Patna High Court
Prabhat Kumar Das vs Santhal Paharia Sewa Mandal on 17 December, 1977
Equivalent citations: 1978(26)BLJR700
JUDGMENT Madan Mohan Prasad, J.
1. This application in revision arises out of an order by which the court below has directed court-fee to be paid on the basis of an amendment of the written statement, which has been allowed subject to the payment of court-fee.
2. It appears that a petition under Order 6, Rule 17 of the Code of Civil Procedure for amendment of the written statement was filed by the petitioner on 4. 6. 1975. The amendment was for addition of a paragraph in the following terms:
(11 A). That the defendant is entitled to legal and equitable set off for the excess amount realized by the plaintiff in lieu of rent from the defendant in contravention with Section 4 of the Bihar Act III of 1947 and for which the defendant is ready to pay requisite court-fee and for the time being the defendant is paying court-fee of Rs. 10/- on the plea of the said legal and equitable set off.
A further prayer was made that in another paragraph the following may be added:
That in any view of the matter the defendant cannot be held to be defaulter in view of excess payment realized by the plaintiff from the defendant in lieu of rent and in contravention of Section 4 of the Bihar Act III of 1947 and to which the defendant is entitled to legal and equitable set off as stated above.
3. The learned Subordinate Judge ordered on 15.7. 1975 that the defendant should give the ascertained amount which he wants to claim as set off. It appears that thereafter a second application under Order 6, Rule 17 was filed on 6. 9. 76. In this application the prayer was for addition of a paragraph to the following effect:
That in view of excess realization of rent from July 1955 onwards up to February 1964 in contravention of Section 4 of the Bihar Act III of 1947, amounting to Rs. 5,400/- (Rupees five thousand and four hundred) as per account stated hereinafter, this defendant states and submits that the said amount of Rs. 5,400/- is deemed to have been paid in advance and lying with the plaintiff to be adjusted towards lawful rent payable by the defendant to the plaintiff. Thus the entire legally recoverable claim of the plaintiff shall be deemed to have been adjusted and satisfied and the plaintiff is not entitled to any rent up to February 1964.
A further prayer in this petition was made again to add to the written statement the following:-
That further the defendant cannot be held to be defaulter in view of aforesaid excess payment realized from the defendant in contravention of Section 4 of the Bihar Act III of 1947.
The learned Subordinate Judge, however, held that both the amendment petitions ought to be allowed. Accordingly, he did so. but, in view of the claim, which he held to be a claim for set off, he made the order of amendment of the written statement, subject to the payment of court-fee thereon under Article 1, Schedule I of the Court-fees Act. This order is being challenged in this Court.
4. Counsel for the petitioner has urged that the court below was not asked to allow both the petitions, inasmuch as, the prayer made in the first petition was superseded and substantially altered and it was only the second petition which ought to have been allowed. Further, it is said that the claim in the manner put forward in the second petition is merely a plea of payment and adjustment and neither a claim for recovery of the amount nor a claim for set off, and as such the order for payment of court-fee as prescribed in Article 1, Schedule I of the Court Fees Act is illegal.
5. The only question, which falls for decision in the present case, is whether the pleading in the second petition for amendment makes out a case of legal and equitable set off or it is merely a plea of payment.
6. Counsel has placed reliance on a decision of a learned single Judge of this Court in the case of Jyanti Lal and Anr. v. Abdul Aziz and Anr. and the decision in the case of the Tata Iron and Steel Co., Ltd. v. R.N. Gupta . In the former case a suit had been instituted for house rent and the defendants had filed their written statement wherein they had pleaded adjustment and satisfaction of a particular amount towards rent on the ground that there was an agreement between the parties that the tenant would spend money for certain improvements of the house and the same would be adjusted towards the rent. The question arose whether the claim amounted only to one of set off or it was merely a claim for adjustment or plea of payment. It was held that the plea in that case amounted only to plea of payment and adjustment and not one of set off. In the latter case of Tata Iron Steel Co. Ltd. a contractor had filed suit for, recovery of certain amount as loss alleged to have been suffered by him on account of a resale of commodities at a loss after wrongful rejection of the same by the defendant. The defendant had deducted a certain amount from the plaintiff's bill. The question, thus, arose, whether the defendant could deduct from the plaintiff's bill without claiming set off. In this connection, the learned Judges held that a plea of satisfaction or extinguishments of a debt or a claim set up merely by way of defence is very different from a plea of set off ; a plea of payment necessarily refers to a satisfaction of extinguishments of a debt effected prior to the stage of the defence, whereas a plea of set off is in the nature of a cross claim and in effect it prays for a satisfaction, or extinguishment of a claim, to be made in the future after the date when the plea has been set up and that if it were held to be merely a plea regarding adjustment of accounts and no more, no court-fee would be payable on the amount mentioned in such a plea.
7. Before I discuss the merits of the instant case, it must first be pointed out that in the first application for amendment rightly or wrongly the petitioner had claimed in so many words set off, of a particular amount. But, it appears that in the second petition for amendment the stand taken up was entirely contradictory, as would appear from the contents of the second petition which I have quoted above. The first petition appears to have been substituted by the second petition for amendment. It is only the prayer in the second petition which should have been allowed by the court below. Therefore, this case must be decided on the basis of the second petition for amendment.
