MARRIED WOMEN
MARRIED WOMEN’S POSITION AT COMMON LAW
At common law the existence of the wife as a legal
person, separate and distinct from her husband was not recognized
And the changes brought about from time to time by
legislation in England and in India to it
The
nature of a married woman’s position at common law has been very well described
by Blackstone: “By marriage the
husband and wife are one person in law, i.e., the very being or legal existence
of a woman is suspended during the marriage or at least is incorporated or
consolidated into that of the husband, under whose being, protection and cover
she performs everything.” According to Bacon so long as the marriage continues,
“the law looks upon the husband and wife but as one person, and therefore
allows of but one will between them, which is placed in the husband as the
fittest and ablest to provide for and govern the family.”
The
court of equity, however, interfered with this position with a view to
mitigating some of the disabilities and hardships under which a married woman
suffered at common law. STORY generalises the innovations made
by the Court of Chancery in the following words: “Now, in courts of equity,
although the principles of law, in regard to husband and wife, are fully
recognised and enforced in proper cases, yet they are not exclusively
considered. On the contrary, courts of equity, for many purposes, treat the
husband and wife, as civil law treats them, as distinct persons, capable (in a
limited sense) of contracting with each other, of suing each other, and of
having separate estates, debts and interests. A wife may, in a court of equity,
sue her husband and be sued by him. And in cases respecting her separate
estate, she may also be sued without him; although he is ordinarily required to
be joined for the sake of conformity to the rule of law, as a nominal party, whenever
he is within the jurisdiction of the court, and can be made a party.”
THE
MARRIED WOMEN’S PROPERTY ACT, 1882,
however, converted the above equitable
rights of the wife into legal rights by providing that a married woman is
capable of acquiring, holding or disposing of by will or otherwise any real or
personal property as her separate property and that she is capable of entering
into and rendering herself liable in respect of her separate property on any
contract or in tort as if she were a feme sole. A married woman, after
the enactment of THE MARRIED WOMEN’S PROPERTY ACT and THE LAW REFORM (MARRIED
WOMEN AND TORT FEASORS) ACT, 1935, stands, with few exceptions, in the
same legal position as a single woman.
With
regard to the position of married women in India the Mohammedan law does not recognize
THE
DOCTRINE OF COVERTURE (which is the condition of being a married woman)
and gives scope to a woman to retain her separate legal entity enabling her to
deal with her property in any way she likes without her husband’s consent.
The
Hindu Law recognizes THE DOCTRINE OF COVERTURE, but still
allows a married woman to hold her separate property. She has absolute dominion
over her stridhan with the unrestricted power to alienate. A condition
absolutely restraining alienation is void. Under THE HINDU SUCCESSION ACT, 1956,
any property possessed by a female Hindu is held by her as its full owner
and not as a limited owner.
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RESTRAINT
ON ANTICIPATION
Anticipation
is the act of assigning, charging, or otherwise dealing with income before it
becomes due. A clause against anticipation is meant to protect the wife’s
property from the influence of her husband by preventing her from depriving
herself of the benefit of the future income. This clause was inserted in a
settlement of property on a woman with a view to warding off the danger of
yielding to the solicitations of her husband to dispose it off.
THE
VALIDITY OF THE RESTRAINT has received statutory
recognition in the MARRIED WOMEN’S PROPERTY ACT, 1882.
The
courts of equity construed THE RESTRAINT ON ANTICIPATION clause
very strictly so that the woman could not absolve herself of this restriction
even though the alienation was distinctly to her benefit. THE LAW OF PROPERTY ACT, 1925, which is the reproduction of section 39 of THE CONVEYANCING ACT, 1881, however, permits the court to
release the restraint with the consent of the wife if the court thinks that
such release is to her benefit.
PIN-MONEY
It
is an allowance settled upon the wife by the husband before marriage for her
dress and personal expenses with a view to decking her person suitably to
her husband’s rank. A wife has only a limited right to recover arrears to
pin-money.
