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  • provisions of order VIII, rule 6 of the Civil Procedure Code.
  • section 24, sub-section (3) of that Act,
  • rule 6 of the Civil Procedure Code
  • sub-rule (2)
  • rule 6(3)
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Citation Codes
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citation codes
Case Number
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  • provisions of order VIII, rule 6 of the Civil Procedure Code.
  • section 24, sub-section (3) of that Act,
  • rule 6 of the Civil Procedure Code
  • sub-rule (2)
  • rule 6(3)
Smart Summary

Judgment Summary

Factual and Procedural Background

The plaintiff is a firm based in Cawnpore that for several years supplied groceries to two firms: (1) Sarju Prasad Bechu Lal, at Bahraich, and (2) Bechu Lal Lalta Prasad, at Chilwaria (district of Bahraich). The plaintiff's suit alleged that both firms were parts of one joint Hindu family constituted by all the defendants and that the family (and hence all defendants) were liable for sums due. The defendants contended that the two firms belonged to separate branches (the two brothers), and thus were not jointly liable.

The trial court found that the two brothers were separate (not a joint family) and dismissed the plaintiff's claim against the branch of Lalta Prasad, while decreeing the claim only against other defendants. The plaintiff appealed; Lalta Prasad and his sons filed a cross-objection seeking a decree for an admitted credit of Rs. 212-12-0 which, they contended, the lower court failed to award them.

Legal Issues Presented

  1. Whether the two brothers (Bechu Lal and Lalta Prasad) constituted a joint Hindu family for the purposes of liability to the plaintiff, or whether they were separate branches (i.e., the primary factual-legal issue of jointness).
  2. Whether the admitted sum of Rs. 212-12-0 standing to the credit of the branch Bechu Lal Lalta Prasad could be pleaded and decreed by defendants as a set off under Order VIII, rule 6 of the Civil Procedure Code (CPC), notwithstanding the dismissal of the plaintiff's claim against those defendants.
  3. Whether a defendant may obtain a decree for a set off (or counterclaim) in favour of himself when the plaintiff's suit against that defendant is dismissed, and whether the written statement paragraph containing the claim operates as a set off under the CPC.
  4. Whether the defendants could raise their omitted claim by way of a cross-objection in this appeal (procedural question under Order XLI, rule 22), given the lapse of the ordinary appeal period.
  5. Whether the claim for Rs. 212-12-0 was one properly governed by Order VIII, rule 6 (i.e., a set off) or was in substance a counterclaim or a suit cognizable by a court of small causes, raising jurisdictional concerns.

Arguments of the Parties

Plaintiff's Arguments

  • The plaintiff's pleaded case: both firms were parts of a single joint Hindu family and the joint family was liable for the debts of either branch.
  • Objection to the defendants' plea for Rs. 212-12-0: Mr. Shambhu Nath (for plaintiff) argued that because the defendants did not admit the plaintiff's claim, they could not plead a set off; he relied on the English common law principle that a set off is a statutory defence only in certain circumstances.
  • Reliance on illustration (g) to Order VIII, rule 6: Dr. Katju argued that that illustration prevented a defendant sued jointly with others from setting off a debt due to him alone.
  • Procedural objection: the plaintiff contended the period for filing an appeal had elapsed when the cross-objection was filed and that the defendants 1 to 3 were not entitled to object to the decree as they were not aggrieved by it in the usual sense.

Defendants' Arguments (including cross-objection)

  • Defendants denied that the two branches formed a joint family and maintained that each branch was separate and liable only for its own accounts.
  • Paragraph 17 of the written statement expressly stated: "Rs. 212-12-0 is admittedly due to the contesting defendants by the plaintiff, for which a decree may be passed in favour of the contesting defendants. A court fee of Rs. 16-8-0 is paid in respect thereof." They relied on this as a set off or claim for a decree.
  • They urged that their claim should be treated under Order VIII, rule 6 CPC as a set off (or at least as a claim which the court should treat as a plaint in a cross-suit), and hence should be decreed even though the plaintiff's main claim against them was dismissed.
  • Procedurally, as respondents in the appeal they relied on Order XLI, rule 22 to take a cross-objection attacking the omission of the lower court to grant the decree for Rs. 212-12-0.

