' SYED MANSOOR ALI SHAH, J.--- Brief facts of the case are that respondent No.1 filed a suit for partition, declaration and permanent injunction arraying he petitioner as one of the defendants.
The respondents are the real sisters of the petitioner. Respondent No.1 has sought partition, inter alia, of House No.969-B, Faisal Town, Lahore.
2. The petitioner filed his written statement on 7-7-2004, thereafter two applications for amendment were moved by defendants Nos.1 and 2 in the suit i.e. Petitioner and respondent No.4 for amendment of their written statements under Order VI, rule 17,. C.P.C. On 18-12-2008.
3. The amendment by the petitioner was sought on the ground that a suit for specific performance filed by one Muhammad Sohail Irshad against the predecessor-in-interest of the parties which was settled on 22-9-2007 by the petitioner and respondent No A by making the payment of Rs. 1 million to Muhammad Suhail Irshad. The suit was accordingly dismissed and possession of the house in question was delivered to the petitioner and respondent No.4.
4. The application for amendment proposes amendments to para 3 of the written statement as well as addition on para 3A.
5. The amendment proposed in para. 3 related to property tax payable on the house. The petitioner has claimed entitlement to receive expenses on account of maintenance of the house and utility facilities, payment of property tax, and half of the amount i.e. Rs.500,000 paid by him to Muhammad Sohail Irshad for the settlement of the suit discussed above.
6. Counsel for the petitioner submitted that the proposed amendments do not change the nature of the suit and, therefore, should have been allowed under Order VI, rule 17, C.P.C. He further submitted that due to subsequent events i.e. The settlement of the suit for specific performance on 22-9-2007 the written statement filed on 7-7-2004 required amendment as it pertained to a fresh liability pertaining to the property, which was the subject-matter of the suit for partition. He further argued that in a matter of partition both the assets and liabilities are partitioned, thereafter, property tax and other liabilities have to be brought into the corpus of the property, which is to be partitioned.
7. Counsel for respondent No.4 while supporting the counsel for the petitioner submitted that it is a well-settled principle that the liabilities pertaining to the property should also be partitioned along with the asset.
8. Counsel for respondents Nos.2 and 3 submitted that he was not party to the settlement dated 22-9-2007 and, therefore, the liability of rupees one million cannot be considered to be a joint liability, therefore, the same cannot be subject-matter of the suit for partition. He vehemently supported the impugned order and opposed the amendment of the written statement.
9. I have heard the learned counsel for the parties and have perused the record.
10. The question of law that emerges in this case is "whether in a suit for partition, the liabilities relating or attached to the property under partition can also be partitioned/apportioned amongst the legal heirs? And whether a defendant in a suit for partition can claim 'Set off?".
11. Exploring Partition Act, 1893 and Order XX, rules 18 and 19 of C.P.C. Furnish an answer to the above question. In the 'commentary to the Partition Act, 1893 cases in India have considered that assets and liabilities both have to be considered at the time of partition. Reference is made to Law relating to Partition by M.N. Das Sixth Edition, Eastern Law house. Under the Chapter on Joint Liabilities, the following has been mentioned:-- "In deciding a case from Lahore in respect of certain debts left by the father of a Mitakshara joint family the Privy Council held antecedent debts of the father so far as they are not illegal or immoral are a liability of the joint estate. They do not merely give rise to a pious obligation on the sons not to object to alienation of the joint estate by the father for such debts. When, however, the family estate is divided it is necessary to take account of both the assets and the debts for which the undivided estate is liable."
12. Partition Act, 1893 is silent about partition or apportioning of liabilities attached to the subject- matter of partition.
13. Order XX, rule 18 and rule 19 provide the elasticity and feasibility to jurisprudentially advance further in answering the above question.
"(18) Decree in suit for portion of property or separate possession of a share therein.---Where the Court passes a decree for the partition of property or for the separate possession of a share therein then,---
(1) .....................................................................................................................
(2) if and insofar as such decree relates to any other immovable property or to movable property the Court may, if partition or separation cannot be conveniently made without further inquiry pass a preliminary decree declaring the rights of the several parties interested in the property and giving such further directions as may be required."
