Liability of joint promisee under the Contract Law

Section 43 of the Indian Contract Act, 1872 deals with joint promise. By virtue of said section, when two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel any one or more of such joint promisors to perform the whole of the promise.

For Example:

Adam, Bracken and Clarke jointly promise to pay Dhoni 3,000 USD. Dhoni may compel either Adam or Bracken or Clarke to pay him 3,000 USD.

It was held in Hazara Singh v. Narinjan Singh, (AIR 1929 Lah 783) that Section 43 applies only where two or more persons have made a joint promise have become jointly interested by inheritance in a contract made by a single person.

Similarly, each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract.

For Example:

Adam, Bracken and Clarke jointly promise to pay Dhoni the sum of 3,000 USD. Clarke is compelled to pay the whole. Adam is insolvent, but his assets are sufficient to pay one-half of his debts. Clarke is entitled to receive 500 USD from Adam’s estate, and 1,250 USD from Bracken.

Further, if any one of two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares.

For Example:

Adam, Bracken and Clarke are under a joint promise to pay Dhoni 3,000 USD. Clarke is unable to pay anything, and Adam is compelled to pay the whole. Adam is entitled to receive 1,500 USD from Bracken.

However, nothing in Section 43 of the Indian Contract Act shall prevent a surety from recovering, from his principal, payments made by the surety on behalf of the principal, or entitle the principal to recover anything from the surety on account of payment made by the principal.

For Example:

Adam, Bracken and Clarke are under a joint promise to pay Dhoni 3,000 USD. Adam and Bracken being only sureties for Clarke. Clarke fails to pay. Adam and Bracken are compelled to pay the whole sum. They are entitled to recover it from Clarke.

Re, to Shaik Shahed v. Krishna Mohan (AIR1917 Cal 829) where it was held that Section 43 of the Contract Act can have no application where parties became jointly interested by operation of law in a contract made by a single person. It was in that case held that if the landlord brings a suit for recovery of rent without impleading all the tenants who are necessary parties, the suit is not maintainable.

Calcutta High Court in Kailash Chandra v. Brojendra & Ors., (AIR 1925 Cal 1056) observed that, Section 43 of the Contract Act will be applicable to the case of the co-heirs of the deceased is based on misapprehension of the scope of Section 43 of the Contract Act. It is quite apparent that the liability of a son for the debt incurred by the father is limited only to the extent of the share of the property inherited by him. Now one of the essential conditions for the applicability of Section 43 of the Contract Act is that it is open to a creditor to sue any one or all debtors whose liability is joint and several for the recovery of the whole of the amount.

In Lukmidas Khimji v. Purshotan Haridas (1882) I.L.R. 6 Bom. 700, Mr. Justice Latham expressly held that Section 43 of the Contract Act materially altered the rules of the English common law, and disallowed an objection by a partner defendant that the other partners should have been joined as defendants; and yet, while thus clearly recognizing that by reason of Section 43 a joint debtor has no right to have his co-contractors joined as defendants, the learned Judge nevertheless held that the rule in Kendall v. Hamilton (1879) L.R. 4 A.C. 504, would bar a fresh suit against the other partners.

In Motilal Bechardas v. Ghellabhai Hariram (1892) I.L.R. 17 Bom. 6 Mr. Justice Farran held in reference to Section 43 that "as far as the liability under a contract is concerned, it appears to make all joint contracts joint and several." If that is a correct view of Section 43, the doctrine of King v. Hoare, (1844) 13 M. and W., 494, is admittedly not applicable.

In Narayana Chetti v. Lakshmana Chetti (1897) I.L.R. 21 Mad. 256, the Court, following Lakmidas Khimji v. Purshotam Haridas (1882) I.L.R. 6 Bom. 700, held that "it is not incumbent on a person dealing with partners to make them all defendants: he is at liberty to sue any one partner as he may choose." The Court expressly applied to partners not only Section 43 of the Contract Act, but Section 29 of the Code of Civil Procedure, which relates not to joint but to several and to joint and several liability.

In Rahmubhoy Hubibbhoy v. Turner (1890) I.L.R. 14 Bom. 408, Scott, J., in the first Court said that "Section 43 of the Contract Act IX of 1872 is not perhaps quite clear whether a complete adoption of the English rule is intended."