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no pleading by the defendant denying the allegations in the plaint, the court may take the
facts stated in the plaintiff admitted unless the court in its discretion under the proviso
requires any fact so admitted, to be proved otherwise than by such admission. The
Karnataka High Court has accepted the Bombay view. 8In another case the Karnataka
High Court has held that a judgment in favour of the plaintiff is not automatic on the
failure of the defendant to file written statement. The court has to consider the case of
the plaintiff before granting a decree in his favour. 9

Except damages:-

It is not necessary for a defendant, in a suit for damages, to deny specifically the damages;it
is quite sufficient if he pleads generally to the damages. 10

Order VIII Rule-7:- Defence or set-off founder upon separate grounds:

Where the defendant relies upon several distinct grounds of defence or set-off or counter-
claim founded separate and distinct facts, they shall be stated, as far as may be, separately
and distinctly.

Order VIII Rule-8:- New ground of defence:

Any ground of defence which has arisen after the institution of the suit or the 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.

The additional ground of defence must be taken before the commencement of trial. A plea
that the suit was liable to be stayed in view of an arbitration clause in the contract was held

8
Sakini Bee v. Mohd Ameen Saheb AIR 1976 Kant 226.
9
Syed Ismail v. Shamshian Begum AIR 2001 Kant 99.
10
National Insurance Co. v. Calcutta Duck Labour Board AIR 1977 Cal 492.
 P a g e | 15

to have been waived, although an additional written statement containing such plea was
file and accepted by the trial court.11

Order VIII Rule-9:- Subsequent pleadings:

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 leave of the Court and
upon such terms as the Court thinks fit; 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 thirty days for presenting the same.

Additional Written Statement:-

Order VIII, Rule 9, C.P.C. lays down an important rule of pleading that no pleading
subsequent to the written statement by a defendant other than by way of defence to a set-
off shall be presented except by leave of the Court. The rule requires leave of the Court
before any party can make a further pleading after written statement has been filed. Where
a defendant intends the file additional written statement, he must file an application
showing the circumstances as to why he failed to raise the plea in the original written
statement, and the other party must be given opportunity to meet the motion.

Additional written statement in consistent with original written statement:-

In view of Order VIII, Rule 9, C.P.C. subsequent to filing of original written statement,
with the leave of the Court, a defendant can file additional written statement. But no leave
can be granted when it is inconsistent with original pleading. To do so resort may be had
to Order VI, Rule 17, and C.P.C.

Order VIII Rule-10:-Procedure when party fails to present written statement called
for by Court:-

Where any party from whom a written statement is required under rule 1 or rule 9 fails to
present the same within the time permitted or fixed by the Court, as the case may be, the

11
Ross & Co. v. Scriven (1916) 43 Cal 1001.
 P a g e | 16

Court shall pronounce judgment against him, or make such order relating to the suit as it
thinks fit and on the pronouncement of such judgment a decree shall be drawn up.

In Modula India v. Kamakshya Singh12, explaining the ambit and scheme of Rules 1, 5
and 10 of Order 8, the Apex Court observed: "Rule 1 merely requires that the defendant
should present a written statement of his defence within the time permitted by the Court.

Under Rule 5(2), where the defendant has not tiled a pleading it shall be lawful for the
Court to pronounce judgment on the basis of the facts contained in the plaint except against
a person under disability but the court may at its discretion require any such fact to be
proved. Again under Rule 10 when any party from whom a written statement is required
fails to present the same within the time permitted or fixed by the Court, the Court ‘shall
pronounce judgment against him or make such order in relation to the suit as it thinks fit`.

It will be seen that these rules are only permissive in nature. They enable the Court in an
appropriate case to pronounce a decree straightway on the basis of the plaint and the
averments contained therein. Though the present language of Rule 10 says that the Court
‘shall’ pronounce judgment against him, it is obvious from the language of the rule that
there is still an option with the Court either to pronounce judgment on the basis of the plaint
against the defendant or to make such other appropriate order as the Court may think fit.
Therefore, there is nothing in these rules, which makes it mandatory for the Court to pass
a decree in favour of the plaintiff straightway because a written statement has not been
filed.”

Cause of action:
Cause of action as understood in the civil proceedings means every fact which, if traversed,
it would be necessary for the plaintiff to prove in order to support his right to a judgment
of the Court. To put it in a different way, it is bundle of facts which taken with law
applicable to them, gives the plaintiffs a right to relief against the defendant.

