The Indian Contract Act, 1872, regulates Indian contract law and is the most important piece of legislation in the country. Except for Jammu and Kashmir, the law applies to practically all of India's states. It specifies the conditions under which contractual parties' commitments are legally enforceable. If we look at the history of the Indian Contract Act of 1872, we can see that it is one of the country's oldest commercial Legislation. On September 1, 1872, the Indian Contract Act was passed. The main legislation that governs any deal entered in India is Indian contract law. The statute is divided into 266 sections.
The Indian Contract Act 1872, Section 43,44,45 deals with the consequences of releasing one joint promisor and the devolution of joint rights.
Section 43: 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.
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 payments made by the principal.
Illustrations: (a) A, B, and C agree to pay D 3,000 rupees in total. D may compel A, B, or C to pay him 3,000 rupees.
Section 44: Where two or more persons have made a joint promise, a release of one of such joint promisors by the promise does not discharge the other joint promisor or joint promisors neither does it free the joint promisors so released from responsibility to the other joint promisor or joint promisors.
Section 45: When a person has made a promise to two or more persons jointly, then, unless a contrary intention appears from the contract, the right to claim performance rests, as between him and them, with them during their joint lives, and, after the death of any of them, with the representative of such deceased person jointly with the survivor or survivors, and, after the death of the last survivor, with the representatives of all jointly.
Illustration: In exchange for a loan of $100,000 from B and C, A undertakes to return B and C jointly on a given date, plus interest. When B dies, the right to demand performance passes to B's representatives jointly with C during C's lifetime, and to C's legal representatives jointly after C's death
In Anokhe Lal v. Radha Mohan Bansal the Supreme Court concluded that the principle set forward by section 45 applies to situations in which one person makes a joint agreement to two or more others. After the death of any one of them, the right to claim completion of the contract arising out of such a promise would be passed on to the legal representatives of the deceased jointly with the surviving promises. If the joint promises were business partners, this condition requires the legal representatives of a deceased partner to join the others in enforcing the contract's right to performance.
DEATH OF A JOINT PROMISER
If one of the joint promisors dies while the litigation is continuing, the other defendant promisors can be sued without having to bring his legal representatives on record. When a lawsuit against a group of joint promisors is dismissed, the plaintiff cannot file an appeal against only some of them while abandoning his claim against the others. When one of the promisors dies while an appeal against a decree obtained against them is underway, the appeal ends as far as the deceased person is concerned because the appeal can continue against the other joint promisors. The abatement has no bearing on the surviving promisors' ability to contribute against the estate of a deceased joint promisor.
Partnership Section 43 refers to parties making a joint pledge, however it does not apply where parties are jointly interested in a contract made by a single person by operation of law. As a result, if there are many successors of the original debtor, the clause does not apply, and they must all be joined as parties to the claim. Whether a sale deed by several vendees holds all vendees jointly liable or holds each vendee solely responsible for his own share is an issue of fact that depends on the parties' intentions. The joint promisor who wishes to defend such an action on this ground bears the burden of proving that each promisor is not individually liable under the contract.
According to Gokhul Bihari Pande v Khiju RaiIf one of the joint promisors dies while the claim is pending, the suit can be initiated against the other defendant promisors without recording his legal representatives. When a lawsuit against a group of joint promisors is dismissed, the plaintiff cannot file an appeal against just a few of them while relinquishing his claim against the others.
This article is written by Merlin Ann Varghese of CHRIST Deemed to be University, Delhi NCR.