ALIMONY
It is an allowance made to a wife out of her
husband’s estate for her support during divorce or judicial separation
proceedings or during their altercation. It is granted for the support of the
wife and she has no power to assign it.
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GUARDIANS,
INFANTS, IDIOTS AND LUNATICS
THE
COURT OF CHANCERY EXERCISED A BENEFICIAL JURISDICTION OVER INFANTS, IDIOTS,
LUNATICS AND MARRIED WOMEN
DIFFERENT
CLASSES OF GUARDIANS, ADVERTING TO INDIAN LAW ON THE SUBJECT
The
Court of Chancery, from the earliest times, exercised jurisdiction over
infants, idiots, lunatics and married women. Since the passing of the
Judicature Act of 1873 this jurisdiction of THE COURT OF CHANCERY has
been assigned to the Chancery Division
of the High Court of Justice. The jurisdiction over infants is founded on
the prerogative of the Crown as parens
patriae with a view to protecting the person and property of the infants.
The Chancery Division has now authority over the appointment and removal of
guardians, maintenance of infants and management and disposition of their
property,
GUARDIANS
The
guardian may be natural, testamentary or statutory. The common law gave to the
father the guardianship of his legitimate children, children during the age of
nurture and until the age of discretion. The limit was fixed at 14 years in the
case of a boy and 16 in the case of a girl. The father’s legal right of
guardianship now continues till the infant attains the age of twenty one.
A
person appointed by the father or mother by means of a deed or will to act as
guardian after his or her death is known as the testamentary guardian. He is
entitled to manage the infant’s property and to look after his personality.
After
the death of the father the mother is the statutory guardian jointly with the
testamentary guardian, if any.
In
India the Indian Majority Act, 1875,
fixes the age of majority at 18 years, except those for whose person or
property or both a guardian has been appointed by a court or those whose
property is under the superintendence of the Court of Wards in which case the
age is 21 years.
The
High Courts in India possess the power to appoint a guardian of the person and
property of minors independently of the Guardians and Wards Act.
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PERFORMANCE, SATISFACTION AND ADEMPTION
DOCTRINE
OF PERFORMANCE
The equitable doctrine of performance
is not to be confused with the doctrine
of part performance, which has been discussed subsequently under the Specific Relief Act. The doctrine of
performance is based upon the maxim “Equity imputes an intention to fulfill an
obligation.” Strahan defines performance as meaning transfer of property which,
whether the donee wishes or not, operates in law as a complete or pro tanto discharge of a previous
legal liability of the donor. Thus where, A is bound in equity to do an act for
B but leaves that act undone and instead does some other act which is of a kind
applicable to the performance of the covenant, equity will seize upon something
else that he has done and render it available for the benefit of B. In the same
manner if a person has covenanted to purchase and settle realty and afterwards
purchases it but does not settle the same, the purchase would be treated as a
performance pro tanto if the lands
purchased are of less value than the lands covenanted to be purchased and
settled.
DOCTRINE
OF SATISFACTION
Satisfaction,
according to Strahan, means a transfer of property which, if the donee
accepts it, operates in law as a complete or pro tanto discharge of a previous legal liability of the donor.
SATISFACTION
AND PERFORMANCE
Satisfaction
relates to the doing of an act in substitution for the performance of an
obligation, whereas in performance the identical act which the party covenanted
to do is considered to have been done. Another difference between the two
doctrines is that the doctrine of satisfaction is clearly based upon an implied
intention of the testator, but the doctrine of performance rests on the ground
of natural justice, i.e., equity will seize upon something else that he has
done.
ORDINARY
DEBTS AND PORTION DEBTS
The doctrine of satisfaction
may be considered with regard to ordinary debts and portion debts.
Hanbury
observes that if a debtor, without mentioning the debt in his will bequeaths by
it to his creditor a sum as great as, or greater than, the debt, his legacy destroys or
swallows up the debt; but this result does not follow if the legacy were on a
contingency, or were less than the debt. But it has to be noted that though
there is an equitable presumption in favour of satisfaction of a debt by a legacy
of equal or greater amount, the courts
will never make a great deal of resistance to circumstances which will lead up
to its overthrow. And if the legacy is less than the debt, there will be no
satisfaction, not even pro tanto.
