CIVIL PROCEDURE CODE, 1908

Set-off and Counter- Claim

Order VIII

Submitted By- Submitted to-

Nimrat Brar Dr. Karan Jawanda

300/14 Semester- 7

B.Com- LLB

6th Semester
 Set-off and Counter- Claim

INDEX

ACKNOWLEDGMENT.....................................................................................................................II

TABLE OF CASES...........................................................................................................................III

WRITTEN STATEMENT...................................................................................................................1

SET – OFF..……………..................................................................................................................3

COUNTERCLAIM……………………..............................................................................................8

DISTINCTION BETWEEN SET – OFF AND COUNTERCLAIM.............................................................13

BIBLIOGRAPHY…………………………………………………………….……………………..V

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 Set-off and Counter- Claim

ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who have helped me a lot in preparing this
project report.

My sincere thanks to our lecturer of Civil Procedure Code without blessings of whom this
project could never become a reality.

Special thanks to the library of University Institute of Legal Studies, Panjab University,
Chandigarh and to its librarians for providing me latest books on this topic.

I owe a great many thanks to my seniors for guiding me and sharing their views on topic with
me.

______________________

(Nimrat Brar)

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 Set-off and Counter- Claim

TABLE OF CASES

 Abdul Hasan v. Zohra Jan, I.L.R. 5 All. 299

 Abdul Hassan v. Zohra Jah, (1883) A.W.N. 45.
 Abdul Majid v. Abdul Rashid, AIR 1950 All. 201
 Amichand Pyarelal v. Union of India, (1977) 79 Bom. LR 1
 Anand Enterprises, Bangalore v. Syndicate Bank, Bangalore, AIR 1990 Kant 175
 Bai Shri v. Norotan, I.L.R. 13 Bom. 672
 Bhaskar Chandra Behera v. Renital Rice Mill Company, 54 Cut. L.J 375
 Bhupendra Narain v.Bahadur Singh, AIR 1952 SC 201
 Chishtom v. Gopal Chander, (1889) 16 Cal. 711
 Daga Films v. Lotus Production, AIR 1977 Cal 312
 Diltor Koer v. Harkhoo, 37 I.C. 367
 Dooni Lal v. Smt. Giniya Devi, AIR 1970 Cal. 452
 Ganesh Swaroop Tandan v. Anchal Kumar Tandon, 2007 (2) ALJ 160
 Gocool Coomar v. Bhichokk Singh, 22 W.R 1
 Har Prasad v. Ram Sarup, 82 I.C. 340
 Himachal Fruit Growers Co-operative Marketing and Processing Society Ltd v. Upper
India Food Preservers and Processors Ltd, AIR 1984 H.P. 18
 Jashwant Singh v. Smt. Darshan Kaur, AIR 1983 Pat 132
 Jyanti Lal And Anr. v Abdul Aziz, AIR 1956 Pat 199
 Kalmud Singh v. Gir Prasad, 17 C.W.N 1060
 Kelly v. Carret, 6III. 649.
 M.V. Sastry, Masulipatam v. Murlidhar Jhun Jhun Wala (P) Ltd, AIR 1964 AP 88
 Maiden v. Bhondu, 17 P.R. 1910
 Malati Udyog Ltd. v. Blue Star Ltd. , AIR 1995 Punj 45
 Muhammad v. Kubra, I.L.R. 15 Cal. 526
 Mula Kuar v. Ulfat Singh, (1886) A.W.N. 172
 Munshi Ram v. Radha Kishan, AIR 1975 Punj 112
 Najan Ahmed v. Salemahomed, 77 I.C. 943
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 Set-off and Counter- Claim

