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Jointly perform liability

Sec 42 states, when two or more persons have jointly entered into a contract with one or more persons then all joint promisors need to perform their promise together.

 

Example

Ramesh, Suresn and Mahesh Owe ₹ 30,000 to Dinesh. All the three need to jointly perform their obligation.

Joint and several liabilities of joint promisors

In case all the joint promisors do not perform their obligation voluntarily then sec 43 would come into operation. As per Sec 43(para1) The liability of joint promisors towards the promisee is joint and several. In the absence of an express agreement to the contrary, the promisee may compel anyone or more of such joint promisors to perform the whole of the promise.

 

Example

Ramesh, Suresn and Mahesh Owe ₹ 30,000 to Dinesh. All the three need to jointly perform their obligation. In case all the three do not voluntarily discharge their obligation then Dinesh can compel any one of them to discharge the whole obligation. Dinesh Compels Mahesh to pay ₹ 30,000 to him.

 

Note: ‘Several’ liability of a joint promisor means a liability which can be separated from the joint liability and becomes an individual liability. Hence if all of the promisors do not perform the promise then the promisee can compel any one or more of promisors so as to make liability several.

Joint promisors’ right to claim contribution

Sec 43(para2) states that If one of the joint promisors has actually performed whole of the obligation to the promisee, then such joint promisor would be entitled to recover a contribution from the other joint promisors towards the total liability. The contribution shall be equal or in the agreed ratio.

 

Example

Ramesh, Suresh and Mahesh took a joint loan from Dinesh for ₹ 30,000. They decide to share the loan amount in the ratio 5:3:2. Dinesh recovers the total amount from Mahesh. After this payment, Mahesh is entitled to demand contribution from Ramesh and Suresh in accordance with the ratio that they had agreed upon. So, Ramesh has to pay ₹ 15,000 and Suresh, ₹ 9,000 to Mahesh.

Joint promisors’ duty to share loss from default in contribution

Sec 43(para3) states that when A joint promisor fails to make his contribution as required by the previous rule. In such a case, the other joint promisors will have to share this loss equally even if there was a ratio to divide the main liability.

 

Example

Ramesh, Suresh and Mahesh took a joint loan from Dinesh for ₹ 30,000 and decided to share equally. Ramesh is unable to pay anything and Mahesh is compelled to pay the whole sum. Mahesh is entitled to receive ₹ 15,000 from Suresh. This amount includes ₹ 10,000 as normal contribution plus equal share of sum under default i.e., ₹ 5,000.

Effect of release of one joint promisor

Sec 44 states that a release of one of the joint promisors by the promisee, does not discharge the other joint promisors. It only releases such discharged promisor of his liability towards the promisee, but such discharge by the promisee does not release the discharged joint promisor from his liability to the other joint promisors.

 

Example

Ramesh, Suresh and Mahesh took a joint loan from Dinesh for ₹ 30,000 and decided to share equally. Dinesh releases Ramesh from his liability and sues Mahesh and Suresh for payment. Here, neither Mahesh nor Suresh is released from their liability to Dinesh. Also Ramesh is liable to Mahesh and Suresh for contribution. Thus Mahesh and Suresh can claim ₹ 5,000 each from Ramesh.

 

Note: However, under English law, the liability of joint promisors is only joint and not “joint and several” and therefore, the release of one of the joint promisors shall relieve all the other promisors of their liability.





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