A.S. Anand, J.
1. This revision petition is directed against the order of the District Judge, Jammu dated 2-9-1980 and hay arisen in the following circumstances : Respondent No. 1 filed a suit for recovery of Rs. 24,948/- as the instalments contributed by him towards the Chit Fund Scheme started by the defendant-petitioner. The defendant-petitioner in the written statement inter alia averred that the plaintiff had stood surety for some other members of the Chit Fund Scheme who after having received definite amounts stopped paying the instalments and, therefore, the defendant-firm adjusted the amount due to the plaintiff against its own claim against the defaulters for whom the plaintiff had stood surety as also against some arrears due from the plaintiff. The plaintiff submitted before the trial court that since the defendant had not paid the court-fee on the amount of set off claimed by him in the written statement, he could not be heard on that plea. The following preliminary issues were raised in the case :
1. Whether defendant No. 1 can claim set off without paying court-fee on the amount of set off? OPD
2. Whether the suit is bad for mis-joinder of the parties and causes of action? OPD 2 to 4
2. The learned District Judge vide the impugned order held that the defendant could not claim the set off without paying the court-fee on the amount of set off and directed defendant No. 1 to pay the court-fee on the amount of set off in case he wanted that plea to be taken note of on or before 1-10-1980. The defendant No. 1 has challenged that order by way of this revision petition.
3. With a view to properly appreciate the arguments raised at the bar, it would be desirable to first notice the provisions of Order 8, Rule 6, C.P.C. Clause (1) of Rule 6 of Order 8 reads as follows :--
'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 plaintiffs 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.'
4. By its very nature set-off is, a plea in defence which by adjustment would wipe off or reduce the plaintiffs claim. A plea of set-off must, however, be distinguished from a plea of payment or adjustment. While set-off extinguishes the debt or reduces the same, a payment refers to a satisfaction or extinguishment of a debt effected prior to the raising of the defence of payment. The question of set-off can arise only in respect of dues which are outstanding and which have not already been adjusted. A plea of payment or adjustment on the other hand is essentially a different plea and can be taken note of provided the same was raised before the institution of the suit and not afterwards.
5. One of the basic factors which has to be taken into consideration while determining whether a plea raised in defence is a plea of set-off or of payment by adjustment, is to find out as to whether a separate action could be maintained by the defendant on the basis of the claim made by him. In case a separate claim could be maintained by him and put forward in a separate suit, then the plea would be a plea of set-off and court-fee will have to be paid on the claim. On the other hand, if adjustment had been made prior to the filing of the suit, no court-fee would be payable on the amount, which stood adjusted prior to the institution of the suit, as the plea in that case would be a plea of adjustment by payment. Under Schedule 1, Article 1 of the Court-fees Act, ad valorem court-fee is payable on the set-off claimed but no court-fee need be paid on the plea of adjustment for the simple reason that the plea of adjustment is in the nature of informing the court that prior to the institution of the suit, the amount or a part of it stood adjusted and the plaintiff was not entitled to claim that amount.
6. The sole question which requires determination in the instant case is whether the plea raised by the defendant was a plea of set-off or of adjustment. According to Mr. Balgotra, it was a plea of adjustment, while according to Mr. Sharma it was a plea of set-off. For reasons to follow, I agree with Mr. Sharma that the plea raised by the petitioner-defendant was a plea of set off and not a plea of adjustment or payment.
7. As already noticed, if a separate action could be maintained on the basis of the claim made by the defendant in a separate suit, then it would be set off and the defendant would be liable to pay court fee under Schedule 1, Article 1 of the Court-fees Act. The defendant in the written statement raised the plea that certain amounts were due to him from the alleged defaulters for whom the plaintiff had stood surety and therefore he had adjusted that amount due to the plaintiff against the amount allegedly due from the defaulters. It was open to the defendant to raise his claim against the defaulters personally and he could certainly raise that claim through separate suit against them. In case the conditions of surety permitted, he could even raise that claim, by a separate suit, against the plaintiff. That apart, from the material on the record, it transpires that the alleged adjustment was notified by the defendant to the plaintiff after the institution of the suit and not prior to it. In these circumstances, the plea of the defendant was a plea of set-off and not adjustment or payment and the defendant could not escape the liability to pay court-fee on the claim of set-off. Thus, I find the order of the District Judge to be unexceptionable and I confirm his finding on issue No. 1 and hold that the defendant-petitioner could not claim set-off without paying the court-fee on that amount.
8. Issue No. 2 was not pressed before the learned District Judge and the same has not been pressed before me either. The same is, therefore, decided against defendants 2 to 4.
9. In the result this revision fails and is dismissed as such with costs.
10. The learned District Judge had granted time to defendant No. 1 to pay the court-fee on the amount of set-off on or before 1-10-1980 by his order dated 2-9-1980. Since, defendant No. 1 filed this revision petition in this court, and that revision petition has now been dismissed by me, I grant further time to defendant No. 1 to pay the court-fee on the amount of the set-off claimed by him en or before 1-12-1983.
11. The record of the case shall be sent back to the trial court where the parties are directed to appear through their counsel on 1-12-1983.