1. This is an appeal by the plaintiff, whose suit has been dismissed against one set of defendants 1 to 3, and has been decreed only against defendants 4 and 5. The pedigree of the defendants is as follows:
Bechulal (dead) Lalta Prasad, D. 1
Baldeo Lachmi |-----------------|
(monor) Narain Kalu Ram Ram Narain
D. 4 (monor) D.2 (monor) D.3
2. The plaintiff is a firm in Cawnpore, and he was in the habit of supplying for a number of years groceries to two firms as set out in para. 1 of the plaint. One of these firms was called Sarju Prasad Bechu Lal, situated in the town of Bahraich, and the other firm was called Bechu Lal Lalta Prasad, situated in the town of Chilwaria in the District of Bahraich. The plaintiff alleges that both these firms belong to a joint Hindu family constituted by all the defendants. The defendants, on the other hand, claim that the firm at Bahraich is owned only by the branch of Bechu Lal and the firm at Chilwaria is owned only by the branch of Lalta Prasad and that the branches are separate. The. short issue is whether these two brothers were joint or separate, but I must note that even if it is shown that the family was joint, it is further to be shown by the plaintiff that the firm of Sarju Prasad Bechu Lal was started with joint family funds.
3. Evidence has been given on both sides and a perusal of that evidence leads me to the conclusion that the trial Court was sight in holding that these two brothers were separate. The appellant relies on two documents, a letter and a postcard written by Lalta Prasad in 1926, printed at pp. 36 and 39. These letters appear to me to indicate merely that Lalta Prasad was offering to use his influence with his brother, Bechu Lal, to settle his account. Lalta Prasad does not say in these letters that he was responsible for the money owned by Bechu Lal. Lalta Prasad gave evidence that his father Sarju Prasad died nearly 40 years ago, that his father was a grain-parcher in a small way and after his death there was a partition by the 'panchas' of the family property between Lalta Prasad and Bechu Lal, and Lalta Prasad received Rs. 300 in cash as his share in the ancestral house and he went away to Chilwaria and started business there. Bechu continued in his business at Bahraich. Bechu had the family house rebuilt and purchased a house in Bahraich and mortgaged a house in Bahraich, all these transactions being separate from Lalta Prasad. Lalta Prasad bought a house in Chilwaria.
4. The only point which the cross-examination shows in favour of the plaintiff is that Lalta Prasad admits that when he went to the plaintiff in order to begin an account, the plaintiff said he was to give a firm name. The natural name for the witness to give would have been his father's name and his own. That is, he might have given a name Sarju Prasad, Lalta Prasad. Instead of doing so, he gave the name Bechu Lal Lalta Prasad, that is, he gave the name of his brother, although his case is that his brother had nothing to do with him. The mere use of a name, however, does not prove the case of the plaintiff. Some of the witnesses, who appear for the plaintiff, also do business with the two defendant firms, and all these witnesses admit that the two defendant firms are entered separately in their books. It is also admitted by the plaintiff's witness, Ram Saran, that the widow of Bechu Lal still lives in Bahraich and is in possession of the property of Bechu Lal. That would not be the case if the family were joint. For these reasons I come to the conclusion that the plaintiff has failed to prove that the family was joint. Therefore the plaintiff cannot hold the branch of Lalta Prasad responsible for the debit balance in the account of the branch of Bechu Lal. It is admitted by the plaintiff that in the account of Lalta Prasad there was a credit balance of Rs. 212-12-0. The suit therefore was correctly dismissed against the branch of Lalta Prasad. Accordingly I would dismiss the appeal against Lalta Prasad and his son with costs.
