The claimant though urged before this Court vehemently that the respondent having issued a cheque of Rs. 50 lakhs, which was dishonored, the entire outstanding claim under various invoices stood revived on the ground that there was fresh period of limitation under section 18 of the Limitation Act, the claimant having exercised the option under section 60 of the Indian Contract Act, no such inconsistent plea can be permitted.
55. Under section 60 of the Indian Contract Act, where the debtor has omitted to intimate and there are no settled circumstances undertaking the debt to be applied, the creditor may apply at his discretion to any lawful debt actually due and payable to him from the creditor, whether is regular or is not barred by law in force for the time being as to the limits of the suit. In this case, admittedly the respondent did not intimate the claimant that the said sum of Rs. 50 lakhs was made towards any particular invoice or was by way of part payment towards all the outstanding invoices on the date of such part payment.
56. At this stage, it would be apposite to refer to section 61 of the Indian Contract Act which provides that where neither party makes any appropriation, the payment shall be applied in discharge of the debts in order of time, whether they are or are not barred by the law in force for the time being as to the limitation of suits. If the debts are of equal standing, the payment shall be applied in discharge of each proportionably. In our view, since the claimant in this case has invoked section 60 of the Indian Contract Act, 1872, section 61 of the Indian Contract Act cannot be invoked.
IN THE HIGH COURT OF BOMBAY
Commercial Appeal No. 574 of 2019 in Commercial Arbitration Petition No. 987 of 2018
Anmol Steel Processors Private Limited Vs. Colour Roof (India) Limited
Hon'ble Judges/Coram:
R.D. Dhanuka and R.N. Laddha, JJ.
Decided On: 19.01.2022
Author: R.D. Dhanuka, J.
Citation: MANU/MH/0167/2022.
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