CPC Case Brief – Karam Chand Thapar (Set off rule)

Spread the love

You can grab notes on other topics of CPC here.

Facts – Central government is obliged to disburse a certain amount for the purpose of grant of stowing materials and related functions to Coal Company and this amount is to be used only for these stowing purposes and no other purposes.  Coal Company is obliged to pay a royalty to the Central government for extracting sand. Issue arises that due to arrears (unpaid dues) of royalty by the Coal Company, the Central government in order to recover the same has set the dues against the stowing funds.

Issue – Whether the Central Government can withhold the release of stowing assistance, which is its statutory obligation to do, for the purpose of satisfying its demand of money arising under the contractual obligation (i.e. in mining lease) incurred by the Coal Company qua it?

Holding – A plea in the nature of equitable set-off is not available when the cross-demands do not arise out of the same transaction.

Also, in this case, the court does not allow the company to get damages as stowing funds are needed for the safety of workers and not giving them would be hazardous to lives of workers and it would not be equitable.

You can grab notes on other topics of CPC here.

 


Spread the love

Leave a Reply

Your email address will not be published. Required fields are marked *