The judgment highlights the legal principles governing the plea of set-off in a suit for recovery of money, emphasizing the specific conditions that must be met for a valid set-off claim.

JUDGMENT :

1. Sri.S.G.Kadadakatti, learned counsel for appellant and Sri.Vishwanath Hegde, learned counsel for respondent, have appeared in-person.

2. The parties are referred to as per their ranking before the trial Court.

3. The facts are simply stated as under :-

It is stated that the plaintiff is a Co-Operative Society registered under Souharda Act. The defendant had leased his premises to the Society on a monthly rent of Rs.2000.00 per month (Rupees Two Thousand only). The Lease Agreement was entered in to on 1/2/2001. Plaintiff-Society deposited a sum of Rs.25,000.00 (Rupees Twenty-Five Thousand only) as security deposit. The said amount was repayable to the plaintiff at the time of vacating the leased premises. The lease agreement dtd. 1/2/2001 was initially for a period of 11 months. Plaintiff- Society used to deposit the monthly rent to the savings account of the defendant in the plaintiff -Society. Subsequent to the expiry of the lease, the lease between the parties nevertheless continued and was orally renewed. The deposit of Rs.25,000.00 (Rupees TwentyFive Thousand only) was treated as security deposit after the expiry of initial lease. Under the renewed lease, the rent was fixed at Rs.2,000.00 (Rupees Two Thousand only) till 31/1/2003. Subsequent to the expiry of oral lease on 1/2/2003 fresh oral lease was created between the parties. The deposit of Rs.25,000.00 (Rupees Twenty Five Thousand only) was treated as deposit for the fresh oral lease as well. Under the renewed lease the rent was fixed at Rs.2,300.00 (Rupees Two Thousand Three Hundred only) with effect from 1/2/2003 till 31/3/2007. Again, with effect from 1/4/2007 the oral lease was renewed orally and Rs.25,000.00 deposit made earlier was treated as security deposit by plaintiff repayable to the plaintiff at the time of vacating the premises. The said agreement continued till 31/1/2009. Again on 31/1/2009 lease was orally renewed and oral arrangement with respect to security deposit continued with an understanding that the same shall be repayable to the plaintiff at the time of vacating the premises. Rent was fixed at Rs.3,000.00 (Rupees Three Thousand only) per month.

It is averred that the plaintiff credited the rent to the account of defendant in terms of written lease agreement and oral lease. The rent for the month of November was not deposited as defendant made untenable demand in respect of arrears rent.

The plaintiff on 30/11/2011 issued reply to the defendant to his letter dtd. 21/11/2011. It is said that plaintiff shifted its office to new building in Hospet road and made a request to the defendant to accept the possession of the lease premises. The defendant did not accept the possession and refused to issue possession receipt. Hence, plaintiff was constrained to intimate the factum of handing over the possession, vacating the premises to the defendant vide letter dtd. 7/12/2011.

The letter was served on the defendant. The defendant issued a legal notice dtd. 5/12/2011. The notice was served on the plaintiff on 8/12/2011. To the said notice, plaintiff replied vide notice dtd. 14/12/2011 and the same was served on the advocate for defendant.

It is also averred that the plaintiff - Society already vacated the premises in the month of December 2011 and plaintiff is not liable to pay any rent for the month of December 2011. The plaintiff occupied the premises till November 2011. Thus, plaintiff is liable to pay Rs.3,000.00 (Rupees Three Thousand only) towards rent. Deducting Rs.3,000.00, the defendant is liable to refund Rs.22,000.00 to the plaintiff. Accordingly, plaintiff-initiated action for recovery of money.

After the issuance of the summons, the defendant appeared through his counsel and filed written statement. He admitted certain plaint averments and denied other averments made in the plaint.

The defendant contended that former Chairman of plaintiff- Society requested him to give the premises for rent purpose. The defendant agreed for the same and th