Order VIII Rule 6 CPC - Particulars of Set-off in Written Statement
Order VIII Rule 6 governs a defendant's plea of legal set-off in a suit for recovery of money. It permits adjustment of a definite, legally recoverable monetary claim against the plaintiff's demand when the statutory conditions are met.
Order VIII Rule 6 - Statutory provisions
The following reproduces the substance of the central CPC provision, with minor punctuation and spelling normalization for readability. State amendments and special procedural regimes should be checked where relevant.
(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, presents 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.
Illustrations under Rule 6
The CPC supplies eight illustrations explaining when a legal set-off is and is not available:
- The rules relating to a written statement by a defendant apply to a written statement in answer to a claim of set-off.
- A bequeaths Rs. 2,000 to B and appoints C his executor and residuary legatee. B dies and D takes out administration to B's effects, C pays Rs, 1,000 as surety for D; then D sues C for the legacy. C cannot set-off the debt of Rs. 1,000 against the legacy, for neither C nor D fills the same character with respect to the legacy as they fill with respect to the payment of the Rs. 1,000.
- A dies intestate and in debt to B. C takes out administration to A's effects and B buys part of the effects from C. In a suit for the purchase-money by C against B, the latter cannot set-off the debt against the price, for C fills two different characters, one as the vendor to B, in which he sues B, and the other as representative to A.
- A sues B on a bill of exchange. B alleges that A has wrongfully neglected to insure B's goods and is liable to him in compensation which he claims to set-off. The amount not being ascertained cannot be set-off.
- A sues B on a bill of exchange for Rs. 500. B holds a judgment against A for Rs. 1,000. The two claims being both definite pecuniary demands may be set-off.
- A sues B for compensation on account of trespass. B hold a promissory note for Rs. 1,000 from A and claims to set-off that amount against any sum that A may recover in the suit. B may do so, for, as soon as A recovers, both sums are definite pecuniary demands.
- A and B sue C for Rs. 1,000. C cannot set-off a debt due to him by A alone.
- A sues B and C for Rs. 1,000. B cannot set-off a debt due to him alone by A.
- A owes the partnership firm of B and C Rs. 1,000. B dies, leaving C surviving. A sues C for a debt for Rs. 1,500 due in his separate character. C may set-off the debt of Rs. 1,000.
Conditions for claiming legal set-off
1. The plaintiff's suit must seek recovery of money
Rule 6(1) addresses money-recovery suits. A defendant cannot automatically invoke statutory legal set-off in a suit seeking only a non-monetary remedy.
2. The amount must be ascertained and legally recoverable
The defendant's demand must be a definite monetary sum that can legally be recovered from the plaintiff. A disputed claim for unliquidated damages is generally not a legal set-off under Rule 6, although a properly framed counterclaim may be available under Rule 6A.
3. The parties must act in the same legal capacities
Both parties must fill the same character in the claim and the proposed set-off. A debt owed in an individual capacity ordinarily cannot be adjusted against a claim made in a distinct representative capacity. The statutory illustrations explain this restriction.
4. The court must have pecuniary jurisdiction
The amount sought to be set off cannot exceed the court's pecuniary jurisdictional limits.
5. The plea must be made at the prescribed stage
Rule 6(1) contemplates a written statement containing particulars of the debt at the first hearing, or later with the court's permission. Other applicable deadlines for written statements, including stricter requirements in specified commercial disputes, must also be observed.
Effect of a valid set-off
Under Rule 6(2), the written statement asserting set-off operates like a plaint in a cross-suit, allowing the court to decide the original claim and set-off in one judgment. The provision expressly preserves a pleader's lien for costs payable under the decree. Rule 6(3) applies the rules for written statements to a response to a set-off claim.
Example: If the plaintiff proves a debt of Rs. 80,000 and the defendant establishes a legally permissible set-off of Rs. 30,000, the net amount may be Rs. 50,000 in the plaintiff's favour, subject to other findings and orders of the court.
Legal set-off, equitable set-off and counterclaim
Legal set-off is governed by Order VIII Rule 6 and requires an ascertained sum and the other conditions stated above. Equitable set-off is a judicially recognized defence that may be considered where opposing demands are sufficiently connected; its availability depends on the facts and applicable law. Counterclaim under Order VIII Rule 6A is a substantive claim by the defendant against the plaintiff, potentially including damages, and is subject to its own procedural and jurisdictional requirements.
What should a written statement pleading set-off contain?
It should clearly identify the amount, transaction or legal basis, date and enforceability of the debt, supporting documents, the parties' legal capacities, and the relief sought. The defendant should plead facts showing that Rule 6 applies and comply with any applicable court-fee, verification, limitation and procedural requirements.
Official law and related provisions
For the authoritative statutory text and any amendments, consult the India Code official legislation portal and search for the Code of Civil Procedure, 1908 (Act 5 of 1908), First Schedule, Order VIII, Rule 6. For applicable commercial-suit procedure, also consult the Commercial Courts Act, 2015 and its amendments to the CPC.
Related reading: Order VIII Rule 6A - Counterclaim, Rule 6B - Counterclaim to be stated, and Rule 1 - Written statement.
Frequently asked questions
Can an unliquidated damages claim be set off under Rule 6?
Ordinarily no. Legal set-off requires an ascertained sum. A counterclaim or, where justified, an equitable set-off may require separate analysis.
Can a defendant raise set-off after the first hearing?
Rule 6(1) allows a later plea with the court's permission, subject to other binding procedural limits.
Does a set-off require a separate lawsuit?
Not necessarily. A properly pleaded set-off can be adjudicated with the original suit, because Rule 6(2) gives the written statement the effect of a plaint in a cross-suit.
Legal information: This article explains the central CPC framework. State amendments, special statutes, commercial-suit rules and case-specific orders may alter the procedure. Check the applicable law before filing.