IMPORTANT POINT
Concept of equitable set-off is founded on fundamental principles of equity, justice and good conscience.

JUDGMENT

Dipak Misra, J.

Delay in filing the application for substitution is condoned and prayer for substitution of appellant No. 2 is allowed.

2. Leave granted.

3. The appellant Nos. 1 and 3 along with the predecessor-in-interest of appellant No. 2 instituted suit No. 301 of 1993 in the High Court of Calcutta principally for a declaration that they are entitled to be paid all the commissions and other incentives payable to the agents/field officers by the defendants in respect of the transactions and/or business which was done through the customers/certificate holders in accordance with the circulars/terms and conditions of appointment of all agents/field officers of the defendant company and for a decree of Rs.25 lacs against the defendant No. 1 company jointly and severally or in the alternative to cause an enquiry pertaining to the damages suffered by the plaintiffs and pass a decree for such a sum.

4. After issuance of notice of the plaint which was presented on 11.8.1993, the defendants entered appearance and filed their written statement on 12.8.1994. Thereafter, on 7.4.1998, the defendants filed an application for amendment of the written statement. The amendment that was sought for by the defendants was to the effect of grant of a decree for a sum of Rs.4,19,509.43 in favour of the defendant No. 1 and a decree for further interest and, if necessary, to enquire into the sum which is payable by the plaintiff No. 1 to the defendant company. The said application was seriously opposed by the plaintiffs on the ground that such an amendment was totally impermissible and by seeking incorporation of such a plea by way of amendment the defendants were actually taking recourse to an adroit method of introducing a counter claim or set-off.

5. The learned single Judge scanned the anatomy of the language employed in Order VI Rule 17, Order VIII Rule 6 and Rule 6-A of the Code of Civil Procedure and after referring to decisions in Jai Jai Ram Monohar Lal v. National Building Material Supply, Gurgaon, AIR 1969 SC 1267 Suraj Prakash Bhasin v. Smt. Raj Rani Bhasin and others, AIR 1981 SC 485 Nichhalbhai Vallabhai v. Jaswantlal Zinabhai, AIR 1966 SC 997 Abdul Rahim Naskar v. Abdul Jabbar Naskar and ors., AIR 1950 Cal 379 Baijnath Bhalotia v. State Bank of India and others, AIR 1967 Pat 386 and I.T.C. Limited v. M.M.P. Lines Pvt. Ltd. and others, AIR 1978 Cal 298 and analyzing the principles stated therein, came to hold that there is no scope for entertaining a counter claim when the time had expired long back and there was no justification to accede to the claim at the desire of the party. Be it noted, the learned Judge came to hold that the claims were not identical in nature and, hence, the defendants could not have asked for adjustment of any claim on the basis of a cause of action inasmuch as the nature of cause of action, as pleaded by the defendants in their amendment application, is different from the cause of action set forth by the plaintiffs in the suit. It was further opined that conceptually they did not meet the same character and the spacious plea that the amendment should be treated as equitable set-off was not acceptable. Emphasis was laid on the relief sought in the plaint which pertained to declaration and the entitlement of the plaintiffs to the commission and incentives payable by the defendants to the plaintiffs. Being of this view, the learned single Judge rejected the application for amendment.

6. Dissatisfied with the order of rejection an appeal was preferred and the Division Bench vide order dated 17.6.2004 came to hold that the claim put forth by the defendants by way of written statement could no longer be legally recoverable at that distance of time; and that the claim could not be treated as a counter claim and set-off as envisaged under the Civil Procedure Code. The Division Bench, after referring to Mackinnon Mackenzie and Company Pvt. Ltd. v. Anil Kumar Sen and Anr., AIR 1975 Cal 150 came to hold that the prov