Appropriation of payments can cure revenue default where circumstances show an implied direction toward earlier arrears.

Payment received after a collector's sale warning may be treated as appropriated to the earlier arrears if the surrounding circumstances show an implied direction by the payer. On the facts discussed, the remittance made on the last day for payment was intended for the January kist in arrear, not the March kist, so the default was removed and no enforceable arrear remained to support the revenue sale. Applying the principles of appropriation of payments under the Indian Contract Act, the sale was therefore invalid and liable to be set aside.

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Issues: Whether the sum remitted by the plaintiffs was to be appropriated towards the earlier arrears of the January kist, so as to remove the default and invalidate the revenue sale.

Analysis: The notice issued by the Collector warned of sale unless the arrears were paid by 28 March. The plaintiffs remitted a sum which was received on that date, and the circumstances showed that the payment was intended for the January kist in arrear rather than the March kist. In the absence of an express appropriation by the payer, the surrounding facts supported an implied direction as to appropriation. On that basis, the money must be treated as having been paid towards the January arrear, leaving no subsisting default on the last day for payment. The sale was therefore unsupported by any enforceable arrear of revenue. Reference was also made to the principles of appropriation of payments under the Indian Contract Act.

Conclusion: The issue was decided in favour of the appellants, and the sale was held to be invalid and liable to be set aside.

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