ALIGARH MUSLIM UNIVERSITY

(MALAPPURAM CENTRE, KERALA)

Assignment in place of Tutorial-Semester VI

SUBJECT: Code of Civil Procedure, 1908

Topic: Written statement, setoff and

counterclaim (order 8) CPC.

Unit-2

Submitted to: Submitted by:

Mr. Alinihas V sir Afzal
Asst. professor 18BALLB24
AMU-MC GJ3799

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Table of content
1) Written statement
a. introduction
b. meaning
c. Who may file?
d. When to be filled?
e. Outer limits
f. Particulars
g. Special rules of defence
h. Documents to be relied upon
2) Setoff
a. General
b. Doctrine explained
c. Essential
d. Types
e. Conditions
f. Effects of setoff
3) Counterclaim
a. Doctrine explained
b. Object
c. Modes
d. Who may file?
e. When counterclaim may be filed?
f. Setoff and counterclaim: distinction
4) Bibliography

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Written statement

Introduction

A civil suit is instituted by filing a plaint in the appropriate court which has jurisdiction over
the subject-matter. A plaint is filed by the plaintiff. Similarly, the defendant has to file a
written statement, i.e., response to the content in the plaint. This written statement, in some
cases, is accompanied by set-off and counter-claim. So, set-off and counter-claims are the
cross-claims done by the defendant and these cross-claims cannot be contested unless they
are accompanied by the written statement. A written statement is a reply to the plaint, and
such reply has to be given within 30 days the date of the filing of the plaint.

Meaning
Though the expression "written statement" has not been defined in the Code, it is "a term of
specific connotation ordinarily signifying a reply to the plaint filed by the plaintiff". In other
words, a writ ten statement is the pleading of the defendant wherein he deals with every
material fact alleged by the plaintiff in his plaint and also states any new facts in his favour or
takes legal objections against the claim of the plaintiff.

Who may file written statement?

A written statement may be filed by the defendant or by his duly constituted agent. Where
there are several defendants and a common written statement is filed by them, it must be
signed by all of them. It is, however, sufficient if it is verified by one of them who is aware of
the facts of the case and is in a position to file an affidavit. But a written statement filed by
one defendant does not bind other defendants.

When written statement may be filed?

A defendant should, within thirty days from the service of summons n him, present a written
statement of his defence. The said period, however, can be extended up to ninety days.

Outer limit for filing written statement

In Kailash v. Nanhku1, the Supreme Court was called upon to consider whether the time-
limit of ninety days prescribed by the proviso to Rule 1 of Order 8 for filing written statement
by the defendant was mandatory or merely directory.

Considering the provision of the Code as originally enacted, recommendations of the Law
Commission, anxiety of Parliament to ensure speedy disposal of cases but without sacrificing

1
6 April, 2005
https://indiankanoon.org/doc/877414/

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fairness of trial and principles of natural justice inbuilt in all procedural laws, the court held
the provision directory and permissive and not mandatory and imperative.

“The process of justice may be speeded up and hurried but the fairness which is a basic
element of justice cannot be permitted to be buried.”

In the leading decision of Salem Advocate Bar Assn. (II) v. Union of India2, harmoniously
construing Rules 1, 9 and 10 of Order 8, the Supreme Court observed:

“On failure to file written statement under this provision, the Court has been given the
discretion either to pronounce judgment against the defend ant or make such other order in
relation to suit as it thinks fit. In the context of the provision, despite use of the word 'shall',
the court has been given the discretion to pronounce or not to pronounce the judgment against
the defendant even if written statement is not filed and instead pass such order as it may think
fit in relation to the suit. In construing the provision of Order 8 Rule 1 and Rule 10, the
doctrine of harmonious construction is required to be applied.”

Particulars: Rules 1-5 & 7-10

A written statement should be drafted carefully and artistically. All the general rules of
pleading apply to a written statement also. Before proceeding to draft a written statement it is
absolutely necessary to examine the plaint carefully. Like a plaintiff, a defendant may also
take a number of defences, either simply or in the alternative, even though they may be
inconsistent, provided they are maintainable at law and are not embarrassing.

Special rules of defence

Over and above the general defences, Rules 2 to 5 and 7 to 10 deal with special points
regarding filing of a written statement:

1. New facts, such as the suit is not maintainable, or that the trans action is either void or
voidable in law, and all such grounds of defence as, if not raised, would take the
plaintiff by surprise, or would raise issues of fact not arising out of the plaint, such as
fraud, limitation, release, payment, performance or facts showing illegality, etc. must
be raised.
2. The denial must be specific. It is not sufficient for a defendant in his written statement
to deny generally the grounds alleged by the plaintiff, but he must deal specifically
with each allegation of fact which he does not admit, except damages.
3. The denial should not be vague or evasive.
4. Every allegation of fact in the plaint, if not denied specifically or by necessary
implication, or stated to be not admitted in the pleadings of the defendant, shall be
taken to be admitted except as against a person under disability.