Rule 6 of Order VIII of the Code of Civil Procedure, deals with set off and is as follows :-
6(1). Where in a suit for the recovery of money the defendant claims to set off against the plaintiff's demand any ascertained sum of money legally recoverable by him from the plaintiff, not exceeding the pecuniary limits of the jurisdiction of the Court and both parties fill the same character as they fill in the plaintiff's suit, the defendant may, at the first hearing of the suit, but not afterwards, unless permitted by the Court, present a written statement containing the particulars of debt sought to be set off.
(2). The written statement shall have 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; but this shall not effect the lien, upon the amount decreed, of any pleader in respect of the costs payable to him under the decree.
(3). The rules relating to a written statement by a defendant apply to a written statement in answer to a claim of set-off.
It may be noticed after a reading of the aforesaid rule that the amount claimed to be set off must be an ascertained sum of money and next, such claim must be legally recoverable from the plaintiff. The other requirements of the rule need not be elaborated here. It need also be noticed that the effect of a set off is that a written statement has the same effect as a plaint in a cross-suit. It is well known that Rule 6 contains the plea of legal set off. Apart from it there is a plea of equitable set off. A set off is said to be defined as the "extinction of debts of which two persons are reciprocally debtors to one another by the credits of which they are reciprocally creditors to one another". A plea of set off is different from a plea of payment. A plea of payment merely alleges a satisfaction, or extinguishments of a debt, but a plea of set off is different inasmuch as there it is a claim made by the defendant against the plaintiff and in effect, as observed in the case of Tata Iron and Steel Co. Ltd., it prays for a satisfaction, or extinguishments of a claim to be made in future after the date when the plea has been set up. The distinction thus between a plea of payment and a plea of set off is very fine, As adjustment which has been made prior to the suit would not be in the nature of a set off. If, however, a claim is made and the adjustment is to be made in future, after the suit, it would be so.
9. As I have said, in the case of set off, the amount must also be legally recoverable. One of the tests, therefore, adopted by courts for finding out the distinction between a plea of payment and set off is as to whether a suit would lie or the recovery of the amount claimed. The statements in a particular case have, therefore, to be examined from this point of view, as well. It has to be seen whether the defendant could have instituted a suit for the recovery of the aforesaid amount. In a case where the statement is that of a plea of payment, it merely states that the amount which was due to the defendant had been adjusted towards the payment of the amount due to the plaintiff from the defendant. Where the defendant alleges that the debt which the plaintiff owed to him has been wiped out partly or wholly by the adjustment of the debt due to the defendant, obviously, no suit can lie for the recovery of an amount of that kind. In the case of set off, however, it is not so. In case the defendant alleges that there is still outstanding debt payable by the plaintiff to the defendant and the defendant prays in the suit that the amount aforesaid must be deemed to wipe of or extinguish the debt due from the defendant to the plaintiff it is a plea of set off. In the case of set off, therefore, the debt exists until the plea of set off is made and allowed, not so in the case where there is a plea of payment.
10. In the light of the aforesaid principles, I would examine the content of the plea in the present case. What is it that the defendant in the present case states and asks for ? From the facts aforesaid it would appear that the defendant is first saying that there was an excess realization of rent to the extent of Rs. 5,400/-. Next he says that this amount be deemed to have been paid in advance and adjusted to the rent payable by the defendant. He further says that the entire amount was recoverable and it should be deemed to have been adjusted towards the rent. Here it is quite obvious that the defendant is not setting up a claim which has to be adjusted in future, namely, in the suit; neither is it a claim for recovery of that amount. It is a statement of facts relating to the past, namely, that an excess payment was made and that must be deemed to have wiped of the arrears of rent. The purport of this amendment appears to be, as stated in the other paragraph which is sought to be added to the written statement, that the defendant wanted a declaration that he was not a defaulter because of the excess payment made by him which satisfied the dues towards rent. It appears, therefore, that all that is alleged in the present case is a plea of payment had adjustment. Now, testing the plea of the defendant in the present case on the test whether a suit could lie, it is obvious that in view of the statement aforesaid no such suit would lie. The defendant stated that what was due to him had been paid by way of advance towards payment of rent. The defendant is not alleging any subsisting claim. Thus, he could not have filed a suit for the recovery of the amount and for that reason again the plea raised in this case cannot be deemed to be a plea of set off. The learned Advocate General who appears for the Opposite Party in this case has not seriously contended that the statements indicate a case of set off.
11. It is well known that Article 1, Schedule I of the Court Fees Act deals with a case of set off, and court-fee is payable on a claim of set off. Obviously because, the effect of plea of set off is like that as a plaint as stated in Rule 6 of Order VIII of the Code. There is no question of levying court-fee on a plea of payment and adjustment made by the defendant.
12. I would, accordingly, set aside the order of the learned Subordinate Judge demanding court-fee As stated earlier, the learned Subordinate Judge has allowed both the amendments to be incorporated. The order allowing the first petition of amendment is also set aside but that allowing the second petition is upheld.
13. In the result, the application succeeds, but in the circumstances of this case there will be no order as to costs.