Image source: https://rb.gy/qbkcbu

This article has been written by Suhasini Kamble, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.

Introduction

Joint rights come into existence when there is a promisor and promisee, in which the promisor or promisors have jointly made a promise for a consideration jointly with two or more promisees and is binding with him/them legally by the Indian contract Act, 1872. A promisor is someone who makes a promise to a promisee against any consideration. 

It’s an important concept, where the responsibility is taken by either of the parties for an act or omission, especially in the case of joint liability where all the promisors are held liable together. It depends upon and includes the performance on the basis of several contracts which have to be performed and as a part of the legislative department come under the ministry of law and justice. The definition of the devolution of joint rights is more elaborately clarified in the bare act of Indian Contract Act, 1872, which is the Civil Law of India. Section 45 of the Act, deals with the joint right’s which clarifies the actual meaning of the devolution of joint rights.

As per the Act, 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 both parties during their joint lives, and after the death of any one 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 representative of all jointly. 

Illustration

X, in consideration of 10,000 rupees lent to him by Y and Z, promises Y and Z jointly to repay them that sum with interest on a day specified. Y dies. The right to claim performance rests with B’s representative jointly with Z during Z’s life; and, after the death of Z, with the representatives of Y and Z jointly.

Joint- promises

In many cases, there may be more than one promisor and more than one promisee. If there is more than one promisor, they are called a Joint Promisor and if there is more than one promisee, they are called Joint Promisee. All promises during their lifetime are jointly entitled to claim performance. They must jointly sue upon the promisee that refuses to join and must be added as a defendant. As per this, a person cannot be prevented from filing a suit merely because he is only a joint promisee and the other promisees have refused to join him in filing the suit.   

Co-heirs of single promisee

Co-heir is one of the several individuals among whom the money is to be divided. When a promise is made with several persons jointly, then in the absence of any agreement to the contrary to a contract, all the promisee jointly have a right to claim compensation and a single promisee cannot demand for the performance of the contract alone. 

Right to claim performance:

Under section 43 of the Act, the right to claim the performance is with all the promisees, even after the death of any of the promisee through his representatives and lasts with all the joint promisees. It may be basically like an obligation by one person who enters in connection with two or more persons. Here the promisee is actually liable to claim the amount he had given earlier even after the death of both persons. In such cases, it is considered by the acts of the representative of the persons. As per law the right to claim actually rests on the legal representatives of the deceased person in a joint manner, when any of the promisees dies and it remains as a part of the surviving promisees.

Discharge by one of several joint promisees

As per Section 44 of the Act, it is stated that where two or more persons have made a joint promise, a release of one of such joint promisors by the promisee does not discharge the other joint promisor or joint promisors, neither does it free the joint promisors so released from the responsibility to the other joint promisor or joint promisors.  This means that even if the promisee releases one of the promisors for any reason, it doesn’t mean that the other joint promisors are discharged from their responsibility to fulfill the given promise. Each one has an equal contribution towards the completion of the joint contract.

Unless a contrary intention appears

Under Section 2 (The Interpretation clause) of the Act, the words and expressions are used in the following senses, unless a contrary intention appears from the context mentioned in clause (a) to clause (j). Now here contrary intention may be shown, if the application of the defined term in the circumstances of a particular case leads to an illogical or unreasonable result or a result that is unacceptable to the essential objective of the legislative provision. The term contrary means that it is a conflicting, illegal or is a violation  against the legal regulation or a legal statute. So here we understand that unless there is such a situation where there is no contrary intention then it will not be a legal or lawful act or abstaining other than mentioned in the Contract Act. 

Partners

When one or more persons share the ownership of a firm or business equally with one another are called partners. As the parties are jointly associated with any business then all the partners are jointly liable for the profit and loss in the business. Section 42 and section 43 of the Act deals with the joint and several liabilities. The joint and several liabilities are the concepts used in cases where there are one or more persons to a contract. It is necessary to find out who is responsible for any act or omission, or as in case of joint liability all promisors, who will be held liable together. 

For example, as per section 42, when two or more persons have made a joint promise, then, if any one of the promisors expires even then all the remaining promisors are responsible to fulfill the promise and liable to the contract as the case may be. As per section 43, when two or more individuals make a joint promise, the promisee may in the absence of any direct agreement to the contrary, compel any one or more of such joint promisors to perform the entire promise of the contract. For example – A, B, and C jointly promise to pay D of Rs. 5000/-. D may compel either A or B or C to pay him Rs. 5000/-  

Co-mortgagees

There are two main persons involved in the lending process called as the mortgagor and the mortgagee. A mortgagor is someone who borrows money to pay for their home or business and is referred to as the borrower. A mortgagee is a person who lends money to the mortgagor and is typically referred to as the lender. The mortgagee or mortgagees will set the terms of the loan which will include the period of the loan, dues, interest amount etc. 

The co-mortgagees are those who share the money lent to the mortgagor or mortgagors as a loan. The co-mortgagor is a participant in a loan who shares the money to pay back the loan to the mortgagee or mortgagees. A co-mortgagor shares in the repayment obligation and ownership of a property and has equal participation in the mortgage transaction entitled to some legal protection available to a single person. For example, if any one borrower declares itself bankrupt, the other one is protected against creditors irrespective of their financial status.

Case laws 

Mukundas Raja Bhagwandas & Sons vs. State Bank of Hyderabad

In this case, the Hon’ble Supreme Court held that such a decree requiring one of the joint promisees to pay in the first instance in the first instance and then to proceed against the others, was bad in law, there being no such equitable principle or statutory provision and it converted the decree to a joint and several one against all the defendants.

Conclusion

With the joint rights there are a number of liabilities which are considered as joint conception which are looked upon by the courts while giving any judgement in any such cases where question of rights and liability arises. Devolution of joint rights is an important ground on the legal considerations of the Contract act. It is a necessary and basic obligation and liability over the borrower to credit the amount taken prior to the demise of the promisees. It is very much necessary to bind the promisor or promisors to fulfill the contract. 

There are several guidelines and case laws related to the grounds of devolution of joint rights and en-number of judgments have been given for understanding the proper ground and to further deal with such cases. The devolution of joint rights is a widespread concept and several liabilities and responsibilities lie between the persons who are involved in it. So, it is necessary to make certain rules by which the borrowers who do not repay the money shall pay to the promisees in their surviving days which were lends by the promisor as a part of the contract. It is a very strong ground and may continue to be the evolving laws on the basis of the contract of devolution of joint rights in a more established and clarified way. 

References

  • advocatespedia.com
  • citeman.com
  • blog.ipleaders.in
  • collinsdictionary.com
  • legalserviceindia.com
  • quickenloans.com
  • investopedia.com

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.

LEAVE A REPLY

Please enter your comment!
Please enter your name here