Legal Fiction

LEGAL FICTION

What is Legal Fiction?

Legal fiction is a concept in law where certain circumstances that are not factually true are assumed and constructed to be true, for the purpose of achieving a specific legal outcome. A the same time it is also used to break down complex legal issues by applying and interpreting laws more effectively to such fictitious elements when, in reality, such elements wouldn't fit into those laws.

For instance, a corporation is considered a legal person before the eyes of the law in various jurisdictions, when in reality they are not a natural person. So, upon considering them a person, legal fiction allows corporations to enter contacts, sue, and be sued just like any other living person.

Therein, upon such categorizing, laws, and rules get applied more effectively and make complex situations easier to handle by the courts and legislature by bridging the gaps.  

Legal Fiction as defined by Jurists and Philosophers:

William Blackstone -

In Commentaries on the Laws of England Vol. 3, 1768, William Blackstone describes legal fiction, wherein in the first instance, the concept may seem strange, but they are considered to be “highly beneficial and useful”. He further states its purpose is to ensure fairness or equity, to prevent harm, and to never cause injustice and asserts it with the maxim “fictione juris semper subsistit aequitas - all legal fictions are founded in equity” .

Jeremy Bentham -

Jeremy Bentham’s views on legal fiction were highly critical as he considered them to be “false assertions” that though known or acknowledged to be false, are still considered to be true. However, he believed abstract ideas like power and obligation as essential concepts, but to him, legal fiction uses deceptive arguments and they are a way of “illicit judicial lawmaking” .

Sir Henry Sumner Maine -

Henry Maine, in chapter 2 of his work Ancient Law, discusses legal fiction in detail. He states that it is a tool that allows the legal system to adapt and handle new circumstances without evidently changing the law but still enabling legal development.

“Legal Fiction to signify any assumption which conceals, or affects to conceal, the fact that the rule of law has undergone alteration, its letter remaining unchanged, its operation being modified”.

The above quote from his book gives how the legal system evolves whilst maintaining the rule of law, the concept of legal fiction.

Lon Fuller -

Lon Fuller, in one of his works called Legal Fictions, 1967, provided a well-rounded stance and definition of legal fiction.

“A fiction is either (1) a statement pro-pounded with a complete or partial consciousness of its falsity, or (2) a false statement recognized as having utility”.

He noted that though legal fictions are not intended to deceive, he still considers that when they are taken way too seriously and believed, they become “dangerous and loses its utility.” Thus, though he appreciated legal fiction being functional in law, he criticized it for being based on pretense.

Legal Fiction as defined in case law(s):

Santa Clara County v. Southern Pacific R.R., 1886

One of the most important takeaways was that the court unanimously agreed that corporations are “persons” and come within the ambit of the Fourteenth Amendment, which, therefore, allows such corporations to sue, be sued, and enter contracts.

East End Dwelling Co. Ltd. v. Finsbury Borough Council, 1951

One of the leading cases for the concept of legal fiction. Wherein, this case illustrates how legal fiction can be employed to apply laws to hypothetical or constructed/assumed circumstances. Lord Asquith stated,

“If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had existed, must inevitably have flowed from or accompanied it.”

The court held that, while ensuring the law is adapted fairly it should also be applied to its logical consequences.

Bengal Immunity Company Limited v. State of Bihar, 1955

The issue was whether the Bihar Sales Tax Act could be applied to this company based in Calcutta, but goods were also sold in Bihar. The court held that the sales tax could be applied to the company as per the concept of legal fiction. It also, asserted the purpose of legal fiction is to be limited for the reason it was created and cannot be extended beyond such reason. Justice, N.H. Bhagawati rightfully stated that,

“A legal fiction presupposes the correctness of the state of facts on which it is based and all the consequences which flow from that state of facts have got to be worked out to their logical extent. But due regard must be had in this behalf to the purpose for which the legal fiction has been created.”

Cambay Electric Supply  v. The Commissioner of Income Tax, 1978

The issue in this case was about the balancing charge from the sale of old machinery and buildings under Section 41(2) of the IT Act. Where the court stated that the fiction of treating balancing charges under this provision as deemed income is established for specific purposes,

“It is well settled that a legal fiction is to be limited to the purpose for which it is created and should not be extended beyond its legitimate field”.

