Login : Advocate | Client
Home Post Your Case My Account Law College Law Library

Report No. 13

62. Section 38.-

There has been a divergence of opinion as to the true meaning of the last paragraph of this section, namely, 'An offer to one or several joint promisees, has the same legal consequences as an offer to all of them'. This divergence has arisen in connection with the question whether payment by a debtor to one of a number of joint creditors, operates as a discharge of the debt. One view, whose chief exponent was White C.J., of the Madras High Court, is that all the joint promisees get the benefit of the legal consequences, whatever those consequences may be, of an offer, or a tender, to one of them.

But the legislature in enacting this part of section 38 was not contemplating the legal consequences of an offer which has been accepted but the legal consequences of an offer which has been refused. Consequently, it does not follow from the section that the acceptance of payment by one of several promisees operates as a discharge of the claims of the others.1 This opinion was adopted by a Full Bench in the Punjab High Court2 and by the High Courts of Calcutta,3 Allahabad,4 Nagpur,5 Patna6 and Mysore.7

The opposite view is represented by the majority opinion in Annapurnamma v. Akkayya, 36 Mad 544, in which Sankaran Nair, J. said that it was difficult to impute an intention to the legislature that the promisor was entitled to make the offer, though the promisee was not entitled to accept it. According to this view, if the promisor was entitled to offer payment to one of the promisees which the latter was entitled to accept, the promisor cannot be held liable to pay over again to the other promisees, and thus one of several payees can give a valid discharge of the entire debt without the concurrence of other payees.

1. In Ramasami v. Muniyandi, (1910) 20 MLJ 709 and in the dissenting opinion of the learned C.J., in Annapurnanamma v. Akkayya, 36 Mad 544.

2. Mathura Dad v. Nizan Din, 41 IC 921

3. Abdul Hakim v. Adwaita Chandra, 322 Cal WN 1021.

4. Shyam Lal v. Jagannath, AIR 527.

5. Madheo Singh v. Balmukund, AIR 1948 Nag 279.

6. Syed Abbas v. Misrilal, AIR 1921 Pat 27.

7. Venkata Setty v. Rangasetty, AIR 1952 Mys 68.

Pollock and Mulla1 have expressed agreement with the above mentioned judgment of White, C.J. That is also, as shown above, the preponderating opinion in the High Courts. The English Law is thus stated in Halsbury's Laws of England-

1. Op. Cit., p. 292.

"In the case of a debt owing to two or more persons jointly, a tender made to one of the joint creditors on behalf of all, operates as a tender to the all."1

1. Halsbury, 3rd Edn., Vol. 8, p. 172.

In our opinion, the apparent ambiguity in the last paragraph of section 38 should be clarified by adding a qualification to the word "offer" and stating-

"An offer to one of several joint promisees, which has not been accepted, has the same legal consequences as an offer to all of them".

We think that section 38 is not concerned with the question whether an offer when accepted by one of the promisees operates as a discharge binding on all the promisees. In order to achieve that result, all the promisees must concur in the acceptance of the offer.

63. In our report on the Limitation Act1 we stated that the correct view was that one of several creditors could not give a valid discharge so as to bind the others and had suggested that the Contract Act might be suitably amended accordingly. In consonance with that recommendation we suggest that a separate section2 be added after section 38.

1. Third Report of the Law Commission, para. 27.

2. Vide section 38-A, App I.

64. Sections 39-40.- No change is recommended in sections 39-40.

Indian Contract Act, 1872 Back

Client Area | Advocate Area | Blogs | About Us | User Agreement | Privacy Policy | Advertise | Media Coverage | Contact Us | Site Map
powered and driven by neosys