Comprehensive Analysis of Section 45 of the Indian Contract Act, 1872

Comprehensive Analysis of Section 45 of the Indian Contract Act, 1872

Introduction

Section 45 of the Indian Contract Act, 1872 (hereinafter “ICA 1872”) embodies the rule that where a promise is made to two or more persons jointly, the right to claim performance vests in them jointly during their joint lives, and after the death of any of them devolves on the survivor(s) together with the legal representative(s) of the deceased promisee. The provision is relatively terse, yet it has generated considerable litigation—particularly in the context of partnership suits, the procedural framework under Order XXX of the Code of Civil Procedure, 1908 (“CPC”), and special statutes that modify or exclude its operation. This article undertakes a doctrinal and jurisprudential analysis of Section 45, critically engaging with leading judicial authorities and statutory developments in India.

Statutory Text and Legislative Context

The statutory language reads:

“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 him and them, with them during their joint lives, and, after the death of any 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 representatives of all jointly.” (ICA 1872, s. 45)

Section 45 forms part of Chapter III (Of the Contingent Contracts), reflecting the wider legislative concern with allocation of risk and assignment of obligations among several parties. Its twin provision on the liability side is Section 43, which permits any one of several joint promisors to be compelled to perform. Read together, Sections 43 and 45 engineer a calibrated balance between plural creditors (promisees) and plural debtors (promisors).

Conceptual Foundations: Joint Promisees, Survivorship and Representatives

Section 45 operationalises two classic common-law concepts: joint tenancy in obligations and the doctrine of survivorship. The right is indivisible inter se the promisees; hence, a solitary promisee cannot unilaterally sue on the contract. Indian courts have consistently treated the provision as mandatory unless the contract itself displaces jointness by an express severance clause.

Judicial Recognition of the Rule

  • In Anokhe Lal v. Radhmohan Bansal (1996) the Supreme Court characterised Section 45 as the “nub” governing actions by joint promisees, and explained that Order XXX Rule 4 CPC serves as an exception specifically for partnership suits, “diluting the rigour” otherwise imposed.[1]
  • Earlier, the Bombay High Court in Devshi Harpal v. Bhikam (1927) had already held that legal representatives of a deceased partner were not indispensable in a suit by the firm, notwithstanding Section 45.[2]
  • The principle was reiterated by the Supreme Court in Brij Kishore Sharma v. Ram Singh & Sons (1996), which upheld the dismissal of an objection premised on non-joinder of the deceased partner’s estate, citing Order XXX Rule 4(1).[3]

Intersection with Procedural Law: Order XXX CPC

Order XXX permits two or more partners to sue or be sued in the firm name. Rule 4, introduced to resolve conflicting High Court views, provides:

“Notwithstanding anything contained in Section 45 of the Indian Contract Act, 1872, where two or more persons may sue or be sued in the name of a firm … and any of such persons dies, whether before the institution or during the pendency of any suit, it shall not be necessary to join the legal representative of the deceased as a party to the suit.” (CPC, Ord. XXX r. 4(1))

Thus, in litigation by or against a partnership firm, the statutory presumption of jointness is procedurally overridden. The surviving partner(s) represent the firm as a quasi-entity, obviating the need to implead estates of deceased partners. The jurisprudence has clarified that Rule 4(2) merely preserves, but does not create, the representative’s right to intervene.[1][3]

Section 45 and Special Statutes: Express Displacement

While Ord. XXX r. 4 modifies Section 45 within civil procedure, Parliament has on occasion enacted substantive provisions that supersede it. A striking illustration is Section 68 of the Major Port Trusts Act, 1963 (“MPT Act”), which, “notwithstanding the provisions contained in Section 45 of the Indian Contract Act,” prescribes a distinct regime for payment on Port-Trust securities.[4] The Supreme Court in Board of Trustees, Port of Bombay v. Sriyanesh Knitters (1999) observed that the MPT Act is not a self-contained code; therefore, where it does not exclude general law, recourse to Section 45 remains open.[4]

Similarly, specialised contexts—e.g., Government-promoted industrial schemes (State of Punjab v. Sewa Singh Gill, 1969) or public-private partnerships (Mohammad Laiquiddin v. Kamala Devi Misra, 2010)—frequently involve composite promises made to or by a consortium. In such scenarios, unless the enabling statute specifically displaces Section 45, courts revert to its default intention-based inquiry.