 Oriental Ceramics Products v. Calcutta Municipal Corporation, AIR 2000 Cal. 17

 Rahit Singh v. State of Bihar, AIR 2007 SC 10
 Rama Mahal v. Sri M/S V.R. Rajashekhar, AIR 2008 (NOC) 52 (AP)
 Raman Sukuram v. Velayudhan Madhavan,AIR 1982 Ker. 253
 Ramesh Chand v. Anil Panjwani, (2003) 7 SCC 350
 Ramjiwan Mal v. CHand Mal, ILR 10 All. 587
 Rohit Singh v. State of Bihar, (2006) 12 SCC 734
 Sheosaran v. Mahabir Parshad, ILR 32 Cal 576
 Stephen Clark v. Ruthnavaloo, 2 M.H.C.R 296
 Sugesan & Co. Pvt. Ltd. v. Hindustan Machine Tools Ltd., Hyderabad, AIR 2004 AP
428
 Suman Kumar v. St. Thomas School and Hostel, AIR 1988 P&H 38
 T.K.V.S. Vidyapoornacharya Sons v. M.R. Krishnamachrya, AIR 1983 Mad 291

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 Set-off and Counter- Claim

WRITTEN STATEMENT (ORDER VIII)

A written statement ordinarily means a reply to the plaint filed by the plaintiff; it is the pleading
of the defendant.

Rule 1 lays down that the defendant shall, within 30 days from the date of service of summons
on him, present a written statement; if the date of service of summons on him, present a written
statement; if he fails to do so, he shall be allowed to file the same on such other day as specified
by the court, for reasons to be recorded in writing, but which shall not be later than 90 days from
the date of service of summons.

Like a plaintiff, a defendant is also bound to produce all the documents in support of his defence,
or claim for set-off or counter-claim, which are in his possession or power.1 In a written
statement, the defendant is required to deal with every material fact alleged by the plaintiff, and
also state new facts in his favor or take legal objections against the plaintiff’s claim.

Rule 2 lays down that ‘new facts’, such as the suit is not maintainable, or that the transaction is
void, etc., and all such grounds of defence, if not raised, would take the plaintiff by surprise, or
would raise issues of fact not arising out of the plaint (viz fraud limitation, payment, release,
performance or facts showing illegality, etc.) must be raised.

Thus, if the plea is not taken, it may be presumed that it has been waived. And the defendant will
not be entitled, as of right, to rely on any ground of defence which he has not taken in his written
statement. However, a plea of limitation or other pure questions of law could be taken up at a
later stage.2

Rules 3, 4 and 5 deal with the manner in which allegations of fact in the plaint should be
traversed or denied. The written statement must deal specifically with each allegation of fact
(except damages) in the plaint and when a defendant denies any such fact, he must not do so
evasively or vaguely, but answer the point of substance, otherwise the said fact shall be taken to
be admitted.

1
Rule 1 A
2
http:// indiankanoon.org/doc/1752222/

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 Set-off and Counter- Claim

Rule 5 provides that every allegation of fact in the plaint, if not denied or stated to be not
admitted in the pleadings of the defendant, shall be taken to be admitted, except against a person
under disability (viz. a minor). Further, if the defendant has not filed a pleading at all, the court
can pronounce a judgment on the basis of the facts in the plaint, except against person under
disability. However, the court may, in its discretion, require any such fact to be proved (by the
plaintiff).

The court has not to act blindly upon the admission of a fact made by the defendant in his written
statement nor should the court proceed to pass judgment blindly merely because a written
statement has not been filed by the defendant traversing the facts set out by the plaintiff in the
plaint filed in the court.

Any new ground of defence, which has arisen after the institution of the suit or presentation of a
written statement claiming a set-off or counter-claim, may be raised by the defendant or plaintiff,
as the case may be, in his written statement (Rule 8).

Rule 9 lays down that no pleading subsequent to the written statement of a defendant other than
by way of defence to set-off or counter-claim shall be presented except by the court’s leave and
terms; but the court may at any time require a written statement or additional written statement
from any of the parties and fix a time of not more than 30 days for presenting the same.

Rule10 provides that where any party from whom a written statement is required under R.1 or
R.9 fails to present the same within the time permitted by the court, the court shall pronounce
judgment against him, or make such order in relation to the suit as it thinks fit. A decree will be
drawn according to the said judgment.

Rules 5 and 10 are permissive in nature i.e. enable the court to pronounce a decree straightway
on the basis of the plaint.

