SHIVASHANKAR BHAT, J.

( 1 ) THIS is defendants Revision Petition against the order of the trial Court, directing a payment of Rs. 19,412/- as court fee on the amount claimed by the defendants as set off.

( 2 ) ACCORDING to the plaint, defendants approached the plaintiff for temporary financial assistance and thus borrowed various sums on different dates; the total borrowings by the defendants was Rs. 1,40,000/- and the rate of interest allegedly agreed to be paid by the defendants was 18% per annum. After deducting some of the payments made by the defendants, the plaintiff sued for an amount of Rs. 1,94,112/- as detailed in the plaint.

( 3 ) THE defendants filed the written statement, with an opening sentence as "the defendants above named file the following written statement, claim set off and prefer the counter claim against the plaintiff:-" The substance of the case pleaded by the defendants was, that, the plaintiff approached them to execute and cause to be executed certain works for her, pertaining to the construction of a house on a site of the plaintiff. The works entrusted to the defendants were of electrification, water supply (plumbing) and sanitary works. According to the defendants, only a sum of Rs. 1,40,000/- (Rs. 15,000 + Rs. 1,25,000) was received from the plaintiff in respect of those works, effected by or through the defendants, and a balance sum of Rs. 56,640/50 was still due to them from the plaintiff. The defendants denied the plaintiffs case of temporary financial assistance rendered to the defendants, as per the request of the defendants; according to the written statement all the payments made by the plaintiff was towards the works entrusted to them by the plaintiff; they, thus, made a counter claim of Rs. 56,640/50 being the alleged balance due to them from the plaintiff.

( 4 ) IN the written statement, the defendants repeatedly used the phrase "set off or "counter claim" in respect of the case pleaded by them; however, in a memo dated 14-6-1988/13-7-1988 filed, it was stated that the counter claim was only for the balance amount after adjusting the payments received from the plaintiff. In view of the phraseology used by the defendants in the written statement, without examining the substance of the case pleaded by the defendants, the trial Court held that, the defendants were liable to pay court fee under section 8 of the Karnataka Court Fees and suits Valuation Act, 1958 (for short the act) and directed payment of a court fee of rs. 19,412/- (obviously on the entire amount of Rs. 1,94,120/- which was in fact the plaint claim ).

( 5 ) SECTION 8 of the states, that, "a written statement pleading a set off or counter claim shall be chargeable with fee in the same manner as a plaint".

( 6 ) ORDER 8, Rule 6 of the Code of Civil procedure enables a defendant to claim set- off against the plaintiffs demand of any ascertained sum, legally recoverable by him from the plaintiff. Similarly Order 8, Rule 6a CPC provides for the setting up of a counter-claim by the defendant. As per order 8, Rule 6a, counter- claim can be filed by the defendant provided the cause of action accrued to the defendant before the defendant had delivered his defence or before the time limited for delivering his defence has expired (vide: Mahendrakumar v state of M. P. , AIR 1987 SC 1395 [LQ/SC/1987/446] ). Counterclaim has the same effect as a cross-suit as per sub-rule (2) of Order 8, Rule 6a CPC.

( 7 ) THE words "set-off and "counterclaim" are not defined. However, they have been judicially interpreted. These words are to be understood by reference to their setting in the Civil Procedure Code and the purpose behind the relevant provisions. The set-off permitted by Order 8, Rule 6 has been held to be a statutory creation. The right to set- off, was not available under the "common law", even in countries like England and united States of America.

( 8 ) AMERICAN Jurisprudence, speaks of "set off as:-"in its broadest sense set off is the discharge or reduction of one demand by an opposite one, and it has been frequently defined as a cross-claim, for which an action might be maintained against the plaintiff. "". . . . . . IT is a counter claim which a defendant may interpose by way of cross action against the plaintiff; an independent demand of a defendant made to counter balance that of the plaintiff in whole or in part; a counter demand which a defendant holds against a plaintiff, arising out of a transaction extrinsic to the plaintiffs cause of action, the right which exists between two persons, each of whom under an independent contract, express or implied, owes an ascertained amount to the other, to set off their mutual debts by way of deduction so that in an action brought for the larger debt the residue only after such deduction may be recovered".

( 9 ) THE object of permitting a set off or a counter claim by the defendant, in the plaintiffs suit, rather than by an independent suit, is to avoid circuiting of action, inconvenience, expense, consumption of the courts time and injustice.

( 10 ) A cause of action or a relief, which could normally be the subject of an independent suit, is permitted to be pleaded as a set off or counter claim by virtue of the provisions of the Code of Civil Procedure. Since, it is an avatar of an independent suit, the Court Fees Act provides for payment of court fees on the relief sought by the defendant. The approach to the question of court fee, therefore, has to be, to see what would be the court fee payable on the relief sought by the defendant, in case, the defendant had to file an independent suit to realise the said relief.

