Wali Ullah, J.
1. This is an appeal under Section 6A, Court-fees Act, by the defendant who has been called upon to make good a deficiency in court fee in regard to the amount of set-off claimed by him in the suit.
2. It appears that the plaintiffs respondents filed a suit for recovery of Rs. 38,000. The plain-tiff's case was that they acted as Commission Agents of the defendant and supplied vegetables and fruits to the Military authorities at Jhansi on behalf of the defendant who is a vegetable merchant.
3. The claim has been laid at Rs. 38,000 as the unpaid price for the supplies made by the plaintiffs. The defendant contested the suit. He filed a written statement in which he admitted that he entered into a contract with the Military authorities for the supply of vegetables and fruits. Thereafter, according to him, he entered into a contract with the plaintiffs under which the plaintiffs were to supply the vegetables and fruits to the Military authorities on his behalf on certain terms. According to the defendant the plaintiffs did not supply some of the things to the Military authorities in time, according to the terms of the contract. Thereupon he (the defendant) had to make purchases from other persons at higher rates in order to supply the goods to the Military authorities in time. He thereby suffered a loss of Rs. 32,588-4-2. It was also the case of the defendant that the balance due to the plaintiffs in respect of the goods actually supplied by them to the Military authorities was only Rs. 30,817-14-3 and not Rupees 38,000 as claimed in the plaint. As against this amount the defendant claimed Rs. 32,538-4-2 as the price of the articles supplied by him to the Military authorities owing to the failure of the plaintiffs to supply them in time. In paras. 25 and 29 of the written statement the defendant claimed that the plaintiffs' suit was liable to be dismissed with costs, whereas the defendant was entitled to a decree of Rs. 1720-5-11 against the plaintiffs with costs.
4. It appears that on 12th February 1947, a preliminary issue regarding the sufficiency of the court-fee was framed in the suit. It was to this effect:
'Is the defendant liable to pay a court-fee on the relief claimed by him in paras. 25 and 29 of the written statement viz., to be granted a decree of Rs. 1720-5-11 and if so, what is the amount of court-fee payable ?'
5. On 18th February 1947, the Court recorded a finding on this preliminary issue to the effect that the defendant was liable to pay an ad valorem court-fee on the relief claimed in paras. 25 and 29 of his written statement that a decree for Rs. 1720-5-11 be passed in his favour.
6. On 17th March 1947 the plaintiffs filed an application to the effect that the defendant was liable to pay ad valorem court-fee on Rupees 32,538-4-2 and not only on Rs. 1720-5-11. On this application the same learned Judge who had decided the preliminary issue on 18th February 1947 ordered notice to issue to the defendant. This application came up for disposal before the successor-in-office of the learned Judge who decided the matter in the first instance.
7. A preliminary objection was raised by the defendant. It was to the effect that the question of sufficiency of the court-fee could not be gone into again in that Court and the only remedy of the plaintiffs was to appeal against the order of 18th February 1947. The learned Judge however overruled the preliminary objection as he was of the opinion that it was absolutely clear from the order of his predecessor dated 18th February 1947 that he confined his attention to the question whether the defendant was or was not liable to pay a court, fee for the amount for which he sought a decree against the plaintiffs. Further, the learned Judge held that the question subsequently raised viz., whether the defendant was, or was not, liable to pay court-fee on the total amount which he wanted to set-off against the plaintiffs' claim was not determined on the earlier occasion.
8. On the merits the learned Judge considered the relevant portions of the written statement and came to the conclusion that in reality the claim set up by the defendant in the written statement was for damages and loss suffered by him on account of the default committed by the plaintiffs in making necessary supplies to the Military authorities in time; that this loss was estimated to be Rs. 32,538-4-2. In effect, therefore, the defendant claimed to set off an ascertained sum of money against the plaintiffs claim. In this view of the matter, the learned Judge held that the defendant was liable to pay court-fee on the whole amount of set-off claimed by him which was Rs. 32,638-4-2 and not only in respect of Rs. 1720-5-11 the excess amount of the set-off.