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 Set-off and Counter- Claim

SET OFF

Set off means a claim set up against another. It is a cross claim which partly offsets the original
claim. It is an 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. 3 Where there are mutual debts
between the plantiff and the defendant, one debt may be settled against the other. 4 It is a plea in
defence, available to the defendant. By adjustment, set-off either wipes out or reduces the
plantiff’s claim in a suit for recovery of money.5

In its original and strict sense, set-off is a plea in defence, pure and simple, which by adjustment
would wipe off, or, reduce the plaintiff's claim. In its enlarged sense, and that is of statutory
creations, as in this rule, it is a defence and a counter claim combined, defence to the extent of
the plaintiff's claim, and, a claim by the defendant in the suit itself for the balance.6

The law recognizes two types of set-off,

i. Legal set-off; and

ii. Equitable set-off.

Order 8 Rule 6 deals with legal set- off but the provision is not exhaustive and does not take
away the power of the court to allow such adjustment independent of Rule 6 of Order 8, it is
known as equitable set-off.

Essentials – In order to claim a set-off, the following preconditions are required to be

satisfied:

i. That the claim must be recovery of money;

ii. The defendant must refer a claim in the written statement which is legally recoverable
from the plantiff;
iii. Such claim must be for ascertained sum of money;
iv. Both the parties must fill the same character; and

3
Jyanti Lal And Anr. v Abdul Aziz, AIR 1956 Pat 199
4
Chamber’s 21st Centuary Dictionary (1997) at p.1283
5
M.V. Sastry, Masulipatam v. Murlidhar Jhun Jhun Wala (P) Ltd, AIR 1964 AP 88
6
http://www.indiankanoon.org/doc/248153/

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 Set-off and Counter- Claim

v. The sum claimed by way of set-off should not exceed the pecuniary limits of the
jurisdiction of the Court.7
vi. It must be recoverable by the defendant or by all the defendants, if more than one;
vii. It must be recoverable by the defendant from the plantiff or from all the plantiffs , if more
than one.

A plea of set-off is “a plea whereby a defendant acknowledges the justice of the plantiff’s
demand, but sets up another demand of his own, to counterbalance that of plantiff; either in
whole or in part”. Thus, it is a “reciprocal of acquittal of debts between two persons”.8 The right
of a defendant to claim set-off has been recognized under Rule 6. It obviates the necessity of
filing a fresh suit by the defendant. This rule has not the effect of enlarging the right of set-off;9
at the same time it is not intended to take away any right to set-off, whether legal or equitable.10

Set off is reciprocal acquittal of debts. In an action to recover money set-off is a cross-claim for
money by the defendant, for which he might maintain an action against the plaintiff and which
has the effect of extinguishing the plaintiff’s claim protanto. Where in a suit for recovery of
money by the plaintiff, the defendant finds that he also has a claim of some amount against the
plaintiff, he can claim a set-off in respect of the said amount.

 Suit for the recovery of money – No matter what the title may be, no matter whether
such title arises ex delicto or ex contractu, so long as the relief sought is to recover
money, it is suit for money.11 So a suit for dissolution of partnership with a prayer of
recovery of money that may be found due to the plantiff upon taking the partnership
accounts is a suit for money and a plea of set-off may be raised in such a suit.12 This rule
applies only if the suit is for recovery of money and has no application to a suit in
ejectment against a tenant, though it is based on default of payment of rent.

7
Malati Udyog Ltd. v. Blue Star Ltd. , AIR 1995 Punj 45
8
http://www.indiankanoon.org/doc/1473302/
9
Stephen Clark v. Ruthnavaloo, 2 M.H.C.R 296
10
Kalmud Singh v. Gir Prasad, 17 C.W.N 1060
11
Ramjiwan Mal v. CHand Mal, ILR 10 All. 587
12
Ibid.

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 Set-off and Counter- Claim

 No set-off for sum not ascertained – In order to entitle a defendant to plead a set off, the
debt to which it relates must be for an ascertained sum of money due and owing to the
defendant by the plaintiff out of transaction in which mutual credits are directly proper by
reason of their being in respect of the same right.13 The expression ‘ascertained sum’ in
this rule means an amount concluded and conclusive.14 It excludes such items as
liquidated damages and mesne profits the amount of which is not ascertainable until the
court determines them.15 Where, however a defendant says that there were definite sums
of debit and credit between the parties and that on date of suit a definite known balance,
the amount of which is given in the written statement was due to the defendant from the
plantiff, the sum claimed is an “ascertained sum”.16