Table of Precedents Cited

The opinion refers to legal texts and one reported case. The table lists the case mentioned and the role it played in the court's reasoning.

Precedent Rule or Principle Cited For Application by the Court
Winterfield v. Bradnum Illustration that under the Judicature Act a counterclaim may exceed the plaintiff's claim and need not arise out of the same transaction. The case is cited (via Odgers' exposition) to distinguish the English set off from the broader modern counterclaim power and to illustrate the difference between set off and counterclaim when discussing the scope of Order VIII, rule 6 and subsequent provisions in the Civil Procedure Code.

Court's Reasoning and Analysis

The court's analysis proceeds in two connected strands: (A) the primary factual determination on jointness of the family, and (B) the legal analysis of the defendants' claim for Rs. 212-12-0 as a set off/cross-claim and the procedural entitlement to press that claim in this appeal.

A. Factual determination — jointness of the family

After reviewing evidence adduced at trial, Bennet, J. concurred with the trial court's finding that the two brothers (the heads of the two firms) were separate branches and not members of one joint Hindu family. The judge emphasised that even if jointness were established, the plaintiff would still have to prove that the firm of Sarju Prasad Bechu Lal was started with joint family funds; that proof was not made. Because the plaintiff failed to establish jointness, the plaintiff could not hold the Lalta Prasad branch responsible for the debit balance of the Bechu Lal branch.

B. Legal analysis — set off, counterclaim and procedural remedy

  1. The court examined paragraph 17 of the defendants' written statement — which admitted that Rs. 212-12-0 was due to the contesting defendants and included payment of a court fee — and concluded that this amounted to a claim by way of set off under Order VIII, rule 6 of the Civil Procedure Code. The written statement thus had the practical effect of a plaint in respect of that claim.
  2. On the plaintiff's objection that a defendant must admit some part of the plaintiff's claim before pleading set off, the court held that Order VIII, rule 6 contains no such requirement.
  3. The court reviewed the English law background (via Odgers) distinguishing traditional English set off and the modern counterclaim under the Judicature Acts. It observed that Indian Order VIII, rule 6 and related provisions incorporate some attributes of counterclaims and modify other attributes of English set off: notably, sub-rule (2) of Order VIII gives the written statement the same effect as a plaint in a cross-suit so as to permit a final judgment on both the original claim and the set off; and Order XX, rule 19(1) contemplates a decree that specifies amounts due to each party and enables recovery of any sum due to either party.
  4. The court therefore reasoned that (i) a set off under Order VIII, rule 6 may be pleaded even if the plaintiff's claim is denied; (ii) a defendant may obtain a decree in his favour under Order XX, rule 19 even though the plaintiff's suit is dismissed; and (iii) Order VIII, rule 6 is broader than the English set off but narrower than a full counterclaim (it is limited to a suit "for the recovery of money" and to an "ascertained sum of money legally recoverable").
  5. The plaintiff's reliance on illustration (g) to Order VIII, rule 6 (which states that where A sues B and C for Rs. 1,000, B cannot set off a debt due to him alone by A) was addressed: Bennet, J. interpreted that illustration as designed to avoid conflicting execution problems where a joint decree might be entered against co-defendants while a lone defendant obtains a separate decree against the plaintiff. But where a defendant affirmatively denies any joint debt (as in the present case), the illustration was not intended to preclude a set off; the wording of the rule does not forbid a defendant who denies joint liability from pleading a set off due to him alone.
  6. Regarding the procedural objection that the defendants' cross-objection was out of time, the court found that as respondents in the appeal they were entitled under Order XLI, rule 22 to take any cross-objection they could have taken by way of appeal. The omission by the lower court to deal with the set off (no issue framed; judgment and decree did not refer to it) appeared to be an oversight. The plaintiff had not filed a written reply to the set off and had admitted the facts alleged in it. Having dismissed the plaintiff's claim of a joint debt, the lower court should have decreed the set off in favour of the defendants.
  7. Bennet, J. therefore concluded the court should grant a decree in favour of defendants 1 to 3 for the set off (Rs. 212-12-0).
  8. Niamat-ullah, J. agreed with the result (dismissal of the appeal and allowance of the cross-objection) but observed difficulty with applying Order VIII, rule 6 to the defendants' claim. He noted that paragraph 17 and the payment of court fee looked very much like a counterclaim or a plaint (and practically a suit cognizable by a court of small causes), so there could be jurisdictional objections to an Additional District Judge decreeing that claim. He doubted that Order VIII, rule 6 strictly applies where the defendant seeks a decree in his own favour rather than a mere set off against the plaintiff's demand. Nonetheless, he declined to dissent because the majority's view produced substantial justice between the parties.