5. The cross-objection has been brought by Lalta Prasad and his son. This cross-objection is to the effect that the lower Court has erred in not allowing the sum of Rs. 212-12-0, to the respondents, and asks that the decree should be modified by this claim being decreed against the plaintiff. Objections of various sorts have been taken to this cross-objection. The matter arose in the following manner : In the plaint it is stated in para. & that there was a surplus of Rs. 212-12-0 in the ac. count of the firm Bechu Lal, Lalta Prasad with the plaintiff. In para. 5 it was stated that this surplus was directed by Lalta Prasad, defendant, to be transferred from that firm's account to the account of the firm Sarju Prasad-Bechu Lal which had a debit balance. On the point of fact the finding of the lower Court is that this allegation is not true. Lalta Prasad has given evidence to the contrary and there is no reason why his evidence should not be believed. The written statement in para. 17 set out the following claim:
Rupees 212-12 0 is admittedly due to the contesting defendants by the plaintiff for which a decree may be passed in favour of the contesting defendants. A court-fee of Rs. 16-8-0 is paid in respect thereof.
6. Now in my opinion this claim in the written statement amounts to a claim by way of set off under the provisions of Order 8, Rule 6, Civil P.C. The suit of the plaintiff is for the recovery of money, and the defendants claim to set off against the plaintiff's demand an ascertained sum of money legally recoverable by them from the plaintiff. The objection has been taken by Mr. Shambhu Nath for the plaintiff that these defendants do not admit the claim of the plaintiff, and therefore they cannot plead a set-off. There is nothing in Rule 6 which requires the defendant to admit any part of the claim of the plaintiff. His next objection was that a set-off could not be decreed if the suit of the plaintiff was dismissed against the defendant claiming the set off. This idea comes from English Common law. Odgers' 'Pleading and Practice in Civil Actions' Edn. 8, states on p, 250:
A set-off is a statutory defence to the whole or to a portion of the plaintiff's claim. At Common law a defendant who had any cross claim against the plaintiff could not raise it in the plaintiff's action: he had to bring a cross action. Ho might, it was true, when sued for the price of goods give evidence of a breach of any warranty, express or implied, in reduction of the price. But that was all. Then two statutes were passed in the reign of George II, (2 Geo. II. Order 22, and 8 Geo. II. Order 24) which enabled a defendant in the plaintiff's action to plead what is known as a 'set-off' but only in certain cases. In the first place, only a debt of a liquidated amount could be set-off; and it could only be set-off in an action in which the plaintiff's claim was also liquidated This is so still. Both must be due from and to the same parties in the same right. If the debt due from the plaintiff to the defendant exceeded the amount due from the defendant to the plaintiff, the defendant could mot recover the difference in the plaintiff's action; he could only setoff an amount equal to the plaintiff's claim; he had to bring a cross action for the balance.
7. On p. 254, Odgers says:
The Judicature Act, which gave every defendant a very wide power of counter-claiming, did not altar the rules as to set-off. Whatever was a good set-off, either at law or in equity, in 1875, is a good set-off, still and nothing else is admissible as a set-off, though it may be an excellant counterclaim. The distinction is important, because it carries with this result that a set-off is still a defence proper to the plaintiff's action, while a counter-claim is practically a cross-action.
8. On p. 255, Odgers states:
The modern counter-claim is entirely the creation of the Judicature Act, 1873. By virtue of Section 24, Sub-section (3) of that Act every Judge of the High Court of Judicature and of the Court of Appeal now has power to grant to any defendant in respect of any estate, right, or title, legal or equitable, claimed or assorted by him, all such relief against the plaintiff as the defendant shall have properly claimed by his pleading to the same extent as if the defendant had brought an action against the plaintiff for the purpose; and the Court will give judgment in the plaintiff's action both on claim and counter-claim. The defendant's claim need not relate to or be in any way connected with the plaintiff's claim, or arise out of the same transaction.... It may exceed the amount of the plaintiff's claim: Winterfield v. Bradnum (1878) 3 Q.B.D. 324.
