sessions Court starts, and the judge follows the steps outlined in section 231 of the Criminal Procedure Code. The public prosecutor (PP) presents the case during the first hearing in a Sessions Court by outlining the allegations made against the defendant.

2. The Sessions Court judge has the following options after hearing the submission and evidence from both sides:

• Whether to release the defendant if appropriate justification isn’t provided (section 277), or
• If there is enough evidence to believe that the accused committed a crime that can only be tried in a Sessions Court, then the charges can be framed under section 228 (1)(b).
• If the case falls within the jurisdiction of Sessions Court, the court will frame the charges and explain the charges along with the relevant purpose to the defendant. Moreover, the defendant’s statement is also recorded.

3. According to section 228 (1)(a) of CrPC, the Sessions Court judge may decide to transfer the case to the Chief Judicial Magistrate (CJM) if he or she believes that the offence that has been brought against the named accused is not solely appropriate for trial in the Sessions Court.

4. However, if the accused enters a guilty plea, the Session Court judge may find him guilty. If not, a date might be set for the hearing of the prosecution’s evidence.

5. In the case of Narain Singh vs the State of UP 2010 Cr LJ (NOC) 435 (ALL), it was observed that when hearing testimony, a Sessions Court judge may also order witnesses to appear if the prosecution requests it. In a Session Court, only the prosecution’s evidence is considered while drafting charges. It is impossible to dig into the probative value.

6. In the case of Satish Nanaji Dhote vs State of Maharashtra 2009 CrLJ (NOC) 871 (Bom), it was held that scrutiny of the evidence and material on record is not necessary for framing charges. It is sufficient to construct accusations if there is a strong suspicion against the accused.

Trial Procedure Before the Sessions Court

Only the public prosecutor is authorised to file a case in a Session Court according to section 225 of CrPC.

• Section 226 of CrPC states that the prosecutor must make his case by detailing the accusation against the accused and the evidence he intends to use to demonstrate the accused’s guilt when an accused person is brought into court as a consequence of a case being committed under section 209 of CrPC.
• In accordance with section 227 of CrPC, if the judge determines that there is no basis for continuing after considering the case records, the provided documents, and the oral arguments of the accused and the prosecution, he will release the accused.
• If the court determines that there is cause to suspect that the offence is committed by an individual that violates section 228 of CrPC:
  • In that scenario, he may establish a charge, transfer the matter to the CJM/JM (first class), and direct the accused to appear before the CJM/JM (first class). This magistrate will handle the criminal trial as a warrant case that was initiated based on a police report.
  • Can be tried in Session Court: He will make up the accusation.
  • Before being asked to enter the plea, the accused will be informed about the charges with an explanation as per section 228(1)(2) of CrPC.
• As per section 230 of CrPC, the judge will set a date for the examination of witnesses and may, at the prosecution’s request, issue a summons requiring their attendance if the accused does not enter a plea of guilty or refuses to do so, asserts his or her right to a trial, or is not found guilty under section 229 of the Criminal Procedure Code.

Conclusion

With a few minor exceptions, the foundation for district and Sessions Court is primarily the same across the country. They deal with both civil and criminal proceedings in accordance with their distinct authorities.

The civil and criminal justice systems are separated at the most fundamental level.

The laws related to the court of sessions are followed only in a few significant cases. This suggests a very sensible legal approach that the Session Courts have jurisdiction over cases involving harsh punishment that are required to be decided by a senior and experienced court.

What Is Sessions Court in India and Its Functions?
Anushka Saxena

Court martial is a known word, but people usually fail to understand its true meaning. It creates fear in the minds of those working in military services. So, in this law note, we will understand the term court martial in detail and when it is used.

What Is Court Martial?

A court martial is a military court that functions like an ordinary civil court, but only the personnel working in the armed forces are tried in this court.

Moreover, the work of this court is to initiate proceedings and punish the individual found violating the decorum of the armed forces or guilty of any other such offence. All the proceedings in this court take place as per military law.

