Skip to content


Domingo John Picardo Vs. Gregory Pinto - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 970 of 1959
Judge
Reported inAIR1962Kant190; AIR1962Mys190
ActsIndian Contract Act, 1872 - Sections 59
AppellantDomingo John Picardo
RespondentGregory Pinto
Appellant AdvocateA. Ranganath Rao, Adv.
Respondent AdvocateB.P. Holla, Adv.
Excerpt:
.....such notices in accordance with law and in compliance with section 56. - if the circumstances are such that money reaches the hands of the creditor and he accepts it without knowing the conditions subject to which the debtor proposed to make the payment or thought of making that payment, the creditor cannot be deprived of his normal right which he possess of making an appropriation which is to his best advantage......with the payment. what is of greater importance is that what deprives the creditor of his right to make appropriation is his accepting the payment with the knowledge that the payment is made by the debtor subject to an express appropriation. the creditor should, therefore, have an opportunity of considering the offer of payment made by the debtor subject to the appropriation suggested him and deciding himself either to accept payment or not upon such conditions. if the circumstances are such that money reaches the hands of the creditor and he accepts it without knowing the conditions subject to which the debtor proposed to make the payment or thought of making that payment, the creditor cannot be deprived of his normal right which he possess of making an appropriation which is to his.....
Judgment:
ORDER

(1) The respondent sued the petitioner for the recovery of arrears of rent due in respect of a shop occupied by the petitioner. The respondent is employed abroad, and the rents were being collected on his behalf by a sister-in -law of his residing in Mangalore. The claim in the suit was for rents due in respect of the period from 1-1-1952 to 31-1-1958 after giving credit for two payments, one of Rs. 216/- in November 1957, and the other of Rs.72/- in February 1958, together with interest and other charges. The plaint claim came to Rs. 229-57. The suit has been decreed by the Court below.

(2) The only point raised in this Revision petition is that in respect of the payment of Rs. 216/- in the month of November 1957, there had been an express appropriation by the paying debtor, the tenant, to the effect that the same was intended as payment of the rent for 3 years ending 31-12-1956. If this case of appropriation by the tenant is accepted, part of the claim in suit would he barred by limitation. The lower Court did not accept this argument.

(3) The admitted facts on the basis of which this question of appropriation is raised are these: On 12-11-1957 the petitioner sent a money order for Rs. 216/- to the plaintiff 's sister-in-law at Mangalore which was received by her on 13-11-1957. Either at the same time or on the same day of the despatch of the money order, the petitioner wrote a letter Ex. B-5 dated 12-11-1957 to the plaintiff resident in Buserah which reached the Plaintiff on the 19th of that month. In that letter the petitioner stated that :

'I am sending Rs. 216/- towards the last three years rents ending on 31-12-1956 at the rate of Rs. 72/- per year for the shop and the small room attached to it. ........'

(4) On these facts, the contention on behalf of the petitioner is that he did expressely intimate the plaintiff that the payment was being made on account of rent in respect of a specified period and that the plaintiff 's sister-in-law as his agent having accepted the same , the appropriation by him (petitioner) was complete and binding on the plaintiff. He states that the case comes directly within the provisions. Of Sec.59 of the Indian Contract Act. That section read as follows:

'59. Where a debtor, owing several distinct debts to one person, makes a payment to him, either with express intimation, or under circumstances implying that the payment is to be applied to the discharge of some particular debt, the payment, if accepted must be applied accordingly.'

(5) The petitioner's contention is that no appropriation having been made by the plaintiff until the issue of a lawyer's notice making the demand which resulted in the suit, the original appropriation made by the defendant in his letter Ex. B.5 would be operative even though the intimation of that appropriation reached the plaintiff at Buserah some days after his agent at Mangalore had accepted the money. He relied, upon a Bench decision of the Madras High Court reported in Chegganmull v. Manicka Mudaliar, AIR 1926 Mad 792 which suggests that circumstances may exists where a debtor may have a reasonably short interval after payment to make the appropriation provided the creditor had not made any appropriation. On behalf of the plaintiff -respondent, reliance has been placed upon ReluMal v. Ahmed, AIR 1926 Lah 183 and K.G. Jacob v. Ittyavira George, AIR 1951 Trav-Co. 80 in support of the proposition that intimation of appropriation of the payment must be synchronous with the payment. It is also argued that the view which receives support from the AIR 1926 Mad 792 case, is opposed not merely to express provisions of sec.59 but also to what appears to be the position in English Law. So far as English Law is concerned the position is summarised in Halsbury's Laws of England, Third Edition, Volume 8, at page 214, Paragraph 366, as follows:

'366. Debtor has first right to Appropriate.

Where several distinct debts are owing by a debtor to his creditor, the debtor has the right when he makes a payment to appropriate the money to any of the debts that he pleases, and the creditor is bound if he takes the money to apply it in manner directed by the debtor. If the debtor does not make any appropriation at the time when he makes the payment, the right of appropriation devolves on the creditor. 'It will be noticed that the language in which Halsbury has summarised the English law is very nearly the same as or at any rate to the same effect as the language employed in the Indian Contract Act. For the purpose of deciding whether a debtor can take advantage of the provision under sec.59, it seems that mex unnecessary to insist that intimation of appropriation should be necessary synchronous with the payment. What is of greater importance is that what deprives the creditor of his right to make appropriation is his accepting the payment with the knowledge that the payment is made by the debtor subject to an express appropriation. The creditor should, therefore, have an opportunity of considering the offer of payment made by the debtor subject to the appropriation suggested him and deciding himself either to accept payment or not upon such conditions. If the circumstances are such that money reaches the hands of the creditor and he accepts it without knowing the conditions subject to which the debtor proposed to make the payment or thought of making that payment, the creditor cannot be deprived of his normal right which he possess of making an appropriation which is to his best advantage. He even has the right of making a re appropriation is not sufficiently advantageous to him. Subject only to the rule that an appropriation made by him once communicated to the debtor will be irrevocable. That is how Sir George Rankin described the right of a creditor in Rama Shah v. Lal Chand, . His Lordship states that :

'The creditor has a right to appropriate a payment by the debtor to the principal or to the interest of the same debt. There is no obligation upon the creditor to make the appropriation and communicated it to the debtor he would have no right to appropriate it otherwise.'

(6) Upon the facts of this case, there cannot be any doubt that the circumstances in which the payment was made to the creditor agent in India without intimating to her the appropriation proposed by the debtor and the intimation of appropriation to the creditor which reached him some days after money had been received by his agent, were certainly circumstances in which the creditor had no opportunity whatever of either accepting or refusing to accept the payment on the stipulations made by the debtor.

(7) This argument therefore fails and with that the Revision Petition.

(8) Petition is dismissed with costs.

(9) Petition dismissed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //