The main legal point established in the judgment is that the liability of the defendant to pay court-fee on a set-off amount arises only after the court ascertains the sum recoverable by the defendant from the plaintiff as damages, and only that sum is entitled to be set-off towards the suit claim but on payment of requisite court-fee.

( 1 ) 1. This civil revision petition laid to this court under Section 115 C. P. C. arises from and is directed against an order made by the court-below on issues 5 and 6 in a pending suit being O. S. 557/82.

( 2 ) THE petitioners herein are the defendants in the court-below and the sole respondent is the plaintiff. The parties are referred to as plaintiff and defendant in the course of this order.

( 3 ) THE plaintiff filed a suit against the defendants amongst whom the first defendant was a firm of which defendants 2 to 5 were partners, for recovery of a sum of Rs. 32 lakhs and odd stated to be due under a term loan obtained by the defendants from the plaintiff on the security of certain properties.

( 4 ) IN the course of the written statement filed on behalf of the defendants it was sought to be contended that because there was some delay on the part of the plaintiff in advancing the loan, defendants who in an- ticipation of the said loan made certain arrangements had to suffer losses on account of the delay in the receipt of the loan amount and, therefore, it was urged the plaintiff was liable to them in damages which was tentatively quantified at Rs. 4 lakhs. This sum the defendant claimed to set- off from the aggregate of the suit claim made against them. The plea in the written statement raising the aforesaid claim of set- off is found in para 7 of the written statement. It reads:" These defendants further plead that they are put to loss by the delay in making the various payments under the agreements by the plaintiff-bank. In consequence, they have suffered damages. The plaintiff is bound to pay the defendants towards the same. The amount of damages so suffered by these defendants is therefore liable to be equitably set-off against any amount determined to be payable by the defendant to the plaintiff. "

( 5 ) ON the Filing of the written statement as aforesaid the plaintiff having again joined-in by urging that on the sum of Rs. 4 lakhs claimed as set-off being actually in the nature of a counter claim, requisite court-fee had to be paid and that there should be an order accordingly. The court framed two issues in that behalf at issues 5 and 6 as follows:" 5) Is the claim of damages of defendants a set off, or a counter claim ? 6) Are defendants entitled to get a deduction of the said damages without payment of court fee ?"having framed the issues as above, the court proceeded to decide them before disposing off the suit on its merits.

( 6 ) LEARNED Judge in the court-below after hearing both sides held the claim by the defendant was in the nature of a counter claim and the defendants were, therefore, liable to pay court-fee thereon before asking the court to deduct the same from the suit claim. On the finding of the learned Judge as aforesaid the defendants being saddled with liability to pay as large a sum of Rs. 40,000/- by way of court-fee seek to challenge that order as legally unsustainable.

( 7 ) SRI. Krishnamurthy, learned Senior counsel who appeared in support of this petition alongside Sri. H. N. Narayan, raised on behalf of the petitioner only one contention namely that the sum claimed by the defendant in the written statement would not attract any court-fee because it had not yet partaken the character of an ascertained sum legally recoverable as enjoined by Order 8, rule 6 C. P. C. Relying on the definition clause in the Court-Fees Act (hereinafter referred to as 'the Act') as per Section 3 (4) which enumerated, amongst other things, that expressions used but not defined in the act or in the Karnataka General Clauses act, 1899 but defined in the Code of Civil procedure shall have the meaning assigned to them in the said Code, Mr. Krishnamurthy pointed out that a set-off that can be taxed under the Act is only the kind of set-off envisaged under Order 8, Rule 6 of the Code of Civil Procedure identified as legal set-off.

( 8 ) ORDER 8, Rule 6 reads as follows: (1) Where in a suit for the r