| 1. INTRODUCTION: | | | | which debt the payment is to be applied, the |
| When a debtor owes several distinct debt to a | | | | creditor may apply it at his discretion to any |
| creditor and makes a payment which is | | | | lawful debt the payment actually due and payable |
| insufficient to the whole debt, the question arises | | | | to him from the debtor, whether its recovery is |
| to which debt the payment is to applied. Section | | | | or is not barred by the law in-force for the time |
| 59 to 61 provides the rules which governs the | | | | being as to the limitation of suits. |
| appropriation of payment made by a debtor to | | | | => Example: |
| the creditors. | | | | A owes several debt to B. one of them Rs. 2 Lac |
| 2. RULES WHICH GOVERN APPROPRIATION OF | | | | is time barred. A sends Rs. 4 l.ac to B without |
| PAYMENT: | | | | Indicating to which debt the amount is to be |
| Following are the rules which govern appropriation | | | | appropriated. B may appropriate Rs. 2 Lac against |
| of payment. | | | | the time barred debt. |
| (I) APPROPRIATION BY DEBTOR: | | | | (III) APPROPRIATION BY LAW: |
| The first rule which governs the appropriation of | | | | The third rule is in sec. 61. |
| payment is laid down in sec. 59. It confers the | | | | When neither party makes any appropriation of |
| right of appropriation upon the debtor. | | | | payment shall be applied In discharge of the debt |
| According to this sec. | | | | in order of time. Whether they are or are not |
| Where a debtor, owing several distinct debt to | | | | barred by the law in force for the time being as |
| one person, makes a payment to him, either with | | | | to the limitation of the suit. If the debt are ol |
| express intimation, or under circumstances | | | | equal standing the payment shall be applied in |
| implying, that the payment is to be applied to the | | | | dischrage of each proportionately. |
| discharge of some particular debt, the payment If | | | | => Application: |
| accepted, must be applied accordingly. | | | | It applies when neither party makes an |
| => Application of Rule: | | | | appropriation. In this situation the law gets the |
| This principle applies to several distinct debt and | | | | right to appropriate the payment. |
| not to a single debt payable by installments. | | | | => Example: |
| => Example: | | | | A owes two debts of Rs 4 lac each which are |
| A owes to B other debt the sum of 5000. | | | | time barred and another debt of 8 lac to B. A |
| Rupees B writes to A and demands payment of | | | | sends Rs 4 lac. Neither party makes any |
| this sum. A sends to B 5000 Rupees. This | | | | appropriation of Rs 4 lac would be appropriated |
| payment is to be applied to the discharge of the | | | | rateably against two debt of Rs 4 lac each which |
| debt of which B had demanded payment. | | | | are time barred. |
| (II) APPROPRIATION BY CREDITOR: | | | | 3. CONCLUSION: |
| The second rule is laid down in sec 60. which | | | | To conclude I can say that, under contract Act |
| enables the creditor to make appropriation | | | | 1872. Sec 59 to 61 provide the rules which |
| payment According to this section | | | | governs the appropriation of payment made by a |
| "Where the debtor has omitted to intimate, and | | | | debtor who owns a number of distinct debts to |
| there are no other circumstances Indicating to | | | | his creditor. |