12
(1988) 4 SCC 619.
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II. SET-OFF (RULE -6)

Order VIII Rule-6.:-Particulars of set-off to be given in written statement:-

Where in a suit for the recovery of money the defendant claims to set-off against the
plaintiff's demand any ascertained sum of money legally recoverable by him from the
plaintiff, not exceeding the pecuniary limits of the jurisdiction of the Court, and both parties
fill the same character as they fill in the plaintiff's suit, the defendant may, at the first
hearing of the suit, but not afterwards unless permitted by the Court, presents a written
statement containing the particulars of the debt sought to be set-off.

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. The rules relating to a
written statement by a defendant apply to a written statement in answer to a claim of set-
off.

Meaning-
In law, a set-off is a statutory defense to the whole or to a portion of a plaintiff's claim. Set-
off in the written statement is a claim added by the defendant against the plaintiff to defend
himself. Set-off is a cross-claim between plaintiff and defendant in which the plaintiff is
legally liable to pay that money to the defendant.

Essentials of set-off:

i. The suit filed by the plaintiff must be related to the recovery of money.
ii. The defendant’s claim for set-off must be for a specific amount of money.
iii. Money claimed by the defendant in the written statement must be legally
recoverable. For example, the defendant cannot claim any money which he won
in a bet with the plaintiff.
iv. The amount claimed by the defendant must not exceed the pecuniary limit of the
court. It simply means every court has its own limit that the court can only deal
 P a g e | 18

with the cases where a certain amount of money is in the issue. The defendant
cannot claim his set-off which is beyond the pecuniary jurisdiction of the
court. For example, a court has the pecuniary jurisdiction of 1 lakh, but the
defendant claims a set-off which is the amount of 5 lakh, in that case, the
pecuniary jurisdiction is exceeding. The defendant cannot claim that set off in
that case.
v. Both the defendant and plaintiff must fill the same character as they fill in the
plaintiff’s claim. It means, the defendant cannot claim a set-off in which the
plaintiff was not the main party. The defendant cannot claim money that is
recoverable from a person who is in the plaintiff’s relation.

Purpose of set-off in a written statement:-

a. To prevent the institution of a fresh suit in the court.

b. It prevents multiple lawsuits between plaintiff and defendant.
c. It prevents the valuable time of the court.
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 pro tanto.Where in
a suit for recovery of money by the plaintiff, the defendant finds that he has also a claim of
some amount against the plaintiff, he can claim a set-off in respect of the said amount. The
doctrine of set-off may be defined as "the 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".

Types of Set-off:-
1. Legal Set-off:- It can be explained with the help of following illustrations-
a. A sues B on a bill of exchange. B alleges that A has wrongfully neglected to insure
B's goods and is liable to him in compensation which he claims to set-off. The
amount not being ascertained cannot be set-off.
b. A sues B on a bill of exchange for Rs. 500. B holds a judgment against A for Rs.
 P a g e | 19

1,000. The two claims being both definite, pecuniary demands may be set-off.
c. A and B sue C for Rs. 1,000 C cannot set-off a debt due to him by A alone.
d. A owes the partnership firm of B and C Rs. 1,000. B dies, leaving C surviving. A
sues C for a debt of Rs. 1,500 due in his separate character. C may set-off the debt
of Rs. 1,000.

The set-off mentioned above is a legal set-off. It is apparent from a reading of the above
provisions that in order to constitute legal set-off the following conditions must be fulfilled,
viz.

a. The suit must be for recovery of money.

b. The defendant must claim an ascertained sum of money. A sum of money due in
respect of a disputed transaction cannot constitute an ascertained sum.
c. That ascertained sum must be legally recoverable from the plaintiff, i.e. it is not
barred by the law of limitation.
d. The plaintiff’s claim and the set-off must be claimed in the same character. The
amount must be recoverable by the defendant and if there is more than one defendant
then by all the defendants. Again, the amount must be recoverable by the defendant
from the plaintiff and if there are more than one plaintiff then from all the plaintiffs.
e. The set-off should be within the pecuniary jurisdiction of the court.
The above provisions further establish that the court must treat the claim of the defendant
exactly as if the defendant had filed a plaint and the court must pass a decree in favour of
the defendant, if his claim is established. It is only in a written statement that a plea of set-
off can be raised. The rule further confines only to set-off and does not provide for a
counter-claim, which is allowed by way of equitable set-off, and is not expressly provided
in rule 6-A of Order VIII by C.P.C. (Amendment) Act, 1976.

Explanation of some of the above-mentioned-

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The suit must be for recovery of money. This rule applies only the suit is for recovery of
money and has no application to as suit in ejectment against a tenant. Though it is based
on default of payment of rent. It is also held in Madho Saran’s case13, that a suit for
redemption is not a suit for money.