Holding and Implications

Holding: We dismiss this appeal with costs, and we decree the cross-objection with costs throughout.

Direct effect on the parties:

  • The trial court's finding that the two brothers/branches were separate is upheld; the plaintiff failed to prove a joint family, and therefore the plaintiff cannot hold the branch of Lalta Prasad responsible for the debit of the branch of Bechu Lal.
  • The cross-objection of Lalta Prasad and his sons (defendants 1 to 3) is allowed and the court grants a decree in their favour for the sum admitted to be due to them: Rs. 212-12-0, together with costs.

Broader implications:

  • The court set out and applied the principle that a defendant's claim in the written statement can operate as a set off under Order VIII, rule 6 CPC, and that such a set off may be finally adjudicated even if the plaintiff's suit against that defendant is dismissed (supported by the combined operation of Order VIII, rule 6(2) and Order XX, rule 19(1)).
  • The judgment emphasises the distinction between English law set off, the statutory set off under the CPC, and the modern counterclaim (as developed under the Judicature Acts), observing that Order VIII, rule 6 in India is broader than the English set off but narrower than a full counterclaim.
  • The opinion does not purport to lay down a novel constitutional principle or a binding rule beyond the statutory construction and application in the case; it remedies an omission of the lower court by granting the relief the defendants sought and does not purport to create a new wide precedent beyond its statutory interpretation and application to these facts.

Enumerated Legal Propositions (as stated by Bennet, J.)

  1. A set off under Order VIII, rule 6 may be pleaded although the claim of the plaintiff is denied. It is not merely a defence to the plaintiff's claim and a decree may be granted under Order XX, rule 19 to the defendant although the suit of the plaintiff is dismissed by the decree.
  2. A set off under Order VIII, rule 6 is wider than a set off at English law, but it is not so wide as a counterclaim.
  3. Where a plaintiff sues several defendants alleging a joint debt, a defendant who denies the joint debt may plead a set off due to him alone.
  4. A defendant respondent whose set off has not been decreed or has not been referred to in the decree may make this a ground of cross-objection in appeal (Order XLI, rule 22).

Note: This summary is confined to the matters expressly stated in the provided opinion and does not add or infer facts or legal conclusions beyond the text of the judgment.

    Bansidhar Kunjilal v. Lalta Prasad

    Bennet, J.:— This is an appeal by the plaintiff, whose suit has been dismissed against one set of defendants, Nos. 1 to 3, and has been decreed only against defendants Nos. 4 and 5. The pedigree of the defendants is as follows:

    The plaintiff is a firm in Cawnpore and it was in the habit of supplying for a number of years groceries to two firms as set out in paragraph 1 of the plaint. One of those firms was called Sarju Prasad Bechu Lal, situated in the town of Bahraich, and the other firm was called Bechu Lal Lalta Prasad, situated in the town of Chilwaria, in the district of Bahraich. The plaintiff alleges that both these firms belong to a joint Hindu family constituted by all the defendants. The defendants, on the other hand, claim that the firm at Bahraich is owned only by the branch of Bechu Lal and the firm at Chilwaria is owned only by the branch of Lalta Prasad, and that the branches are separate. The short issue is whether these two brothers were joint or separate; but I must note that even if it is shown that the family was joint, it is further to be shown by the plaintiff that the firm of Sarju Prasad Bechu Lal was started with joint family funds.

