Lassoo And Sons v. Krishna Bahadur Nepali

1. (After stating facts, his. Lordship discussed the evidence and proceeded.) The important question however is whether the defendants are entitled to set off the full sum of Rs. 1,175 against Rs. 1,925 due by them to the plaintiffs.

2. Under O. 8, R. 6 of the CPC, a defendant is entitled to set off any ascertained sum of money against the plaintiff if inter alia it is legally recoverable. In this case the amount sought to be set off was in respect of dealings which took place in Calcutta and as the plaintiffs carried on business in Kashmir it was argued that this Court had no jurisdiction to entertain the set off. It is clear from the terms of O. 8, R. 6 that the amount of the set-off must be within the pecuniary limits of the jurisdiction of the Court in which the plaintiff's suit is brought, that is to Bay, it cannot exceed the pecuniary jurisdiction of that Court. The nature of the set-off must also be within the cognizance of the Court and a Court cannot entertain a set-off if its nature is such that if it is made the subject-matter of a separate suit it will not ??? within its jurisdiction. Plaintiffs' counsel relied on Beni Madho v. Gaya Prasad (1), but that decision is based upon the facts of that case. It was a suit for arrears of rent in a Revenue Court and it was held that the Revenue Court was not competent to deal with the set-off of a nature which was not within its jurisdiction. The same principle is also laid down in Halsbury, Vol. 25, p. 484, wherein it is stated that no Court has jurisdiction to entertain a defence of set-off, unless the subject of the set off is in its nature such that it may be made a subject of a cross action or counterclaim in the Court. It cannot be said that this Court cannot take cognizance of a claim of Rs. 1,175 but it was argued that this Court cannot entertain the set-off because it would have no jurisdiction if a cross-suit was filed in respect thereof against the plaintiffs. In this respect however the distinction between a set-off and a counterclaim must be borna in mini. In one sense both are cross actions but a set-off is also a ground of defence. If established it affords an answer to the plaintiffs' claim either wholly or pro tanto for a set-off is really a debt claimed by a defendant against the plaintiff balancing a debt claimed by the plaintiff against the defendant. A counter claim on the other hand is really a weapon of offence and enables a defendant to enforce a claim against the plaintiff as effectually as in an independent action.

3. It is allowed to be pleaded by the defendant at his option subject to certain rules, in order to avoid multiplicity of proceedings between the parties. Reliance was placed by counsel for the plaintiffs on O. 8, R. 6, sub-R. (2), which says that a written statement containing a set-off shall have the same effect as a plaint in a cross-suit, but that is so in order to enable the Court to pronounce a final judgment in respect of both the original claim and the set-off. A set-off and a counterclaim therefore are essentially different and in India we are governed by O. 8, R. 6. of the CPC, and the High Court Rules as regards set-off and by the High Court Rules only as regards counterclaim. This distinction has been brought out by the appeal Court in Vithaldas v. Hyderabad Spinning & Weaving Co. Ltd. (2), in which it was held that if the defendants were to file a separate suit on the subject-matter of their claim in that suit this Court would have no jurisdiction to try it, as the plaintiff resided outside jurisdiction and the whole cause of action arose outside jurisdiction. A set-off however cannot only be the subject-matter of a separate action but it can also be pleaded as a defence when the claim to the set-off one against the other exists in the same right. A question might arise whether a defendant would be entitled to get a decree for the amount of excess over the plaintiff's claim, that is, if the amount sought to be set off exceeds the amount of the plaintiff's claim. This however is a point which does not arise here for decision. R. 136 of the High Court Rules provides that where in any suit a set-off or counterclaim is established as a defence against the plaintiff's claim the Court may if the balance is in favour of the defendant give judgment for the defendant for such balance. Whether that rule will also apply if the amount in excess is in respect of a claim on which a separate action cannot for want of jurisdiction be brought in this Court is a point which is not free from doubt. It was argued that the words legally recoverable in O. 8, R. 6, do not necessarily mean legally recoverable in the same Court in which the plaintiff's suit is brought but for the purposes of the decision in this case it is not necessary to deal with the point any further. The amount of the defendant's claim which they are entitled to set off against the plaintiffs' claim of Rs. 1,925 is Rs. 1,175 and therefore in my opinion the plaintiff is entitled in terms of O. 8, R. 6, sub-R. (2), to a judgment for the balance. (His Lordship then proceeded and decreed the suit.)

R.K

4. Suit decreed.