That ascertained sum must be legally recoverable from the plaintiff. The amount claimed
by way of set-off under this rule must be ‘legally’ recoverable. It follows from this that if
the defendant’s claim is barred by the law of limitation; it cannot be pleaded by the way of
set-off under this rule.14

The set-off should be within the pecuniary jurisdiction of the court. One of the riders of the
jurisdiction of the court before which a plea in the nature of set-off or counterclaim is
advanced, is that only such court can en terrain the plea as would have been empowered to
take its cognizance had it been made the subject—matter of a separate suit. The valuation
of a set-off for the purpose of jurisdiction must be taken as relating to the whole amount
pleaded as a set-off and without reference to any portion of the plaintiffs claim admitted
by the defendant.

A sues B in a Presidency Small Cause Court for Rs 1,000. B claims to set-off a sum of Rs
2,700, and claims judgment for Rs 1,700, after giving a credit for Rs 1,000 admitted by B
to be due to A. The Small Cause Court has no jurisdiction to try the claim as to set-off the
value of the amount claimed asset-off being above Rs 2,000. 15

When a defendant pleads set-off, he is put in the position of a plaintiff as regards the amount
claimed by him. There are two suits-one by the plaintiff against the defendant and the other
by the defendant against the plaintiff; and they are tried together. A separate suit number,
however, is not given to a set-off. Where the plaintiff does not appear and his suit is
dismissed for default, or he withdraws his suit, or he fails to substantiate his claim at the

13
AIR 1953 Patna 73.
14
Bharta v. Cheta Ram AIR 1934 All 427.
15
ManoharLal v. MadanLal AIR 1956 Punj 190.
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trial and his suit is dismissed, it does not affect the claim for a set-off by the defendant and
a decree may be passed in favour of the defendant if he is able to prove his claim.

Principles governing equitable set-off:-

As a result of a series of decisions of the Courts in India there emerge the following
propositions of law with regard to equitable set-off:

a. As equitable right of set-off exists in this country when both the claim of the plaintiff
and that of the defendant arise out of the same transaction.
b. The law of equitable set-off applies where the cross-claims, though not arising out
of the same transaction, were closely connected together.
c. In order that a claim for equitable set-off may arise, it is not sufficient that there are
cross-demands; it is further necessary that there should be a connection between
them which makes it inequitable to drive the defendant to a separate suit-as when
the demands arise out of the same transaction or when there is on each side
knowledge of and confidence in one debt discharging the other.

Applicability of Equitable set-off:-

The plea of legal set-off in which it is not necessary that the amount claimed should be
ascertained, is recognized by Rule 6. It, however, does not take away from the parties right
to claim equitable set-off and while the plea of legal set-off having been recognized by
Rule 6, can be raised as of right and the Court is bound to entertain and adjudicate upon it
when raised in the same suit, the equitable set-off cannot be claimed as of right and the
Court has a discretion to adjudicate upon it in the same suit or to order it to be dealt with
in a separate suit.16

The distinction between legal and equitable set-off:

a. In a legal set-off the amount claimed must be an ascertained sum of money but in
an equitable set off the claim must-be allowed even with respect to an

16
Laxmidar v. Munnabhai, AIR 1964 SCC 11.
 P a g e | 22

unascertained sum of money.

b. In a legal set-off the court is bound to entertain and adjudicate upon the plea when
raised. In the case of an equitable set-off, however, it is not obligatory on the court
to adjudicate upon it and the defendant cannot claim it as a matter of right. The
court has the discretion to refuse to take notice of the equitable set-off if the
investigation into the equitable claim is likely to result in delay.
c. In a legal set-off it is not necessary that the cross-demands arise out of the same
transaction, but an equitable set-off is allowed only when the cross-demands arise
out of the same transaction as the plaintiff ’s claim.
d. In a legal set-off the amount claimed to be set off must be legally recoverable and
not barred by limitation at the date of the suit, but a claim by way of equitable set-
off can be allowed even if it is barred at the date of the suit where there is fiduciary
relationship between the plaintiff and the defendant.
e. If the defendant’s claim is barred at the date of the written statement but not barred
at the date of the suit, the defendant can get an equitable set-off to the extent of the
plaintiff’s claim only but not for the balance found due to him. In a legal set-off
the whole claim is admissible and the defendant can even get a decree for the
balance.

A legal set-off requires a court-fee because it is a claim that might be established by a

separate suit in which a court-fee would have to be paid. But there is no such fee required
in an equitable set-off which is for an amount that may equitably be deducted from the
claim of the plaintiff where a court-fee has been paid on the gross amount.