Then again in order to attract the application of the doctrine of satisfaction
the amount of the legacy must be certain and should have been incurred before
the will.
With
regard to a portion debt (which is a debt incurred by a father or mother by way
of making provision for a child of his or her, or a debt incurred by some other
person standing in loco parent is to another in favour of the other), the rule
is that there is the presumption of satisfaction of the outstanding obligation
to make a provision if a parent gives subsequently legacy to his child. Equity
leans against legacies being taken in satisfaction of debt, but leans in favour
of a provision by will being in satisfaction of a portion by contract, feeling
the great improbability of a parent intending a double portion for one child to
the prejudice generally of other children. (Thynee
v. Earl of Glengall, 2 H.L.C, 133). The difference in the two Cases is
illustrated thus:
(1) In the case of
debt, small circumstances of difference between the debt and the legacy are
held to negative any presumption of satisfaction; whereas in the case of
portions, small circumstances are disregarded;
(2) In the case of
a debt, a smaller legacy is not held to be in satisfaction of part of a larger
debt; but in the case of portions it may be satisfaction pro tanto; and
(3) It has been
decided that in the case of debt, a gift of the whole or part of the residue
cannot be considered as a satisfaction, because it is said that the amount
being uncertain, it may prove less than the debt.
In
India the rule with regard to satisfaction of portion by a subsequent legacy is
opposed to the English law and is
governed by the Indian Succession Act.
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ADEMPTION
OF LEGACIES
Ademption is
the complete or partial extinction or withholding of a legacy by some act of
the testator during his life other than revocation by a testamentary
instrument. Where a father or person in loco parentis provides a portion by his
will and subsequently in his life makes another gift also amounting to a portion,
the portion is adeemed. Lord Selborne
explained in Re. Pollock, Pollock v.
Worrall (28 Ch. D. 552) as follows: When a testator gives a legacy to a
child, or to any other person towards whom he has taken on himself parental
obligations, and afterwards makes a gift or enters into a binding contract in
his life-time in favour of the same legatee, then (unless there be distinctions
between the nature and conditions of the two gifts) there is a presumption pr i
m a f a de that both gifts were made to fulfil the same natural or moral
obligation of providing for the legatee; and consequently that the gift inter vivos is either wholly or in part
a substitution for, or an “ademption” of,
the legacy.
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CONVERSION
AND RECONVERSION AND COVENANT RUNNING WITH LAND
“EQUITY LOOKS ON THAT AS DONE WHICH OUGHT TO
BE DONE.”
RECONVERSION
Snell
defines it as that imaginary process by
which a prior notional conversion is annulled or discharged, and the notionally
converted property restored in contemplation of equity to its original actual
quality. Thus, if real estate is devised on trust to sell it and pay the
proceeds to A, from the moment of the testator’s death A becomes absolutely
entitled to the property as personality, whether or not a sale has actually
taken place. But A has a right to elect in what form he will take the property.
And according to his election the property will vest in him as land or money.
An infant cannot ordinarily elect. Only the court can direct an inquiry whether
it will be for his benefit to reconvert and order accordingly.
COVENANT
RUNNING WITH THE LAND
It
is an expression borrowed from English law of real property and forms an
exception to the general rule that all covenants are personal. A covenant is
said to run with the ‘land when either the liability to perform it, or the
right to take advantage of it, passes to the assignee of that land. In India it
is governed by sections 55, 65 and 108
of the Transfer of Property Act as also
section 23 of the Specific Relief Act. There is an implied warranty of
title by the mortgagor in the mortgaged property, the benefit of which runs
with the land. The seller while selling the property also undertakes that he is
entitled to sell the property and the benefit of this implied covenant also
runs with the land. Similarly a covenant in a lease for renewal thereof also
runs with the land. Covenants in the nature of easements pass to the transferee
of the property whether he has notice of them or not Such covenants bind the
land from the inception.
