Equitable set-off may be allowed where cross-demands arise from the same transaction and are closely connected.

Order VIII Rule 6 CPC confines legal set-off to an ascertained sum recoverable in a money suit, while equitable set-off is a separate equitable doctrine available where cross-demands arise from the same transaction or are otherwise so closely connected that separate proceedings would be inequitable. Unlike legal set-off, it is not available as of right and depends on judicial discretion. On the stated facts, the amended written statement was treated as sufficiently connected with the plaintiffs' claim to be considered at trial as a plea of equitable set-off, with its ultimate maintainability left to be tested on evidence.

---

---

Issues: Whether the amendment of the written statement could be sustained as a plea in the nature of equitable set-off, though it did not amount to a legal set-off or counterclaim.

Analysis: Order VIII Rule 6 of the Code of Civil Procedure, 1908 governs legal set-off and requires an ascertained sum recoverable in a suit for recovery of money. Equitable set-off is a distinct doctrine founded on equity, justice and good conscience, available where cross-demands arise out of the same transaction or are so connected in their nature and circumstances that it would be inequitable to insist on a separate suit. Such a plea is not available as of right and rests in the discretion of the court. On the facts, the amended claim was treated as sufficiently connected with the plaintiffs' claim to be considered at trial as a plea of equitable set-off, leaving its ultimate acceptability to be tested on evidence.

Conclusion: The amendment was rightly allowed to the extent that the defence could be treated as a plea of equitable set-off, and the question whether that claim is ultimately maintainable was left for determination at trial.

Ratio Decidendi: A claim may be permitted as equitable set-off if it arises from the same transaction or is so connected with the opposing claim that it would be inequitable to refuse adjustment, and the allowance of such a plea lies within the court's discretion rather than as a matter of right.

---