 Legally Recoverable – A claim to be recoverable, and thus capable of being set-off,

must be a legal demand,17 and a demand arising out of a transaction which is legally
invalid cannot be the subject of set-off.18

 Same character – In order to entitle a defendant to plead a set-off, the debt to which it
relates must be for an ascertained sum of money due and owing to the defendant by the
plantiff out of a transaction in which mutual credits are directly proper by reason of their
being in respect of the same right.19 That is to say, the parties must fill the same character
with regard to both claim and set-off, and the nature of the opposed rights must have
some sort of identity.20 So an amount due as manager cannot be set-off against a personal
liability.21

 Court – fee on written statement claiming set-off – A written statement containing a

claim of set-off is chargeable with the court-fee which would be payable on a plaint of

13
Abdul Hassan v. Zohra Jah, (1883) A.W.N. 45.
14
Diltor Koer v. Harkhoo, 37 I.C. 367
15
Har Prasad v. Ram Sarup, 82 I.C. 340
16
Najan Ahmed v. Salemahomed, 77 I.C. 943
17
Kelly v. Carret, 6III. 649.
18
Gocool Coomar v. Bhichokk Singh, 22 W.R 1
19
Abdul Hasan v. Zohra Jan, I.L.R. 5 All. 299
20
Mula Kuar v. Ulfat Singh, (1886) A.W.N. 172
21
Abdul Hasan v. Zohra Jan, I.L.R. 5 All. 299

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 Set-off and Counter- Claim

that nature.22 In absence of a valid claim of set-off the defendant cannot be allowed to
agitate the claim in the suit.23 A plea of set off is distinct from the plea of payment and
should not be entertained until Court-fee with respect to it has been paid by the defendant
in the court of first instance.24

Equitable Set off

The law recognizes two kinds of set off (i) Statutory set-off (ii) Equitable.25 Rule 6 deals with
legal set off only. It was allowed by the Court of Common Law of England. It is always in
respect of an ascertained amount of money. But there may be cases in which the defendant may
be allowed a set-off in respect of an unascertained sum of money. The rule does not exclude
equitable set-off provided the defendant’s cross- demand arises out of the same transaction as the
plantiff’s claim.26 Order XX Rule 19(3) of the Code recognizes an equitable set-off.

A plea in nature of equitable set-off is not available when the cross demands do not arise out of
the same transaction.27 The law of equitable set-off also applies even where the cross claims,
though not arising out of the same transaction, are closely connected together. 28 In a suit by a
servant against his master for salary, the latter can claim set-off for loss sustained by him
because of negligence or misconduct by the former since such claim arises out of the same
relationship.29 In a suit by a washerman for his wages, the defendant – employer may set-off the
price of clothes lost by the plaintiff.30

Legal and equitable set-off: distinction

 Legal set off must be for ascertained sum of money. Equitable setoff may be allowed
even for unascertained sum of money.

22
Bai Shri v. Norotan, I.L.R. 13 Bom. 672
23
Dooni Lal v. Smt. Giniya Devi, AIR 1970 Cal. 452
24
Muhammad v. Kubra, I.L.R. 15 Cal. 526
25
Maiden v. Bhondu, 17 P.R. 1910
26
Najan Ahmed v. Salemahomed, 77 I.C. 943
27
Bhupendra Narain v.Bahadur Singh, AIR 1952 SC 201
28
Sheosaran v. Mahabir Parshad, ILR 32 Cal 576
29
Chishtom v. Gopal Chander, (1889) 16 Cal. 711
30
Maiden v. Bhondu, 17 P.R. 1910

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 Set-off and Counter- Claim

 Legal set-off can be claimed as a right and the court is bound to entertain and adjudicate
upon it. Equitable set-off, on the other hand, cannot be claimed as of right and the court
has discretion to refuse to adjudicate upon it.
 In a legal set off it is not necessary that the cross demands arise out of the same
transaction. Equitable set off can be allowed only when they arise out of the same
transaction.
 In a legal set-off, it is necessary that the amount claimed must be legally recoverable and
must not be time-barred. A claim by way of equitable set off may be allowed even if it is
time barred when there is fiduciary relationship between the parties.
 A legal set off requires court fees, but no court fee is required in the case of an equitable
set off.