Bhavnagar University v. Palitana Sugar Mill Pvt. Ltd., 2003

The SC interpreted Section 20 of Gujarat Town Planning and Urban Development Act, 1976, in specific sub-section (2) provides for an exception on land acquisition for development, that if the land is not yet acquired or proceedings have not yet been initiated then upon notice being served the land designation lapses. The court stated that,

“The purpose and object of creating a legal fiction in the statute is well-known. When a legal fiction is created, it must be given its full effect”.

So, here, a legal fiction has been created to attain the full effect of the provision on development planning.

Nandlal Wasudeo Badwaik v. Lata Nandlal Badwaik, 2014

In this case, the distinction between a legal fiction and a presumption of fact under Section 112 of the Evidence Act was stated, wherein,

“Legal fiction assumes the existence of a fact which may not exist. However, a presumption of a fact depends on the satisfaction of certain circumstances.”

Based on such given circumstances, it's reasonable to conclude or assume a particular fact, and therefore, section 112 provides only for presumption and does not create legal fiction.

Legal provision(s) relating to Legal Fiction:

The legal provisions provided below don’t define legal fiction, still, these are a few examples or instances where legal fiction is applied in an Indian legal context and how it differs from a legal presumption.

Section 3 (42) of the General Clauses Act, 1897

This provision employs legal fiction, treating non-human entities like companies/associations/bodies of individuals as “persons” for the purpose of the law. Thus, such entities have rights and obligations similar to those of natural persons, which enhances the legal process by breaking down complex situations.

Section 2 (20) Companies Act, 2013

The section provides for the legal status of a “company”, which must be incorporated are the 2013 act or previous company laws. This established a company as a separate legal entity that ought to be incorporated and is distinct from the members, allowing the company to have its rights and obligations. So, this is inherently based on the concept of legal fiction, providing them a corporate legal personality or personhood, separate from its shareholders or members.

Section 3 of the Majority Act, 1875

The provision provides the age of majority for individuals legally residing in India as 18 years. Here legal fiction is being employed wherein, the individuals are “deemed” to have attained the age of majority at the beginning of the 18th date of birth.

So, when individuals are deemed to attain majority at the age of 18, for the purpose of law, their rights and obligations are established, which simplifies legal issues.

Section 12 of the Hindu Adoption and Maintenance Act, 1956

The section provides the effects and implications of adoption between the child and the adoptive parents. Wherein, from the date of the adoption, the adopted child is “deemed”  or legally considered to be the child of the adoptive parents. Owing to this, from that day onwards all the previous ties with biological parents are replaced and adoptive parents take precedence from thereon.

Again, the use of the term “deemed” here makes the provision a creation of legal fiction, where the adoptive child is treated as a child of the adoptive parents replacing the biological parent for legal purposes, from the date of adoption.

Section 116 of the Bharatiya Sakshya Adhiniyam, 2023  

The above provision states and establishes the presumption of legitimacy for a child, wherein, if the child is born during a valid marriage or within 280 days after the dissolution of the marriage, the mother is unmarried, then the child is legitimate based on the “conclusive proof” unless otherwise proven, that they did not have access to each other during the mentioned timeline . (Section 112 of the Indian Evidence Act, 1872)

This provision is to be noted in order to understand the difference between presumption and legal fiction. So, in this case, it is an instance of presumption and not a matter of legal fiction, because, until is otherwise proven by the parties, the law presumes that the child is legitimate based on the conclusive proof.

Therefore, the presumption of fact shouldn’t be confused with legal fiction, which is an assumption made by law that certain things are true for the purpose of law and its reasoning. A presumption can be disproved with sufficient proof and evidence, but legal fiction is accepted regardless of the underlying truth.

Section 20 of  the Bharatiya Nyaya Sanhita, 2023

One of the most important principles of law is “ignorance of the law is not an excuse”, which is a creation of legal fiction. But Section 20 of BNS states that a child below the age of 7 years is presumed to be incapable of committing an offence. (S. 82 of the Indian Penal Code, 1860)

Therefore, this again is a provision to understand the distinction between presumption and legal fiction.

International Experience

The below-mentioned are a few instances of either recent or common concepts that are a creation of legal fiction in certain countries and how they have been conceptualized.