Furthermore, there are 70 crimes under military law for which the armed forces personnel can be tried under this court.

It is to be noted that matters such as rape, murder, and suicide are tried under civil courts, and the military also investigates such matters at their level.

Four Types of Court Martial in India

Let’s study them one by one.

1. General Court Martial (GCM)

Everyone — from the soldier to the officer, can be punished, and the panel consists of 5 to 7 members apart from the judge. This court can give punishment up to life imprisonment or death.

2. District Court Martial (DCM)

Every personnel, starting from the soldier to the Junior Commissioned Officer (JCO) level, can be punished under this court, and the panel consists of 2 or 3 members. Moreover, the panel has the provision to give imprisonment for a term of two years.

3. Summary General Court Martial (SGCM)

In this, the court martial punishes only those officers who commit any crime in the region of Jammu and Kashmir.

4. Summary Court Martial (SCM)

This court martial tries the personnel ranking from soldier to non-commission officers (NCO), and the offenders can be imprisoned for two years.

Court Martial Process

These are the steps that need to be followed in the court of inquiry against the officer who is found guilty:

• If the soldier is found guilty, then he can be punished immediately.
• If the case is big (that is, it’s of a grievous nature), it is transferred to a summary of evidence.
• The summary of evidence investigates the matter, and on finding relevant evidence, the summary of evidence can provide immediate punishment or recommend the proceeding to court martial.
• Any case can be tried in front of the court martial only after the summary of evidence recommends the case.
• The guilty person is given the right to appoint his or her lawyer.
• Furthermore, only the President can provide relaxation to the offender under Article 72 of the Indian Constitution.
• The court martial decision can be appealed before the Armed Forces Tribunal.
• Moreover, the decision or the judgment of the Armed Forces Tribunal can be appealed in the High Court.

Conclusion

The court martial has the same powers as that of a civil court. Moreover, the court martial can punish the guilty person by imprisonment or death sentence as deemed necessary. Furthermore, the court martial can also suspend or terminate the officer if found guilty, or the allowances such as pension or other future benefits can be taken away.

Read Next: Can a Police Officer Arrest a Soldier in India?

What Is the Meaning of Court Martial in India?
Anushka Saxena

Local self-government is a form of government introduced at the village or local level to decentralise power. As India is a big country with several states, the law-making power cannot stay only with a few people sitting at the centre.

This is because in a centralized system of power concentration, the sole authority is not aware of the happenings at the local and divisional levels, and to ascertain and resolve the problems taking place at the local or rural level, a local-self government was required to take care of a particular section of the society.

In this law note, you will learn about the meaning and evolution of local self-government in India.

Meaning of Local Self-government

As we know, for a better working government, everyone, whether rich or poor, must have an equal say or democratic right to elect their representative. In the same way, for a country to function properly, every sector of the society must have equal participation, and therefore, participation of the people from the grassroots level is also very important.

Thus, the concept of local self-government evolved, representing the people of local or rural areas. The 73rd Constitutional Amendment Act of 1992 entrusted local self-government in India.

Furthermore, a person sitting at the centre in New Delhi does not know the problems existing in a small village in Karnataka. Therefore, to solve a problem in a particular area, a person from that area must be elected as the representative of the whole area. This is known as the local self-government.

History of Local Self-Government

In response to pleas for local autonomy during British rule, the village Panchayat was created as a local self-government. The control was given to the citizens at the lower level. (The Government of India Act of 1935 also empowered the states to pass laws.)

Even after the enactment of local self-government, the makers of the Constitution weren’t happy with the current legal framework. In addition, they included Article 40, allowing states to establish autonomous organisations in the form of local Panchayats.

Evolution of Local Self-Government

The concept of local self-government is not a new concept. It was there even before India’s independence but was not implemented properly. However, after the 73rd Amendment, this concept was taken seriously, and the Government of India appointed various committees for proper study and implementation.

Now, you will learn about a few committees that formed part of the adequate implementation of the concept of local self-government.

