Set-off and Counter-claim Under the Civil Procedure Code, 1908

Set-off and Counter-claim Under the Civil Procedure Code, 1908

Set-off under order 8 rule 6 means

  • Claims set up by one party against another
  • Counter-claim against the original claim
  • An extinction of debts between the parties
  • Kind of defence available to the defendant
  • The settlement which reduces or wipe off the plaintiff’s claims

The conditions precedent for the set up of this rule

  • Suit for recovery of money
  •  must ascertain a definite  sum of money
  • money claimed must be legally recoverable
  • money demanded should not surpass pecuniary jurisdiction of the court where the defendant had filed set-off
  • While pleading set-off, the defendant  is in the position of a plaintiff
  • the claim and the set-off should be in between the same parties and for the same right
  • The claim must be made at first hearing

Doctrine

There have been cases whereby the litigants were permitted to set-off even an unascertained entirety of cash by the Courts of Equity in England, on the reason that, if the offended parties’ case and the respondents’ case emerging out of a similar exchange, at that point, it is unjust to drive the litigants to a different suit. This lawful philosophy later came to be known as the convention of fair set-off.

The privilege to fair set-off is perceived just if the case emerges out of a similar exchange which is the establishment of the offended party’s case and the case has not become time-banned. Supplication in the idea of impartial set-off isn’t accessible when the cross requests don’t emerge out of similar exchanges. At the point when a supplication in the idea of evenhanded set-off is raised, at that point, it isn’t done as an issue of right and the carefulness lies with the court to engage and permit such request or not.

Types

  • Legal

Guaranteed for ascertained cash must emerged from a similar exchange

  • Equitable

Guaranteed for unascertained cash must emerged from a similar exchange

Effect

Where plaintiff

  • Do not appear
  • Fails to substantiate his claims
  • Withdraw his suit
  • His suit get dismissed for any default

Then also it will not affect the claim of set off by the defendant.

Meaning

  • Counterclaim implies a case made by the respondent in the suit
  • It is a case autonomous of, and detachable from, the guarantee of the offended party which can be upheld by a cross-activity.
  •  For the most part, it is a reason for activity against the offended party however for the respondent.
  •  It is treated as plaint of the respondent against the offended party and represented by the principles pertinent to the plaints.
  • The offended party may document a composed proclamation against the counterclaim of the respondent.

Doctrine

Respondent has a request to crush the alleviation looked for by the offended party against him is a counterclaim. Consequently, notwithstanding his privilege of set-off, a respondent in a suit may set up a counterclaim. It might be set up just in regard to a case for which the respondent is entitled to document a different suit. Be that as it may, before the correction act 1976, there was no particular arrangement for a counterclaim in the code. That the option to make a counterclaim legal.

Object

  • Before the Amendment Act of 1 976, no counterclaim or set-off could be guaranteed aside from cash suits.
  • Law commission the report suggested dodging the variety of procedures, right to the litigant to raise a request of set-off in expansion to a counterclaim in a similar suit.
  • The principal objects of counterclaim are as follows:-
  1. To spare the hour of the courts
  2.  For staying away from the variety of the suits
  3.  For barring the bother to the gatherings to the case
  4.  For choosing all questions between
  5. similar gatherings to dodge the assortment of the suit
  6.  To dodge draw out preliminaries, and so on

Modes of counter claim

There are three methods of arguing or setting up a counterclaim in common suits, which are as follows:-

1. in the composed explanation documented under Request 8 Rule 1

2. by changing composed articulation with the leave of the court and setting up counterclaim

3. in a resulting arguing under Order 8 Rule 9.

Who may record

  • Might be by the respondent against the offended party.
  • In some cases or unexpectedly and alongside the offended party, the litigant may likewise guarantee alleviation against the co-litigants in the suit.
  •  In any case, a counterclaim exclusively against codefendants is not viable.

When it might be set up

  • by a respondent against a the offended party in regard of the reason for activity accumulating either previously or after the recording of the suit
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Impact of counterclaim:-

  • The court can articulate the last judgment both in the first case and the counterclaim.
  • The counterclaim of the litigant will be treated as a plaint and the offended party can record a composed proclamation in answer to the counterclaim of the litigant and the principles of the record, a plaint will likewise apply to it.
  • Essentially, an answer documented in answer to a counterclaim will be treated as a composed explanation and administered by the guidelines of the composed explanation.
  • For a situation where regardless of whether the suit of the offended party is stayed, suspended, excused or removed, the counterclaim will be chosen on merits, and the litigant will have qualified for getting a pronouncement for a counterclaim acclaimed in the composed proclamation.
  •  For the situation where the offended party doesn’t record any answer to the counterclaim, the court may articulate the judgment against the offended party in connection to the counterclaim documented by the litigant.

Counterclaim at the appellate stage

  • Appellate authority has no power to entertain counter-claim at the appellate stage.

Set off v/s Counterclaim

  1. Set-off is a legal guard to an offended party’s activity, while a counterclaim is significantly a cross-activity.
  1. Set-off must be for a learned whole or must emerge out of a similar exchange as the offended party’s case. A counter-guarantee need not emerge out of a similar exchange.
  1. Set-off is a legal ground of protection and must be argued in the composed articulation. It tends to be sued as a shield and not as a blade. Counter-guarantee, then again, doesn’t bear the cost of any safeguard to the offended party’s case. It is a weapon of offence which empowers the respondent to authorize his case against the offended party as solidly as in an autonomous activity. It is such a cross-activity.
  1. In the event that the resolution of restriction is argued to a guard of set-off, the offended party so as to set up his supplication needs to demonstrate that set-off was banned when the offended party started the activity. It isn’t sufficient to demonstrate that it was banned when it was argued. On account of a counter-guarantee, it is sufficient for the offended party to demonstrate that the counter-guarantee was banished when it was argued.
  1. An evenhanded set-off is a case by the respondent in protection, which for the most part can’t surpass the offended party’s case. A counter-guarantee the litigant may, nonetheless, surpass the offended party’s case, being in nature of the cross activity. Under the arrangement rule 6-F of Order 6, if in any suit a set-off or counter case is set up as a safeguard against offended parties guarantee and any equilibrium is found because of the respondent as the case might be the court may offer judgment to the gathering qualified for such equilibrium

Conclusion

Set off are set up by one gathering against another. The counter case against the first case. It is a suit for the recuperation of cash. Counterclaim suggests a case made by the respondent in a suit. The annoyed party may archive a formed decree against the counterclaim of the respondent. Respondent has a solicitation to pulverize the lightening searched for by the insulted party against him is a counterclaim. Set off v/s Counterclaim Set-off is a legitimate watchman to an outraged gathering’s action, while a counterclaim is fundamentally a cross-action. Counter-ensure, of course, doesn’t bear the expense of any defence to the insulted party’s case. A fair set-off is a case by the respondent in assurance, which generally can’t outperform the insulted party’s case. A counter-ensure the prosecutor may, in any case, outperform the outraged party’s case, being in nature of the cross action.

Also Read: Difference Between Judgment, Decree, Order under Civil Procedure Code

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