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THE
DOCTRINE OF ELECTION AND IT’S THE EXCEPTIONS
STORY
defines election as “the obligation imposed upon a party to choose between two
inconsistent or alternative rights or claims, in cases where there is a dear
intention of the person, from whom he derives one, that he should not enjoy
both.”
The
equitable doctrine of election
implies that he who takes a benefit under an instrument must accept or reject
the instrument as a whole. It is the choosing between two inconsistent rights.
Thus where X makes a will gifting A’s property to B, and a gift to A, A can
only take the gift by giving his own property or its value to B, otherwise he
can elect to keep his own property by rejecting the gift as a whole. The
principle hi that effect shall be given to every part of the instrument.
Pomeroy places THE
DOCTRINE OF ELECTION under the maxim, “He who seeks equity must do equity.”
The doctrine of election
was thus explained by Chitty, J. In
re lord Chesham (1886) 1 Ch. D. 466:
“The principle on which the doctrine of election is based is that a main shall
not be allowed to approbate and reprobate; that if he approbates he shall do
all in his power to confirm the instrument which he approbates. The
consequences of such a principle cannot be legitimately carried beyond the
principle itself; if a man approbates, his obligation is confined to his
adopting the· instrument as a whole and abandoning every right inconsistent
with it.”
PRINCIPLE OF COMPENSATION
Maitland observes
that it is now well settled that THE PRINCIPLE OF COMPENSATION is the
true one. Election is not based on THE
PRINCIPLE OF FORFEITURE OR CONFISCATION but on THE PRINCIPLE OF COMPENSATION.
ITS REQUIREMENTS
The
two necessary conditions for the operation of the doctrine of election are the
following:
(1) that the
property given to the donee is property of which the donor, and
(2) that the
property of the donee given to the third person is property of which the donee,
were entitled freely to dispose.
ESSENTIALS FOR THE APPLICABILITY OF THE DOCTRINE:
The doctrine of election
generally arises in powers of appointment; and Hanbury summarizes the following
essentials which must be present in order to raise a case of election at all:
(1) It must appear
by the will itself that the testator intended to give away property which did
not in fact belong to him.
(2) The testator
must have left something of his own to the person whose property he leaves away
to a stranger.
(3) The property
left to the stranger must have been something which belonged to the legatee,
about whom the question of election arises.
(4). Normally no
case far election arises, when a donee of a power makes an appointment in
favour of an object of the power, but super adds some proviso in favor of a
non-object
(5) The doctrine
may apply, not only as between a gift under a claim adverse to the will and
outside it, but also as between claims arising under two clauses in the same
will.
(6) The doctrine
cannot apply so as to compensate for the loss of a gift which was void as an
attempt to the rule against perpetuities.
(7) The doctrine
cannot operate, unless the person about whom the question arises has power to
alienate both the property given to him the will and the property to which he
is entitled independently of It.
(8) If the person
who should elect dies without electing, the question whether his duty to do so
devolves on any other person depends upon the question whether the interest
taken by is identical with that of the deceased.
INDIAN LAW
Section 35 of the Transfer of Property Act 1882
embodies the doctrine of election. The requirements of this Section are as
under:-
(1) That the
transferor transfers a property to another which he has no right to transfer;
(2) And that by the
same transaction he confers some benefit to the person whose property he
transfers. Where the owner dissents from the transfer he must relinquish the
benefit conferred upon him and the benefit intended for him reverts to the
transferor.
Sections180-190
or the Indian Succession Act
contains similar provisions with regard to election governing testamentary
dispositions.
LIMITATIONS
This doctrine is not applicable:
(1) Where the
testator has not left his own property to the person whose property he has
transferred to a stranger; or
(2) Where [I
testator makes two or more separate bequests of his own property in the same instrument.
Thus where two distinct gifs are made, one being onerous and the other
beneficial, the donee is not given the option to elect as to whether he will
accept both or neither.
(3) It is also not
applicable to the case of creditors, it being applicable to a case of bounty
only. When, therefore, there is a devise to a creditor for the payment of his
debts, he is at liberty to accept its benefit without prejudicing his legal
rights.
