Literal Meaning
Legal form is essential form.
Explanation & Origin
Origin – Forma legalis forma essentials est is latin term which is used in the law for the legal forms. The term literally translates to that legal form is essential form in any case.
Explanation-The legal form are very important. In the business the legal form gives the company a legal entity and its gets very useful for the owners. Having all the legal document is part of the society and is a need of time.
Illustration
A legal form is a essential when forming a company.
Case Reference
In the case of Messrs. R. C. Mitter & Sons vs The Commissioner[1]In such a case, though the partnership had been brought into existence by an oral agreement amongst the partners, if the terms and conditions of the partnership have been reduced to theform of a document, it would be right to say that the partnership has been constituted under that instrument. The word “constituted ” does not necessarily mean ” created ” or ” set up “, though it may mean that also. It also includes the idea of clothing the agreement in a legal form. In the Oxford English Dictionary, Vol. II, at pp. 875 & 876, the word ” constitute ” is said to mean, inter alia, ” 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 in its wider significance would include both, the idea of creating or establishing, and the idea of giving a legal form to, a partnership. The Bench of the Calcutta High Court in the case, under examination now, was not, therefore, right in restricting the word “constitute ” to mean only ” to create “, when clearly it could also mean putting a thing in a legal shape. The Bombay High Court, therefore, in the case, was right in holding 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.
In the case of Pierce Leslie & Co. Ltd vs Violet Ouchterlony Wapshareand [2] On November 10, Dorothy sent a telegram to the appellant company informing them that the family was agreeable to their new proposal. The draft agreement was sent by the appellant on November II. In the beginning of November Mrs. Wapshare was ill and was in a hospital in Bangalore. But on November 10, she was well enough to discuss the appellant’s proposal. On November 12, she came to Ootacamund and on November 13 she went to her lawyer Gonsalves, discussed the matter, with him and gave her consent. Gonsalves was approached to put the bargain in a legal form. He took exception to the draft agreement, but found the formal agreements to be free from blemish. At a meeting held on November 18, 1937 the shareholders of the company unanimously accepted the proposal. Mrs. Wapshare, Dorothy, Robert and Edward were present at the meeting. The meeting was also attended by E.W. Simcock, chairman of the company, H. M. Small, the director, nominated by the Imperial Bank of India and C. K. Pittock. All the Wapshare’s were sui juris’ Dorothy was a shrewd young lady and the best business brain in the family. The Wapshares knew the value of the properties intimately. They knew that Naduvattam if sold separately would not fetch more than Rs. 2 lakhs. Yet they chose to retain Naduvattam and sell their estates for Rs. 10 lakhs instead of selling all the estates for Rs. 14 lakhs. The reason was that there was no other, buyer willing to pay more than Rs. 10 lakhs for the other estates. They had decided not to sell Naduvattam and they were satisfied that ft. 10 lakhs was a just and fair price for the other estates sold separately from Naduvattam. The appellant’s offer enabled them to keep Naduvattam and at the same time to liquidate the Bank’s dues. The deal was satisfactory to- them in every way. They obtained all necessary legal advice. The documents were in proper legal form. There was no fraud, no concealment and no undue influence. No advantage was taken by the_ appellant of any information acquired by them in their character as secretary. The Wapshares clearly understood that they were, dealing with the appellant company, had the fullest information about all material, facts and that having this information they agreed to sell. they made no complaint about it for 12 years. Their long acquiescence ‘in the sale is evidence that the transaction was fair in all respects, On the whole and especially having regard to the long acquiescence we hold that the transaction was just and fair and 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. In saying so we must not be understood to say that we encourage transactions of this type. Having regard to their fiduciary character the appellant company might well have avoided entering into the transaction.
In the case of A. K. Gupta And Sons vs Damodar Valley Corporation[3] It may further be mentioned that the amendment was considered just as the defendants themselves had cancelled the contract without strictly complying with the terms of the contract and the Court felt that the justice of the case required that the amendment be granted. It would appear from the various cases discussed above that an amendment which would enable a plaintiff to make a claim which has become time-barred is as a rule to be refused and that the Court would exercise its special power to allow such amendment only when there be special circumstances in the case. The nature of those special circumstances is to be gathered from those cases in which such an amendment was allowed. It appears to me that such special circumstances can be only when the amended claim was at least intended to be made by the plaintiff who had given in the plaint all the necessary facts to establish the claim but had due to clumsy drafting not been able to express himself clearly in the plaint and to couch his relief in the proper legal form. Such circumstances justify an amendment not really as a judicial concession to the plaintiff to save him from any possible loss but on the ground that the original claim in the plaint, though defectively stated, really amounted to the claim sought to be made by the amendment. Looked at in this way, the permission to amend does not in reality offend against the law of limitation and serves the interests of justice. At this stage I may properly refer to what was said by the Privy Council.
Edited by Vigneshwar Ramasubramania
Approved & Published – Sakshi Raje
[1] 1959 AIR 868
[2] 1969 AIR 843
[3] 1967 AIR 96
