Multiple choice

Ram, Rohit and Kiran jointly borrowed Rs. 2,00,000 from Rahim by executing a promissory note. Rohit and Kiran are not traceable. Rahim wants to recover the entire amount from Ram. Ram objected this move by saying he is liable to pay 1/3 of the debt only. Which of the following statement(s) is correct?

  1. Rahim can recover the entire amount from Ram.

  2. Rahim can only recover 1/3 of Rs. 2,00,000 from Ram.

  3. Rahim cannot recover any amount from Ram.

  4. The promissory note is not executable against Ram as Rohit and Kiran are not traceable.
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A Correct answer
Explanation

When parties execute a joint promissory note, they are jointly and severally liable. The creditor can recover the entire debt from any one of the borrowers, who then has the right to seek contribution from the co-borrowers. Ram's liability is not limited to 1/3 but extends to the full amount.

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