    Evidence has been given on both sides, and a perusal of that evidence leads me to the conclusion that the trial court was right in holding that these two brothers were separate. [After discussing the evidence the judgment continued.] For these reasons I come to the conclusion that the plaintiff has failed to prove that the family was joint. Therefore the plaintiff cannot hold the branch of Lalta Prasad responsible for the debit balance in the account of the branch of Bechu Lal. It is admitted by the plaintiff that in the account of Lalta Prasad there was a credit balance of Rs. 212-12-0. The suit, therefore, was correctly dismissed against the branch of Lalta Prasad. Accordingly I would dismiss the appeal against Lalta Prasad and his sons with costs.

    A cross-objection has been brought by Lalta Prasad and his sons. This cross-objection is to the effect that the lower court has erred in not allowing this Rs. 212-12-0 to the respondents, and asks that the decree should be modified by this claim being decreed against the plaintiff. Objections of various sorts have been taken to this cross-objection. The matter arose in the following manner. In the plaint it was stated in paragraph 4 that there was a surplus of Rs. 212-12-0 in the account of the firm Bechu Lal Lalta Prasad with the plaintiff…. The written statement in paragraph 17 set out the following claim: “Rs. 212-12-0 is admittedly due to the contesting defendants by the plaintiff, for which a decree may be passed in favour of the contesting defendants. A court fee of Rs. 16-8-0 is paid in respect thereof.” Now in my opinion this claim in the written statement amounts to a claim by way of set off under the provisions of order VIII, rule 6 of the Civil Procedure Code. The suit of the plaintiff is for the recovery of money, and the defendants claim to set off against the plaintiff's demand an ascertained sum of money legally recoverable by them from the plaintiff. The objection has been taken by Mr. Shambhu Nath for the plaintiff that these defendants do not admit the claim of the plaintiff, and there fore they cannot plead a set off. There is nothing in rule 6 which requires the defendant to admit any part of the claim of the plaintiff. His next objection was that a set off could not be decreed if the suit of the plaintiff was dismissed against the defendant claiming the set off. This idea comes from English common law. Odgers in his “Pleading and Practice in Civil Actions”, eighth edition, states on page 250:

    “A set off is a statutory defence to the whole or to a portion of the plaintiff's claim. At common law a defendant who had any cross claim against the plaintiff could not raise it in the plaintiff's action; he had to bring a cross-action. He might, it was true, when sued for the price of goods, give evidence of a breach of any warranty, express or implied, in reduction of the price. But that was all. Then two statutes were passed in the reign of George II, (2 Geo. II, c. 22, and 8 Geo. II c. 24) which enabled a defendant in the plaintiff's action to plead what is known as a “set off”—but only in certain cases. In the first place, only a debt of a liquidated amount could be set off; and it could only be set off in an action in which the plaintiff's claim was also liquidated. This is so still. Both debts must be due from and to the same parties in the same right… if the debt due from the plaintiff to the defendant exceeded the amount due from the defendant to the plaintiff the defendant could not recover the difference in the plaintiff's action; he could only set off an amount equal to the plaintiff's, claim; he had to bring a cross-action for the balance.”

    On page 254 Odgers says:

    “The Judicature Act, which gave every defendant a very wide power of counterclaiming, did not alter the rules as to set off. Whatever was a good set off, either at law or in equity, in 1875, is a good set off still; and nothing else is admissible as a set off, though it may be an excellent counterclaim. The distinction is important, because it carries with it this result—that a set off is still a defence proper to the plaintiff's action, while a counterclaim is practically a cross-action.”

    On page 255 Odgers states:

    “The modern counterclaim is entirely the creation of the Judicature Act, 1873. By virtue of section 24, sub-section (3) of that Act, every Judge of the High Court of Justice and of the Court of Appeal now has power to grant to any defendant in respect of any estate, right, or title, legal or equitable, claimed or asserted by him, all such relief against the plaintiff as such defendant shall have properly claimed by his pleading to the same extent as if the defendant had brought an action against the plaintiff for the purpose; and the court will give judgment in the plaintiff's action both on claim and counterclaim. The defendant's counterclaim need not relate to or be in any way connected with the plaintiff's claim, or arise out of the same transaction… It may exceed in amount the plaintiff's claim: Winterfield v. Bradnum(1).”

