Rajendra Nath Mittal, J. - (1.) THIS is an appeal against the order of the Official Liquidator dated 16th February, 1977, under Section 460(6) of the Companies Act, read with Rule164 of the Companies (Court) Rules.
(2.) BRIEFLY , the facts are that the Appellant -Bank had Sanction -ed the overdraft limit of the Northern India Finance Corporation Ltd., Jullundur City (hereinafter referred to as the Company), to the extent of one lakh rupees, on the joint and several liability of the Company and all its Directors. Later, the Company was ordered to be wound up. After the winding up order had been passed, the Appellant filed a suit for the recovery of Rs. 20,983.30, the amount due from the Company against the Directors only on the basis of their personal liability, on 11th March, 1971. The Company was not impleaded as a party therein. The suit was dismissed on 5th June, 1974, against which a First Appeal was filed in this Court. The appeal has been accepted by me and the case remanded to the trial Court for fresh decision, -vide judgment, dated 22nd February, 1983. The Appellant filed a claim before the Official Liquidator for Rs. 23,218.60 which, besides the amount of the suit, includes Rs. 330 as lawyer's fee and Rs. 1,904.80 as Court fee for filing the suit. The claim has been rejected by the Official Liquidator on the ground that _he suit filed by the Appellant against the Directors bars its claims against the Company. Hence, this appeal.
(3.) THE question for determination is that if a suit is filed for recovery of a debt against some of the joint debtors, whether a claim can be filed before an Official Liquidator against another joint debtor, a company in liquidation. Section 43 of the Contract Act inter alias provides that when two or more persons make a joint promise, the promise may, in the absence of express agreement to the contrary, compel any one or more of such joint creditors to perform the whole of the promise. From a reading of the Section, it is evident that a promise can institute a suit against one or more of the joint promises, as he chooses, to perform whole of the promise and it is not necessary that he should sue all the joint promises together. Thus, it can be inferred that in case he files a suit against some of the promises, the second suit against the other joint promises is not barred. The position in English law is different. In King v. Hoare, (1844) 13 M&W 494, it was held that a decree obtained against one of several joint debtors is a bar to a subsequent suit against others. In Kendall v. Hamilton, (1879) 4 A. C. 504, the above Rule was adopted by majority. Section 43 and the above cases were noticed Punjab Co -operative Bank Ltd. Jullundur v. The Official Liquidator attached to Punjab and Haryana High Court, Chandigarh. (B.N. Mittal, J.) by a Division Bench of the Allahabad High Court in Muhammad Askari v. Radhe Ram Singh and Ors. : I.L.R. (1900) All 307, where Sir Arthur Strachey, C.J. speaking for the Bench, in view of Section 43, did not follow, the Rule laid down in the above -said English cases and held as follows: As explained in those judgments, the doctrine that there is in the case of a joint contract a single cause of action which can only be once sued on is essentially based on the right of joint debtors in England to have all their co -contractors joined as Defendants in any suit to enforce the joint obligation. That right was in England Enforce -able before the Judicature Acts by means of a plea in abatement, and since the Judicature Acts by an Application for joiner which is determined on the same Principles as those on which the plea in abatement would formerly have been dealt with. In India that right of joint debtors has been expressly excluded by Section 43 of the Contract Act, and therefore the basis of the doctrine being absent, the doctrine itself is inapplicable. Cessante rationed legist, cessat ipsa lEx. (Emphasis supplied by underlining). Banerji, J., other member of the Division Bench, while agreeing with the learned Chief Justice, made the following observations: Where the liability is joint and several and the judgment first obtained has remained unsatisfied a second suit is not barred. This is a proposition which admits of no doubt and is supported by the authorities cited by the learned Chief Justice in his judgment. Therefore, since the enactment of Section 43 of the Contract Act, the recovery of a judgment against one of several joint debtors does not bar a subsequent suit against his co -debtors.;