9. Learned counsel for the appellant has contended in the first instance that the question of deficiency of court-fee had already been decided on 18th February 1947 and it was not open to the Court below to reopen that question and in-effect to review the earlier order. After hearing the learned counsel for the parties we are satisfied that there is no force in this contention. From the order dated 18th February 1947 it is perfectly clear that the learned Judge there confined his attention to the question whether the defendant was or not liable to pay a court-fee on the amount for which he sought a decree against the plaintiffs. It is further clear that the question subsequently raised viz., whether the defendant was or not liable to pay a court-fee on the total amount which he wanted to set-off against the amount claimed by the plaintiffs was never adverted to on the earlier occasion. The issue regarding the sufficiency of the court-fee was therefore decided by the Court without applying its mind to the question subsequently raised. In these circumstances we do not see how it can be urged that the Court had no power to consider and determine this question. Even if, the application filed by the plaintiffs on 17th March 1947 be looked upon as an application seeking a review of the earlier order passed on 18th February 1947, it seems to us that it would be too much to say that the errors committed could not be corrected subsequently by the Court. This view is in keeping with the principle affirmed by this Court in the case of Kamta Chaudhry, v. Lal Chandra Mool Pratap Bahadur : AIR1945All284 . To the same effect is the principle laid down in the latest pronouncement of the Federal Court in the case of Hari Sankar Pal v. Anath Nath the Court observed :
'When, however, the Court disposes of a case without adverting to or applying its mind to a provision of law which gives it jurisdiction to act in a particular way, that may amount to an error analogous to one apparent on the face of the record sufficient to bring the case within the purview of Order 47, Rule 1, Civil P. C.'
10. In that case the High Court had omitted to consider the provisions of Order 41, Rule 33, Civil P. C. It had allowed the appeal but had refused to make any order in favour of a non-appealing party, whose position was identically the same as that of the successful appellants, without applying its mind to the provisions of Rule 33 of Order 41. The Federal Court held :
'That the High Court was not incompetent to rectify its omission and reconsider the matter it and when it is brought to its notice by way of an application for review.'
11. Learned counsel for the appellant has next contended that on a proper interpretation of what is contained in the written statement, it would appear that it is simply a plea of payment, or adjustment of accounts, and not a plea of set-off such as is contemplated by Article 1, of Schedule 1, Court-fees Act. We have carefully gone through the relevant paragraphs of the written-statement and in particular paras. 16, 19, 24 and 25 on which the learned counsel has laid stress. It seems to us that there is no claim made here which is merely either by way of defence or a plea of payment. On the contrary, here there is a claim by way of a set-off. Whether this claim fulfills the requirements of Order 8, Rule 6, Civil P. C., is a different question. A plea of satisfaction or extinguishment of a debt or a claim set up merely by way of defence is very different. It may be noted that a plea of payment necessarily refers to a satisfaction or extinguishment of a debt effected prior to the stage of the defence, whereas a plea of set-off is in the nature of a cross-claim and in effect it prays for a satisfaction, or extinguishment of a claim, to be made in the future after the date when the plea has been set up. If it were held to be merely a plea regarding the adjustment of accounts and no more it would not come within the scope of Article 1, Schedule 1, Court-fees Act and no court-fee would be payable on the amount mentioned in such a plea.
12. The next contention of the learned counsel for the appellant is that if the claim set up by the defendant be held to be a claim of set-off made by him, it is merely a claim to an equitable set off and as such no court-fee need be paid on the amount.
13. Learned counsel has in this connection referred us to the case of Ram Das v. Dwarka Das A. I. R. (17) 1930 ALL. 875: (128 I. C. 763), which was decided by two learned Judges of this Court. At page 876 it was observed :
'it has been held in this Court in several cases that an equitable set-off can be claimed even independently of the specific provisions of the Code of Civil Procedure (Section III now corresponding to Order 8, Rule 6: Nand Ram v. Ram Prasad, (27 All. 145), and the earlier oases referred to therein. It is not necessary to demand court-fees on this account.'
There is no reference in this case to Article 1, Schedule l, Court-fees Act. Next reference was made by learned counsel to the case of Madan Mohan v. Bhora Bam Lal, in : AIR1934All115 Kendall J., observed :
'If however the set-off could be claimed as an equitable set-off there is no reason why the Court should not have allowed it without payment of a Court-fee. A legal set oft requires a court-fee because it is a claim that might be established by a separate suit in which a court-fee would have to be paid. But there is no such fee required in the case of an equitable set-off which is for an amount that may equitably be deducted from the claim of the plaintiff where a court-fee has been paid on the gross amount.'