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 Set-off and Counter- Claim

COUNTER CLAIM

Rules 6-A to 6-G have been inserted by the Code of Civil Procedure (Amendment) Act, 1976,
with a view to make a detailed provision regarding counter claims. 31 Counterclaim may be
defined as “a claim made by the defendant in a suit against the plaintiff”. It is a claim
independent of, and separable from, the plaintiff’s claim which can be enforced by a cross action.
It is a cause of action in favor of defendant against the plaintiff.32

It may be set up only in respect of a claim for which defendant can file a separate suit. 33 Thus a
counterclaim is substantially a cross-action.34 The essence of a counter claim is that the
defendant should have a cause of action against the plaintiff and the counter claim is in the
nature of a cross action, and not merely a defence to plaintiff’s claim.35

Object and Scope

The object appears to be to reduce pendency of cases so that causes of actions and cross claims
similar in nature could be clubbed together and disposed of by a common judgment. Now a
specific provision has been added though even before the introduction of Rule 6-A in appropriate
cases, courts had entertained and disposed off counter claims.36

From the wordings and plain reading of Rule 6-A of Order VIII it is clear that it contemplates
counter claim with respect to any suit without having any restriction. The scheme of new rule to
permit the defendant to set up counter claim which arises between the parties and which are not
non-cognizable to the Court where the suit is pending, the object is to reduce the pendency of the
cases so that claims and cross claims similar in nature can be disposed off by the common
judgment. The provisions relating to counterclaim thus seek to save time of courts, exclude
inconvenience to the parties to litigation, decide all the disputes between the same parties
avoiding unnecessary multiplicity of judicial proceeding and prolong trials.37

31
Vide Notes on Clauses of the CPC(Amendment) Bill, 1974, p. 314
32
Concise Oxford English Dictionary (2002) at p. 325
33
Munshi Ram v. Radha Kishan, AIR 1975 Punj 112
34
Amichand Pyarelal v. Union of India, (1977) 79 Bom. LR 1
35
Abdul Majid v. Abdul Rashid, AIR 1950 All. 201
36
Raman Sukuram v. Velayudhan Madhavan,AIR 1982 Ker. 253
37
Ramesh Chand v. Anil Panjwani, (2003) 7 SCC 350

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 Set-off and Counter- Claim

A counter claim shall be treated as the plaint and the same is governed by the rules that are
applicable to plaints, all principles including the general law of limitation that are applicable for
filing of a plaint are also applicable for a counter claim. In other words, a counter claim has to be
treated as if it was a suit or a cross suit, and the object apparently, is to enable the Court to
pronounce a final judgment in the same suit instead of driving one party to file a separate suit,
which may proliferate the litigation. A counter claim has to be treated of a regular plaint, can be
filed subject to the fulfillment of all the conditions that are applicable to a regular plaint.38 If the
suit of the plaintiff is discontinued or dismissed the counter claim may nevertheless be proceeded
with as in the case of a counter claim, written statement is really in the nature of plaint.39

Modes of setting up Counterclaim

There are three modes of pleading or setting up counterclaim in a civil suit:

i. In the written statement filed under Order 8 Rule 1;

ii. By amending written statement with the leave of the court and setting up counterclaim;
and
iii. In a subsequent pleading under Order 8 Rule 9.40

Who may file counterclaim

Normally, it is the defendant who may file a counter claim against the plaintiff. But incidentally
and along with the plaintiff, the defendant may also claim relief against the co-defendants in the
suit. But a counter claim solely against co-defendants is not maintainable.41

38
Sugesan & Co. Pvt. Ltd. v. Hindustan Machine Tools Ltd., Hyderabad, AIR 2004 AP 428
39
Daga Films v. Lotus Production, AIR 1977 Cal 312
40
Ramesh Chand v. Anil Panjwani, 2003 7 SCC 350
41
Rohit Singh v. State of Bihar, (2006) 12 SCC 734

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 Set-off and Counter- Claim

Time for filing counter claim

A counter claim can be filed before the filing of a written statement or before the time limited for
filing a written statement has expired e.g. if the time allowed for filing a written statement is one
month then the counter claim has to be filed within a period of one month.42