    Now, when the provisions now embodied in order VIII, rule 6 of the Civil Procedure Code were framed by the legislature, the word counterclaim was not introduced, but some of the attributes of a counterclaim were given to a set off, and some of the attributes of a set off at English law were modified. This has been done in regard to the attribute that “a set off is a statutory defence to the whole or a portion of the plaintiff's claim”, and that a defendant had to bring a cross-action for the balance due to him over what was due to the plaintiff. There is nothing in order VIII, rule 6 to make either of these attributes apply to a set off under that rule. On the contrary it is provided in sub-rule (2) that “The written statement shall rave the same effect as a plaint in a cross-suit so as to enable the court to pronounce a final judgment in respect both of the original claim, and of the set off; ….” And in order XX, rule 19(1) it is provided: “Where the defendant has been allowed a set off against the claim of the plaintiff, the decree shall state what amount is due to the plaintiff and what amount is due to the defendant, and shall be for the recovery of any sum which appears, to be due to either party.” These two provisions show that the court must treat the claim of the defendant exactly as if the defendant had filed a plaint, and the court must pass a decree in favour of the defendant if his claim is established, even though the claim of the plaintiff against the defendant is dismissed.

    I may note that the Civil Procedure Code does not make a set off under order VIII, rule 6 as wide as a counterclaim, as the suit of the plaintiff must be “for the recovery of money” and the set off of the defendant must be of “any ascertained sum of money legally recoverable by him from the plaintiff”.

    For the plaintiff Dr. Katju took objection that on the principle of illustration (g) to order VIII, rule 6, defendants 1 to 3 could not plead any set off. That illustration is as follows: “A sues B and C for Rs. 1,000. B cannot set off a debt due to him alone by A.” The illustration is very brief and does not explain on what principle it is based. I consider that the illustration is introduced to prevent a decree being given for A against B and C jointly, with a decree for B alone against A on a set off, as difficulties might arise in the execution of such a decree. But where B pleads that there is no joint debt due from him and C to A; as is pleaded by B in the present case, the case is different, and I do not consider that the illustration is intended to apply to such a case. There is nothing in the wording of order VIII, rule 6 to show that a set off could not be pleaded in such a case. The expression, “and both parties fill the same character as they fill in the plaintiff's suit”, is illustrated by illustrations (a) and (b) which show how a person fills different characters, for example as legal representative and as vendor.

    The last argument made was that in any case this matter cannot be raised by way of cross-objection; that the period for filing an appeal had elapsed when the cross-objection was filed, and that the defendants 1 to 3 were not making any objection to any part of the decree of the lower court, as that decree dismissed the claim of the plaintiff against these defendants with costs. But in my opinion these defendants are taking an objection to the decree on the ground that it omits to give them the relief which they asked for in the set off, a decree for Rs. 212-12-0. They could have filed an appeal against the decree on the ground of this omission. As they have been made respondents in this appeal, under order XLI, rule 22 they are entitled to “take any cross-objection to the decree which they could have taken by way of appeal”. In my view, therefore, on the claim for set off this Court should grant a decree in favour of defendants 1 to 3.

    I may enumerate the propositions of law on which I base this opinion, as follows:

    1. A set off under order VIII, rule 6 may be pleaded although the claim of the plaintiff is denied. It is not merely a defence to the plaintiff's claim and a decree may be granted under order XX, rule 19 to the defendant although the suit of the plaintiff is dismissed by the decree.

    2. A set off under order VIII, rule 6 is wider than a set off at English law, but it is not so wide as a counterclaim.

    3. Where a plaintiff sues several defendants alleging a joint debt, a defendant who denies take joint debt may plead a set off due to him alone.

    4. A defendant respondent whose set off has not been decreed or has not been referred to in the decree, may make this a ground of cross-objection in appeal.

