B. N. MALLIKARJUNA, J. ( 1 ) THIS second appeal is filed by the plaintiff challenging the judgment and decree dated July 25, 1985 of the Prl. Civil Judge, Bijapur in Regular Appeal No. 1 of 1984 arising out of the judgment and decree of the Munsiff and JMFC, Indi dated november 22, 1983 in Original Suit No. 38 of 1981. ( 2 ) PLAINTIFFS suit is one for recovery of a sum of Rs. 5,000/-being the principal and Rs. 2,400/- being the interest, in all Rs. 7,400/- borrowed by the defendant as a hand loan on a receipt, exhibit P-2 dated August 5,1978. The defendant resisted the suit contending amongst other grounds that the debt is discharged by making payments in instalments commencing from March 31, 1979 to April 10, 1980. Several issues were framed based on the pleadings and the Trial court on the question of plea disagreed with the defendant's case and decreed the suit. ( 3 ) DEFENDANT carried appeal before the Prl. Civil Judge, Bijapur. The Appellate Court on reappraisal of evidence found that the plea of discharge is not established. However, both the courts below held against the defendant on other pleas that the plaintiff is a" money lender and a debtor within the meaning of that expression contained in the Karnataka Debt Relief Act and the suit is barred both under the provisions of the Karnataka money Lenders Act and the KDR Act. Hence, the second appeal by the plaintiff. ( 4 ) THE substantial question of law formulated by this Court at the time of admission on December 4, 1985 reads thus:"whether the lower Appellate Court was right in holding that there was variance made out by the appellants-plaintiffs in the pleading, while considering the relevant entry in Exhibit D-4 a notebook produced by respondent-defendant in support of his plea of discharge of the amount in the suit pronote ignoring the fact that the presumption of law under Section 118 of the Negotiable Instruments Act is in favour of the plaintiff, and at the most he has to adduce rebuttal evidence ?" ( 5 ) THE learned Counsel for the appellant contended that the judgment of the Appellate Court suffers from legal infirmity, finding recorded on the plea of discharge is not based on proper evidence and it is totally based on misconstruing of evidence. Further he submitted that in view of the facts admitted or proved, the Court ought to have read the evidence keeping in mind the provisions of Section 60 of the Indian Contract Act. Therefore, whatever may be the finding of the Appellate Court that needs to be disturbed as there is error in law and defect of procedure. In support of his arguments, he relied on two decisions of the Supreme Court in Yeshwant Deorao v Walchand ramchand and the other in Firm Sriniwas Ram Kumar v mahabir Prasad and Others. The learned Counsel for the respondent on the other hand contended that the plea of discharge being a question of fact and appellate Court has recorded its finding after reappraising the evidence, this Court sitting in second appeal cannot interfere with that finding however erroneous it may be. In support of his arguments he invited my attention to the decisions of the supreme Court in Deity Pattabhiramaswamy v S. Hanymayya and Others , Afsar Shaikh and Another v Soleman Bibi and others and State of Uttar Pradesh v Ram Chandra Trivedi. ( 6 ) WHAT is the scope of this Court in second appeal under Section 100 of Code of Civil Procedure is well-settled and therefore, I find no need to refer to those decisions cited at the bar. It is settled law that this Court sitting in appeal under section 100 of Code of Civil Procedure cannot interfere with the findings of the Courts below on question of fact however erroneous it may be, but at the same time if it is shown that the finding so recorded is by misconstruing of evidence or without there being any evidence resulting in grave error or defect in procedure, this Court could certainly consider as to whether those findings are sustainable in law. Here is a case where the learned Trial Judge after considering the relevant evidence both oral and documentary records a finding that the discharge is not proved. The Appellate Court after reconsidering the evidence holds otherwise. But, in considering the evidence afresh as rightly pointed out by the learned Counsel for the appellant, the Court ought to have read that evidence keeping in mind the relevant law on the point at issue. The Appellate Court after reconsidering