Hemant Gupta, J.@mdashThe defendant is in revision aggrieved against the order passed by the learned Trial Court on 17.1.2004 whereby the application filed by the defendant for discovery and production of documents was declined.
2. The plaintiff filed a suit for the recovery of Rs. 1,21,958.83P against the defendant, an ex-employee of the plaintiff who was advanced loan for the purchase of vehicle. Said suit for recovery has been filed on the allegation that the company has right to recover the entire loan amount together with interest in lump sum after the defendant ceased to be in employment of the plaintiff. Said suit has been filed on 8.8.1994. Before filing the said suit, the defendant has served a notice dated July 20, 1994 whereby the defendant has claimed that the company i.e. the plaintiff owed a sum of Rs. 2,42,700/-after settlement of all the dues that were payable by him. The defendant in the written statement has relied upon the said notice and claimed that no loan amount is due against the defendant after adjustment of the amount payable to the defendant by the plaintiff.
3. During the pendency of the said suit the defendant moved an application for production of certain documents i.e. the documents necessary to substantiate the plea by which he has claimed amount payable to the defendant after settlement of all the dues of the plaintiff. Learned Trial Court declined such application on the ground that no counter claim has been filed nor there is any plea of set off. It was further found that since the defendant has filed a separate suit challenging his dismissal therefore, the documents sought for have no relevancy in respect of the present suit.
4. The petitioner has argued that the claim of the petitioner is neither of set off or of counter claim but of adjustment before the filing of the suit and therefore, the production of the documents sought for is necessary for determining the controversy between the parties. Reliance is placed upon Punjab Electric Power Co. Ltd v. Suraj Kishan AIR 1937 Lah 62 ; D. Konda Pentiah v. Chenchu Rangiah AIR 1955 AP 176;
5. The learned Trial Court has failed to appreciate that in fact the case of the defendant is that of adjustment and that too before the filing of the suit and thus the production of documents sought for would be relevant to determine the controversy between the parties. In D. Konda Pentiah ''s case (supra) it has been held that a plea of adjustment must be distinguished from a plea of set off. The plea of adjustment or satisfaction premises that the extinction of the plaintiff''s claim or satisfaction took place prior to the date on which the defence was raised in the suit. A claim of set off is raised by the defendant for the first time in the written statement. It was held to the following effect:
"3. A distinction has always been observed by Courts of law between an adjustment and a set off. The plea of adjustment or satisfaction premises that the extinction of the plaintiff''s claim or satisfaction took place prior to the date on which the defence was raised in the suit. By a claim for set off, on the other hand, the defendant prays that the plaintiff''s dues from the outstanding dues owed by the plaintiff to the defendant. It is implicit in such a plea that the mutual indebtedness has not been adjusted till that date and adjustment is sought in the suit itself."
6. Similarly a Division Bench of Orissa High Court in the Tata Iron and Steel Co. Ltd.''s case (supra) held to the following effect.
"15. A plea of satisfaction or extinguishment of a debt of a claim set up merely by way of defence is very different. A plea of payment necessarily refers to a satisfaction or extinguishment of a debt effected prior to the stage of the defence, whereas a plea of set off is in the nature of a cross claim and in effect it prays for a satisfaction, or extinguishment of a claim, to be made in the future after the date when the plea has been set up. If it were held to be merely a plea regarding adjustment of accounts and no more, no court fee would be payable on the amount mentioned in such a plea.
"In this context the difference between adjustment and set off is sometimes missed. This aspect of the position in law was directly in issue in a Lahore case where the plaintiff brought a suit against the defendant of certain amount, defendant inter alia pleaded that the plaintiff owed to him another amount which was adjusted with the claim in suit and only a little balance had remained due to him; plaintiff contended that the defendant cannot claim the adjustment unless he prays court fee on it. On these facts it was held that it was an adjustment that was claimed and not a set off; hence no court fee was necessary, Punjab Electric Power Co. Ltd.''s v. Suraj Kishan AIR 1937 Lah 62."
7. Still later a Division Bench of Madhya Pradesh High Court in Raja Balbhadra Singh ''s case (supra) considered the earlier judgments and held to the following effect:
"On general principles a person is entitled to pay to himself that amount which is due to him from another if he has in his hand monies belonging to that other, provided that his dues are legally recoverable. Although that question will be adjudged by the Court of law when it arises, he is not obliged to sue for the recovery of the money which he is already in possession of."
8. Somewhat similar question was raised before the Division Bench of Kerala High Court in Cheria Elias''s case (supra) wherein it was held to the following effect:
"Set off is a plea open to a defendant by which he could claim wiping off or reducing the plaint claim by adjustment of the amount due to him from the plaintiff. A plea of set off is distinguishable from a plea of payment of adjustment. Set off extinguishes the debt or reduces the same. Payment of adjustment refers to a satisfaction or extinguishment of a debt effected prior to the raising of defence in the written statement. The question of set off can arise only in respect of dues which are outstanding and which have not already been adjusted. Thus, a plea of payment or adjustment is definitely and essentially a different plea and can be pressed into service only if the same was raised before the institution of the suit and not afterwards. To determine whether a plea raised in defence is a plea of set off or of payment by adjustment it has to be ascertained as to whether a separate action could be maintained by the defendant on the basis of his claim. If he could institute a separate suit for realisation of the amount due to him, it is a case of set off. If the adjustment was made prior to the filing of the suit by the plaintiff and a plea is taken to that effect, it would be a plea of adjustment by payment."
9. In view of the principles of law discussed in the judgments, it may be noticed that the defendant has claimed a sum of Rs. 2,42,700/- prior to the filing of the suit after alleging the settlement of all the dues of the plaintiff. Such plea was raised even before the filing of the written statement and was reiterated in the written statement dated 4.9.1995. A plea of a adjustment is the plea which is raised by the defendant prior to the filing of the suit, whereas the plea of set off is raised by the defendant for the first time in the written statement. Therefore, the finding recorded by the learned Trial Court that the plea of set off was not raised is not correct as in fact it is a case of adjustment before the filing of the Suit.
10. Therefore, the application filed by the defendant could not have been dismissed for the reasons so recorded by the learned Trial Court. Consequently, the order passed by the learned Trial Court declining of production of such documents is set aside. The application filed by the defendant for production of documents is allowed. The plaintiff is directed to produce the documents sought for by the defendant to determine the controversy between the parties completely and effectively.
