Set off is a defence of the defendant in a money suit which will reduce the plaintiff's claim. If the plaintiff seeks the recovery of one lakh from the defendant and the defendant in his written statement claims the amount of fifty thousand from the plaintiff, it amounts to a set off. If duly proved, the defendant need only pay the balance amount.
There are generally two types of set off recognised by law. They are legal set off and equitable set off. These are noted below.
1. Legal Set off
In a legal set off there will be ascertained sum of money. The defendant is required to pay court fee on such ascertained money claim as in the case of the plaintiff. The court will look into the matter as well. Claiming a legal set off is the legal right of the defendant.
2. Equitable Set off
The defendant cannot claim equitable set off in his written statement as a matter of right. This type of set off arises when the claims of both parties are in one same transaction. The money is not an ascertained one.