Balwant Rai Mehta Committee

This committee was appointed in 1957 to check and suggest certain measures for better working of the community development program and National Extension Service. Moreover, after a complete evaluation, the committee recommended the establishment of a local government known as Panchayati Raj. A few recommendations of the Balwant Rai Mehta Committee are as follows:

1. Three-tier Panchayati Raj system:
   A. Gram Panchayat at the village level.
   B. Panchayat Samiti at the block level.
   C. Zila Parishad at the district level.
2. They suggested that the directly elected people will form a Gram Panchayat and indirectly elected people shall form a Panchayat Samiti and Zila Parishad.
3. Furthermore, the main objective of local self-government shall be planning and development.
4. This committee further added that the Panchayat Samiti shall be the executive body that will implement the things, and the Zila Parishad will work as an advisory and supervisory body.
5. The chairman of Zila Parishad will be the District Collector.
6. The Balwant Rai Mehta Committee also asked for certain resources to help them properly discharge their duties.

The report of the Balwant Rai Committee was accepted by the National Development Council in 1958. But they further said that no rigid pattern has to be followed, and the states will be free to form their own pattern, keeping the main objective in mind.

Rajasthan was the first state to adopt the concept of local self-government, and it was first implemented in the Nagore district. At the same time, different states adopted different patterns and formations of local self-government.

Ashok Mehta Committee

This committee was appointed in 1977 to suggest ways to strengthen the Panchayati Raj system in India. Here are a few recommendations of the Ashok Mehta Committee:

1. The three-tier system can be replaced with a two-tier system to increase efficiency. That is Zila Parishad at the district level and Mandal Panchayat formed for a group of villages.
2. The district-level body will supervise local government activities after the state level.
3. Zila Parishad shall be an executive body that will be responsible for making plans at the district level.
4. The Zila Parishad and Mandal Panchayat may have taxation powers for mobilising their financial resources.
5. There should be a regular audit by the agency at the district level.
6. Panchayati Raj institution shall be granted constitutional recognition.

GVK Rao Committee

This committee was formed to review existing administrative arrangements for rural development and poverty elevation programs. Furthermore, the Planning Commission appointed this committee in 1985.

GVK Rao Committee found that the development was not seen as bureaucrats were involved in the process, and hence, there was no involvement of local people. Then, there came a need to remove bureaucratisation and include people of that particular area in the decision-making. This committee recommended the following to improve the Panchayati Raj system:

1. Zila Parishad, which is a district-level body, will be the most important body in democratic decentralisation.
2. The district and lower level are to be assigned with the specific planning, implementation, and monitoring of rural development programs.
3. There shall be a post of District Development Commissioner. He will work as a chief executive officer of the Zila Parishad.
4. Regular elections shall be held for levels of the Panchayati Raj system.

LM Singhvi Committee

The Rajiv Gandhi government established this committee to guide the growth of Panchayats and their institutions. Consequently, under the Narasimha Rao government, the 73rd and 74th Constitutional Amendment Acts of 1992 were approved. The main recommendations of the LM Singhvi Committee were:

1. There must be constitutionally sanctioned Panchayati Raj Institutions.
2. A three-tier structure for the Panchayati Raj system should be in place at the village, block, and district levels.
3. Nyaya Panchayats must be established for a group of villages.

Conclusion

One of India’s most effective governance systems is the local self-government system. It is an effective entity that controls most Indian communities at the local level. A small number of significant committees greatly aided the development of local self-government in India. It operates locally, something the state-level government cannot do.

The majority of systems globally, including this one, are flawed. Corruption, a lack of resources, and poor management are common problems for local self-government. Thankfully, the government has launched some programs to improve rural regions nationwide to solve these issues.

Read Next: Amendments in Indian Constitution for Local Self-Government

Meaning and Evolution of Local Self-Government in India
Anushka Saxena

Salomon vs Salomon & Co. Ltd
(1897) A.C. 22, [1896] UKHL 1

In this case law explanation, you will read about the famous case of Salomon vs Salomon, which is essential to understand company law.