the evidence holds otherwise. But, in considering the evidence afresh as rightly pointed out by the learned Counsel for the appellant, the Court ought to have read that evidence keeping in mind the relevant law on the point at issue. If the appellant were to show that the finding recorded is by misconstruing of evidence or without considering the relevant provisions of law and the finding so recorded has materially affected by violating the law or procedure, then the appellant is bound to succeed. In this context I shall refer to the evidence on record very briefly. ( 7 ) WHATEVER may be the pleadings what transpires inevidence according to the finding recorded by both the Courts below is that there were two debts each Rs. 5,000/-, one borrowed under Exhibit P-l on September 3, 1978 and the other on August 5, 1978 under Exhibit P-2. Further it transpires that the repayment is only Rs. 5,000/- in instalments commencing from march 31, 1979 to April 10, 1980. Exhibit P-3 and Exhibit D-4 are the documents supporting the payments. The learned Counsel for the respondent vehemently contended that in the absence of a specific plea, the Appellate court was right in holding that what was paid was towards the discharge of the debt under Exhibit P-2. On the facts pointed out by the Courts below, I find myself unable to agree with this argument. ( 8 ) PLAINTIFF-APPELLANT has tried to elicit in evidence as against the plea of discharge that defendant had borrowed two hand loans of Rs. 5,000/- each, one on 3-9-1978 and the other on 5-8-1978 under Exhibit P-1 and Exhibit P-2, subsequently defendant (D. W. 1) and his brother (D. W. 2) partitioned, hand loan under Exhibit P-1 dated 3-9-1978 fell to the share of D. W. 2, payment made under Exhibit D-4 are by D. W. 2 towards the discharge of the debt under Exhibit P-1 and the hand loan under exhibit P-2 was due on the date of suit and it had to be paid by the defendant. It is admitted that the parties are doing business at chadachan town in Indi Taluk, plaintiff has a cloth shop, defendants have a kirani shop, loans were borrowed for the purpose of business. Both Exhibit P-1 and Exhibit P-2 are produced by the plaintiff, they are by defendant and they are admitted. It is admitted that the parties are doing business at chadachan town in Indi Taluk, plaintiff has a cloth shop, defendants have a kirani shop, loans were borrowed for the purpose of business. Both Exhibit P-1 and Exhibit P-2 are produced by the plaintiff, they are by defendant and they are admitted. Repayment shown and proved is only Rs. 5,000/- and plaintiff says that it is towards the discharge of debt under exhibit P-1. There is no evidence to the contrary. I enquired both the learned Counsel and they concede that the entries in Exhibit P-3 or Exhibit D-4 do not indicate specifically whether the repayment is towards Exhibit P-1 or exhibit P-2. In the circumstances, whatever the plea of partition may be, in the absence of clear evidence either express or implied as to how the repayment has to be appropriated, the Appellate Court ought to have read the evidence keeping in mind the provisions of Section 60 of the Indian Contract Act. ( 9 ) TRUE, the plaint in this behalf is too vague and bald. But at the same time, we cannot loose sight of the fact that the onus of establishing the plea of discharge was entirely on the defendant and only in rebuttal the plaintiff has tried to show that what was paid under Exhibit D-4 is towards the debt under Exhibit p-1. The first Appellate Court interferes with this finding of the trial Court on the ground that there is no sufficient pleading, secondly the theory of partition is not proved or established and there is failure on the part of the plaintiff to produce a similar document like Exhibit P-3 in respect of debt under Exhibit P-1. In regard to the theory of partition both the Counsel fairly concede that it was an extraneous matter and the Court need not have elaborately dwelt on that issue. In regard to failure to produce a document similar to Exhibit P-3,1 should say that the observation of the Appellate Court is not just and proper. Documents like Exhibit P-3 and D-4 are maintained only when payments are commenced, but, that is not the case either of the plaintiff or the defendant. Therefore, one cannot expect the plaintiff to maintain document like Exhibit P-3 concerning the debt under Exhibit P-1. Documents like Exhibit P-3 