Judgements on Joint and Several Liability

Radhika M

When a suit is initiated before a court of law, it must decide upon the issues raised. At the end of the proceedings, it must adjudicate the liabilities of parties. Also, there may be more than one party, who is liable. So, in cases where there are more than one party who is liable, the court has to decide the liability of each person. The nature of liability can be divided in as joint, several and joint and several.

In joint liability one party is liable to fulfil the obligation entered in to by him and his partner, in case of the latter’s default. Joint liability does not make a proportionate division of liabilities between contracting parties. If any party becomes unable to perform his share of duty, the other party is automatically liable to perform it.

For eg: if two persons jointly take out a loan and one of the parties becomes unable to pay it back, the duty cast upon the remaining partner to repay the whole amount. Such instances may occur when a party is declared dead or bankr

are held liable jointly, but it is the privilege of the opposite party to proceed against any one of them or all of them. If the opposite party chooses to proceed against one such party and if he had to perform the duty which was supposed to be done collectively, then such party has a right to be indemnified by the non-performing party.

Therefore, in such cases a person has both joint and several (independent) liability. A person cannot escape from his independent liability when the liability is joint and several.

These terms are often used in both civil and criminal law.

Criminal Law

As per Section 34 of the Indian Penal Code, 1860 (hereinafter as the IPC) if an offence committed by several persons in furtherance of a common intention then it will be deemed that such an act was committed by him alone.

Under the Criminal Law there is no joint and several liability because the complainant is not at liberty to proceed against any one of the accused persons. Rather there is a joint and constructive liability. A person is deemed to be liable for an offence, even though he may be absent from the scene of occurrence.

The Supreme Court in the case of Suresh & Anr v. State of Uttar Pradesh[1] observed that section 34 of the IPC recognizes the principle of vicarious liability in the criminal jurisprudence. It is not the commission of an overt act which makes him liable under the section but rather a shared common intention. If two persons or more persons intentionally commits an offence jointly, then it is same as if they have done it individually.

In Ashok Kumar v. State of Punjab[2] the court observed that it is not necessary that every person bearing the common intention must do acts in a similar or identical manner. What is necessary is the common intention among the participants of the crime.

Civil Law

Order 1 Rule 6 of the Civil Procedure Code, 1908 (hereinafter as the CPC) says that a plaintiff may make such persons as joint parties in a suit if they are liable under a same contract. He is at option to make them jointly or severally or jointly and severally liable.

In the case of Her Highness Maharani Mandalsa Devi & Ors. Vs. M. Ramnaram Private Ltd. & Ors[3], the Apex Court observed that a suit can be instituted by or against a partnership firm or all its partners. The decree against a partnership firm can be obtained under Order 30 of CPC and it is enforceable against all the partners under Order 21 Rule 50 of the Code.

Again, in another case L. Kochivareed vs P. Meriappa Gounder[4], the court observed that the essence for the claim of mesne profit is the wrongful possession of the land by the defendant. It is the fact of such wrongful possession which constitutes the defendant’s liability. But if such act can be regarded as the joint or concert act of several persons, all the persons who participated in such act will be held liable. Further it held that the defences like he was not in actual possession or did not receive any profit from his confederates won’t be available.

Under the Indian Contract Act, 1872

Section 42 of the Indian Contract Act says that if a promise is made by two or more persons, then all of them are liable to fulfil the promise. In the event of death of a promising party, the liability devolves upon his legal representatives. Section 43 of the Act incorporates the principle of joint and several liability.

It says that one of the joint promisors may be compelled to fulfil the whole promise at the option of the promise. Also, the promisors who fulfilled the promise has a right to claim contribution from the non-performing one. In the case of default by one or more promisors, the remaining promisors must equally share the loss.

Also, as per s.44, relieving of one joint promisor by the promisee will not automatically free others from the liability. This liability devolves upon the legal representatives of the promisor after his death. Also, under the contracts of indemnity and guarantee, the indemnity holder and surety is answerable to default made by the promisor.