9. Now when the provisions now embodied in Order 8, Rule 6, Civil P.C. were framed by the Legislature, the word counter claim was not introduced, but soma of the attributes of a counter claim were given to a set-off and some of the attributes of a set-off at English law were modified. This had been done in regard to the attribute that 'a set-off is a statutory defence to the whole or a portion of the plaintiff's claim' and that a defendant had to bring a cross-action for the balance due to him over what was due to the plaintiff. There is nothing in Order 8, Rule 6 to make either of these attributes apply to a set-off under that rule. On the contrary it is provided in Sub-rule (2):
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 of both the original claim and of the set-off....
10. And in Order 20, Rule 19(1), it is provided:
Where the defendant has been allowed a set-off against the claim of the plaintiff, the decree shall state what amount is due to the plaintiff and what amount is due to the defendant, and shall be for the recovery of any sum which appears to be due to either party.
11. These two provisions show that the Court must treat the claim of the defendant exactly as if the defendant had filed a plaint and the Court must pass a decree in favour of the defendant if his claim is established, even though the claim of the plaintiff against the defendant is dismissed, I may note that the Civil Procedure Code, does not make a set-off under Order 8, Rule 6 as wide as a counter claim, as the suit of the plaintiff must be 'for the recovery of money' and the set-off of the defendant must be of 'any ascertained sum of money legally recoverable by him from the plaintiff.' For the plaintiff, Dr. Katju took objection that on the principle of Illus. (g), Order 8, Rule 6, defendants 1 to 3 could not plead any set-off. That illustration is as follows : 'A sues B and C for Rs. 1,000. B cannot set-off a debt due to him alone by A.' The illustration is very brief and does not explain on what principle it is based. I consider that the illustration is introduced to prevent a decree being given for A against B and C jointly, with a decree for B alone against A on a set-off, as difficulties might arise in the execution of such a decree. But where B pleads that there is no joint debt due from him and C to A, as is pleaded by B in the present case, the case is different, and I do not consider that the illustration is not intended to apply to such a case. There is nothing in the wording of Order 8, Rule 6, to show that a set off could not be pleaded in such a case. The expression 'and both parties fill the same character as they fill in the plaintiff's suit' is illustrated by illustrations (a) and (b) which show how a person fills different characters, for example as legal representative and as vendor. The last argument made was that in any case this matter cannot be raised by way of cross-objection; that the period for filing an appeal had elapsed when the cross-objection was filed, and that defendants 1 to 3 were not making any objection to any part of the decree of the lower Court, as that decree dismissed the claim of the plaintiff against these defendants with costs.
12. But in my opinion these defendants may 'take any cross-objection to the decree on the ground that it omits to give them the relief which they asked for in the set-off, a decree for Rs. 212-12.0. They could have filed an appeal against the decree on the ground of this omission. As they have been respondents in this appeal, under Order 41, Rule 22, they are entitled to 'take any cross-objection to the decree which they could have taken by way of appeal.' In my view therefore on the claim for set-off this Court should grant a decree in favour of defendants 1 to 3. I may enumerate the propositions of law on which base this opinion as follows : (1) A set-off under Order 8, Rule 6 may be pleaded although the claim of the plaintiff is denied. It is not merely a defence to the plaintiff's claim, and a decree may be granted under Order 20, Rule 19, to the defendant although the suit of the plaintiff is dismissed by the decree. (2) A set-off under Order 8, Rule 6 is wider than a set-off at English law, but it is not so wide as a counter claim. (3) Where a plaintiff sues several defendants alleging a joint debt, a defendant who denies the joint debt may plead a set-off due to him alone. (4) A defendant-respondent whose set-off has not been decreed, or has not been referred to in the decree, may make this a ground of cross-objection in appeal. In regard to the last proposition, it was pointed out that the lower Court framed no issue on the set-off and the judgment and decree do not refer to it. Under Order 8, Rule 6(3) the plaintiff might have filed a written statement in reply to the set-off, but he did not do so. He had admitted tjhe facts alleged in the set-off, and he depended for his defence to it on his claim that there was a joint debt. No issue was therefore necessary on the set-off. It was apparently by oversight that the judgment and decree did not refer to it. When the Court below dismissed the claim of the plaintiff to a joint debt, it should have decreed the set-off in favour of defendant 1 to 3. This Court should remedy the omission and should grant the defendants, respondents a decree for the setoff.
