Section 59 – THE INDIAN CONTRACT ACT, 1872

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.
Illustrations
(a) A owes B, among other debts, 1,000 rupees upon a promissory note which falls due on the first June. He owes B no other
debt of that amount. On the first June, A pays to B 1,000 rupees. The payment is to be applied to the discharge of the promissory
note.
(b) A owes to B, among other debts, the sum of 567 rupees. B writes to A and demands payment of this sum. A sends to B
567 rupees. This payment is to be applied to the discharge of the debt of which B had demanded payment.

Application of payment where debt to be discharged is indicated

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Practice area's of B K Goyal & Co LLP

Company Registration Services in major cities of India

Complete CA Services

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