So, an indemnity holder is entitled to recover all the monies and costs incurred by him under the contract of indemnity from the promisor. The liability of a surety is co-extensive with that of the principal debtor. When the surety pays monies owed by the principal debtor to the creditor, he assumes the position of the creditor.

In the case of Kidar Lall Seal & Anr v. Hari Lall Seal[5], the Supreme Court held that the right to contribution as between co-mortgagors is governed by sections 82 and 92 of the Transfer of Property Act not by S.43 of the Indian Contract Act. It is based on the principal that, when there is a special law dealing with a matter operation of general law is excluded.

Under the Indian Partnership Act, 1932

Section 10 of the Indian Partnership Act a partner of the firm shall indemnify the firm for its losses caused by the fraud committed by him. And vice versa a partner shall be indemnified by the firm in case of any individual loss sustained by him during business under s.13(e) of the Act.

Section 25 of the Act says that a partner is jointly and severally liable along with all other partners for an act done by the firm. The liability of the firm is co-extensive with that of a partner in case of any injury caused to a third party by such partner during his normal conduct of business.

In the case of Income Tax Officer, Agra v. Radha Krishnan[6], the Respondent was one of the partners in a firm. The Income Tax officer while assessing and determining the shares of each partner sought to recover the unpaid tax of another partner, attributable to the Respondent.

Supreme Court held that all the contractual obligations entered by a firm are enforceable jointly and severally against the partner. But the liability under a statute is an exception since it is not arising from any contract. If the statute has not made it enforceable jointly and severally against the partners, then the authorities cannot impose it upon them.

Under Law of Torts

When two or more persons had a duty to take care which they failed to perform and then causes an injury to a third person, there is a joint tort, and they are jointly and severally liable. They are joint tortfeasors, and the plaintiff has a right to proceed against any one or all of them. This is called Composite Negligence under the common law. Contributory negligence occurs when the injured party has himself contributed towards the accident, which means there was negligence on his part as well.

In the case of T.O Anthony v. Karvarnan[7], the Supreme Court held that in case of composite negligence there is no need to establish the extent of responsibility of each wrongdoer by the Plaintiff nor it is necessary to the court to determine the amount of responsibility of joint tortfeasors. But in the case of contributory negligence the claim of the plaintiff cannot be rejected merely because there was an element of negligence in his part too.

Therefore, in cases of such Contributory Negligence only claimed amount can be reduced (proportionate to the negligence owed by the claimant) and the other party still stands liable. In this case an injury was caused to the appellant owing to his own negligence and of first Respondent. The tribunal fixed that their contribution of negligence towards such an accident is 50% each and fixed the compensation amount accordingly. The Supreme Court in an appeal filed held that the contributory negligence of the appellant was only 25%, therefore only such amount can be reduced.

In the case of Pawan Kumar & Anr v. M/S Harikishan Dass Mohanlal & Ors[8], a boy was died, and another person was severally injured due to an accident caused by a jeep and a truck. The truck fled from the scene and was declared untraceable. In a suit for damages, High Court apportioned the damages payable by the truck and jeep as 70% and 30% respectively. In an appeal the Supreme court held that the drivers of jeep and truck are jointly and severally liable for the incident and the claimant can proceed against any of them at his option.

Conclusion

The theory of joint and several liability is an important in Common Law. This principle allows the injured party to proceed against any one of the wrongdoers so that he would not be shuttled between the parties at fault. But at the same time, it gives the paying parties a right to demand contribution from non-paying parties. Here no party must carry the burden of the another. That is why most systems and laws fix the liability as joint and several.

  1. (2001) 3 SCC 673
  2. AIR 1977 SC 109
  3. AIR 1965 SC 1718
  4. 1979 AIR 1214, 1979 SCC (3) 150
  5. 1952 AIR 47, 1952 SCR 179
  6. 1968 AIR 46, 1967 SCR (3) 821
  7. (2008) 3 SCC 748
  8. (2014) 3 SCC 590