1. These are two cases, an appeal and a cross appeal, which have arisen out of a suit instituted by one Hasan Shirza, who is the respondent before us against the Muslim Bank carrying on business as a Banking concern at Hyderabad and four others, in the Court of City Civil Judge, Hyderabad, on the allegation that the Muslim Bank took up on lease the building belonging to the plaintiff on 1st Isfandar 1348 Fasli on a monthly rental of Rs. 200 for a period of five years and executed a rental agreement in favour of the plaintiff on 20th Khurdad 1348 Fasli. The plaintiff alleged that according to the terms of the lease deed, the plaintiff had the right to eject the defendant from the premises if six months rent fell in arrears and as the defendant had paid the rent only to the end of Thir 1349 Fasli, according to the terms of the lease deed the tenancy terminated, and the plaintiff was entitled to eject the defendant. The plaintiff prayed for (a) a decree for ejectment against the defendants; and (b) a decree for the amount of rent due viz. Rs. 20,310 upto the date of the suit. One of the directors, Shaik Ahmad was impleaded in the suit as it was alleged that he took upon himself personal, responsibility for the payment of the amount and prevailed upon the plaintiff to stop filing this suit. This suit was filed on 19th Azur 1353 Fasli. An objection with regard to the valuation of the suit and the jurisdiction of the Court was raised by the Office and the Court finally decided that the value of the suit was beyond the pecuniary jurisdiction of the City Civil Court according to the market value of the suit property and directed the return of the plaint to the proper Court. This order was passed or 16th Ardibihest 1353 Fasli but the actual order directing the plaintiff to present the plaint to the proper Court as required by S. 71, Civil P.C. was made on 30th Aban 1353 Fasli. After this endorsement was made the plaintiff represented the plant in the High Court on 1st Dai 1334 Fasli. Defendants 1 and 6 filed separate written statements. The defendants while admitting the execution of the rental agreement in favour of the plaintiff, pleaded that they had spent large sums of money affecting repairs and improvements to the building and claimed that they were entitled to adjust a sum of Rs. 10,189-12-6 out of the amounts spent by them towards the rent that the plaintiff was demanding. The defendants also claimed credit for (a) a sum of Rs. 869-10-0 being the amount of costs awarded to the defendant by the City Civil Court when ordering the re-presentation of the plaint to the proper Court; (b) certain amounts which they said they had paid to the creditors of the plaintiff under instructions from the plaintiff; and (c) the amounts paid by the defendant on account of Municipal Taxes and Water Charges which the plaintiff was bound to pas in law. It was also urged by the defendants that a portion of the rent claimed had become barred. They contended that the plaintiff was not entitled to deduct the period be when the date of the order directing the return of the plaint by the City Civil Court and the date of the actual presentation of the plaint in the High Court for the purposes of computation of the period of limitation. The lower Court framed the necessary issues and oral and documentary evidence was led by the parties. After going into the account relating to the amounts paid by the defendants towards rent account the Court passed a decree for Rs. 13,373-98 as against defendant 1 and dismissed the suit as against the others. Defendant 1 and defendant 6 have filed an appeal jointly while a cross appeal has been filed by the plaintiff with regard to certain items which were wrongly given credit for. The lower Court dismissed the suit as regards ejectment on the ground that the plaintiff had to appear before the Bent Controller and obtain his permission. The plaintiff appeared before the Bens Controller and his application was dismissed. Against this order the plaintiff has filed a revision before us. We heard the arguments of the respective Advocates in the appeal and the cross-appeal, while, we adjourned the hearing of the revision pending the decision by the Full Bench on the question as to whether as against an order on appeal from the House Rent Controller, a revision would lie to the High Court or whether the remedy lay by way of a writ of certiorari.
2. Before dealing with the various items for which the defendants claim credit it would be convenient to consider about the question of limitation as it is contended that the plaintiff is not entitled to deduct the period from 16th Ardibhisht 1353 Fasli to 1st Dai 1354 Fasli.
