Joint promise liability: an unsatisfied suit against some debtors does not bar a claim against the company in liquidation.

A claim before an official liquidator is not barred merely because the creditor had earlier sued some joint debtors and that suit remained unsatisfied. Section 43 of the Contract Act permits a promisee to compel any one or more joint promisors to perform the whole obligation, so the creditor is not required to sue all joint promisors together. A claim filed in liquidation stands on the same footing as enforcement by suit. The earlier suit against the directors therefore did not extinguish or bar the claim against the company in liquidation, and rejection of the claim on that ground was erroneous.

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Issues: Whether a claim before the official liquidator against a company in liquidation is barred merely because the creditor had earlier filed a suit against some other joint debtors and the suit remained unsatisfied.

Analysis: Section 43 of the Contract Act recognises that where two or more persons make a joint promise, the promisee may compel any one or more of them to perform the whole obligation. On that footing, a creditor is not bound to sue all joint promisors together, and an unsatisfied suit against some of them does not extinguish the claim against the others. The filing of a claim before the official liquidator stands on the same footing as enforcing the debt by suit. The prior suit against the directors, therefore, did not bar the claim against the company in liquidation.

Conclusion: The claim was not barred, and the rejection of the claim on that ground was /erroneous and unsustainable.

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