Under Section 61 of the Indian Contract Act, how should a payment be applied if the debts are of equal standing in time?
1
The eldest debt must be discharged in full before applying the payment to the next.
2
The payment should be applied entirely to the smallest debt to reduce the number of outstanding debts.
3
The payment must be applied in discharge of each debt proportionally.
4
The creditor decides which debt to prioritize, disregarding the equal standing.