13. I agree with my learned brother in dismissing the appeal; but I wish to make a few observations with regard to the claim of defendants 1 to 3, in respect of the sum of Rs. 212-12-0, I feel considerable difficulty in holding that the defendants' claim comes within the purview of Order 8, Rule 6, Civil P.C. Before considering the terms of Rule 6, I would like to mention the nature of the claim made by the defendants. The plaintiff claimed a decree for Rs. 7,068-9-9 against defendants 1 to 5 alleging that they belonged to one joint Hindu family and had two branches of the joint family business, one at Bahraich under the name and style Sarju Prasad-Bechu Lal and the other at Chilwaria under the name and style Bechu Lal-Lalta Prasad. According to the plaintiff's case, the entire joint family was liable for sums due from one or the other of the two concerns. It is in evidence that each branch had a separate 'khata' with the plaintiff. 'The 'khata' standing in the name of the branch Bechu Lal-Lalta Prasad showed a balance of Rs. 212-12-0 against the plaintiff, so that the plaintiff had to pay that sum of Bechu Lal-Lalta Prasad. On the other hand a sum of Rs. 7,581-5-9 was due to the plaintiff in the 'khata' of Sarju Prasad-Bechu, Lai. According to the plaintiff's allegations, contained in his plaint, the sum of Rs. 212-12-0, was due to the same body of individuals who were liable to pay to him Rs. 7,581-5-9. Accordingly he gave credit for Rs. 212-12-0, and claimed the balance of Rs. 7,368-9-9. Defendants 1 to 3 resisted the plaintiff's claim and pleaded that they were not liable to pay any part of what was due from Sarju Prasad-Bechu Lal, that is to say, any part of Rs. 7,581-5-9. On the contrary they maintained that a sum of Rs. 212-12-0 ought to be paid by the plaintiff to them. Para. 17 of their written statement was as follows:
Rupees 212-12-0 are admittedly due to the contesting defendants by the plaintiff for which a decree may be passed in favour of the contesting defendants. A court-fee of Rs. 16-8-0 is paid in respect thereof.
14. It is clear that defendants 1 to 3 in-tended to make a counter claim against the plaintiff for Rs. 212-12-0 and paid a court-fee of Rs. 16-8-0. For all practical purposes para, 17 of their written statement might well have been considered to be a plaint; and as the plaintiff did not deny that that sum was due to the firm Bechu Lal-Lalta Prasad, a decree in favour of defendants 1 to 3 could have been passed, but for the difficulty that the defendants' claim in its nature is one cognizable by the Court of Small Causes, and the Additional District Judge, before whom the suit was pending, had no jurisdiction to pass a decree in a suit cognizable by a Court of Small Causes. Order 8, Rule 6, Civil P.C. clearly contemplates cases in which the defendant claims to set off 'against the plaintiff's demand 'for an ascertained sum of money legally recoverable by him from the plaintiff. Where the defendant does not claim a setoff against the plaintiff's demand, but a decree in his own favour, I doubt that Order 8, Rule 6, Civil P.C. can in terms apply. It is noteworthy that the entire claim of the plaintiff is to be decreed against one set of the defendants without any set-off while the claim of another set of the defendants is to be decreed in its entirety against the plaintiff. It is not a case in which the decree in favour of the defendant is in respect of the excess left after the set-off. As my learned brother is inclined to take the view that Order 8, Rule 6, Civil P.C. applies and as his view leads to substantial justice between the parties, I do not consider it desirable to record my dissent from his well-considered decision. In this view I agree in decreeing the cross-objection in terms proposed by my learned brother.