Order VIII, Rule 6A (1) of the Code gives a right to set-up counter-claim against the claim of the
plaintiff in respect of cause of action accruing to the defendant either before or after the filing of
the suit but before the defendant delivered his defence or before the time limited for delivering
his defence has expired, Rule 6C of Order VIII enables the plaintiff to make his objections with
regard to the maintainability of the counter claim at any time before the issues are settled in
relation to the counter claim and on hearing of such application the court may pass orders if it
thinks fit.43

Where issues are framed and evidence is closed held, counter claim cannot be raised. 44 Delay by
itself is also not a sufficient ground to disallow amendment of pleadings.45 Where cause of action
to defendants after filing of written statement held, counter claim cannot be filed.46 The next
point that remains to be considered is whether rule 6-A (1) of Order VIII of the Code of Civil
Procedure bars the filing of a counter-claim after the filing of a written statement. This point
need not detain us long, for Rule 6-A (1) does not, on the face of it bar the filing of a counter-
claim by the defendant after the written statement. The cause of action for the counter-claim had
arisen before the filing of the written statement, the counter-claim was, therefore, quite
maintainable.

6-B Counter claim to be stated – Where any defendant seeks to rely upon any ground
as supporting a right of counterclaim, he shall, in his written statement, state specifically that he
does so by way of counter claim.

42
Himachal Fruit Growers Co-operative Marketing and Processing Society Ltd v. Upper India Food Preservers and
Processors Ltd, AIR 1984 H.P. 18
43
Bhaskar Chandra Behera v. Renital Rice Mill Company, 54 Cut. L.J 375
44
Rahit Singh v. State of Bihar, AIR 2007 SC 10
45
Oriental Ceramics Products v. Calcutta Municipal Corporation, AIR 2000 Cal. 17
46
Ganesh Swaroop Tandan v. Anchal Kumar Tandon, 2007 (2) ALJ 160

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 Set-off and Counter- Claim

Withdrawal of the suit has no effect on the counter-claim. - “Rule 6-B provides that if in any
case, the defendant sets up a counter-claim, the suit of the plaintiff is stayed, discontinued or
dismissed, the counter-claim may nevertheless be proceeded with.”47

6-C Exclusion of counterclaim – Where a defendant sets up a counter claim and the
plaintiff contends that the claim thereby raised not to be disposed of by way of counter claim but
in an independent suit, the plantiff may, at any time before issues are settled in relation to the
counter claim, apply to the Court for an order that such counter claim may be excluded, and the
Court may, on the hearing of such application make such order as it thinks fit.

Should the plaintiff in a given case desire that the counter-claim filed by the defendant in answer
to his suit claim be dealt with as a separate suit in itself, be ought to apply for that relief before
the Trial Court and it should be done before the issues are settled. On his application for
amending his suit claim and the counter-claim, the Court will have to consider whether the
counter-claim should be dealt with as part and parcel of the suit or whether the defendant should
be referred to a separate suit. These exceptional provisions in rule 6-C only illustrate the
homogeneity of the suit claim and the counter-claim as a single proceeding.48

6-D Effect of discontinuance of suit - If in any case in which the defendant sets up
a counterclaim, the suit of the plaintiff is stayed, discontinued or dismissed, the counter-claim
may nevertheless be proceeded with.

If the plaintiff’s suit is not pressed or is given up or withdrawn or breaks down for any reason
whatsoever, the defendant has still a right to get a decree of a counter-claim as claimed in the
written statement.

6E Default of Plaintiff to reply to counterclaim - If the plaintiff makes

default in putting in reply to the counter-claim made by the defendant, the Court may pronounce
judgment against the plaintiff in relation to the counter-claim made against him or make such
order in relation to the counter-claim as it thinks fit.