CONSEQUENCES OF REFUSAL
If
the person whose property is transferred does not agree to such transfer he
must give up the benefit conferred. The benefit relinquished reverts to the
transferor or his representative. For example, A transfers to C a property ‘X’,
belonging to B and in the same instrument confers a benefit of Rs.500 upon B.
If B does not agree to the transfer of his property ‘X’ to C, he cannot claim
the benefit of Rs. 500.
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FAMILY SETTLEMENT
FAMILY ARRANGEMENT
EXTENT TO WHICH FAMILY ARRANGEMENTS MAY BE ALLOWED
TO BE SPECIFICALLY PERFORMED
THE RULE OF STAPILTON
V. STAPILTON (1 ATK.2)
A
family arrangement is a settlement of a dispute between the members of a family
by mutual agreement. A court of equity will decree the performance of such
agreements which are entered into to save the honour of family provided the
agreements are reasonable. Compromise of a doubtful right is a sufficient
foundation of an agreement. It is now settled law that where a compromise is
entered into with due deliberation and full disclosure, it will be upheld by
the court and will not be set aside on the ground that the parties were under a
mistake as to their rights. All that is essential to enable the court to
enforce the agreement is that there must be full disclosure of all the material
circumstances by the parties. The courts are enjoined to respect family
arrangements as they adjust settlement of claims and are arranged expressly to
end a controversy between members of the same family, all parties taking
chances, and the only ground for setting them aside is that either party has
taken advantage of the known ignorance of the other. Thus in Gordon v. Gordon (3 Swanst. 400) the
court refused to uphold an arrangement between two brothers whereby the elder
brother had given up some of his rights to the younger brother in order to
avoid possible litigation about the legitimacy of the younger brother, because
the younger brother knew all the time that the elder was undoubtedly
legitimate.
STAPILTON V. STAPILTON
In
Stapilton v. Stapilton the father
wanted to make a provision for both of his sons. His elder son was illegitimate
though it was not known to others. He thought that if the elder son was found
illegitimate he would be left without any provision in the absence of such an
agreement. But if his legitimacy was established then the younger son would
have got nothing. In order to prevent the happening of any such contingency he
brought about the agreement to make a division of his real estate. In a suit by
the elder son to enforce the agreement against the younger one, it was found
that the former was illegitimate. The court, however, held that the agreement
could not be rescinded as it was a reasonable compromise of doubtful rights for
peace and honour of the family. It was accordingly laid down as a rule that
where agreements are entered into to save the honour of a family and are
reasonable ones, a court of equity will, if possible, decree a specific
performance of them.
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MISTAKE AND FRAUD
DIFFERENT WAYS IN WHICH THE COURT MAY GRANT RELIEF
AGAINST MISTAKE OR FRAUD
RELIEFS AGAINST MISTAKE OR FRAUD
If
there is a mistake or fraud in the contract the court may grant either of the
following reliefs:
(a) It may order
specific performance with a variation;
(b) It may refuse
to enforce specific performance of the contract if the assent was obtained by
misrepresentation;
(c) It may order
rectification of the instrument so as to express the real intention of the
parties;
(d) It may order
rescission of the contract; or
(e) It may order
cancellation of the instrument.
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MISTAKE
COURTS GRANT RELIEF ON THE GROUND OF MISTAKE OF FACT
BUT NOT ON MISTAKE OF LAW
DISTINCTION BETWEEN A “MISTAKE OF FACT” AND A “MISTAKE
OF LAW”
Mistake
is some unintentional act or omission which is the result of an erroneous
impression or ignorance or misplaced confidence.
MISTAKE OF LAW
With
regard to the mistake of law the cardinal principle of law is expressed by the
maxim ignorantia juris non excusat, i.e. ignorance of
law does not excuse. Everyone is presumed to know the law of the land. Mistake
of law, however, refers to an abstract question of law and not to the existence
or private rights which may even depend on the construction of law. Thus money
paid away under mistake of law cannot be recovered.
