2009 PLP 666 (SCMR)

ZIA PERWEZ, J.

Petitioner seeks leave to appeal against the judgment, dated 6-8-2008, whereby High Court Appeal No.56 of 2005 was dismissed by a learned Division Bench of the High Court of Sindh, Karachi.

2. Respondent instituted Suit No.1726 of 2000 for recovery of Rs.2,15,00,000 along with declaration and permanent injunction on account of losses and unpaid dues etc. during the execution of the contract for the work of extension of terminal building 1-1/2 level scheme at Lahore Airport. The petitioner contested the claim as well as the, amount due to the respondent. The learned Single Judge of the High Court of Sindh after recording the evidence decided the Issues Nos.1 and 2 in favour of the respondent vide judgment, dated 21-12-2004 and decreed the suit to the above extent, while the onus of proof of Issues Nos.3, 4 and 5 was upon the petitioner but the same were not pressed. The learned Single Judge of the High Court of Sindh recorded the judgment in favour of the respondent for a sum of Rs.30,12,092 with mark-up @ 10% per annum from the date of institution of suit till realization. The judgment was upheld in appeal by the learned Division Bench of the High Court through the judgment impugned herein.

3. Ms. Naheeda Mehboob Ellahi, learned Advocate Supreme Court for the petitioner, while stressing upon the documents placed reliance on the evidence brought on record as Exh.44/D-16, which is a statement showing the financial implication of the work i.e. extension of terminal building (1-1/2 level scheme) at Lahore Airport executed by the contractor Messrs Japak International (Pvt.) Ltd. This document reflected an amount of Rs.71,46,663 to be recoverable from the contractor. The main contention of the learned counsel for the petitioner is that as the amount stands admitted on the basis of record, the Courts below have erred in arriving at the conclusion to the effect that the respondent is entitled to recover the decreed amount. She lastly argued that as the amount due to the petitioner was not taken into consideration the petitioner may be allowed leave to appeal against the impugned judgment.

4. We have perused the record in the light of the arguments advanced by the learned counsel for the petitioner. The claim for recovery due to the respondent attracts the provisions of Order VIII, rules 6 and 7, C.P.C., which read as follows:

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6. Particulars of set-off to be given in written statement.

(1) 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, present a written statement containing the particulars of the debt sought to be set-off. (2) 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. (3) The rules relating to a written statement by a defendant apply to a written statement in answer to a claim of set-off." "

7. Defence or set off founded on separate grounds.

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

5. After filing of written statement without claiming any set-off, the party is barred from raising such a defence which is not claimed in the written statement. Claim for set-off can be presented at a subsequent stage only after leave of Court under the provisions of order VIII, rule 9, C.P.C., which reads as under:

"

9. Subsequent pleadings.

No pleading to the written statement of a defendant other than by way of defence to a set-off shall be presented except by the leave of the Court and upon such terms as the Court think 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 for presenting the same." The above provisions of law permit a defendant to raise in his defence what is called a legal set-off. The essential conditions of legal set-off are as follows: (i) The suit must be one for the recovery of money. (ii) As regards the amount claimed to be set-off

(a) it must be an ascertained sum of money; (b) such sum must be legally recoverable; (c) it must be recoverable by defendant or by all the defendants if more than one; (d) it must be recoverable by the defendant from the plaintiff or all the plaintiffs if more than one; (e) it must not exceed the pecuniary limits of the jurisdiction of the court in which the suit is brought; and (f) both parties must fill, in the defendants claim to set-off, the same character as they fill in the plaintiffs' suit." Thus, a plea of legal set-off, in its essential character is a defence and a counter-claim combined, defence to the extent of the plaintiff's claim and a claim by the defendant in the suit itself for the balance. This rule read with Order XX, rule, 19, C.P.C. permits what is in essence a counter-claim of a specific kind, namely, where it is for an ascertained amount exceeding the plaintiff's claim in his suit for recovery of money. The doctrine of equitable set-off permits on equitable considerations a defendant, to raise a plea of set-off even in respect of an unascertained sum of money on the principle that if there be some connection between the plaintiff's claim for a debt and; the defendant's claim to set off, it will be inequitable to drive the defendant to a separate suit. Instances of such equitable set-off are when the claims of the two parties arise out of the same transaction or transactions which can be regarded as one transaction or the cross-demands are so connected, in their nature and circumstances that they can be looked upon as part of one transaction or a final settlement of accounts and part payments against running bills for different items of works executed under a contract. Such a set-off is called an equitable set-off, as it was allowed by the Courts of Equity in England, as distinguished from a legal set-off, which was allowed by the Courts of Common Law in respect only of an ascertained sum. In a number of decisions in the sub-Continent, it has been held that although a claim for equitable set-off falls outside the provisions of Order VIII, rule 6, C.P.C. it is permissible for a defendant to plead an equitable set-off as effectively as a legal set-off. This view finds support from the proposition that the provisions of the Code regulate procedure only, and they do not have the effect of taking away any right of set-off which a defendant may otherwise have independently of its provisions. Order XX, rule 19, C.P.C. is further statutory recognition of the right of a defendant to plead an equitable set-off and obtain relief thereon. However, there is well-recognized distinction between a set-off and a counter-claim. Although in one sense both are identical inasmuch as they are cross-actions on the part of the defendant but a set-off is essentially a weapon of defence. If the defendant succeeds in establishing it, it serves the purpose of answering to the plaintiff's 'claim either wholly or pro tanto because a set-off is really an outstanding ascertained amount not required to be proved by leading evidence of fact constituting the claim as in a case of decree in favour of the defendant or other such established claim. Such debt may be claimed by the defendant against the plaintiff to counter-balance the debt claim of the plaintiff C against the defendant. A counter-claim, on the other hand, is essentially a weapon of offence and is not really relevant as a plea in defence to the claim of the plaintiff. It enables a defendant to have an issue framed and to establish and prove the claim by adducing evidence. On proof defendant may enforce a claim against the plaintiff as effectually as in an independent action. "In such cases the defendant is also required to affix the prescribed ad valorem court-fees under Article 1 of Sched. 1 of the Court Fees Act, 1870 (as amended in 1908). Its essential nature is that of a cross-suit pleaded through the written statement, but, in the same suit. Having regard to these essential ingredients of a counter-claim, it is plain that a right to make a counter-claim is not admissible if it does not fall within the ambit of Order VIII, rule 6, C.P.C. or qualify as an equitable set-off. The right to make a counter-claim has been always held to be a statutory right and as already observed there is nothing in the Code of Civil Procedure conferring the right, to plead such counter-claim, upon a defendant without proper adjudication by a competent forum if the same is disputed by the plaintiff as in the instance case as observed by this Court in the case of Syed Niamat Ali and 4 others v. Dewan Jairamdass and another PLD 1983 SC 5.

6. Perusal of the pleadings reflects that no specific claim for set-off or counter-claim was set forth by the petitioner in their written statements filed before the learned Court. No application for leave to appeal of the Court under the provisions of Order VIII, rule 9, C.P.C. nor the prescribed court-fees was affixed as provided under Article 1 of Sched.1 of the Court Fees Act, 1870 (as amended in 1908) nor any issue to this effect was framed. At this stage, the petitioner cannot be encouraged to plead its own lapses and negligence as a ground for setting aside judgments, which otherwise do not suffer from any legal infirmity. Under the circumstances, the judgment of the trial Court as well as findings in appeal based on issues duly proved by evidence on record do not call for any interference.

7. For the foregoing reasons, as no ground for grant of leave to appeal is made out, this petition is dismissed and leave to appeal is refused. M.B.A./C-4/SC Petition dismissed.