    In regard to the last proposition it was pointed out that the lower court framed no issue on the set off and the judgment and decree do not refer to it. Under order VIII, rule 6(3) the plaintiff might have filed a written statement in reply to the set off, but he did not do so. He had admitted the facts alleged in the set off, and he depended for his defence to it on his claim that there was a joint debt. No issue was therefore necessary on the set off. It was apparently by oversight that the judgment and decree did not refer to it. When the court below dismissed the claim of the plaintiff to a joint debt, it should have decreed, the set off in favour of defendants 1 to 3. This Court should remedy the omission and should grant the defendants respondents a decree for the set off.

    Niamat-ullah, J.:— I agree with my learned brother in dismissing the appeal, but I wish to make a few observations with regard to the claim of defendants 1 to 3 in respect of the sum of Rs. 212-12-0. I feel considerable difficulty in holding that the defendants' claim comes within the purview of order VIII, rule 6 of the Civil Procedure Code. Before considering the terms of rule 6, I would like to mention the nature of the claim made by the defendants. The plaintiff claimed a decree for Rs. 7,068-9-9 against, defendants 1 to 5, alleging that they belonged to one joint Hindu family and had two branches of the joint family business, one at Bahraich under the name and style of Sarju Prasad Bechu Lal and the other at Chilwaria under the name and style of Bechu Lal Lalta Prasad. According to the plaintiff's case the entire joint family was liable for sums due from one or the other of the two concerns. It is in evidence that each branch had a separate “khata” with the plaintiff. The “khata” standing in the name of the branch Bechu Lal Lalta Prasad showed a balance of Rs. 212-12-0 against the plaintiff, so that the plaintiff had to pay that sum to Bechu Lal Lalta Prasad. On the other hand a sum of Rs. 7,581-5-9 was due to the plaintiff in the “khata” of Sarju Prasad Bechu Lal. According to the plaintiff's allegations contained in his plaint, the sum of Rs. 212-12-0 was due to the same body of individuals who were liable to pay to him Rs. 7,581-5-9. Accordingly he gave credit for Rs. 212-12-0, and claimed the balance of Rs. 7,368-9-9. The defendants 1 to 3 resisted the plaintiff's claim and pleaded that they were not liable to pay any part of what was due from Sarju Prasad Bechu Lal, that is to say, any part of Rs. 7,581-5-9. On the contrary they maintained that a sum of Rs. 212-12-0 ought to be paid by the plaintiff to them. Paragraph 17 of their written statement was as follows: “Rs. 212-12-0 are admittedly due to the contesting defendants by the plaintiff, for which a decree may be passed in favour, of the contesting defendants. A court fee of Rs. 16-8-0 is paid in respect thereof.”

    It is clear that defendants 1 to 3 intended to make a counterclaim against the plaintiff for Rs. 212-12-0 and paid a court fee of Rs. 16-8-0. For all practical purposes paragraph 17 of their written statement might well have been considered to be a plaint; and as the plaintiff did not deny that sum was due to the firm Bechu Lal Lalta Prasad, a decree in favour of defendants 1 to 3 could have been passed but for the difficulty that the defendants' claim in its nature is one cognizable by the court of small causes, and the Additional District Judge, before whom the suit was pending had no jurisdiction to pass a decree in a suit cognizable by a court of small causes.

    Order VIII, rule 6 of the Civil Procedure Code clearly contemplates cases in which the defendant claims to set off “against the plaintiff's demandan” ascertained sum of money legally recoverable by him from the plaintiff. Where the defendant does not claim a set off against the plaintiff's demand but a decree in his own favour, I doubt that order VIII, rule 6 can in terms apply. It is noteworthy that the entire claim of the plaintiff is to be decreed against one set of the defendants without any set off while the claim of another set of the defendants is to be decreed in its entirety against the plaintiff. It is not a case in which the decree in favour of the defendant is in respect of the excess left after the set off. As my learned brother is inclined to take the view that order VIII, rule 6, applies, and as his view leads to substantial justice between the parties, I do not consider it desirable to record my dissent from his well considered decision. In this view I agree in decreeing the cross-objection in terms proposed by my learned brother.

    By the Court:—We dismiss this appeal with costs, and we decree the cross-objection with costs throughout.

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    Comments

    Bansidhar Kunjilal v. Lalta Prasad
    (Jan 9, 1934)