47
Suman Kumar v. St. Thomas School and Hostel, AIR 1988 P&H 38
48
T.K.V.S. Vidyapoornacharya Sons v. M.R. Krishnamachrya, AIR 1983 Mad 291

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 Set-off and Counter- Claim

Mere non-filing of the written statement by the defendant does not ipso facto result in passing a
decree against defendant. Sub-rule (2) Order VIII, rule 5 only enables Court to pronounce
judgment on basis of facts contained in plaint, where defendant has not filed pleading. Even then
Court can still require in its discretion that any such fact be proved before judgment can be
pronounced in favour of the plaintiff. The Court can pass judgment in favour of plaintiff only
after consideration of case of plaintiff, which comprises appreciation of pleadings and evidence.
When the defendants filed written statement raising a counter-claim, which is to be treated as a
plaint, failure of plaintiff to file rejoinder or written statement in respect of counter-claim, does
not automatically lead to upholding the counter claim, if the defendant does not satisfy Court
about genuineness and validity of his claim. Inasmuch as under Order VIII, Rule 6E, the Court
may pronounce the judgment against plaintiff or make such order in relation to the counter-claim
as it thinks fit.49

6F Relief to defendant where counterclaim succeeds- Where in any suit a

set-off or counter-claim is established as defence against the plaintiff's claim and any balance is
found due to the plaintiff or the defendant, as the case may be, the Court may give judgment to
the party entitled to such balance.

From rule 6F it is apparent that counter-claim must relate to a monetary claim because court has
been vested with power to pass judgment even in respect of any balance found due to
defendant.50

6- G Rules relating to written statement to apply - The rules relating to a

written statement by a defendant shall apply to a written statement filed in answer to a counter-
claim.

49
Rama Mahal v. Sri M/S V.R. Rajashekhar, AIR 2008 (NOC) 52 (AP)
50
Jashwant Singh v. Smt. Darshan Kaur, AIR 1983 Pat 132

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 Set-off and Counter- Claim

Distinction between set-off and counter-claim

Set-off is distinguishable from counterclaim both in its application and in its effect. In its
application setoff is limited to money claims whereas counterclaim is not so limited. Any claim
in respect of which the defendant could bring an independent action against the plantiff may be
enforced by counterclaim subject only to the limitation that it must be such as can conveniently
be tried with plantiff’s claim. Thus not only claims for money, but also other claims such as
claim for an injunction or for performance or for a declaration may be subject of a counter claim.
The distinction between a set off and a counterclaim is very important and, therefore, must be
carefully considered:

 Set off is a statutory defence to a plantiff’s action, whereas a counterclaim is substantially

a cross action.
 Set off must be for an ascertained sum or it must arise out of the same transaction; a
counterclaim need not arise out of the same transaction.
 Set-off is a ground of defence to plantiff’s action. In other words, the former is a ground
of defence, a shield, which if established, would afford an answer to the plantiff’s claim
in toto (as a whole) or pro tanto (in proportion); the latter is a weapon of offence, a
sword, which enables the defendant to enforce a claim against the plantiff effectually as
an independent action.51
 In the case of legal set-off, the amount must be recoverable at the date of suit, while in
the case of a counterclaim the amount must be recoverable at the date of the written
statement.
 When the defendant demands in a plantiffs suit an amount below or up to the suit claim,
it is a set off in strict sensu, but when it is for a larger amount, the claim for excess
amount is really a counter claim.

51
Anand Enterprises, Bangalore v. Syndicate Bank, Bangalore, AIR 1990 Kant 175

180/13 | Code of Civil Procedure, 1908 Page 13

 Set-off and Counter- Claim

BIBLIOGRAPHY

Books
 Mulla, The Code Of Civil Procedure, 17th edition, Lexis Nexis Butterworths Publication,
2007.

 Jain, M.P., The Code Of Civil Procedure, Wadhawa Publications, 2007.

 Sarkar, Code Of Civil Procedure, 11th edition, Wadhawa Publications, 2006.

 Takwani, C.K., Civil Procedure, 6th edition, Eastern Book Company, 2009.

 Ray, Sukumar, The Code Of Civil Procedure, Universal Law Publishing Co. & Pvt.
Limited, 2008.

Internet Sites and Documents

 http://www.mondaq.com/india/x/227654/Corporate+Commercial+Law/Counter+Claim+
Rules+6A+6G+An+Overview

 http://www.indiankanoon.org/doc/1316608/

 Justice Rajasuria, G .,“Judicial pronouncement on written statement and reply statement

additional written statement counter claim and set off”.

Civil Procedure Code Page V