1. The plaintiff sued the defendant for the recovery of Rs. 544 alleged to be due to him as rent under a lease which provided for rent to be paid at Rs. 40 per month. It appears that the defendant erected an oven in the house, and the lease contained a clause that in the event of the landlord demanding possession of the house the landlord should pay 'the cost of the built oven, namely Rs. 800 '. The defendant asks to be allowed to set-off the sum of Rs. 800 against the amount due for rent and asks that the suit should then be dismissed. He does not claim the surplus, and he says that he is entitled to a set-off without the payment of court fee. The Courts below are against him, and he comes in second appeal on the question of court-fee.
2. His learned advocate admits that court-fee is payable on a legal set-off claimed in accordance with the provisions of Order VIII, Rule 6, of the Civil Procedure Code, 1908. That is clear from the Court-fees Act. He argues, however, that this is a case not of a legal' set-off but of an equitable set-off, and that in the case of an equitable set-off court-fee is not required. He says that the wording of the clause in the lease 'cost of the built oven, namely Rs. 800 ' shows that the sum payable to the defendant on the resumption of the property by the landlord was not an ascertained sum I am not prepared to accept that interpretation. But assuming for the sake of argument that it is not an ascertained sum and that the claim can be regarded as a claim not to a legal set-off but to an equitable set-off where both: claims arise out of the same transaction, namely the lease, I am still not prepared to agree to the other contention raised by the learned advocate, namely, that a claim to an equitable set-off does not require court-fee. He says that when you have cross claims arising out of the same transaction, such as a lease in which a claim for rent is balanced by a claim for compensation to the lessee for the work that he has done to the property, the result is the same as it would be if the landlord's claim were a claim for money and the defendant's claim were a claim in respect of money repaid to the landlord. He argues that as the plaintiff now owes the defendant something in money for the oven, the defendant may be taken to have allowed the plaintiff to retain the: cost of the oven, in other words to have repaid the plaintiff his claim to rent and something more also. The argument is ingenious, but it is against the weight of authority. I am told that there are a number of cases in the unauthorised reports which support the view now put forward. But only one of them has been brought to my notice; and though the learned Judge who decided the case sought to distinguish an equitable set-off from a legal set-off and to explain why in the latter case Court fee is required but hone is required in the former case, I think, with respect, that he has not been very successful in so doing : see Madan Mohan Garg v. Bohra Ram Lal : AIR1934All115 Moreover the learned Judge does not refer to any authorities. I am told also that among the other cases also reported in the unauthorised reports dealing with this point no authorities have been cited. There is, however, clear authority to the contrary in a decision by a division bench of the Madras High Court, Lakshmanan Chettiar v. Ramanathan Chettiar I.L.R. (1935) Mad. 338 where their Lordships said (p, 339):-
We are quite unable to see why in reason a written statement or a defence pleading a legal set-off should have to bear a court-fee and one pleading an equitable set-off not be liable to do so also.
They held that the expression 'set-off' used in Article 1 of Schedule I, of the Court-fees Act as amended includes an equitable set-off, and with that opinion I respectfully agree.
3. I have referred to the plaintiff as the landlord, but that is only for the sake of convenience. The plaintiff is actually an auction purchaser and he says that he is not bound by the lease.
4. The appeal is dismissed with costs.