Appropriation of payment

Appropriation of payment—Debtor while tendering the amount made a unilateral assertion that the payment is towards the principal amount and that there was, therefore, no other amounts due and payable to the creditor—Creditor accepted the amount on protest—Whether the creditor would be bound by the appropriation as proposed by the debtor or is he entitled to appropriate the same against the interest which was due and payable till that date on the principal amount?—Held, the creditor is not bound by the appropriation as proposed by the debtor—He is entitled to appropriate the same against the interest which was due and payable till that date on the principal amount—Principle laid down in Rai Bahadur Seth Nemichand’s case [AIR 1922 PC 26] will have no application. 

File Name:- SC_DECEMBER 2011_4