and D-4 are maintained only when payments are commenced, but, that is not the case either of the plaintiff or the defendant. Therefore, one cannot expect the plaintiff to maintain document like Exhibit P-3 concerning the debt under Exhibit P-1. ( 10 ) WHEN payments are made towards the discharge of the debt and it is shown, that the debts were lawful as on the date of suit and in the absence of a clear direction either expressly or impliedly as to how the appropriation should be made, it was for the creditor to appropriate that amount either towards the debt under Exhibit P-1 or Exhibit P-2. Here is a case where there were two debts of Rs. 5,000/- each and repayment is only Rs. 5,000/- under Exhibit D-4. The plaintiff appropriates towards the later debt and brings an action for recovery regarding the earlier debt. The defendant contends that he repaid Rs. 5,000/- but the plaintiff refused to return the receipt insisting on payment of Rs. 500/- being the interest, the plaintiff assured that he would return the document on payment of interest of Rs. 500/- but he never imagined that the plaintiff would proceed to file a suit to recover the amount. But P-1 and P-2 are produced by the plaintiff, does not take any action to recover the debt under exhibit P-1, concedes that it is repaid as per the entries in exhibit P-3 and Exhibit P-4 but no discharge endorsement is made on Exhibit P-1 or it is returned to defendant or his brother. It is thus seen that the finding by the Appellate Court on the plea of discharge has been recorded without referring to the relevant provisions regarding appropriation of debt, which in law, is an error and a defect in procedure. ( 11 ) THE learned Counsel for the respondent, therefore, in the alternative canvassed that the matter may be remanded to the first Appellate Court to consider as to whether the payment is towards the discharge of the debt either under Exhibit P-1 or under Exhibit P-2. I find myself unable to accede to his argument, for the reason that the evidence reveals that the repayment is only Rs. 5,000/- and it is appropriated towards the discharge of the debt under Exhibit P-1, a lawful debt outstanding on the date of suit. I find myself unable to accede to his argument, for the reason that the evidence reveals that the repayment is only Rs. 5,000/- and it is appropriated towards the discharge of the debt under Exhibit P-1, a lawful debt outstanding on the date of suit. It is not shown whether there was any indication by the defendant as to how it should be appropriated. In the absence of such direction either expressly or impliedly, law provides for appropriation by the creditor towards any of the debts. Therefore, it would not be correct to remand the matter for recording as to whether the repayment is towards the discharge of debt under P-1 or P-2. Lastly, Sri Kulkarni, learned Counsel for the respondent contended that unless it is shown that the evidence on record is sufficient, this Court cannot determine any issue necessary for the disposal of the appeal in view of Section 103 of C. P. C. It is not a case where there is insufficiency of evidence, the onus of establishing the plea of discharge was on the defendant and in discharging that onus, defendant examined himself and another witness. In the cross-examination, the plaintiff elicits the existence of two debts and says that the repayment is only Rs. 5,000/ -. The Appellate Court as well as the Trial Court holds that both the documents P-1 and P-2 are executed by the defendant (paragraph 14 of the Judgment of the Appellate court ). Therefore, it is not a case where there is insufficiency of evidence. The question would be whether there is misconstruence of evidence by the Appellate Court in recording the finding on question of fact. I therefore find no merit in this argument. In the result and for the foregoing reasons, I am of the considered view that the finding recorded by the Appellate Court is by misconstruence of evidence and the evidence is not considered keeping in mind the relevant provisions of law and as such there is error in law and defect in procedure which needs to be corrected. ( 12 ) IN the result, appeal is allowed. The judgment and decree under challenge dated July 25, 1985 in Regular Appeal No. 1 of 1984 is set aside and the judgment and decree of the Trial Court dated November 22, 1983 in Original Suit No. 38 of 1981 is restored. --- *** --- .