"Body corporate" Or "Corporation" - Indian Laws - General

As per clause (d) of section 2 of the Limited Liability Partnership Act, 2008 - body corporate means a company as defined in clause (20) of section 2 of 3the Companies Act, 2013 and includes (i) a limited liability partnership registered under this Act; (ii) a limited liability partnership incorporated outside India; and (iii) a company incorporated outside India, but does not include (i) a corporation sole; (ii) a co-operative society registered under any law for the time being in force; and (iii) any other body corporate not being a company as defined in clause (20) of section 2 of the Companies Act, 2013 or a limited liability partnership as defined in this Act, which the Central Government may, by notification in the Official Gazette, specify in this behalf; Case Laws LLP not a body corporate? - In SRL, it has been held that LLP entity not being 'Body corporate is not liable to pay services tax under reverse charge. There can be surely two views on this issues, a section 3(1) of LLP Act, 2008 itself states that LLP is a body corporate. ( SRL Advisors LLP Vs Commissioner of Central Tax Delhi South Commissionerate - 2021 (7) TMI 1195 - CESTAT New Delhi ) As per legal glossary issued by legislative department - Corporation means : a body corporate legally authorised to act as a single person [art. 19(6)(ii), Const. In Daman Singh- 1985 (4) TMI 322 - SUPREME COURT), a Constitution Bench of this Court considered Entry 43 of List I and Entry 32 of List II of the Seventh Schedule of the Constitution of India and observed: 5. What is a corporation? In Halsbury s Laws of England , Fourth Edition, Volume 9, Paragraph 1201, it is said, A corporation may be defined as a body of persons (in the case of a corporation aggregate) or an office (in the case of a corporation sole) which is recognised by the law as having a personality which is distinct from the separate personalities of the members of the body or the personality of the individual holder for the time being of the office in question. A corporation aggregate has been defined in paragraph 1204 as, [A] collection of individuals united 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 respects 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 institution, or the powers conferred upon it, either at the time of its creation or at any subsequent period of its existence. A Corporation is an artificial being which is a legal person. It is a body/corporate established by an Act of Parliament or a Royal Charter. It possesses properties and rights which are conferred by the Charter constituting it expressly or incidentally. Halsbury 's Laws of England Fifth Edition, Vol. 24 defines the Corporation as follows : 301. Corporations and unincorporated associations. A corporation may be defined as a body of persons (in the case of a corporation aggregate) or an office (in the case of a corporation sole) which is recognised by the law as having a personality which is distinct from the separate personalities of the members of the body or the personality of the individual holder for the time being of the office in question. There are many associations and bodies of persons which are not corporations. Unincorporated associations do not have legal personality, may not sue or be sued in their own name nor (unless their purposes are charitable) may property be held for their purposes otherwise than by virtue of a contract between the members for the time being. CIT (TDS) , KANPUR AND ANR. VERSUS CANARA BANK- 2018 (7) TMI 664 - SUPREME COURT In S.S. Dhanoa vs. Municipal Corporation, Delhi and Others- 1981 (5) TMI 124 - SUPREME COURT had elaborately considered the concept of Corporation. This Court referred and relied the definition of Corporation as given by Chief Justice Marshall in celebrated case of Dartmouth College v. Woodward, NH 4 Wheat 518, 636:4 L Ed 629 . It is useful to extract paragraph Nos. 8 and 9 of the judgment which are as follows: 8. A corporation is an artificial being created by law having a legal entity entirely separate and distinct from the individuals who compose it with the capacity of continuous existence and succession, notwithstanding changes in its membership. In addition, it possesses the capacity as such legal entity of taking, holding and conveying property, entering into contracts, suing and being sued, and exercising such other powers and privileges as may be conferred on it by the law of its creation just as a natural person may. The following definition of corporation was given by Chief Justice Marshall in the celebrated Dartmouth College case : A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and, if the expression may be allowed, individuality; properties, by which a perpetual succession of many persons are considered as the same, and may act as a single individual. They enable a corporation to manage its own affairs, and to hold property, without the perplexing intricacies, the hazardous and endless necessity, of perpetual conveyances for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities, that corporations were invented, and are in use. By these means, a perpetual succession of individuals are capable of acting for the promotion of the particular object, like one immortal being. The term corporation is, therefore, wide enough to include private corporations. But, in the context of clause Twelfth of Section 21 of the Indian Penal Code, the expression corporation must be given a narrow legal connotation. 9. Corporation, in its widest sense, may mean any association of individuals entitled to act as an individual. But that certainly is not the sense in which it is used here. Corporation established by or under an Act of Legislature can only mean a body corporate which owes its existence, and not merely its corporate status, to the Act. For example, a Municipality, a Zilla Parishad or a Gram Panchayat owes its existence and status to an Act of Legislature. On the other hand, an association of persons constituting themselves into a company under the Companies Act or a society under the Societies Registration Act owes its existence not to the Act of Legislature but to acts of parties though, it may owe its status as a body corporate to an Act of Legislature. A Constitution Bench of this Court in Sukhdev Singh and Others vs. Bhagatram Sardar Singh Raghuvanshi and Another, 1 975 (2) TMI 111 - SUPREME COURT had occasion to consider the nature and character of Corporation including its early history. Justice Mathew, delivering his concurrent opinion noted that Corporations in 17th, 18th and 19th Centuries were far more like the bodies corporate we call public authorities today. In paragraph Nos. 83, 86 and 87 following has been laid down: 83. The chartered corporations of the 17th, 18th and 19th centuries were expected, perhaps required, to perform stated duties to the community like running a ferry, founding a colony or establishing East Indian trade. Performance of these functions and securing whatever revenue the enterprise made to the Crown were the primary reasons why a charter was granted. Corporations in early English law were in fact, and in legal cognizance, a device by which the political State got something done. They were far more like the bodies corporate we call public authorities today. Few in the 17th or 18th century would have disputed that such a corporation was an agency of the State. 86. The public corporation, therefore, became a third arm of the Government. In Great Britain, the conduct of basic industries through giant corporations is now a permanent feature of public life. 87. A public corporation is a legal entity established normally by Parliament and always under legal authority, usually in the form of a special statute, charged with the duty of carrying out specified governmental functions in the national interest, those functions being confined to a comparatively restricted field, and subjected to control by the Executive, while the corporation remains juristically an independent entity not directly responsible to Parliament. A public corporation is not generally a multipurpose authority but a functional organisation created for a specific purpose. It has generally no shares or shareholders. Its responsibility generally is to Government. Its administration is in the hands of a Board appointed by the competent Minister. The employees of public corporation are not civil servants. It is, in fact, likely that in due course a special type of training for specialized form of public service will be developed and the status of the personnel of public corporation may more and more closely approximate to that of civil service without forming part of it. Insofar as public corporations fulfil public tasks on behalf of Government, they are public authorities and as such subject to control by Government. One more principle which was reiterated by this Court in above Constitution Bench judgment is that Corporations which are instrumentalities of the Government are subject to the limitation as contained in the Constitution. The Corporations which were under consideration in the above case , namely, Life Insurance Corporation of India, Oil and Natural Gas Commission, Industrial Finance Corporation were held to be constituted within the meaning of Article 12 of the Constitution. Two categories of Corporations have been noticed i.e. statutory corporations and non statutory corporations. Whereas, the statutory corporations owe their existence from by or under statute, non statutory bodies and corporations are not created by or under statute rather are governed by a statute. [ CIT (TDS) , KANPUR AND ANR. VERSUS CANARA BANK- 2018 (7) TMI 664 - SUPREME COURT ]