3. The contention of the learned Advocate for the appellants is that the order directing the return of the plaint was made by the City Civil Court on 16th Ardibhisht 1363 Fasli and the plaintiff chose to re-present the plaint in the High Court only on 1st Dai 1354 Fasli and this period cannot be regarded as a period as during which the plaintiff could be said to have been prosecuting a civil proceeding with due diligence and in good faith in a Court without jurisdiction, within the meaning of S. 14, Limitation Act. It has to be recognised that this section should be liberally construed without disregard of the words of the statute.
4. The scope of S. 14, Limitation Act is that where a plaintiff has been prosecuting a civil proceeding in a Court and that Court by reason of want of jurisdiction either pecuniary or otherwise is unable to go on with the proceeding and the plaintiff is compelled to go on with the suit in another Court of competent jurisdiction, the period during which the plaintiff wish due diligence carried on the proceedings in the first Court would be deducted for the purposes of computing the period of limitation for the suit. Explanation I to this section states that the day on which the suit was instituted in the first Court and the day on which the proceedings ended in the Court would both be taken into account for excluding the time.
5. In the case before us the City Civil Court ceased to have jurisdiction after the value of the Bait was assessed on the market value of the property and therefore the City Civil Court had to return the plaint for presentation to the proper Court, under S. 71, Civil P.C. Section 71, Civil P.C. enacts that the plaint could be returned for presentation to the proper Court at any stage of the suit and at the time of the return of the plaint for presentation to the proper forum the Court shall endorse on the plaint the particulars as to when the plaint was originally presented, and the reason why it is being returned. The return of the plaint to the proper Court is complete only after the endorsement has been made by the Court on the plaint setting out the particulars given in Sub-s. (2) of S. 71, Civil P.C.
6. It would appear from the proceedings in the City Civil Court that although an order stating that the City Civil Court had no jurisdiction to try the suit because the value of the suit was beyond its pecuniary jurisdiction was passed on 16th Ardibihisht 1353 Fasli the necessary endorsement relating to the return of the plaint was made only on 30th Aban 1353 Fasli. The endorsement of the dates of presentation and return are imperative under the law. This endorsement is a part of the Court's duty; therefore, until the endorsement is made, the proceedings cannot be said to have come to an end. The reason why an endorsement by the Court has been considered to be essential is in order to know as to whether the same plaint which was filed in the original Court has been taken back and represented in the Court of competent jurisdiction. Ordinarily, no doubt, the plaintiff cannot take advantage of his own delay, but where there has been a delay on the part of the Court in making the endorsement as required by the Civil P.C. he is entitled to an exclusion of the period till the date the actual endorsement was made. That this is the settled law is borne out by the decisions of the Bombay High Court in the case of Basvanappa v. Krishnadas, 45 Bom. 443 : (A.I.R. (8) 1921 Bom. 379), and the Madras High Court in the case of Gopisetti Narayanaswami Naidu v. Tellanraju Venkata Subbirayadu, 9 M.L.T. 315 : (9 I.C. 541). We are, therefore, of opinion that the plaintiff is entitled to exclude the period from 16th Ardibihisht 1353 Fasli to 30th Aban 1363 Fasli. If this period were excluded then no part of the claim for rent would be barred.
7. The items for which the defendants claim credit may be classified under the following heads : (i) Amounts spent on account of repairs and improvements to the suit house; (ii) amounts paid by the defendant on account of Municipal Taxes and Water Charges due in respect of the suit house direct to the Municipality; (iii) the amount of costs awarded by the City Civil Court to the defendants against the plaintiff.
