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Difference between set-off and counter-claim

BASIS

SET-OFF

COUNTER- CLAIM

Statute "Set off" is defined in CPC rule 6 order VIII. The term "counterclaim" is defined in 6A-6G of order VIII.
Definition A claim set off against another is referred to as a "set-off." It is a cross-claim that partially offsets the primary claim. It is the extinction of debts in which two people are reciprocally debtors to each other and credits in which they are reciprocally creditors to each other. A counterclaim is defined as a claim made by the defendant in a proceeding against the plaintiff. It is a claim distinct from the suit plaintiff's claim that can be enforced through a cross-action. It is an action brought by the defendant against the plaintiff.
Nature Set-off is a statutory defense to a plaintiff's action. Counterclaim is substantially a cross-action and does not afford any defense to the plaintiff's claim.
Arises Out Of Set-off must be for a specific amount or must arise from the same transaction as the plaintiff's claim.x A counterclaim does not have to emerge from the same transaction.
Burden Of Proof The plaintiff must prove that the set-off was barred when the action was filed to establish his plea. The plaintiff only needs to prove that the counterclaim was barred when it was pleaded.
Objective Set-off is a statutory defense that must be pleaded in the written statement. It can be used as a shield rather than a sword. In contrast, a counterclaim provides no defense to the plaintiff's claim. It is an offensive weapon that allows the defendant to enforce his claim against the plaintiff just as effectively as a separate action.
Classifications The two types of set offs are Equitable set-off and Legal set-off. Counterclaim does not have such classifications.

Set-off Case Laws

  • In Jitendra Kumar Khan v. Peerless General Finance & Investment Co. Ltd [(2013) 8 SCC 769], it was observed that certain conditions must be met before applying Order VIII, Rule 6, CPC. There are two primary conditions- firstly, it must be a money-recovery suit, and secondly, the amount sought to be set off must be a certain amount.
  • The issue in M/s. Anand Enterprises v Syndicate Bank [AIR 1990 Kant 175] was the applicability of court fees on a set-off. The Karnataka High Court stated its stance on the topic, saying that a written statement should be treated as a plaint regarding the set-off claim, and the same portion will attract court fees.

Counter-claim Case Laws

  • In Rohit Singh v. State of Bihar [(2006) 12 SCC 734], there was no counterclaim. The counterclaim was considered after the issues were framed and the evidence was closed. The SC observed that, although a counterclaim could be submitted after filing the written statement, this did not imply that a counterclaim could be elevated after the issues were framed and the evidence was closed.
  • In Manikchand Fulchand Katariya v. Lalchand Harakchand Katariya [AIR 1994 Bom 196, 1994], it was held by the Hon'ble Bombay High Court that a counterclaim filed in accordance with Order 8 Rule 6A is not limited to a money suit but also to a decree for possession filed by the defendant in a case instituted by the plaintiff for an injunction.

Conclusion

Set-off and counterclaim are equally important. The provision of Rule 6 Order VIII provides a plea of defense in the form of a set-off, which can be claimed as a matter of right by the defendant. Whereas Order 8 Rule 6F talks about counterclaim, in which if the defendant's counterclaim succeeds, the court always rules in favor of the former.


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