Appropriation of decree deposits: undirected payments go first to interest and costs, so unpaid decretal interest continues.

In execution of a money decree, an undirected deposit is appropriated first towards interest and costs, and only thereafter towards principal. The exception applies only when the judgment debtor specifies at the time of deposit that the payment is confined to principal and communicates that intention to the decree holder. Where no such intimation is given, the deposit does not stop interest on the unpaid decretal balance, and the decree holder may apply the deposited amount against the outstanding interest and costs before principal.

---

---

Issues: Whether the judgment debtor's deposit of the decretal principal amount, without intimating that it was towards principal, stopped further interest and required appropriation of the deposit first towards interest and costs, leaving the decree holder entitled to the entire balance deposited in execution.

Analysis: Under the scheme of execution of money decrees, a deposit is to be given effect to according to the rule of appropriation recognised in execution law. The governing principle, as applied here, is that where the judgment debtor does not specify the head of appropriation while making the deposit, the decree holder may appropriate the amount first towards interest, then costs, and thereafter towards principal. The exception recognised in precedent applies only where the judgment debtor indicates the specific head at the time of deposit and communicates that intention to the decree holder. In the present matter, the judgment debtor deposited the principal amount but did not intimate that the deposit was confined to principal, and therefore the deposit could not arrest the running of interest on the remaining decretal dues.

Conclusion: The deposit was liable to be appropriated first towards interest and costs, and the decree holder was entitled to the entire amount lying deposited in court.

Ratio Decidendi: In execution of a money decree, a deposit made without specifying appropriation is adjusted first towards interest and costs, and interest on the unpaid balance continues until the decretal dues are satisfied.

---