( 11 ) A few illustrations would clarify the issue involved:- suppose the suit of the plaintiff is based on a loan transaction and the defendant pleads repayment, and further asserts excess repayment which he seeks return from the plaintiff, it cannot be said that the defendant should pay court fee on the entire amount which is asserted as having paid to the plaintiff; his liability will be to pay court fee on the excess amount allegedly paid by him to the plaintiff which he seeks repayment from the plaintiff, as a counter-claim. In another case, plaintiff may seek a decree basing his claim on monies lent to the defendant; defendant may denies the nature of the transaction, but sets up a case that monies were paid to him by the plaintiff towards the goods supplied and pleads that he owes nothing to the plaintiff as he has supplied the requisite goods. Can it be said that the defendant, to succeed in the suit, should pay court fee on the entire plaint claim, which the defendant asserts as having been paid towards the value of the goods supplied Here, the dispute, essentially pertains to the nature of the transaction one set up by the plaintiff and another set up by the defendant in defence. In the same set of circumstances, the defendant, in addition to pleading the transaction to be of supply of goods, also sets up the case, that, the plaintiff still owes him some more money, towards the value of goods supplied after adjusting the monies already received from the plaintiff, and seeks the recovery of the said balance of the price of goods due to the defendant, it cannot be said that the defendant should pay court fee on the entire amount representing the value of the goods supplied; the liabilities of the defendant would be to pay court fee, only on the alleged balance price of the goods claimed by the defendant. In such a case, actually, the transaction was a single one, though, the nature of the transaction as asserted by the plaintiff may not be admitted by the defendant who sets up a different kind of transaction, which created the legal relationship between the parties. The dispute essentially pertains to the nature of the circumstances under which the respective relationship between the plaintiff and defendant arose. Plaintiff may claim, as the landlord, arrears of rent; defendant, as the tenant may set up the plea that he had effected repairs to the house which he could receive from the plaintiff under law, and therefore, said amounts had been adjusted towards the rent payable by him; defendant may, in addition, claim the balance amount due to him towards the unadjusted amounts due to him. Here again, court fee payable is not and cannot be on the entire amount spent by the defendant, but, only on the balance of amount which defendant sets up as outstanding to him by the plaintiff and seeks a decree for the same.

( 12 ) THERE is a difference between a case of adjustment and a case of counter claim or set off. An adjustment takes place, as and when the defendant makes the payment to the plaintiff or as and when the defendant renders a service or supplies goods etc. , to the plaintiff, in pursuance of the alleged agreement between the parties. However, in the case of a set off pleaded by the defendant, the claim of the plaintiff has to be reduced in view of the equity involved in the claim to be made out by the defendant. Counter-claim may arise out of a transaction which is the basis for a set off, or in a case where, after adjustment of the monies (or equivalent money value of the services rendered, or materials supplied etc.) by the defendant, some thing more is claimed by the defendant as due from the plaintiff.

( 13 ) THE defendant, by seeking a set off or pleading a counter claim cannot be in a worse position just because, he sets up a set off or pleads counter claim in the plaintiffs suit, rather than, launches an independent suit against the plaintiff.

( 14 ) IF the two transactions - one pleaded by the plaintiff and the other set up by the defendant, are admittedly altogether different, and the defendant while admitting the nature of the transaction pleaded in the plaint, sets up an altogether different case and pleads set off or makes counter claim, different considerations would arise to fix up the defendants liability for the payment of court fee, because, here, question of adjustment by the very terms of the agreement between the parties or by virtue of their legal relationships, do not arise.

( 15 ) IN Jayantilal and Another v Abdul Aziz (AIR 1968 Patna 199), a learned Judge of the patna High Court observed that,-"the essence of a set off is that the defendant should have a cause of action against the plaintiff apart from the suit and not merely as a diffence to the plaintiffs claim. To put it differently, the set off is in the nature of a cross action which could be separately entertained. "

( 16 ) THE meaning of set off is conveyed by the Allahabad High Court in New Victoria Mill co. v Mahesh Company (AIR 1966 All. 619 [LQ/AllHC/1965/184] ) quoting an earlier decision to the effect that 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 claim, to be made in the future after the date when the plea has been set up.

( 17 ) IN the case of an adjustment, which is not by way of set off, -"what is necessary is that, prior to the plea being raised by the defendant, the plea if proved, would reduce the amount of the liability without any further point being adjudicated upon in the suit. "

( 18 ) TO the same effect is the decision of a bench of the Orissa High Court in The Tata iron and Steel Co. Ltd. v R. N. Gupta, (AIR 1963 orissa 174) at para-15.

( 19 ) THE phraseology used in the written statement, in the instant case, has given rise to the petitioners difficulty However it is not the language used, but the substance of the plea raised in the written statement, that is relevant. The trial Court has not examined the nature of the respective contentions of the parties in their respective pleadings. While the plaintiff has pleaded the payments by her to the defendants to be under a loan, the defendants contended that the payments to be towards the works entrusted to them. There may be, also, a dispute, as to the actual amounts paid by one and the value of the works performed by the other. However, ultimately, the court has to decide the respective claims and pass an appropriate decree, not based on two independent transactions (or relationships), but on a finding as to the real transaction/relationships between the parties. It is not a case of set off that has been pleaded by the defendant, but, a case of adjustment of the value of works effected by them, with a counter claim for the alleged balance of amount due to them from the plaintiff. While plaintiff calls the defendants, as her debtors, the defendants plead that they were only contractors. Thus, here, one kind of transaction is not sought to be counter-balanced by another kind of transaction. The nature of the transaction and adjustment under the same transaction are matters of dispute.

( 20 ) CONSEQUENTLY, it has to be held that, the liability of the defendants for the court fee has to be computed only by reference to the sum of rs. 56,640/50 claimed by the defendants, as a counter-claim.

( 21 ) IN the result, this petition is allowed and the order under revision is set aside, but without any order as to costs.

( 22 ) IT is stated that the trial Court has already rejected the counter-claim because of the non-payment of court fee by the defendants as directed by it in the order, which, I have now set aside. If so, the counter claim shall be restored, in case the defendants have already paid the court fee on the sum of rs. 56,640-50, or immediately on the payment of the said court fee within a week from today. Ordered accordingly. Petition allowed.