In this case also there is no reference to, or discussion of, the provisions of Article 1, Schedule 1, Court-fees Act. In this case Kendall J., who was also a party to the decision in the case of Ram Das v. Dwarka Das (A. I. R. (17) 1930 ALL. 876 : 128 I. C. 763), (ubi supra) appears to have followed the view expressed in that case without making any reference to Article 1, Schedule 1. These are the only two decisions of this Court which, are relied on by the learned counsel for the appellant in which it was observed that no court-fee was payable. Learned counsel has also-relied on the decision in the case of Basheshar Nath Khanna and Sons v. Grindlay and Co. Ltd., A. I. R. (24) 1937 Lah. 73 : (171. I. C. 649), by a Bench of that Court. At page 75 it was observed :
'Moreover, defendant 1 was apparently claiming; damages only by way of an equitable set-off, arising: out of the very contract on which the plaintiffs based: their claim. No court-fee would appear to be necessary in the case of such a set-off : See Ram Das v. Dwarka Das A. I. R. (17) 1930 All. 875 : (128 I. C. 763), and Madan v. Bohra Ram Lal, : AIR1934All115 .'
On the other hand, the learned counsel for the respondents has invited our attention to the case of Chakkhan Lal v. Kanhaiya Lal, 20 A. L. J. 1005 : (A. I. R. (10) 1923 ALL. 118), decided by two learned Judges of this Court. In this case a suit was filed for the recovery of a large sum of money in excess of Rs. 20,000. The suit was contested. In the written-statement inter alia, it was alleged that by reason of certain facts-stated by the defendant the plaintiff had become liable to pay the excess amount claimed to the defendant. The amount of this excess was put at Rs. 416 and a decree for this amount in favour of the defendant was prayed for. One of the issues raised in this case was whether the defendant was or was not bound to pay an ad valorem court-fee on the entire sum claimed by him as damages. The learned Civil Judge held that the defendant was liable to pay an ad valorem court-fee on the entire amount claimed as damages in the written statement. Eventually the matter came in revision to this Court. The learned Judges following the principles laid down by the Bench in the case of Budhoo Lal v. Mewa Ram, 19 A. L. J. 558 : (A.I.R. (8) 1921 ALL. 1 F. B.), held that there was no case which has been decided and dismissed the application on that ground alone. They further went on to observe at page 1007 :
'We are of opinion that the order requiring the defendant to pay an ad valorem court-fee on the full amount of the damages claimed in his written statement was a good order, regard being had to Article 1 Schedule 1, Court-lees Act. It must be borne in mind that this article was amended at the time of the enactment of the present Civil Procedure Code, Act V  of 1908, and that rulings prior to the date of the said amendment must be very cautiously used.'
No doubt these observations were in the nature of obiter dicta only. Learned counsel for the respondents has contended that if a written statement contains a plea of set off, whether it be a legal set-off within the scope of the provisions of Order 8 Rule 6, Civil P. C. or merely an equitable set-off, Article 1, Schedule 1, Court-fees Act, is applicable and court-fee is to be paid. He has further contended that the court-fee is to be paid on the whole amount claimed by way of set-off and not only on the difference between the amount of set-off and the amount claimed by the plaintiff in the plaint. In this connection reference has been made to the case of Jugal Kishore Narain Singh v. Bankey Behari Lal, A. I. R. (22) 1935 Pat. 110: (156 I. C. 344) decided by a Bench of that Court. Following the view expressed by this Court in the case of Chakkhan Lal v. Kanhiyalal : AIR1928All118 (ubi supra) it was held: court-fee is payable on the whole and not merely on the difference between the set-off and the amount claimed in the plaint, or even that court-fee was payable only on the excess of the amount of sot-off awarded by the decree over the amount claimed in the plaint. Next, we may refer to the case of Shiromani Sugar Mills Ltd. v. Sugni Chand Hashmat Rai & Co., 1938 A. L. J. 701 : (A. I. R. (25) 1938 ALL. 622), decided by Bennet J. In this case the plaintiffs brought a suit for the recovery of a sum of money being the cost of constructing a a building for the defendants as contracted by the latter. The defendants claimed to set-off Rs. 30,000 on the ground that the plaintiffs had damaged and had occupied the land thereby causing injury to the land of the defendants. The Court below directed that a court-fee should be paid on this set off. It was contended in the appeal that being an 'equitable set-off no court-fee was payable. It was held :
'Article 1, Schedule 1, Court-fees Act as amended by Schedule 4, Civil P. C. prescribes an ad valorem court-fee for any written statement pleading a set-off or counterclaim, and no exception is made in case of equitable set-off.
