Personality, Rights, Liabilities, and Duties

2.1 Personality

• Types of Persons:

  • Natural Person: Living beings (e.g., individuals).
  • Artificial Person: Institutions, companies, entities. Legal personality granted by law.

• Definition of Personality: An entity provided with rights and duties by law. Must be legally acceptable.

• Samar's Definition of Legal Person: A unit or entity other than a human being that possesses personality under the law (e.g., Hindu idol). Legal personality is conferred by law.

• Types of Legal Persons:

  • Corporations: Manage affairs; two types: sole (one person, e.g., one-person company) and aggregate (group of people, e.g., NGOs, companies).
  • Institutions: Larger structures established by an act of Parliament (e.g., JECRC University). Often involved in social infrastructure.
  • Funds and Estates: Manage assets and properties for specific purposes (e.g., trusts, charitable funds).
  • Artificial Persons: Entities given personality and rights/duties by law (e.g., Hindu idols, paper companies). Exist only in the eyes of the law.

2.2 Characteristics of a Legal Person

• Perpetual Succession: Exists indefinitely; continues even after death or removal of members (e.g., Tata company, JEPX). Succession via heirs or representatives.
• Common Seal: Identification and authentication of acts.
• Capacity to Sue and be Sued: Ability to initiate or defend legal actions. Registration may be required for court proceedings.
• Separate Legal Personality: Distinct from its members; the company's existence is independent of its members.

2.3 Concept of Corporate Veil

• Definition: A legal protection shielding members from direct liability. The company is initially held responsible; individual member liability is secondary and determined based on their involvement. Protects members from personal liability.
• Piercing the Corporate Veil: The court can remove this protection if the legal personality is used against the law, holding members personally liable (e.g., Vijay Mallya). This depends on the specific circumstances.

2.4 Conclusion on Legal Personality

• Provides collective identity to members and represents them as a single entity (e.g., a law firm).

2.5 Liability

• Definition (Samar): The bond of necessity between a wrongdoer and the remedy for the wrong. Holding someone responsible for their acts and omissions.

• Act: Doing something required.

• Omission: Failing to do something required or doing something prohibited.

• Legal Obligation: Leads to civil wrong (remedy often financial) or criminal offense (punishment).

• Sources of Civil Liability: Contract law (codified, based on the contract) and tort law (uncodified, based on precedent).

• Types of Liability:

  • Primary Liability: Direct responsibility for one's own acts and omissions.
  • Secondary Liability: Arises when the primarily liable person fails to fulfill their obligation (e.g., electricity bill liability shifting from homeowner to other residents if the homeowner doesn't pay).
  • Limited Liability: Responsibility is limited (e.g., members of a legal firm).

2.5 Liability (Continued)

2.5.1 Consequences of Legal Personality:

• Courts can hold individual members of a corporation personally liable if the corporate "veil" is lifted due to a member's wrongdoing (e.g., Vijay Mallya case). This depends on the specific circumstances; there's no universal rule. Removal of the corporate veil results in the loss of protection afforded by the legal personality, leading to personal liability for members.
• Legal personality provides a collective identity to members, representing them as a single entity in dealings (e.g., a lawyer representing their law firm).

2.5.2 Liability (Recap and Expansion):

• Definition: The bond of necessity between a wrongdoer and the remedy for the wrong; holding someone responsible for acts or omissions.
• Act: Performing a required action.
• Omission: Failing to perform a required action or performing a prohibited one.
• Legal Obligation: Results in civil wrong (remedy often financial) or criminal offense (punishment).
• Sources of Civil Liability: Contract law (codified) and tort law (uncodified, based on precedent).

2.5.3 Types of Liability:

Type of Liability	Description	Example
Primary Liability	Direct responsibility for one's own acts and omissions.	Homeowner's responsibility for their electricity bill.
Secondary Liability	Arises when the primarily liable person fails to fulfill their obligation.	Other residents becoming liable for the electricity bill if the homeowner doesn't pay.
Limited Liability	Responsibility is limited.	Members of a legal firm; shareholders' liability limited to their investment.
Joint Liability	More than one person is jointly responsible.	Multiple partners in a business.
Separate Liability	Each person is responsible only for their own actions.	Different departments in a university each responsible for their specific tasks.
Absolute Liability	Complete responsibility for one's acts or omissions; no chance of avoiding liability.	Cases arising from events like the Bhopal gas leak, stemming from tort law.
Representative Liability	One person is responsible for another's actions due to representation.	A power of attorney acting on behalf of someone else.

2.5.4 Relationship between Legal Personality and Liability:

• Legal personality entails rights and duties. Failure to fulfill duties (omission) leads to liability.
• Legal personality protects members from complete liability, offering limited liability (e.g., corporate veil). Exceptions exist where the veil can be lifted (e.g., individual member wrongdoing).

2.5.5 Legal Rights:

• Definition: Rights recognized and protected by law. Interests protected and recognized by law. A power to legally bind someone to do or not do something.
• Theories of Legal Rights:
  • Will Theory: The will or intention of the person is the major element of the right. Supported by Austin, Holland, and Pollock.
  • Interest Theory: The interest of the person is the major element of the right. Rights can exist without will (e.g., rights of children, lunatics, corporations). Supported by Ihering.
• Elements of a Right (according to Salmond): Inherence, incidence, duty, subject-matter, content, and title.
• Types of Legal Rights:
  • Positive/Negative Rights: Positive rights demand action; negative rights demand inaction. (Examples: Duty of loyalty to the state vs. prohibition against littering).
  • Real/Personal Rights: Real rights are against the whole world (e.g., ownership); personal rights are against a specific person or group (e.g., lease agreement).
  • Perfect/Imperfect Rights: Perfect rights have a legal remedy; imperfect rights do not (e.g., breach of contract vs. moral obligation without legal recourse). Imperfect rights can become time-barred due to limitation acts (statutory time limits for legal action).
  • Proprietary/Personal Rights: Proprietary rights have monetary value; personal rights do not (e.g., property ownership vs. reputation).
  • Heritable/Unheritable Rights: Heritable rights pass to heirs after death; unheritable rights are limited to the lifetime of the holder (e.g., perpetual succession vs. copyright).

4. Further Classification of Legal Rights and Duties

This section builds upon the previous section's categorization of legal rights, expanding on specific types and their relationships with legal duties.

4.1 Further Types of Legal Rights

• Real vs. Personal Rights (Re-emphasis & Example):

  • Real Rights (Rights in rem): Enforceable against the whole world. Example: Ownership of property (seller's absolute ownership transfer in a sale). After a sale, the new owner has rights in rem against everyone.
  • Personal Rights (Rights in personam): Enforceable against a specific person or group. Example: Lease agreement; only the tenant and landlord are involved.

• Perfect vs. Imperfect Rights (Re-emphasis & Time Barring):

  • Perfect Rights: Have a legal remedy (e.g., breach of contract).
  • Imperfect Rights: Lack a legal remedy (e.g., moral obligation). Can become time-barred due to limitation acts (statutory time limits). Example: Failure to sue within a legally defined period.

• Proprietary vs. Personal Rights (Re-emphasis & Clarification):

  • Proprietary Rights: Possess monetary value (e.g., property ownership).
  • Personal Rights: Lack direct monetary value but still exist (e.g., reputation, respect).

• Heritable vs. Unheritable Rights (Re-emphasis & Examples):

  • Heritable Rights: Pass to heirs (e.g., perpetual succession, property inheritance).
  • Unheritable Rights: Limited to the original holder's lifetime (e.g., copyright – lasts for the author's lifetime plus 60 years).

• Rights in re propria vs. Rights in re aliena:

  • Rights in re propria: Rights over one's own property.
  • Rights in re aliena: Rights over another's property. Example: Easement rights (e.g., right to sunlight or airflow across a neighbor's property).

• Principal vs. Accessory Rights:

  • Principal Rights: Independent and exist on their own.
  • Accessory Rights: Dependent on another right.

• Public vs. Private Rights:

  • Public Rights: Belong to the state.
  • Private Rights: Belong to individuals.

• Fundamental vs. Constitutional Rights:

  • Fundamental Rights: Essential for personal development (detailed examples not provided in transcript).
  • Constitutional Rights: Provided by the constitution.

• Vested vs. Contingent Rights:

  • Vested Rights: Certain and immediate; no conditions required (e.g., inheritance after death).
  • Contingent Rights: Dependent on a future uncertain event (e.g., receiving an inheritance if a specific condition is met).

• Legal vs. Equitable Rights:

  • Legal Rights: Recognized by common law.
  • Equitable Rights: Based on equity principles; deal with shares, debentures, etc. and are subject to change.

• Jus ad rem vs. Jus in re:

  • Jus ad rem: Right to acquire something (possession is not provided).
  • Jus in re: Right in a thing (possession is provided). Example: Mortgage types where possession is or isn't transferred to the lender.

4.2 Types of Legal Duties

• Relative vs. Absolute Duties:

  • Relative Duties: Correspond to a specific right of another person.
  • Absolute Duties: Do not correspond to a specific right (e.g., refraining from harming others).

• Positive vs. Negative Duties:

  • Positive Duties: Require action (e.g., duty to pay taxes).
  • Negative Duties: Require inaction (e.g., duty not to harm another).

• Primary vs. Secondary Duties: (Already covered in a previous liability section).

  • Primary Duties: Independent duties.
  • Secondary Duties: Dependent on primary duties (e.g., duty to compensate for breach of contract).

• Legal vs. Moral Duties:

  • Legal Duties: Enforceable by law.
  • Moral Duties: Not legally enforceable (e.g., charitable giving).

4.3 Relationship Between Legal Rights and Duties

• Correlation: Legal rights and duties are correlated; one rarely exists without the other. The existence of a right implies a corresponding duty on another. This is a well-accepted fact amongst jurists.

• Exception: Not all duties have correlated rights (absolute duties exist). Example: Fundamental duties of a citizen (respect for national symbols, etc.). These are obligations, but don't directly translate into a specific, reciprocal right.

• Salmond's View: Legal rights and duties form a legal bond of obligation between two persons (or entities, such as a person and the state). This relationship is shown in the Maintenance of Senior Citizens Act, where children have a duty to care for parents in exchange for eventual inheritance.