Introduction

Every company has its own identity — a separate legal personality (SLP), and this aspect of a company is a very important and fundamental element of company law.

It is regarded as the most comprehensive and consistent law of corporate jurisprudence since it lays the groundwork for the creation and operation of a company.

On the other hand, the rule of “SLP” has traditionally been fraught with controversy and is one of the subjects of dispute both inside and across jurisdictions.

The concept, established in the case of Salomon vs Salomon, is still widely used and is traditionally praised as the framework of both English company law and the entire system of international commercial law.

Facts of the Case

For many years, Aron Salomon successfully ran a profitable leather business. He decided to change it into a limited company in 1892. At that point, Salomon & Co. Ltd. was established with Salomon as the managing director, along with his wife, daughter, four sons, and wife as members.

For £39,000, the corporation bought Salomon’s business. A charge over all of the company’s assets totalling £10,000 in debentures, £20,000 in fully paid up £1 shares, and the remaining £20,000 in cash were used to pay the purchase price. Salomon possessed 20,001 out of the 20,007 shares issued, and a family member held each of the other six shares.

The business had problems almost immediately, and a year later, the holder of the debentures (Salomon having sold his shares to another party) hired a receiver, and the business entered liquidation.

At the time of liquidation, the value of the assets was divided as follows: liabilities received £6,000 (six thousand pounds), debentures received £10,000, and unsecured obligations received £7,000. Nothing would be left over for the unsecured creditors once the debenture holders had been paid.

As a result, the liquidator filed a lawsuit against Salomon, holding him responsible for covering the company’s trade debts.

Issues

• Whether Salomon & Co. Ltd. indeed existed as a company?
• Whether the company, an artificial invention of the law, had actually been properly constituted under any circumstances.
• Whether Salomon was accountable for the business’s debts?

Arguments Brought Before the Court

Salomon & Co. Ltd. was formed under the Act, but according to the liquidator, the business never existed independently. Salomon became the undisputed king due to the large majority of shares. The firm was fake, and the business was run exclusively for and by him.

Judgement

According to the House of Lords, in order to answer the question, it is required to examine the legislation itself without altering or adding to its provisions. The legislation itself must be the entire reference point.

In this instance, the Act stated that any seven or more people who are connected for a legitimate purpose may create a company with or without limited liability by signing their names to a memorandum of association and otherwise complying with the Act’s registration requirements.

Additionally, the Act stated that “no subscriber shall take less than one share.” There was no question that seven genuine living people owned the company’s shares. The court determined that the firm had been legitimately created and was an actual corporation (company) since it complied with the Act’s criteria.

House of Lords held that the provisions of the Act did not require that the people subscribing shall not be related to each other or that owning a single share shall not afford a sufficient qualification for membership, rejecting the liquidator’s argument that Salomon and his family members purchased all the shares and that the company was nothing more than a one-man show.

A creditor of the firm is unconcerned whether the company’s capital is owned by seven people in equal shares, each of whom has the right to an equivalent portion of the earnings, or if it is nearly entirely owned by one person, who gets almost all of the profits.

If one individual controls most of the firm’s capital, the company does not lose its identity. The company in question and its subscribers are entirely different people. The House of Lords also claimed that nothing in the Act required the subscribers to be independent, have a say in a significant amount of the undertaking, or have their own free will.

Conclusion

After this incident, the idea of removing the corporate veil was developed so that no one could commit fraud and escape responsibility by hiding behind the company’s organisation.

There should be some possibilities for applying this idea of lifting the corporate veil. Since a charge secured Aron Salomon’s debt against the company’s assets, it was determined in this case that he had committed no fraudulent or unlawful acts and was the company’s legitimate creditor. As a result, he had a right to be paid at the company’s winding up before any unsecured creditors.

Salomon vs Salomon – Case Explained in Easy Words
Anushka Saxena