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TMI Blog2013 (8) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... ld officers by the defendants in respect of the transactions and/or business which was done through the customers/certificate holders in accordance with the circulars/terms and conditions of appointment of all agents/field officers of the defendant company and for a decree of ₹ 25 lacs against the defendant No. 1 company jointly and severally or in the alternative to cause an enquiry pertaining to the damages suffered by the plaintiffs and pass a decree for such a sum. 4. After issuance of notice of the plaint which was presented on 11.8.1993, the defendants entered appearance and filed their written statement on 12.8.1994. Thereafter, on 7.4.1998, the defendants filed an application for amendment of the written statement. The amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the claims were not identical in nature and, hence, the defendants could not have asked for adjustment of any claim on the basis of a cause of action inasmuch as the nature of cause of action, as pleaded by the defendants in their amendment application, is different from the cause of action set forth by the plaintiffs in the suit. It was further opined that conceptually they did not meet the same character and the spacious plea that the amendment should be treated as equitable set-off was not acceptable. Emphasis was laid on the relief sought in the plaint which pertained to declaration and the entitlement of the plaintiffs to the commission and incentives payable by the defendants to the plaintiffs. Being of this view, the learned sing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants, has strenuously urged that in the garb of equitable set-off an endeavour has been made to introduce a claim which is really in the nature of set-off as incorporated under Order VIII Rule 6 of the Code and, therefore, the learned single Judge was absolutely justified in not allowing the same. He has seriously criticized the opinion expressed by the Division Bench on the ground that in the case at hand the equitable set-off, as argued, encroaches into the compartment of legal set off. It is urged by him that the High Court has committed grave illegality in allowing the amendment as a result of which the defendants have been able to procrastinate the proceeding. 10. Mr. Gupta, learned senior counsel appearing for the defendan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of the debt sought to be set-off. (2) Effect of set-off . 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 affect 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. 12. On a reading of the aforesaid Rule it is noticeable that certain conditions precedent are to be satisfied for application of the said Rule. Two primary conditions are that it must be a suit for recovery of money and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they can be looked upon as a part of one transaction. 15. In Union of India v. Karam Chand Thapar and Bros. (Coal Sales) Ltd. and others[(2004) 3 SCC 504], while referring to concept of set-off, this Court has stated thus: - 15. Set-off is defined in Black s Law Dictionary (7th Edn., 1999) inter alia as a debtor s right to reduce the amount of a debt by any sum the creditor owes the debtor; the counterbalancing sum owed by the creditor. The dictionary quotes Thomas W. Waterman from A Treatise on the Law of Set-Off, Recoupment, and Counter Claim as stating: Set-off signifies the subtraction or taking away of one demand from another opposite or cross-demand, so as to distinguish the smaller demand and reduce the greater by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil Procedure; that the mutual debts and credits or cross-demands must have arisen out of the same transaction or to be connected in the nature and circumstances; that such a plea is raised not as a matter of right; and that it is the discretion of the court to entertain and allow such a plea or not. The concept of equitable set-off is founded on the fundamental principles of equity, justice and good conscience. The discretion rests with the court to adjudicate upon it and the said discretion has to be exercised in an equitable manner. An equitable set-off is not to be allowed where protracted enquiry is needed for the determination of the sum due, as has been stated in Dobson Barlow v. Bengal Spinning Weaving Co.[(1897) 21 Bom 126 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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