14. Reference to the underlined portion of the definition allows the Court to consider the rights of the parties interested in the property. The payments made by the petitioner are directly connected to the property and creates the right of the petitioner in the property. The rights under Order XX, rule 18, C.P.C. Need not be limited to rights in the corpus of the property in a physical sense alone but can also include rights in the shape of claims or liabilities or payments made to upkeep the property or payments made to settle the debt of the predecessor-in-interest of the petitioner who already owned the property before it devolved on the children. All such payments constitute "property" and need to be apportioned at the time of partition. Another way of looking at the matter is provided in section 4 of the Partition Act, 1893 where sale of the property can be made in case the property is not divisible. Surely at the time of such a sale all the debts attached to the property are to be settled first. So if at the time of sale of debts/claims attached to the property can be considered, why the same principle cannot apply at the time of partition of the property. Claims cannot be limited to the third party only. One of the co-sharers can also have a claim on the property which is required to be settled or set off at the time of partition like any other claim.
15. Order XX, rule 9, C.P.C. Provides the facility of "equitable set off" as opposed to "legal set off" which is provided in Order VIII, rule 6, C.P.C. Order XX, rule 19, C.P.C. Provides:-- "19. Decree when set off is allowed.---(1) Where the defendant has been allowed a set-off against the claim of the plaintiff, the decree shall state what amount is due to the plaintiff and what amount is due to the defendant, and shall be for the recovery of any sum which appears to be due to either party..
(2) ..................................................
(3) The provisions of this rule shall apply whether the set-off is admissible under rule 6 of Order VIII or otherwise."
16. Equitable set off has been recognized by the Courts. In PLD 1971 Supreme Court 162 it was held that equitable set off applied to cases of pre-emption. Justice Wahiduddin Ahmed, J. Writing the judgment in the above case note:- "The doctrine of equitable set-off has also been applied in suits for specific performance of contract and suits for redemption. In the case of Brijnath Dass v. Juggernath Dass (1) the right to setoff the costs due to the plaintiff against the amount due by him was recognized in a redemption suit. It was held in that case that the plaintiff was entitled to redemption on paying the amount directed less the costs awarded to him. This principle was further applied by the Madras High Court in the case of Chinanammal v. Chidambara Khothanar (2). In that case, the trial Court passed the decree that on the plaintiff's depositing into Court a certain sum within a fixed time the defendant was to execute a deed of conveyance in his favour. It was further directed that the defendant was to pay the plaintiff a certain amount by way of costs. The plaintiff deposited a sum of money after deducing the amount of costs payable to him under the decree. On these facts it was held by the Madras High Court that the doctrine of equitable set-off was applicable and the plaintiff deposited the proper amount in Court.
' In the light of the above discussion, I am of the view that the claims of the appellants in respect of the purchase-money and the respondents in respect of the costs are in the nature of cross demands arising out of the same transaction and the doctrine of equitable set-off as applied by the Allahabad High Court in suits of pre-emption is fully applicable to such cases. This view has been firmly established and I am not inclined to upset it after a lapse of about 80 years."
17. Justice Zafar Hussain Mirza, J. In PLD 1983 SC 5 noted:- "Order XX, rule 19 is a further statutory recognition of the right of a defendant to plead an equitable set off and obtain relief thereon."
18. It is sub-rule (13) of Order XX, rule 19 that provides the requisite elasticity to extend equitable set off in new area. Equitable set off will be applied where it appears to the Court that it is equitable to allow set off.
19. Needless to say that it must pertain to the same transaction. It, however, does not matter if the amount is ascertained or unascertained. In this case, however, the payments made by the petitioner are ascertained. In the present case, it will be odd that a suit for partition is limited to the physical partition of the property without factoring in the liabilities attached to the said property. It cannot be the policy of law to encourage protracted litigation and subject the parties to another fresh round of litigation for recovering their claims relating to the property partitioned when all the claims arising from the property under partition can be dealt with in the suit for partition.
20. If similar claims can be dealt with in a suit for administration, I see no reason why claims/liabilities attached and fixed to the property in question cannot be apportioned between the parties in a suit for partition. I, therefore, hold that suit for partition includes all the liabilities/claims attached to the said property which will be apportioned and divided as an equitable set off in the suit for partition. In fact, the concept of ,preliminary inquiry under. Order XX, rule 18, CPC seems to be just the right construct for this purpose. The amendment proposed in the petition, therefore, do not change the nature of the -suit and can, therefore, be allowed. Delay does not matter as argued by he counsel for the respondent as the aforementioned claims/liabilities have arisen during the pendency of the suit.
21. Learned trial Court has not correctly applied the law and, therefore, order dated 13-1-2009 suffers from an illegality. The said order is, therefore, set aside and the amendments proposed by the petitioner are allowed under Order VI, rule 17 of the C.P.C.