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In an Indian civil suit for money, the defendant's cross-demand arises from the same transaction as the…

An equitable set-off is discretionary and may apply where the cross-demands arise from the same transaction or are closely connected. If the cross-demand is time-barred as…

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In an Indian civil suit for money, the defendant's cross-demand arises from the same transaction as the plaintiff's claim. It is time-barred as an independent claim. What may the court allow in its discretion solely to reduce the plaintiff's recovery?

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Answer and explanation

Correct answer A

An equitable set-off is discretionary and may apply where the cross-demands arise from the same transaction or are closely connected. If the cross-demand is time-barred as an independent claim, the defensive adjustment can reduce the plaintiff's recovery without producing an affirmative decree for the defendant.

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Option A

An equitable set-off can be considered in the court's discretion where the cross-demands are sufficiently connected. A time-barred cross-demand used this way only reduces the plaintiff's claim.

Option B

Legal set-off under Order VIII rule 6 requires an ascertained sum that is legally recoverable.

Option C

For limitation purposes a counterclaim is treated as a separate suit, instituted when it is made in court.

Option D

An independent time-barred suit remains subject to section 3 of the Limitation Act, 1963.

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