Set-off is a reciprocal acquittal of debts. In an action to recover money, a 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 the recovery of money the defendant claims to set-off against the plaintiffs demand an 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 plaintiffs suit, the defendant may at the first hearing of the suit, but not afterwards unless permitted by the court, present a written statement containing the particulars of the debt sought to be set-of.
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. (O. 8, R. 6).
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Essential Conditions of legal set-off:
ADVERTISEMENTS:
The set-off mentioned above is a legal set-off. It will be apparent from the above that in order to constitute legal set-off the following conditions must be fulfilled:
1. The suit must be for recovery of money.
2. The amount claimed to be set-off must be an ascertained sum of money.
ADVERTISEMENTS:
3. It must be legally recoverable from the plaintiff. i.e., it is not barred by the law of limitation.
4. It must not exceed the pecuniary limits of the jurisdiction of the court.
5. It must be recoverable by the defendant or by all the defendants, it there are more than one.
6. It must be recoverable by the defendant from the plaintiff or all the plaintiffs it there are more than one.
ADVERTISEMENTS:
7. Both parties must fill the same character as they fill in the plaintiff’s suit.
Legal set-off may be explained by one or two illustrations. A suit is brought by a Hindu son as the heir and representative of his father to recover from B certain debt due to the father. B claims to set-off a debt due to him by A’s father. B may do so, for both the parties fill the same character.
But the amount due as manager cannot be set-off against a personal liability, for both parties do not fill the same character.