Order 8 of the code requires a defendant to file a written statement in response to the plaintiff’s plaint. In this case, if the plaintiff files a suit to recover money from the defendant and the defendant also owes the plaintiff money, the defendant may seek to set off the amount he is able to recover from the plaintiff. The defendant must include this information in his submitted written statement in order to set off the sum. Order 8 Rule 6 of the CPC defines the set-off provisions.
set off in cpc: About
- As previously mentioned, the idea of set off refers to a claim that is made against the plaintiff and has the power to reduce or eliminate a party’s obligation or claim.
- Put otherwise, it is a cross-claim that partially refutes the initial assertion. When the plaintiff and the defendant owe each other money, one debt may be settled against the other.
- It is a defense that the defendant may enter into a lawsuit that the plaintiff has filed.
- The court concluded in the Nan Karay Phaw v Nan Karay Phaw case that Rule 6(1)’s wording is explicit and clear. The defendant must assert set-off during the lawsuit’s initial hearing.
- set off cpc example: X is suing Y for Rs. 5000 on a bill of exchange. Y has a Rs. 10,000 judgments against X. Given that both claims are specific, financial demands can be set off.
types of set off in cpc
Legal Set Off in CPC:
- There are particular requirements for legal set-off in CPC. It is not permitted to add new elements and is restricted to the original lawsuit’s parameters. It permits the defendant to present a separate cause of action, and it modifies both parties’ claims in favor of the one whose sum is greater.
- For example: If B has a promissory note from A worth Rs. 1000 and A files a lawsuit against B for trespass, B can claim a set-off by deducting that amount from any money that A may be awarded in the litigation.
- Order VIII Rule 6’s prerequisites for set-off are all met, making this conceivable. After A heals, both sums become firm financial demands.
equitable set off in cpc:
- Whenever legal set-off is not applicable, there is an option for equitable set-off in CPC. It can be applied when the case fails to meet Order VIII Rule 6 requirements and is predicated on the idea of fairness.
- If the cross demands are related to each other or stem from the same transaction, the defendant may be entitled to recover even an amount of money that cannot be determined by fair set-off. As a result, there is no need to bring an additional lawsuit.
- It is crucial to remember that equitable set-off is only applied at the court’s discretion, in contrast to legal set-off, which is the defendant’s right under the CPC.
- For example: In the event that A files a lawsuit against B to recoup Rs. 50,000 based on a contract, B may set off his losses for harm caused by A’s violation of the same agreement.
- However, because the damages sought as a set-off are not a determined amount of money, they are not entirely covered by Rule 6 of Order VIII in this instance. As a result, the court may decide to permit the set-off in light of the particular facts of the case.
Set Off in CPC: Conditions
To be eligible for a set-off, the following conditions need to be met:
- The suit has to be filed for recover of money;
- The amount of money needs to be determined;
- This amount has to be recovered in court;
- It has to be recoupable by the side of the defendant, or by all defendants in the case involving many defendants;
- It has to be recoupable from the side of plaintiff, or, if there are many plaintiffs, from each one of them;
- It is limited to the court’s financial jurisdiction in which the complaint was filed., and
- Both parties have to present the exact same information in the defendant’s attempt for the provision of set off as they did in the case of plaintiff’s complaint.
The Rule 6 Order VIII provision offers a set-off plea of defense, which the defendant may assert as a matter of right after satisfying the prerequisite legal conditions. In addition, the courts have clarified some points and expanded on the idea of how set off is applied. An illustration of this would be the application of court fees to a set-off claim.
The doctrine of set off has been utilized by the courts because it efficiently assists both the parties and the legal system in resolving disputes between the same parties in a single lawsuit, saving both parties and the courts time and energy by avoiding multiple court proceedings.
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