Set-off is claimed in suit for specific performance. Is it maintainable?

The Nature of Set-Off Under Order VIII, Rule 6

The right of set-off is provided under Order VIII, Rule 6 of the Code of Civil Procedure. It permits the defendant, in a suit for recovery of money, to claim a set-off against the plaintiff for any ascertained sum of money legally recoverable from the plaintiff, provided that the sum does not exceed the pecuniary limits of the court's jurisdiction and both parties fill the same character in the claim and counter-claim as they fill in the suit. Every one of these requirements points unmistakably to one conclusion: the suit itself must be a money suit.

The word "ascertained" is of particular importance. A set-off can only be raised for a sum that is liquidated or quantifiable with certainty, not for unliquidated damages or a claim in the air. And more fundamentally, the rule uses the expression "in a suit for recovery of money" — this is not a peripheral condition but the foundational prerequisite of the entire provision.

Why a Suit for Specific Performance Is Different

A suit for specific performance is a suit for equitable relief — the plaintiff seeks to compel the defendant to perform a contract, to execute a deed, to complete a transaction. It is not a suit where any sum of money is being recovered by the plaintiff from the defendant. The plaintiff in such a suit is seeking enforcement of an obligation, not claiming a debt.

The scheme of Order II, Rule 2 makes this even clearer. A suit for specific performance must include all reliefs that arise from the same cause of action — including mesne profits and related money claims — failing which the plaintiff risks being barred from subsequently claiming them. But the existence of this obligation does not transform the nature of the suit itself. The suit remains, at its core, a suit for specific performance — not for recovery of money.

Since the suit is not a suit for recovery of money, the defendant cannot invoke the right of legal set-off under Order VIII, Rule 6. Courts have consistently held that the provisions of Rule 6 apply only where the plaintiff sues for recovery of money, and the defendant seeks to set off a counter-money claim against the plaintiff's demand. Where the plaintiff claims an equitable remedy like specific performance, there is nothing against which the set-off can operate.

Can the Defendant Raise Any Money Claim at All?

This is where the distinction between a legal set-off and an equitable set-off, or indeed a counter-claim, becomes relevant. A set-off under Rule 6 is a right, in strict terms, available only in money suits. However, Rule 6A opens the door to a wider remedy — the counter-claim. A defendant who has a money claim against the plaintiff in a suit for specific performance is not altogether without a remedy. He may raise it as a counter-claim under Order VIII, Rule 6A, provided the claim arises between the same parties, is within the court's pecuniary jurisdiction, and is not barred by limitation.

The distinction is not merely technical. A legal set-off operates as a defence and results in a dismissal or reduction of the plaintiff's claim. A counter-claim is a substantive cross-action, seeking an independent remedy. In a suit for specific performance, the defendant has no legitimate basis to raise a set-off — but he is not precluded from filing a counter-claim for whatever money may be due to him from the plaintiff, if those conditions are otherwise satisfied.

The Practical Position

The court, when faced with a plea of set-off in a suit for specific performance, must decline to entertain it. The plea is not maintainable in law. The defendant cannot use the mechanism of set-off to neutralise or deflect the claim for specific performance, because set-off operates only to cancel a money demand, and there is no money demand in a suit for specific performance. The proper course, if the defendant has a genuine money claim against the plaintiff, is to raise it either as a counter-claim in the pending suit or by way of a separate suit, depending on whether the conditions of Order VIII, Rule 6A are met. The right of set-off, codified as it is under the Code in the context of money suits alone, simply has no foothold in the terrain of equitable remedies.