Next, reference may be made to the case of Hargovind v. Krishnadas Narayandas, A. I. R. (28) 1936 Nag. 290 : (I. L. R. (1937) Nag. 481) in which Pollock J. held :
'That the set-off mentioned in Article 1 of Schedule 1 includes an equitable set-off, and there is no reason to suppose it is confined to a legal set-off.'
To the same effect is the decision by Pollock J. in Bhikubai Govindji & Co. v C. P. Contracting and Mining Syndicate, Nagpur, A. I. R. (23) 1936 Nag. 222 : (I. L. R. (1937) Nag. 99).
14. These decisions were followed by Bose J. in Sadasheo Krishnarao v. Nathu Bala, A. I. R. (30) 1943 Nag. 314 : (I. L. R. (1944) Nag. 260) where it was held :
'There is no difference between an equitable get-off and a legal set-off in the matter of court-fees. In both oases, court-fees must be paid ad valorem on the amount claimed.'
Similarly, in Girdharilal v. Surajmal, Gruer J. held :
'It is quite clear from Article 1, Schedule 1, Court-fees Act, that fees must be paid on a set-off, and I agree with the decision in Chhakkhan Lal v. Kanhaiya Lal, A. I. R. (10) 1923 All. 118 : (45 All. 218) that it must be paid on the full amount of the set-off and not only on the amount claimed in excess of that claimed by the plaintiff.
The Calcutta High Court takes the same view. In Rezai Karim v. Mohammed Israil Ostagar, A. I. R. (26) 1989 Cal. 415 : (183 I. C. 373) decided by a Bench of that Court it was held :
'The word 'set-off' in Schedule 1 Article 1 not having been qualified in any way must include not only a legal set-off but also an equitable set-off.'
Again in T.S. Sitarama Ayyar v. G. Ramanuja Mudaliar, : AIR1933Mad203 , Sundaram Chetty J. following the decision of this Court in Chakkhanlal v. Kanhiya Lal, (20 A. L. J. 1005 : A.I.R. (10) 1923 ALL. 118), held :
'There is nothing to show that the set-off mentioned in Article 1 is confined only to legal set-off coming under Order 8, Rule 6, Civil P. C.; prima facie the expression 'set-off used in this article may well nigh include an equitable set-off also.'
Taking the same view of the law, Beasley C. J. and King J. in Lakshmanan Chettiar v. Ramanathan Chettiar : AIR1985Mad116 held :
'An equitable set-off is a legally recognized one and there is no distinction between that and a legal set-off. The word 'set off' in Article 1 Schedule 1 includes not only a legal set-off but also an equitable set-off and as such court-fee is payable on latter.'
15. Lastly, we may refer to the case of W. Wilrow v. Mahadeo Govind A. I. R. (30) 1943 Bom. 227 ; (210 I. C. 88) where Macklin J., following the decision of the Madras High Court in Lakshmanan Chettiar v. Ramanathan Chettiar, 58 Mad. 338: (A.I.R. (22) 1935 Mad. 115) expressed himself thus :
'Set-off as amended includes an equitable set-off and the necessary court-fee must be paid thereon.'
On a consideration of the relevant statutory provisions as well as the case-law reviewed above, in our judgment the correct position is this : Under Article 1, Schedule 1, Court-fees Act, a written statement pleading, 'set-off or counter-claim' is liable to payment of court-fee calculated ad valorem. The court-fee is to be calculated on the 'amount or value of the subject-matter in dispute.' The words 'set-off and 'counter-claim' are not defined any where in the Court-fees Act. Order 8, Rule 6, Civil P. C. deals with one kind of set-off called a legal 'set-off'. A right to set-off, even independently of the provisions of the Civil Procedure Code has been recognized for a long time both by Courts of Equity in England as well as by Courts in India. This is known as an 'equitable set off. But so far as the question of payment of court-fees on a set-off or counter-claim is concerned the only statutory provision that we have is in Article 1 Schedule 1. No distinction between the two kinds of sets-off has been made in this Article. It follows therefore that court-fee is payable on a set-off or counter claim in a written statement, no matter whether it is a legal set off or equitable set-off. The ad valorem court-fee is to be determined with reference to the total amount claimed by way of set-off and not only with reference to the difference between such amount and the amount claimed in the plaint. The decision of the Court below is therefore quite correct.
16. The result is that the appeal fails and is dismissed with costs.