HARKISONDAS LAKHMIDAS PYARATHI Vs. NARIMAN DADABHOY PARSI

JUDGEMENT

(1.) In this case, there was a decree on July 27, 1922, in favour of the plaintiff for Rs. 354-4-0. The decretal amount was ordered to bo paid by annual instalments of Rs. 80, and if two instalments remained due and unpaid, the whole of the amount remaining due was to be recovered at once. The judgment-debtor paid into Court Rs. 80, and he was given a receipt on December 14, 1923, in payment of the second instalment. Another payment of Rs. 80 was made on December 15, 1924, and he was given a receipt for the third instalment; and a third payment of Rs. 80 was made and he was given a receipt, on December 15, 1925, as for the fourth instalment. The decree-holder in January 1926 sought to recover two instalments, but on receiving the instalment of Rs. 80 paid into Court on December 15, 1925, he made an application for the recovery of only one instalment and was allowed to do so by the learned Subordinate Judge.

(2.) It is now contended on behalf of the judgment-debtor that as he obtained from Court receipts for the second, third and fourth instalments, the amount in regard to the first instalment, which was payable on December 15, 1922, was barred by limitation. It is contended, on the other hand on behalf of the judgment- creditor, that he was entitled to appropriate the three payments to the first three instalments, and that the amount that he was entitled to recover was the amount of Rs. 80 due on account of the fourth instalment. The question, which arises in this case, is whether the judgment-debtor made payments to the creditor within the meaning of Section 59 of the Indian Contract Act in respect of several distinct debts either with express intimation or under circumstances implying that the payments were to be applied to the discharge of some particular debts. In this case the payments were not made to the judgment-creditor personally and were not accepted by him, but were deposited into Court, According to the ruling in Hanmant V/s. Raghavendrarao (1925) 24 Bom. L.R. 410, 413, it is the duty of the Court, when instalments are paid, to appropriate them to the earliest instalments unpaid. If the judgment-creditor had shown by his conduct that he recovered the instalments on account of the second, third and. fourth instalments, the matter would have stood on a different footing. There is nothing in this case to suggest that the judgment-creditor accepted the three payments of Rs. 80 on account of the second, third or fourth instalments, and it would be a fraud upon the judgment-creditor if, without his knowledge, the judgment-debtor made payments into Court and took receipts for the second, third and fourth instalments with the intention of not paying the first instalment.

(3.) The next question is, whether it can be said that the debtor owed several distinct debts within the meaning of Section 59 of the Indian Contract Act. We agree with the decision in Fazal Husain V/s. Jiwan Ali [1906] A.W.N. 135, where a decree was passed on a compromise which provided for payment by instalments and for the decree-holder being entitled to recover the whole balance immediately if two consecutive instalments were not paid and where the judgment-debtor paid three out of five instalments specifying that the payments were to be appropriated to the second, third and fourth instalments, it was held that Sec. 59 of the Indian Contract Act did not justify such appropriation, and the decree-holder was entitled to appropriate the payments to the first three instalments and to an order absolute for sale by reason of the fourth and fifth instalments being overdue. It was said in Clayton's case (1816) 1 Mer. 572 (p. 587) that "the legal principle is that which is laid down in Bois V/s. Cranfield, and appears to be this; viz., that if a man owes another two debts, upon two distinct causes, and pay him a sum of money, he (the payer) has a right to say to which account the money so paid is to be appropriated." It is, therefore, necessary that there should be two debts upon two distinct causes. In this case there was one judgment debt, which was ordered to be paid in several instalments and it cannot be and that the debtor owed several debts within the meaning of Section 59 so as to enable him to apply the payment to the discharge of any particular debt.