1939 (10) TMI 8 - HC - Indian Laws

Defendant's Set-Off Claim Denied in Recovery Suit, Court Emphasizes Proper Court Fees

Girdharilal Chaturbhuj Versus Surajmal Chauthmal Agarwal

The lower Court found that the set-off pleaded by the defendant could not be allowed in the suit for recovery of an amount due on a pro-note. The ... - Issues:1. Legal set-off claimed by the defendant in a suit for recovery of an amount due on a pro-note.2. Unclear nature of set-off pleaded by the defendant - legal, equitable, counter-claim, or plea of satisfaction.3. Requirements for claiming a legal set-off under Order 8, Rule 6, Civil Procedure Code (CPC).4. Validity of the defendant's claim for a commission over reduction of losses and profit from transactions in Bombay.5. Payment of court fees on a set-off as per Court-fees Act and related case laws.6. Court's discretion in allowing equitable set-off and necessity for a protracted inquiry for determination of the sum due.Analysis:1. The plaintiff filed a suit for the recovery of an amount due on a pro-note for Rs. 4000. The lower Court found that the set-off pleaded by the defendant could not be allowed in this suit. The defendant was given the liberty to bring a separate suit against the plaintiff for his claim. The defendant challenged this interlocutory order through revision. The nature of the set-off claimed by the defendant was unclear, whether legal, equitable, counter-claim, or plea of satisfaction.2. The defendant's defense had two main aspects. Firstly, the defendant claimed a commission on reducing the plaintiff's losses in wagering contracts in Bombay, amounting to approximately Rs. 5000. Secondly, the defendant asserted a profit of Rs. 2240 from transactions in Bombay. The requirement for claiming a legal set-off under Order 8, Rule 6, CPC mandates that the sum claimed must be ascertained and legally recoverable.3. The claim for the commission over the reduction of losses was not an ascertained sum as it required further accounting. The other item of Rs. 2240 was an ascertained sum, but it was questioned if it was legally recoverable due to arising from gambling transactions. The parties' roles and the character in which they acted were also unclear from the pleadings, necessitating further clarification through evidence.4. The Court emphasized the necessity of paying court fees on a set-off as per the Court-fees Act. The defendant's attempt to avoid binding himself to a legal position requiring court fees was noted. The Court held that fees must be paid on the full amount of the set-off, not just the excess over the plaintiff's claim. The defendant's failure to pay the court fee hindered the Court from considering the set-off claim.5. The Court discussed the discretion in allowing equitable set-offs, emphasizing that such claims must arise from the same transaction. In this case, the Court found that a protracted inquiry would be needed to determine the sum due, leading to the rejection of the defendant's claim for a set-off in the present suit. The Court concluded that the lower Court was correct in directing the defendant to pursue a separate suit for the set-off claims.