8. It is necessary to consider whether the sums for which the defendants claim credit, on a proper interpretation of the written statement, amount in law, to a plea of payment or adjustment of accounts, or whether they partake of the nature of a set-off such as is contemplated by S. 110 Civil P.C. (O. 8, R. 6, Indian Civil P.C.) It would be regarded as a plea of payment where the satisfaction or extinguishment of the debt is effected prior to the stage of defence, while it would be a plea of set-off where it is sought to extinguish the claim after the date when the defence is raised, Set-off may be of two kinds; a legal set-off and an equitable set-off. It would be called a legal set-off where the amount claimed is an ascertained, sum, and where it is legally recoverable. It would be called an equitable set-off where the defendant is entitled to get credit for the amount though not in law but by way of equity equitably and where, for example, the amount claimed is an unascertained sum. In the case of a legal set-off the amount could be claimed by the defendant as a matter of right subject to payment of court-fee while in the case of an equitable set-off the awarding of the amount is within the discretion of the Court. Where in order to as certain the amount claimed by the defendant by way of an equitable set-off, it would be necessary to enter into a protracted enquiry and would cause delay, the Court may refuse to decree the amount in the same suit. Whether it is an equitable set-off or a legal set off a person would be entitled to a decree only if he pays the requisite court-fee on the amount claimed. The majority of the High Courts are of the opinion that it makes no difference whether it is a legal set-off or an equitable set-off. In either case the defendant would be entitled to a decree for the same only if he pays court-fee on the amount claimed. In this connection we might refer to the case of Lakshmanan Chettiar v. Ramanathan Chettiar, A.I.R. (22) 1935 Mad. 115 : (58 Mad. 338) and in the case of Bhikubai Govindji & Co., C.P. Contracting & Mining Syndicate, Nagpur, 165 I.C. 430 : (A.I.R. (23) 1936 Nag. 222) and the case of Hosiery Knitting Mills Ltd., Delhi v. S. Wahid-ud-din, 183 I.C. 838 : (A.I.R. (26) 1939 Lah. 166). Therefore, if any of the items claimed by the defendant partakes of the nature of, either a legal set off an equitable set-off, the defendant would have to pay the court-fee on the amount claimed.
9. The claims made by the defendants are of different categories so far as the amount that the defendants claim on account of repairs and improvements to the suit house are concerned, we are of opinion that inasmuch as the amount is not ascertained the claim would partake of the nature of an equitable set-off.
10. As regards the amounts paid by the defendants on account of Municipal Taxes and Water Charges and also those amounts which the defendants paid towards the payment of decrees against the plaintiff are liable to be deducted from the rent and would not come within the category of a legal or equitable set-off.
11. The decretal amount would certainly fall within the four corners of S. 110, Civil P.C., and would constitute a claim, by way of a legal set-off.
12. Let us take the claim relating to the sums spent on repairs and improvements. The amount claimed by the defendants comprises of two items : (1) A sum of Rs. 10,000 for which the defendants allege they had express authority from the plaintiff to spend the sum, even at the time of the commencement of the lease. (They rely upon cl. 4 of the lease deed-Exhibit (1), (2) Another sum of Rs. 1,089-13-0, which they Bay, they spent over and above the sum of Rs. 10,000. Wish regard to this amount also they allege they had authority from the plaintiff. In proof of that authority they rely upon Ex. Alif 10, which purports to be a receipt dated 21st Khurdad 1348 Fasli executed by the plaintiff in favour of the Muslim Bank and Stores.
13. Much of the argument in this appeal was directed against the claim for these two items. As regards the first item of Rs. 10,000 the contention of the learned Advocate for the respondents is that the defendants have not proved the actual expenditure for repairs and therefore they are not entitled to the amount. Alternatively it is contended that under one of the conditions of the lease-deed, where the defendants are in arrears of the rent far over six months, the defendants are debarred from adjusting the whole of the sum of Rs. 10,000 even if they had spent that sum for repairs, but they were entitled to get credit only for an amount equivalent to the rent for six months. The learned Advocate for the appellant argues that there was no necessity to prove the actual expenditure incurred on account of repairs effected because the plaintiff never raised any objection to that. As regards the second argument that the defendant is not entitled to appropriate more than six months rent for repairs where the rent is in arrears for over six months, the defendants' Advocate argues that such a condition is in the nature of a penalty and therefore the Court would net enforce it.
14. It would be necessary to look into the pleadings and proceedings in the case in order to decide as to whether the sums of Rs. 10,000 and Rs. 1,089-12-6 are payable to the defendants. In para 2 of the written statement which is-in reply to para 2 of the plaint defendant l merely stated that permission had been given by the plaintiff to effect repairs and improvements upon a limit of Re. 10,000. He entirely based his claim for the sum of Rs. 10,000 merely on the authority given to him by the plaintiff in the lease deed to spend sums upto Rs. 10,000 and did not claim the amount because be had spent the sum. This fact is also borne out by the statements made by the defendant when called upon by the Court to give particulars of the claim. On 4th Ardibihisht 1364 Fasli he was asked by the Court to give details of the amounts spent by him on account of repairs. He took time to give the details, but on a later date he stated to the Court that details of the sum of Rs. 10,000 were not given because he was claiming the amount on the basis of the stipulation in the lease deed.
15. Under the law where a lessee effects repairs which the landlord was bound to make and he failed to do so and the tenant actually effects the same it is open to the tenant either to deduct the amount spent from the rent as and when the amount is spent or recover it from the landlord otherwise. In this case, however, it is not a case of the lessee having had to effect repairs owing to the default of the lesson but the lessee had been expressly authorised under the terms of the lease to carry out repairs and improvements upto a maximum amount of Rs. 10,000/- The covenant in the lease deed is only an enabling covenant authorising the lessee to effect repairs and improvements upto a limit of Rs. 10,000. It therefore follows that the defendant in this case would be entitled to get the amount if he can satisfy the Court that he actually spent the amount. The question is, as to under what category of claim this amount would come under. Gould it be regarded as a legal set-off? It cannot be considered to be a legal set-off because although the amount claimed is a fixed sum still the Court cannot grant a decree to the defendant for Rs. 10,000 unless it is satisfied that the amount claimed was actually spent. But in order to get the amount from the plaintiff he ought to be able to prove actual amount spent by independent evidence. As pointed out above the defendant did not choose to lead any evidence in this regard. Thus it is cleat that it is only after investigation and enquiry that the Court can arrive at the actual amount payable to the defendant. This item, therefore, cannot be classed as a legal set-off as there is no ascertained sum before the Court.
16. At best this could be regarded as partaking of the nature of an equitable set-off and as pointed out by us above where it is an equitable setoff, there is always a discretion vested in the Court to award it or refuse to award it, In this connection we would like to observe that just as the defendant has produced receipts and vouchers for payments made by him to the creditors of the plaintiff and towards Municipal Taxes, it was upon him to have produced vouchers likewise, for the amounts actually spent in respect of the repairs and improvements. The learned Advocate fox the respondent took us through the evidence on record and invited our attention to one of the annual reports of the defendant Bank, which is an admitted document. The annual report contains extracts from the plaintiff's account with the defendant Bank and we happened to go through those accounts and their perusal shows that at various places wherever items of repairs to the house were debited to the plaintiff a remark is made stating that vouchers are not available. Ordinarily we would presume that the annual report of a Banking concern would represent the state of affairs of the Bank as they stood. It was urged by the learned Advocate for the appellant that he might be given an opportunity to prove his accounts relating to the repairs and improvements to the suit house. We do not think that it would serve any useful purpose by remanding the case to the lower Court at this stage, especially when the report shows that there is no documentary proof for the actual spending of the money. We think that the defendant is not entitled to set off the sum of Rs. 10,000 either in law or in equity as against the claim of the plaintiff.
17. Having come to the conclusion that the defendants are not entitled to the sum of Rs. 10,000 we do not think it necessary to go into the question as to whether they are debarred from claiming the amount by reason of their having been in default in the payment of rent for over six months. We, therefore, agree with the lower Court that this item of Rs. 10,000 is to be disallowed though our reasons for disallowing the same are different from those of the lower Court.
18. The second item under the same heading of repairs to the house, is the sum of Rs. 1,089-12-6. The defendant contends that this amount is over and above the sum of Rs. 10,000 which he was entitled to spend under the terms of the lease deed. The documentary Evidence in support of this claim is Ex. Alif 10. As regards this item we are of opinion that the defendant is not entitled to the same. Exhibit Alif-11 which is dated 25th Khurdad 1346 Fasli is a letter written by the plaintiff to the defendant. In this letter the plaintiff says that the defendant is empowered to spend any further amount regarding construction upto Rs. 10,000. It has to be noted that this document, Ex. Alif-11 is of a date subsequent to that of Ex. Alif-10. In this letter the plaintiff expressly says that the defendant is entitled to spend any further amount upto Rs. 10,000. This can only mean that the plaintiff authorized the defendant to spend on account of repairs upto a maximum-of Rs. 10,000 and not above. How could it be construed that the plaintiff bad agreed to the defendant spending a further sum of Rs. 1,089-12-6? Further it was stated that vouchers in respect of this item had been filed in Court, No vouchers have been filed. The defendant should have produced the relative accounts showing the entry relating to this item of expenditure, For all the above reasons, we hold that defendant is not entitled to this amount.
19. Under S. 108(g), T.P. Act, where the tenant pays the Municipal Taxes and Water Charges which the landlord is primarily liable to pay, the payment would be regarded in substance as payment to the landlord. By a fiction of law the tenant would be considered as authorized by the landlord to adjust the rent towards payments made by him. Therefore these amounts would be considered to be payments and not in the nature of a cross-claim or set-off. The plea of the defendant amounts to this that the rent owing to the plaintiff has been satisfied in part by these payments. The defendant would be entitled to credit for the taxes and water charges paid during the pendency of the suit.
20. The next item that has to be considered is the sum of Rs. 869-10-0 being the costs awarded to the defendant by the City Civil Court. As observed by us above, this item is an ascertained sum. It is an amount which is legally recoverable from the plaintiff by the defendant, and therefore, it partakes of the nature of a legal set-off. Being a legal set-off, we are of opinion that the defendant should pay court-fee on the same and is not entitled to it without payment of court-fee. Illustration D of S. 110 clearly shows that the two claims of the plaintiff and the defendant are pecuniary claims and therefore may be set off against each other. We hold that, this is a legal set-off which can be allowed, but before a decree could be passed in favour of the defendant for this amount, it is essential that the defendant should pay court-fee on the same and no plea of set-off would be entertained by a Court until the court-fee in respect of the same has been paid. Reliance was placed by the learned Advocate for the respondents on the decision of the Lower Burma Chief Court in the case of Muthu Erulappa v. Venku Thathayya, 36 I.C. 967 : (A.I.R. (4) 1917 L.B. 179) and he argued that the defendant could not be allowed to pay court-fee at this stage. We are of opinion that that decision cannot apply to the facts of this case for in that case the original Court had not decided the question of valuations. In the case before us there is no question of valuation being determined because it is an ascertained sum. Section 642, Civil P.C., permits the Court to grant time to a party to make up the whole or part of the court-fee payable where the document has been filed on no court-fee or deficit court-fee. There is a discretion vested in the Court to allow the court-fee to be replenished and this can be done at any stage. As was observed by their Lordships of the Privy Council this discretion extends to the whole or any part of the fee prescribed and can be exercised at any stage. In this connection the leading case of Faizullah Khan v. Mauladad Khan, 56 I.A. 232 : 117 I.C. 493 : (A.I.R. (16) 1929 P.C. 147) is an authority on the point. Therefore, the Court has always a discretion to grant time for the payment of the court-fee. We see no reason why the defendant should not be allowed to pay the court-fee at this stage. We are, therefore inclined to follow the view of the Patna High Court in the case of Jugal Kishore Narain Singh v. Bankey Beharilal, A.I.R. (22) 1935 Pat. 110 : 156 I.C. 344. It was argued that this decretal debt was clearly barred and to allow the defendant credit for this amount would be depriving the plaintiff of a valuable right of limitation. We cannot uphold this argument. In order to consider whether a claim by way of set-off made by the defendant is within time, the date to be taken into consideration is the date of the suit and if on that date the defendant's claim was within time, no question of limitation would arise because on that date it was an amount which was legally recoverable. We are supported in this view by a judgment of the Calcutta High Court in the case of Harindranath v. Sourindranath, I.L.R. (1942) 2 Cal. 485 : (A.I.R. (29) 1942 Cal. 559). We, therefore, hold that on the defendant depositing the requisite court-fee payable on the Sum of Rs. 869-10-0 in the lower Court and in the appeal here he would he entitled to set off the amount as against the claim of the plaintiff. We grant the defendant two weeks time to pay the requisite court-fee.
21. A last argument was advanced by the learned Advocate for the defendant stating that under the provisions of S. 238, Civil P.C., where a suit for possession has been dismissed, no decree could be passed for rents pendente lite. Section 238 corresponding to O. 20, R. 12, Indian Civil P.C., merely shows the procedure to be followed when passing a decree in a suit filed for possession of immovable property and for means profits or rents. No doubt where a plaintiff's suit for possession of property is dismissed by reason of want of title in the plaintiff to the suit property, the claim for rent pendente lite also would not be decreed because a person who has no title to the property cannot claim compensation for use and occupation of the property. But where plaintiff's title to the property is not questioned and the Court is unable to grant the relief for ejectment by reason of the jurisdiction to grant the same having been vested in another authority by special law his claim to rent pendente lite cannot be affected and he could be given a decree. One case of our High Court namely, Mahomed Husain Khan v. Nawab Mir Nazir Ali Khan, 37 Deccan Law Rept. 178 is distinguishable because in that case their Lordships Qamar Hasan and Siadat Ali Khan JJ. held that because the plaintiff did not give the statutory notice and the plaintiff was at fault, he would not be entitled to a decree for the rent pendente lite. Another case which is also distinguishable is the case reported in 147 I.C. 166?). In that case the property in respect of which rent pendente lite was sought was auctioned and sold to a third party during the pendency of a litigation. Under those circumstances the Judges held that the person who became the owner there of could not be deprived of the income from the property. This argument of the learned Advocate cannot prevail.
22. The cross-appeal of the respondent relates to two item which the lower Court had given credit for. They are (1) a sum of Rs. 1,450 (2) a sum of Rs. 612-6-0. The contention with regard to item No. 1 is that an identical amount has been given credit for already. The lower Court inadvertently deducted the amount over again. The learned Advocate for the appellant rightly conceded that the amount could not be given credit for. We therefore modify the decree by adding the amount of Rs. 1,450 to the decretal amount payable to the plaintiff. As regards the second' item which relates to the tax paid by the defendant for a portion of the house, plaintiff's Advocate argues that that amount of tax is not payable by the plaintiff because that tax was levied on account of the defendant having sub-let the house and deriving rent. There is no material before us to decide about this. This fact that the bill for the tax payable was sent in the name of the defendant is not conclusive on the point. We are not prepared to deduct the amount, once it comes under the category of taxes payable to the Municipality which the lessor is bound in law to pay.
23. In the result the appeal of the defendant is allowed in part and the cross-appeal of the plaintiff is also partially allowed. The decree of the lower Court would be modified by the addition of the sum of Rs. 1,450 and by the deduction of amounts paid by the defendant on account of Municipal Taxes and Water Charges during the pendency of the suit, and there will be a decree for Rs. 869-10-0 in favour of defendant 1 on his paying the ad valorem court fee payable in lower Court as well as in this Court.
24. The learned Advocate on behalf of defendant 6 argued that the lower Court was wrong in not allowing separate costs. We are of opinion that it is a matter for the taxing authority as the Court has dismissed the suit of the plaintiff as against defendant 6 with costs. The judgment does not require any modification.
25. As regards the costs of this appeal and cross-appeal the plaintiff would be entitled to get his costs to the extent of the amount for which the defendant has appealed viz., Rs. 869-10-0 while the defendant would be entitled to costs of both the Courts on the decree for Rs. 869-10-0 in his favour. This judgment will govern Appeal No. 9/1/1960. A decree be framed in accordance with the directions contained in Paras 19 and 21 supra, (paras 22 and 26 of this report-Ed. 1 on 15-11-1950, and if the defendant appellant fails to pay the court-fee by that date as ordered in para 19 supra, the plaintiff would be entitled to a decree without deduction of the sum of Rs. 869-10-0 and proportionate costs thereon.