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CS Professional · Drafting, Pleadings and Appearances · Commercial Contract Management

Meera owes Kabir ₹50,000 under a contract. Kabir owes Divya ₹50,000. Kabir instructs Meera to credit Divya with ₹50,000 in her books, but Divya never agrees to this. What is the position?

Kabir still owes Divya ₹50,000 and no new contract exists. Substituting a debtor under Section 62 requires agreement of all parties, and Divya, the creditor, never assented, so Kabir's original obligation to her remains.

  1. AKabir's debt to Divya is discharged because Meera has made the entry
  2. BMeera now owes Divya directly and Kabir is released
  3. CA new contract arises automatically between Meera and Divya
  4. DKabir still owes Divya ₹50,000 and no new contract has been madeCorrect

Explanation

Novation by substitution needs the assent of every party concerned. Divya did not assent, so no new contract was formed, and Kabir's liability to her continues, as in the statutory illustration on Section 62. A unilateral instruction cannot discharge an existing obligation.

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