M/S. INDUSTRIAL CREDIT AND DEVELOPMENT SYNDICATE NOW CALLED I.C.D.S. LTD. versus SMT. SMITHABEN H. PATEL AND OTHERS

Citation: [1999] 1 S.C.R. 555 · Decided: 10-02-1999 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

M/S. INDUSTRIAL CREDIT AND DEVELOPMENT SYNDICATE 
A 
NOW CALLED l.C.D.S. LTD. 
v. 
SMT. SMITHABEN H. PATEL AND OTHERS 
FEBRUARY 10, 1999 
B 
[V.N. KHARE AND R.P. SETHI, JJ.] 
Indian Colllract Act, 1872 :· Sections 59 & 6<>-Appropriation of pay-
ment-Decree passed against respondents--Payment to be made in instal-
. ments-Failed to pay full amount-Appellant filed execution for wa"ants of C 
attachment-Objection by respondent that the payment made was towards the 
principal only and not interest-Objections dismissed-Challenged in 
revision-order of executing court set asid~Appellant found to have failed 
in replying to respondents' letter intimating him to appropriate the payment 
towards the principle only-Drder of the High Court appealed D 
against-Held-Sections 59 and 60 applicable only in' pre- decretal 
stage-l'ost-decretal payments to be in accordance with the agreement between 
the parties or general principles-Burden of proof of agreement on the 
propounder-:Respo11dent failed to discharge such an onu~Appellant not 
Ullder obligation to intimate respondents about manner of acceptance of pay-
E 
ment-Sectio11 60 cannot be read independently excluding Section 59-Both 
sections not applicable to the cases of single debHnterest due on a principal 
is not a distinct debt. 
Code of Civil Procedure, 1908 : Order XXI Rules 1 & 2-Payment 
under decree-Decree passed against the respondents alongwith interest and F 
costs--Payment made by the respondents out of court in instalments-No 
agreemellt between the parties as to the mode of payment-Respondents 
claimed adjustment of payment towards the principal amount only-f'ay-
ment/adjustment not recorded in accordance with Rule 1:-Held--R.espon-
dents not entitled to claim benefit of adjustment in the manner insisted upon G 
by them. 
In a suit filed by the appellant on the basis of a mortgage deed 
executed by the respondent, a decree was passed holding the respondent 
liable to pay a sum of RS. 5,25,451.07 together with costs and interest. It 
was undisputed that there was no agreement between the parties regarding H 
' 
555 
556 
SUfREME COURT REPORTS 
[1999] 1 S.C.R. 
A the mode of payment excepting that the decretal amount was to be paid in 
instalments. In case of default of two instalments the appellant was en-
titled to realise the balance due by sale of suit schedule property and in 
case of sale proceeds being insufficient, the appellant was entitled to 
recover the balance due personally from the respondents. On respondents' 
B failing to pay the full amount, the appellant filed an execution petition 
praying to recover the amount by attachment and sale of scheduled im-
movable property and also the arrest of the respondents. The executing 
court, dismissing the objections filed by the respondents, held the appel-
lant entitled to recover the balance decretal amount. The assertion of the 
respondents that the payments made by them were towards payment of the 
C principal amount and not towards the costs and interest, was rejected on 
the basis of the finding of fact that the appellant had intimated the 
respondents that the amount paid by them had not been adjusted towards 
the principal amount. 
In revision before the High Court, the trial court order was set aside 
D on the presumption of implied acceptance of the amount towards the 
principal amount inferred from the fact that the appellant had not replied 
the letters sent by the respondents alongwith the instalments specifically 
· mentioning appropriation of amount towards the principal amount only • 
. 
E 
In appeal before this Court the issue involved was regarding a 
judgment debtor's unilateral right to make payment of the decretal 
amount in the manner of his choice. 
The respondents, taking the principal and interest due thereon to be 
separate debt, sought refuge under the protection provided by Section 60 
F 
of the Indian Contract Act, 1872. It was contended that in the absence of 
intimation by the appellant and also in view of no other circumstance 
indicating as to which specific debt the payment was to be applied, they 
were entitled ta apply it at discretion to any lawful debt actually due. 
G 
Allowing the appeals, this Court 
HELD : 1.1. Sections 59 and 60 of the Indian Contract Act, 1872 would 
not be applicable to the instant case as these sections are applicable to the 
cases in pre-decretal stage and not thereafter. Post decretal payments have 
to be made in terms of the decree or in acco

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