FORMA LEGALIS FORMA ESSENTIALIS EST
BY-TRIDIBESH DASGUPTA (HERITAGE LAW COLLEGE)
This article aims to establish a proper explanation of the Latin maxim Forma Legalis Forma Essentialis Est and its role in the world of litigation. This articles establishes the literal meaning of above mention the Latin Maxim with three cases of the Indian Judiciary and the Judgements pronounced by various court of law.
“Anything said in Latin sounds profound”. Forma Legalis Forma Essentialis Est literally means legal form is essential form. It is a Latin maxim which is used in law for the legal forms, facts and theories. It translates that legal form is essential form in any case. A legal form gives an institution, estate or a company its legal entity and legal rights to its owner or parties. In the world of litigation preparation and execution of any legal task requires certain legal forms, every claim or request before the court of law are based on these forms. For instance, in business or corporate sectors legal forms gives the company or corporation a legal entity and legal identity to its owners or partners.
NEED FOR LEGAL FORM
A Judge or clerk may refuse improper non-legal forms or documents which may invalid or preclude a claim or defence. This why it is very essential to present properly filed legal forms for preparation and execution of any legal task. A legal form is legally binding in the eyes of the court.
TYPES OF LEGAL FORM
Essential elements for a legal form don’t always require physical elements, like for a valid agreement to be enforceable by law (a contract) offer and acceptance, lawful consideration, free consent and intention to create a legal relationship is required. Section 10 to Section 18 of the Indian Contract Act, 1872 states all the essential elements required for a legal form related to an agreement or a contract.
In similar way the Section 7 of the Companies Act, 2013 states all the essential legal requirements for incorporation of company (give legal form or entity to a company). Few of the legal forms are as follows:-
1. Memorandum of Association (Section 4)
2. Articles of Association (Section 5)… etc.
1. Messrs. R. C. Mitter & Sons v. The Commissioner 1959 AIR 868, 1959 SCR Supl. (2) 641
In this case a firm was said to have been constituted by a verbal agreement in April, 1948 and the- deed of partnership was drawn up in September, 1949. Though the partnership of the firm had been brought into force by verbal agreement amongst the partners, if the terms and conditions of the partnership have been incorporated in the form of a document or a legal form, it would be right to say that the partnership has been constituted under that instrument. The word “Constituted” under an instrument of partnership occurring in Section 26 (A) of the Indian Income-tax Act does not necessarily mean “created” or “set up”. It not only includes the firm that was incorporated by the instrument of partnership but also the idea of clothing the agreement in a legal form by reducing the terms and conditions of the partnership in writing. Oxford English Dictionary, Vol. II, at pp. 875 & 876 states that among other things the word “constitute” is said to mean, “To set up, establish, found (an institution, etc.)” and also “to give legal or official form or shape to (an assembly, etc.)”. Thus the word has a wider a significance which indulges both the idea of establishing, setting up or creating and the idea of giving a legal form to an agreement of a partnership for incorporation of a firm.
The Calcutta High Court in this case, restricted the word “constitute” to mean only “to create”, when clearly it could also mean putting a thing in a legal form. The Bombay High Court, therefore, in this case, rightfully held that the section could not be restricted in its application only to a firm which had been created by an instrument of partnership, and that it could reasonably and in conformity with commercial practice, be held to apply to a firm which may have come into existence earlier.
2. Pierce Leslie & Co. Ltd v. Violet Ouchterlony Wapshareand 1969 AIR 843, 1969 SCR (3) 203
In 1927 OUCHTERLONY WAPSHAREAN formed a limited company and conveyed his estates to the company. He and his family held all the shares of the company. The company borrowed a sum of money from the Imperial Bank of India. Since 1931, the family was keen on selling the estates, but none of the offers were finalised. The family tried to raise the loan but failed. In default of payment within 15th November, 1937 the trustee under the trust of debenture deed was authorised to enter into possession of the estates and sell them. The company was not in a position to liquidate the bank’s debt without selling the estates. In the beginning of November 1937, the family had received an offer from A.L. & Co. for the purchase of all the estates of the company for Rs.14 lakhs, but the family was anxious to retain one of the estates. The appellant-company Offered back Rs.10 lakhs for all the estates excluding the one which the family wanted to retain. The family knew that this estate, if separately sold, would not fetch more, than Rs.2 lakhs and yet they chose to retain it. At a meeting all the members of the family unanimously accepted the, proposal. There all Sui juries and had business acumen. They knew the value of the properties and accepted Rs.10 lakhs is a just and fair price. The offer enabled them to retain the estate which they wanted to retain and at the same time helped them to liquidate the Bank’s debt amount. They had all the legal requirements and the documents were in proper legal form. The director nominated by the Imperial Bank and the chairman of the company attended the meeting. After the transfer, the company went into liquidation and it dissolved on March 1, 1940, under section 209 (h) of the Companies Act, 1913. On January 10, 1938 possession of the properties was taken by the appellant in proper legal form and a new company was promoted to which the properties were transferred by conveyances dated January 14, 1939 and 50 % of the shares of the new company were held by the appellant-company by May 15, 1939 which managed and controlled the new company. No complaint was made by the members of the family the transaction for 12 years, but, on December 21, 1950, a suit was instituted by them against the appellant that the old company had not been wound up in by means of law and was still in existence in proper legal form and that the real owner of the properties was the old company and the new company held them in trust for the old company. The Madras High Court held that the long acquiescence in the sale as evidence that the transaction was in legal form in all respects and held that the appellant did not gain any pecuniary advantage by availing themselves of their fiduciary character or under circumstances in which their interests were in conflict with those of the old company.
3. A. K. Gupta And Sons v. Damodar Valley Corporation 1967 AIR 96, 1966 SCR (1) 796
A.K.Gupta And Sons filed a suit against Damodar Valley Corporation claiming declaration that, on a proper interpretation of one of the clauses of the contract the appellant was entitled to an enhancement of 20% over the tendered rates. The plaint stated, that work had been done according to the contract and that the suit’s value for purposes of jurisdiction was Rs.65000, but as it was a declaration suit only, court fees on that basis had been paid. The High Court rejected the petition for amending the plaint by including a prayer for a decree for Rs.65000 or such other amount as may be found due on proper account being taken and then made by the appellant on the ground that the claim for money was time-barred long before the petition for amendment was made, and because there were not a single special circumstance to justify the grant of the amendment. It further stated that due to clumsy drafting, not been able to express himself clearly in the plaint and to couch his relief in the proper legal form and such circumstances justify an amendment not really as a judicial concession to the plaintiff to save him.
In the above mentioned cases it is evident that the legal form is the most essential form. Legal entity is not possible without proper legal form or the court of law does not recognize an estate, institution or a company. For example, when a company is given a legal form, it becomes a distinct legal entity, its life commences from the date of incorporation. A partner of a firm that has not been given a legal form cannot sue the firm or any of the other partners of the firm.
2. A. K. Gupta And Sons v. Damodar Valley Corporation 1967 AIR 96, 1966 SCR (1) 796
3. Pierce Leslie & Co. Ltd v. Violet Ouchterlony Wapshareand 1969 AIR 843, 1969 SCR (3) 203
4. Messrs. R. C. Mitter & Sons v. The Commissioner 1959 AIR 868, 1959 SCR Supl. (2) 641
6. Book : N.D. Kapoor; Elements Of Mercantile Law
[DISCLAIMER: This article is for general information only. We have tried to include as much information as possible but there are chances that some important information may have been missed .It is NOT to be substituted for legal advice or taken as legal advice. The publishers of the this article shall not be liable for any act or omission based on this note].