What is the law relating to the performance of a contract by joint promisors under the Indian Contract Act, 1872?

Question: What is the law relating to the performance of a contract by joint promisors under the Indian Contract Act, 1872? [RJS 2014]

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Answer

Section 43 in the Indian Contract Act, 1872 lays down a provision for Any one of joint promisors may be compelled to perform. It states:

“When two or more persons make a joint promise, the promisee may, in the absence of an express agreement to the contrary, compel any 1[one or more] of such joint promisors to perform the whole of the promise”.

Each promisor may compel contribution- 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.

Sharing of loss by default in contribution- 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.

Explanation.—”Nothing in this section 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.”

This section lays down three rules relating to the performance of a contract by joint promisors under the act

1. Anyone compellable to perform [Section 43 (Para 1)]

Firstly, when a joint promise is made, and there is no express agreement to the contrary, the promisee may compel any one or more of the joint promisors to perform the whole of the promise. For example, ‘A’, ‘B’, and ‘C’ jointly promise to pay ‘D’ Rs 3000/- ‘D’ may compel either ‘A’ or ‘B’ or ‘C’ to pay him Rs 3000/-

2. Right of contribution [Section 43 (Para 2)]

Secondly, a joint promisor who has been compelled to perform the whole of the promise, may require the other joint promisors to make an equal contribution to the performance of the promise, unless a different intention appears from the agreement. For example, ‘A’, ‘B’ and ‘C’ are under a joint promise to pay ‘D’ Rs 3000/-. ‘D’ recovers the whole amount from ‘A’. ‘A’ may require ‘B’ and ‘C’ to make equal contributions.

3. Sharing of deficiency [Section. 43 (Para 3)]

Thirdly, if any one of the promisors makes default in such contribution, the remaining joint promisors must bear the deficiency in equal shares. ‘A’ ‘B’ and ‘C’ are under a joint promise to pay ‘D’, 3000 rupees, and if ‘C’ is unable to pay anything. The deficiency must be shared by ‘A’ and ‘B’ equally. If C’s estate is able to pay one-half of his share, the balance must be made up by ‘A’ and ‘B’ in equal proportions.

But Section 43 allows an action to be brought against any one of the joint promisors without impleading the others as defendants. So, if the creditor sues only one joint promisor, he is subsequently not allowed to sue the others, according to English Law but in Indian law, according to Strachey C.J. in Mohd Askari v. Radhe Ram Singh, [ILR (1900) 22 All 307, 311-12], there is no such bar in the words of Section 43 and, therefore, a subsequent suit against other promisors should be allowed to proceed.

Pollock and Mulla observe: the reasoning of Strachey CJ seems to us conclusive. But some other High Courts have disallowed such actions and have held different views on the same.

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

1. Law of Contract Mains Questions Series Part-I
2. Law of Contract Mains Questions Series Part-II
3. Law of Contract Mains Questions Series Part-III
4. Law of Contract Mains Questions Series Part-IV
5. Law of Contract Mains Questions Series Part-V
6. Law of Contract Mains Questions Series Part-VI
7. Law of Contract Mains Questions Series Part-VII
8. Law of Contract Mains Questions Series Part-VIII
9. Law of Contract Mains Questions Series Part-IX
10. Law of Contract Mains Questions Series Part-X