United Kingdom (UK)

One of the recent instances of legal fiction is the Prorogation Controversy in the UK in the year 2019. Here, the Prime Minister’s decision to advice the Queen of the UK to suspend or prorogue the parliament for 5 weeks before the British Exit (Brexit) deadline from the EU. This particular prorogation was held unlawful by the Supreme Court of the UK in the joint case of R (Miller) v. The Prime Minister and Cherry v. Advocate General for Scotland, as it undermined the ability of the Parliament to operate its constitutional functions, without reasonable justifications.

In this context, legal fiction played a role, given the fact that prorogation as a concept in itself is not a creation of legal fiction but the discussions around prorogation can involve legal fiction. For instance when the interpretation of prorogation is used in a way that may not be in line with the intended meaning, like alterations made in this case.

So, here in this context, the UK used legal fiction to assume and pretend that the parliament was never suspended in the first place, and such mention in the records was removed officially. Instead, it was stated that the parliament was adjourned, so that the parliament was enabled to reconvene the next day.

United States of America (USA)

The concept of a “person having ordinary skill in the art (PHOSITA)”, is considered to be the creation of legal fiction in the Patent Laws. PHOSITA simply means a person who has ordinary skills and knowledge in a particular field of technicality. This concept being a legal fiction aids the legal process to identify and determine the obviousness and non-obviousness of a patent. This could be determined by assessing whether the person with “ordinary skill” in that particular technical field would find the said invention of the patent to be obvious or not based on his prior art.

The concept was codified for the very first time in the USA, in its Patent Act, 1952, under Section 103, which stated the “conditions of patentability”. According to the section a patent cannot be registered if someone with ordinary skill in that particular field would find the invention obvious based on the existing knowledge or prior art. Therefore, for an invention to be patentable it must fulfill the condition that that is not obvious in that technical area.

• This concept has also been codified in India, under the Patent Act, of 1970, under Section 2 (ja), which defines “inventive step”, which is a requirement for an invention to be patentable in India. Where the invention must be non-obvious to the person skilled in that art, so must involve some level of technical advancement or economical or both.

These concepts ensure that patents are granted only for novel and non-obvious inventions, by the assumption of the skill of a fictional person.

European Union (EU)

The concept of “non-entry in transit zones” is a legal fiction employed in the EU member states in order to manage border control and asylum procedures. This concept as a legal fiction allows the EU member states to claim that third-country nationals have not legally entered their country’s border/territory. This is until and unless they have been granted with necessary clearance by immigration officers, irrespective of their physical presence in the country.

Most of the EU countries use this fiction at international airports and other ports of entry, and over the years the prominence of this has increased in the context of restraining or preventing asylum-seekers trying to enter the country.

It simply means, that when an individual arrives through the port to one of the EU countries and has not yet cleared the immigration checks, they are considered to be in a “transit zone”, implying that they are not legally/officially yet on the territory of that particular country. In such a way the fiction allows the states to conduct screening regulations concerning their identity, health, and safety protocols.

On one hand, the EU member states have the advantages due to this legal fiction, as they get to have controlled entry through security checks, but on the other hand, in the context of asylum seekers, this is seen as a violation of human rights in the international regime. This puts them at risk of “refoulement”, where due to the fiction the individuals might have to return to a country where they may be persecuted, and overall it limits their rights and procedures as part of asylum.

• This concept of non-transit entry as a legal fiction is non-existent in India.

Research that engages with Legal Fiction

Parita Mashruwala, Legal Fictions: Do they fit the Juristic Reality? ,  International Journal of Legal Science and Innovation.

This particular article analyzes the importance and implications of legal fiction when it comes to the applications, interpretation, and development of law. The author of the article details the historical development or origin of the term “legal fiction”, dating to Roman Law, and in the end how the concept of legal fiction has been sustained during the contemporary times of legal systems, which includes both in the common law and in statutory laws of various jurisdictions.

Along, with this various other examples are provided such as adoption, separate legal entities, and deeming provisions in tax laws, where legal fiction is created or applied. Then, the article majorly delves into the Indian law context, firstly, the research distinguishes legal fiction from presumptions and that the former are inherently not true but are created to serve specific utilitarian purposes.

Amid, this the research also specifies the criticisms of legal fiction by citing the statements of scholars like Jeremy Bentham, while he argued for the concerns and implications surrounding legal fiction, some scholars like William Blackstone acknowledged the need for legal fiction. Illustrating how legal fiction has evolved over the years, brings in a more balanced view of the concept comprehensively, where careful consideration is required for legal reasoning.

