SOUTH INDIAN BANK LTD Vs. ANTONY VARKEY

JUDGEMENT

(1.) Revision petitioner was the plaintiff Bank. The suit was filed for recovery of an amount of Rs. 32,38.041.20 arising out of several loans on the basis of overdraft agreements secured by hypothecation of stock in trade, vehicles and machineries etc. The defendants were set exparte and suit was restored after one year and eight months of the institution of the suit. Defendants contended that on the oral assurance of sufficient working capital being made available to them by the previous manager and some of the employees, they had spent large amounts for canvassing orders etc. Defendants claimed that they are entitled to claim from the Bank as damages Rs. 57.47 lakhs out of which Rs. 25 lakhs is stated to be profits which were lost on account of their inability to conduct the business due to lack of funds. Therefore, in the written statement it was claimed that it may be set off against the amounts due to the Bank and a decree may be passed in favour of the defendants for the balance amount due to them.

(2.) Learned Sub Judge found that eventhough an amount was estimated tentatively for the loss and damages sustained due to the breach of agreement and inaction in disbursement of further loans, the amount was not quantified. The amount can be quantified only after adjudication and the amount, according to Para.10 and 22 of the written statement, has to be adjusted from the amount due. So it is a case of adjustment and no court fee need be paid on the same until the matter is finally adjudicated and preliminary decree is passed. Learned Judge also relied on the decision in M/s. Anand Enterprises, Bangalore v. Syndicate Bank, Bangalore (AIR 1990 Kant. 175).

(3.) Revision petitioner urges that in Para.4 of the written statement it is clear that what is raised is a claim for set off and counter claim and their plea for set off and counter claim is based on the allegations which they could have been filed as a separate suit also and in effect it will amount to counter claim or claim for set off for which court fee has to be paid. If it is a claim for set off court fee has to be paid in view of S.6(2) of the Code of Civil Procedure. S.6(2) of the Code of Civil Procedure states that Written statement claiming a set off shall have the same effect as a plaint in a cross suit. S.8 of the Court Fees Act was also referred to. Under S.8 of the Court Fees Act a written statement pleading a set off or counter claim shall be chargeable with fees in the same manner as a plaint. The rates are mentioned under Schedule.1 Art.1 of the Court Fees Act. The claim raised in the written statement is a claim for set off or counter claim, court fee has to be paid as per Schedule.1 Art.1 but such court fee need not be paid if it is a question of adjustment. Therefore, the question to be decided is whether the claim raised by the defendants in the written statement is a question of set off or counter claim or it is only an adjustment.