Q. ‘A’ sues ‘B’ on a bill of exchange for Rs. 10,000. ‘B’ holds a judgment against ‘A’ for Rs. 15,000. ‘B’ claims set-off against ‘A’ for 15,000. Will ‘B’ succeed? Give reasons and also refer relevant provisions in this regard
State Bank Law Officer Exam. (Based on memory)
Ans: Yes, ‘B’ will succeed—Order 8, Rule 6 of Civil Procedure Code.
Reasons: Rule 6 of Order 8 of Civil Procedure Code deals with provisions relating to set off (legal set off).
According to Rule 6 of Order 8 following are the essential conditions for applicability of the principle of set off:—
(i) Suit must be for the recovery of money
(ii) Sum of money must be ascertained
(iii) Such sum must be legally recoverable
(iv) It must be legally recoverable by the defendant/all the defendants if more than one.
(v) It must be recoverable by the defendant from the plaintiff or from all the plaintiffs, if more than one.
(vi) It must not exceed the pecuniary jurisdiction of the court in which the suit is brought. In the given problem we find that all the essential conditions for the application of set off (Legal set-off) are satisfied. Hence, ‘B’ will succeed in his claim of set-off against ‘A’.
Note: (1) The facts of this problem have been taken from Illustration (d) of Order 8, Rule 6 which reads as follows—“A sues B on a bill of exchange for Rs. 500. ‘B’ holds a judgment against A for Rs. 1,000. The two claims being both definite, pecuniary demands may be set-off”.
(2) Set-Off: The literal meaning of set-off is a claim against a claim—M/s Gupta Private Loan Committee v. Moti Ram, AIR 1984 J&K 38.
A claim of defence by defendant against the claim of plaintiff in a money suit is called set-off—Aninda Saha v. Amal Shaha, AIR 2001 NOC 101 Cal.
Set-off means the deduction of one demand from another cross demand. It is a demand which a defendant makes against the plaintiff for the purpose of liquidating the whole or a part of his claim. This rule deals with legal set off as it is restricted only to “ascertained sum”—Learned author P.C. Sarkar in his work on Civil Procedure Code (7th Edition, Volume 1, Page 443).
Source: Kishor Prasad, Problems & Solutions on Civil Law, Universal