2
2 August, 2005
https://indiankanoon.org/doc/342197/

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The combined effect of Rules 3, 4 and 5 has been considered by Subba Rao, J. (as he then
was) in the case of Badat & Co. v. East India Trading Co3. in the following words:

"These three rules form an integral code dealing with the manner in which allegations of fact
in the plaint should be traversed and the legal consequences flowing from its non-compliance.
The written statement must deal specifically with each allegation of fact in the plaint and
when a defendant denies any such fact, he must not do so evasively, but answer the point of
substance. If his denial of a fact is not specific but evasive, the said fact shall be taken to be
admitted. In such an event, the admission itself being proof, no other proof is necessary."

5. Where the defendant relies upon several distinct grounds of de fence or set-off or
counterclaim founded upon separate and distinct facts, they should be stated
separately and distinctly.
6. Any new ground of defence which has arisen after the institution of the suit or
presentation of a written statement claiming a set off or counterclaim may be raised
by the defendant or plaintiff, as the case may be, in his written statement. Here the
court is empowered to take notice of subsequent events.
7. No pleading after the written statement of the defendant other than by way of defence
to a setoff or counterclaim can be filed. The court may, however, allow any party to
file his pleading upon such terms as it thinks fit.
8. If the defendant fails to present his written statement within the time permitted or
fixed by the court, the court will pronounce the judgment against him or pass such
order in relation to the suit as it thinks fit and a decree will be drawn up according to
the said judgment.

In Modula India v. Kamakshya Singh Deo4, explaining the ambit and scheme of Rules 1, 5
and 10 of Order 8, the Supreme Court observed,

"Rule 1 merely requires that the defendant should present a writ ten statement of his defence
within the time permitted by the Court. Under Rule 5(2), where the defendant has not filed 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

3
1964 AIR 538, 1964 SCR (4) 19
4
1989 AIR 162, 1988 SCR Supl. (3) 333

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Court to pass a decree in favour of the plaintiff straightway because a written statement has
not been filed."

Documents relied on in written statement: Rule 1

Like a plaintiff, a defendant is also bound to produce all the docu ments in support of his
defence, or claim for set-off or counterclaim which are in his possession. If the defendant
fails to produce them, they will not be received in evidence except with the leave of the court.
This provision, however, does not apply to the following documents;

i. documents reserved for cross-examination of the plaintiff's witnesses; or

ii. documents handed over to a witness merely to refresh his memory.

SET-OFF: RULE 6
"Set-off" means a claim set up against another. It is a cross-claim which partly offset the
original claim. It is an extinction of debts of which two persons are reciprocally debtors to
one another by the cred its of which they are reciprocally creditors to one another. Where
there are mutual debts between the plaintiff and the defendant, one debt may be settled
against the other. It is a plea in defence, available to the defendant. By adjustment, set-off
either wipes out or reduces the plaintiff's claim in a suit for recovery of money.

Doctrine explained

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".

A plea of set-off is "a plea whereby a defendant acknowledges the justice of the plaintiff's
demand, but set up another demand of his own, to counterbalance that of the plaintiff, either
in whole or in part". Thus, it is a "reciprocal acquittal of debts between two persons". The
right of a defendant to claim set-off has been recognised under Rule 6. It obviates the
necessity of filing a fresh suit by the defendant.

Illustrations:

a) A Bequeaths Rs 2000 to B and appoints C his executor and residuary legatee. B dies
and D takes out administration to B's effects. C pays Rs 1000 as surety for D; then D
sues C for the legacy. C cannot set-off the debt of Rs 1000 against the legacy, for
neither Nor D fills the same character with respect to the legacy as they fill with
respect to the payment of Rs 1000.
b) A sues B on a bill of exchange for Rs 500. B holds a judgment against A for Rs 1000.
The two claims being both definite, pecuniary demands may be set-set-off.

Types

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The law recognises two types of set-off

i. Legal set-off; and

ii. Equitable set-off.

Order 8 Rule 6 deals with legal set-off. But the said provision is not exhaustive and does not
take away the power of the court to allow such adjustments independent of Rule 6 of Order 8.
It is known as “equitable set-off”.