Analytical Appraisal of Key Case Law

Anokhe Lal v. Radhmohan Bansal (1996)

The Supreme Court faced an application under Order XXX r. 4 to implead a third party in a partnership suit. It held that Section 45 requires legal representatives of a deceased joint promisee to act jointly with survivors unless Rule 4 applies. Because the suit was already instituted in the firm name, the exception applied, making impleadment discretionary rather than mandatory.[1]

Brij Kishore Sharma v. Ram Singh & Sons (1996)

Here, a partner died pending suit. The Court reaffirmed that, by virtue of Ord. XXX r. 4(1), the legal representatives were unnecessary parties. Notably, the Court emphasised that Section 45’s substantive rule could not override the procedural innovation enacted by Parliament, underscoring the lex specialis principle.[3]

Godavari Pravara Canal Co-operative Union v. Krishnarao (1973)

The Bombay High Court adopted the same approach, expressly declining to follow the contrary view of the Madhya Pradesh High Court and invoking earlier Bombay precedents to hold that Rule 4 entirely disposes of the necessity to join a deceased partner’s estate.[5]

Board of Trustees, Port of Bombay v. Sriyanesh Knitters (1999)

The Port Trust invoked Section 171 ICA (general lien). The Court remarked that unless the MPT Act expressly displaced a particular provision of the ICA, general law would supplement the special statute. Section 68 did expressly modify Section 45, yet no corresponding provision modified Section 171; accordingly, the lien could be claimed. This decision reveals the Court’s broader interpretive method: an express inconsistency alone suffices to displace Section 45.[4]

Comparative Perspective: Partnership Dissolution and Section 45

Although Section 45 does not deal with dissolution, the Supreme Court’s decision in Mohammad Laiquiddin v. Kamala Devi Misra (2010) is instructive. It turned on Section 42(c) of the Indian Partnership Act, 1932, yet echoed Section 45’s theme of jointness: the firm’s very existence terminated on the death of a partner in a two-partner setup.[6] The resultant automatic dissolution also terminated any joint right to claim performance of ongoing contracts. Thus, while Section 42(c) is conceptually distinct, both sections converge on the normative idea that death of a party reconfigures (or extinguishes) joint contractual rights.

Policy Rationales and Critique

  • Protection of promisors: By compelling joinder of all promisees, Section 45 shields the promisor from multiple actions or inconsistent discharge.
  • Procedural efficiency: The exception embodied in Ord. XXX r. 4 recognises commercial reality: partnership firms function as economic units; insisting on impleadment of legal representatives would stifle commerce.
  • Doctrinal coherence: Express statutory overrides (e.g., MPT Act s. 68) vindicate legislative supremacy while preserving Section 45’s general applicability.

Critics argue that the mandatory joint-promisee rule is anachronistic in modern commerce, where assignments, trusts and multi-creditor arrangements are commonplace. A reform proposal could emulate English Law’s apportionment statutes, permitting any promisee to sue with notice to co-promisees, thereby balancing promisor protection with creditor flexibility.

Conclusion

Section 45 of the ICA 1872 continues to operate as the default rule for devolution of rights among joint promisees, grounded in common-law concepts of joint contractual liability. Judicial development—most notably via Order XXX CPC—has substantially moderated its rigour in the arena of partnership litigation. Special statutes occasionally supersede Section 45, but only by express terms. The doctrinal landscape therefore reflects a layered hierarchy: general contract law, procedural innovations, and bespoke legislative regimes. In the absence of explicit displacement, Section 45 endures, serving the twin goals of promisor protection and orderly succession of contractual rights.

Footnotes

  1. Anokhe Lal v. Radhmohan Bansal, (1996) 6 SCC 730, ¶¶ 7–9.
  2. Devshi Harpal v. Bhikam, AIR 1927 Bom 125.
  3. Brij Kishore Sharma v. Ram Singh & Sons, (1996) 11 SCC 480, ¶¶ 3-4.
  4. Board of Trustees of the Port of Bombay v. Sriyanesh Knitters, (1999) 7 SCC 359, ¶¶ 14-15 (discussing MPT Act s. 68).
  5. Godavari Pravara Canal Co-operative Purchase & Sale Union Ltd. v. Krishnarao, AIR 1974 Bom 52.
  6. Mohammad Laiquiddin v. Kamala Devi Misra, (2010) 2 SCC 407, ¶¶ 26-30 (on Section 42(c), Partnership Act 1932).