Section 60

Section 60 of the Indian Contract Act, 1872, states: 'In the absence of any express or implied contract to the contrary, the payment must be applied to the discharge of the debt which is earliest in point of time. If two or more debts are of equal standing, the payment must, unless the contrary appears, be applied to the discharge of all such debts rateably.' This section reiterates the principle that in the absence of any express or implied contract to the contrary, the payment must be applied to the discharge of the debt that is earliest in point of time. The courts have held that if two or more debts are of equal standing, the payment must be applied rateably to the discharge of all such debts. In the case of K. S. Ramaswamy vs. K. S. Ranganatha, the court observed that the payment must be applied to the discharge of the debt which is earliest in point of time, unless the parties have agreed to the contrary.