But
as Jessel M.R., observed in Eaglcsfield v. Lord Londonerry (4 Ch. D., 693) it is difficult to draw
a hard and fast line between questions of fact and questions of law. There is
hardly any question of fact that does not involve incidentally a question of
law.
The
above proposition that mistake of law does not excuse is hedged in by the
following exceptions, viz., it does not apply
(1) to the
ignorance of a private right;
(2) to the ignorance
of a right which depends upon questions of mixed law and fact;
(3) to mistake as
to the law of a foreign country; and
(4) relief will be
provided against a mistake of law on the ground of fraud or undue influence or
when the mistake is combined with surprise.
MISTAKE OF FACT
With
regard to mistake of fact the rule is expressed by the maxim ignorantia facti excusat. i.e. ignorance
of fact is a good excuse. Thus it is common place that money paid away under
mistake of fact can generally be recovered back. Relief is, however, given only
where mistake is material, whether unilateral or mutual, and such as a party
could not ascertain by inquiry and reasonable diligence, and which the party
knowing ought to have disclosed. But, as Desai observes, no relief can be had
if the means of the information were equally open to both parties and no
confidence was reposed.
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FRAUD
ACTUAL AND CONSTRUCTIVE FRAUD
NOTES ON ACTUAL FRAUD
HOW FAR EQUITY RELIEVES IN CASES OF ACTUAL FRAUD
STORY
defines fraud as all acts, omissions and concealments which involve a breach of
legal or equitable duty, trust or confidence, justly reposed, and are injurious
to another, or by which an undue or unconscientious advantage is taken by
another.
Section 17 of the Indian Contract Act
defines ‘fraud’ so as to mean and induce the suggestion as a fact, of that
which is not true, by one who does not believe it to be true; the active
concealment of a fact by one having knowledge or belief of the fact; a promise
made without any intention uf performing it ; any other act fitted to deceive;
and any such act or omission as the law specially declares, to be fraudulent.
Fraud
is either actual or constructive. Actual fraud is again Sub-divided into
misrepresentation and concealment.
ACTUAL FRAUD
Actual
fraud is, therefore, anything done or omitted to be done, with a view to
committing designedly positive fraud.
Equity
will relieve, in the following cases of actual fraud:
1. If there be a
misrepresentation or suggestio falsi.
It
consists in a false representation of fact made knowingly without a belief in
its truth, or recklessly, careless whether it be true or false. No action for
damages will lie if the defendant honestly believed in the truth of his assertion.
2. If there is a
fraudulent concealment of suppression-veri
where it was the legal duty of a person to disclose.
3. If it is an
unconscionable bargain as shown by the grossly inadequate consideration which
is indicative of the existence of fraud or undue advantage taken.
4.
If the transaction has been entered into by a person of unsound mind.
5. if the transaction has
been entered into under duress.
In
all the above cases of actual fraud, the transaction will be voidable at the
option of the party whose consent was caused by fraud or misrepresentation.
CONSTRUCTIVE FRAUD
STORY
defines a constructive fraud to mean such ads or contract although not
originating in any actual evil design or contrivance to perpetrate a positive
fraud or injury upon other persons, are yet, by their tendency to deceive or
mislead other persons, or to violate private or public confidence, or to impair
or injure the public interests, deemed equally reprehensible with positive
fraud, and, therefore, are prohibited by law, as within the same reason and
mischief, as acts and contracts done malo-animo.
CONSTRUCTIVE FRAUD FALLS UNDER THREE HEADS
1. Transactions which are
treated as fraudulent as being contrary to the general public policy, as
contracts in restraint of trade, marriage brokerage contracts, i.e., a contract
to reward third Person for bringing about a marriage, contracts to suppress
criminal proceedings, etc.
2. Frauds arising on
account of an abuse of some fiduciary relationship, as gifts by children to
their parents, transactions between client and legal adviser or patient and
medical adviser, agent and principal, guardian and ward or trustee and
beneficiary.