Conditions

A defendant may claim a set-off, if the following conditions are satisfied:

i. The suit must be for the recovery of money;

ii. The sum of money must be ascertained;
iii. Such sum must be legally recovery;
iv. It must be recoverable by the defendant or by all the defendants, if more than one;
v. It must be recoverable by the defendant from the plaintiff or from all the plaintiffs, if
more than one;
vi. It must not exceed the pecuniary jurisdiction of the court in which the suit is brought;
vii. Both the parties must fill, in the defendant's claim to set off, the same character as
they fill in the plaintiff's suit.

Effect of set-off

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 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.

COUNTERCLAIM: RULES 6A - 6G
"Counterclaim" may be defined as "a claim made by the defendant in a suit against the
plaintiff". It is a claim independent of, and separable from, the plaintiff's claim which can be
enforced by a cross-action. It is a cause of action in favour of the defendant against the
plaintiff.

Doctrine explained

One of the pleas open to a defendant to defeat the relief sought by the plaintiff against him is
a counterclaim. Counterclaim may be defined as "a claim made by the defendant in a suit
against the plaintiff". Therefore, a defendant in a suit may, in addition to his right to plead a
set-off, set up a counterclaim. It may be set up only in respect of a claim for which the
defendant can file a separate suit. Thus, a counterclaim is substantially a cross-action.

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Before the Amendment Act of 1976, there was no specific provision for counterclaim in the
Code. The Supreme Court, however, held the right to make a counterclaim statutory. It was
held that the court has power to treat the counter claim as a cross-suit and hear the original
suit and counterclaim together if the counterclaim is properly stamped.

Object

Before the Amendment Act of 1976, no counterclaim or set-off could be claimed except in
money suits. The Law Commission of India, however, recommended to avoid multiplicity of
proceedings, right to the defendant to raise a plea of set-off in addition to a counterclaim in
the same suit.

Nature and scope By the Amendment Act of 1976, a specific provision has been made for
counterclaims by inserting Rules 6-A to 6-G. Under sub-rule (1) of Rule 6-A, the defendant
may set up by way of counterclaim against the claim of the plaintiff any right or claim in
respect of action ac crying to the defendant against the plaintiff either before or after the
filing of the suit but before the defendant has delivered his defence or before the time fixed
for delivery of his defence has expired. Such counterclaim, however, should not exceed the
pecuniary limits of the jurisdiction of the court.

Modes of setting up counter claim

There are three modes of pleading or setting up a counterclaim in a civil suit:

i. In the written statement filed under Order 8 Rule 1

ii. By amending written statement with the leave of the court and setting up
counterclaim;and
iii. In a subsequent pleading under Order 8 Rule 9,7

Who may file counterclaim?

Normally, it is the defendant who may file a counterclaim against the plaintiff. But
incidentally and along with the plaintiff, the defendant may also claim relief against the co-
defendants in the suit. But a coin terclaim solely against co-defendants is not maintainable.

When counter claim may be set up?

A counterclaim may be set up by a defendant against a plaintiff in respect of cause of action

accruing either before or after filing of the suit, provided such claim is not barred by
limitation.

Effect of counterclaim

Such counter claim has the effect of a cross-suit and the court can pronounce a final judgment
both on the original claim and the counter claim. The counterclaim of the defendant will be
treated as a plaints and the plaintiff has a right to file a written statement in answer to the
counterclaim of the defendant.

Set-off and counterclaim: Distinction

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The distinction between a set-off and a counterclaim is very important and, therefore, must be
carefully considered:

a. Set-off is a statutory defence to a plaintiff's action, whereas a counterclaim is

substantially a cross-action.
b. Set-off must be for an ascertained sum or it must arise out of the same transaction; a
counterclaim need not arise out of the same transaction.
c. Set-off is a ground of defence to the plaintiff's action. In other words, the former is a
ground of defence, a shield, which if established, would afford an answer to the
plaintiff's claim in toto (as a whole) or pro tanto (in proportion); the latter is a weapon
of offence, a sword, which enables the defendant to enforce the claim against the
plaintiff effectually as an independent action.
d. In the case of a legal set-off, the amount must be recoverable at the date of the suit,
while in the case of a counterclaim the amount must be recoverable at the date of the
written statement.
e. When the defendant demands in a plaintiff's suit an amount below or up to the suit
claim, it is a set-off strict sense, but when it is for a larger amount, the claim for
excess amount is really a counterclaim.

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Bibliography
• CIVIL PROCEDURE WITH LIMITATION ACT, 1963
By ck takwani
Page no. 251-267
• https://www.indiafilings.com/learn/code-of-civil-procedure-set-off-and-counter-
claim/#:~:text=So%2C%20set%2Doff%20and%20counter,the%20filing%20of%20th
e%20plaint.
Visited on 29/03/2020
• class notes on order of cpc

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