Bhaskar Joshi,  The Concept of Legal Fiction, Legal Vidhiya

This provides a well-rounded analysis of legal fiction, starting from its historical development citing the works of Lon Fuller and its importance in the Indian legal system. Given the known purpose of legal fiction as to assuming certain facts or circumstances as true, the article further analyzes the application of legal fiction in several Indian contexts. Which, includes its application in, determining the age of consent, deeming prospectus in corporate law, adoption, and taxation, indicating the role legal fiction plays in simplifying such complex legal processes.

All of the above subject matter was addressed with relevant case laws and sections, where legal fiction was applied and interpreted to bridge the gaps. At the same time, the article also highlights the shortcomings that come with, when completely relying upon legal fiction, so it suggests courts consider the legislative intent as well for a more balanced approach.

Arjun Nair, Unmasking Legal Fiction: Illuminating The Path of Indian Jurisprudence, Journal of Legal Research and Juridical Sciences.

The research mentioned above provides a comprehensive study of legal fiction in Indian Jurisprudence, analyzing various instances like the doctrine of possession and adoption. It extends beyond the formal definitions of the concepts and gives in the implications that occur in reality owing to the application of legal fiction.

Most importantly the paper questions the legal fiction undermining the legislative intent through interpretations, which puts the risk of judicial activism and overreach. Therefore, it provides that a balanced approach is required that ensures the principles of justice and equity while application and interpretation in the Indian legal system.

Dr.P.R.L. Rajavenkatesan, Dr. A. Shanmuga Sundaram, The Role of “Legislative Intent” and “Legal Fiction” in Retrospective Law - Justification and Limitation, SSRN Papers.

The above-mentioned research studies the existing role of legislative intent and legal fiction specific to the context of retrospective laws in India. Retrospective laws refer to legislation applying to events occurring before the law was enacted, and Indian courts in some instances have upheld these laws based on legislative competence.

Importantly the research examines implications when legal fictions are applied to retrospective laws and when courts uphold such laws, the outcomes cause potential injustices on the parties involved, as it overlooks the existing judgments. In that instance, the research puts forth that it compromises the integrity of the judiciary, as retrospective laws override settled rights

Therefore, the mentioned research argues that the use of legal fiction to justify the retrospective law can be contrary to the principles of justice, fairness, and equity.

Challenges and Way Ahead

The most important aspect while addressing the concept of legal fiction is the pure lack of data regarding the process and implementation of the matter in reality.

In general, legal fiction has varied sets of challenges, they can potentially diverge from reality when it is overly relied upon in the legal process, as it is an assumption at the end of the day. It came into existence for the advantageous purpose of simplifying complex legal issues, but it may at some point end up with outcomes that are contrary to the intent or circumstance of the law.

In the point of application of legal fiction by courts, if in case it is misinterpreted or overused, it can potentially bring in the risk of judicial overreach. This would be the circumstance when it is employed beyond its actual purpose that was intended. Therein, the legislative intent is undermined in the process, which results in the frustrating credibility of statutory law, which is supposed to be fair, just, and in equity.

In the words of Jeremy Bentham, who criticized the concept of legal fiction owing to the involvement of “false assertions” and “deceptive arguments”, which makes it obscure instead of clarifying legal reasoning.

Prevalent confusion still exists about distinguishing legal fiction and presumption, which can lead to wrong interpretations in the legal context. Given the explicit codification of presumption in criminal laws, laymen can still be misled by these two concepts, which seem similar in the first instance.

Legal fiction in the application and implementation process brings in many ethical concerns. Firstly, when applied to retrospective laws, they can end up imposing liabilities for actions that were once lawful. This may result in conflict with the principles of justice and fairness, where they may affect the parties of the issues and obstruct the already granted rights.

Secondly, violating the principles of international law, when the created legal fiction, though seeming harmless for the legal process or the country, may harm individuals who are involved. As seen in the instance of the EU’s legal fiction policy of “non-transit entry”  as an asylum policy considered to violate human rights.

Lastly and most importantly, the excessive and over-reliance on legal fiction may cause legal disruption, as stated legal fiction is to be employed only for its actual intended legitimate purpose, and people at authority have to make sure that it doesn’t override.

Therefore, it brings in the need for a more balanced approach that must be taken to ensure the principles of justice, fairness, and equity are upheld while applying legal fiction, by being within the legislative intent.