3. Frauds arising out of
catching bargains with heirs, reversioners and expectants during the life of
their parents or other ancestors.
The
presumption of constructive fraud is made on the weaker party. The courts view
with great caution the contracts entered into between persons who stand in such
fiduciary relationship that they can influence the will of the other and unless
such contracts are entered into with scrupulous good faith they will be set
aside. The governing principle is that where influence is acquired and abused
or confidence reposed and betrayed equity will give relief; and influence is
presumed in cases mentioned in (2)
above until the contrary is shown.
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SET-OFF
Set-off
is a reciprocal acquittal of debts. In an action to recover money a set-off is
a cross-claim for money by the defendant, for which he might maintain an action
against the plaintiff, and which has the effect of extinguishing the plaintiff’s
claim pro-tanto.
Set-off
may be either legal or equitable.
LEGAL SET-OFF
Where
in a suit for the recovery of money, the defendant claims to set-off against
the plaintiff’s demand any ascertained sum of money legally recoverable by him
from the plaintiff not exceeding the pecuniary limits of the jurisdiction of
the court, and both parties fill the same character, as they fill in the
plaintiff’s suit the defendant may, at the first hearing of the suit, but not
afterwards unless permitted by the Court, present a written-statement
containing the particulars of the debt sought to be set-off.
THE SET-OFF MENTIONED ABOVE IS A LEGAL SET-OFF WHICH
REQUIRES THE FULFILLMENT OF THE FOLLOWING CONDITIONS:
(a) The suit must
be for recovery of money.
(b) The defendant
should claim ascertained sum of money.
(c) The ascertained
sum must be legally recoverable from the plaintiff.
(d) The plaintiff’s
claim and the set-off must be claimed in the same character. The amount must be
recoverable by the defendant and if there are more than one defendant, the debt
must be recoverable by all the defendants.
(e) The set-off
should be within the pecuniary jurisdiction of the court.
EQUITABLE SET-OFF
By
equitable
set-off we mean that form of set-off which the Courts of Equity in
England allowed when cross-demands arose out of the same transaction, even if
the money claimed by way of set-off was an unascertained sum of money.
Such
a set-off is called an equitable set-off.
It
was observed by Lord Mansfield in Green v. Farmer (4 Burr. 2220), that
natural equity said that cross-demands should compensate each other by
deducting the lesser sum from the greater; and that the difference was the only
sum which could be justly due.
In
India, the distinction between legal and equitable set-off remains.
The provisions as to legal set-off are laid down in O. 8, r. 6 of the Code of
Civil Procedure. So far as equitable set-off is concerned, it is provided
by O. 20, r. 19 (3) which reads:
“The
provisions of this rule (relating to a decree for set-off and an appeal there
from) shall apply whether the set-off is admissible under S.6 of Order VIII or otherwise.”
AS REGARDS A SET-OFF THE FOLLOWING POINTS MAY BE
NOTED:
(1) For set-off,
the claim must be enforceable by an action. It is not available if the debt is
barred by the statute.
(2) A set-off is
allowed only when the claim exists between the same parties and in the same
right.
(3) A debt of which
the defendant is only an assignee may bet set-off.
(4) A set-off will
not be allowed if the right of the third person is affected.
Disclaimer: In this note, we have attempted to summarise some of the significant aspects to be kept in mind by readers to ensure compliance of tax laws and regulations. Readers should ensure to verify specific provisions as applicable to each case before taking any business decisions. It would be pertinent to note that some changes are being made to the tax laws and rules and regulations on a continuous basis by way of notifications, clarifications etc issued by the department based on their practical experience in implementing the legislation.
It may be noted that nothing contained in this note should be regarded as our opinion. Professional advice should be sought for applicability of legal provisions based on specific facts. Though reasonable efforts have been taken to avoid errors or omissions in this note we are not responsible for any liability arising to readers directly or indirectly due to any mis-statements or error contained in this note. It must be noted that the views expressed in the note are based on our understanding of the law and regulations as published by the Government authorities and we may or may not agree or subscribe to such views.
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