Whether it is mandatory for a counter claim to be filed along with written Statment ?
Rule 9 of Order VIII prohibits presentation ofnpleadings subsequent to the written statement of a defendant other than by way of defence to setoff or counterclaim, except by the leave of the Court, and upon such terms as the Court thinks fit; and the provision further stipulates that the Court may at any time require a written statement or additional written statement from any of the parties and fix a time of not more than thirty days for presenting the same. This
amendment with respect to subsequent pleadings was made to the CPC by way of Act 22 of 2002.
it is not mandatory for a counterclaim to be filed along with the written statement. The Court, in its discretion, may allow a counterclaim to be filed after the filing of the written statement,
in view of the considerations mentioned in the preceding paragraph. However, propriety requires that such discretion should ordinarily be exercised to allow the filing of a counterclaim till the framing of issues for trial. To this extent, I concur with the conclusion reached by my learned Brothers. However, for the reasons stated above, I am of the view that in exceptional
circumstances, a counterclaim may be permitted to be filed after a written statement till the stage of commencement of recording of the evidence on behalf of the plaintiff.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SLP (C) NO. 23599 OF 2018
ASHOK KUMAR KALRA …PETITIONER
VERSUS
WING CDR. SURENDRA AGNIHOTRI
& ORS. …RESPONDENTS
JUDGMENT
N.V. RAMANA, J.
1. Questions about procedural justice are remarkably persistent
and usual in the life of Common Law Courts. However,
achieving a perfect procedural system may be feasible or
affordable, rather more manageable standards of meaningful
participation needs to be aspired while balancing cost, time
and accuracy at the same time.
2. The present reference placed before us arises out of the order
dated 10.09.2018 passed by a twoJudge Bench of this Court,
wherein clarification has been sought as to the interpretation of
REPORTABLE
1
Order VIII Rule 6A of the Civil Procedure Code (hereinafter
referred to as “the CPC”), regarding the filing of counterclaim
by a defendant in a suit. The reference order dated 10.09.2018
is extracted below:
“.........
The papers to be placed before the Hon’ble Chief Justice of
India for constitution of a threeJudge Bench to look into
the effect of our previous judgments as well as whether
the language of Order VIII Rule 6A of the Civil
Procedure Code is mandatory in nature.”
(emphasis supplied)
3. Before we proceed further, we need to allude to the brief factual
background necessary for the disposal of this reference. A
dispute arose between the Petitioner (defendant no. 2) and
Respondent No. 1 (plaintiff) concerning performance of
agreement to sell dated 20.11.1987 and 04.10.1989.
Respondent No.1 (plaintiff) filed the suit for specific
performance against the petitioner (defendant no. 2) on
02.05.2008. Petitioner (defendant No.2) herein filed a written
statement on 2.12.2008 and counterclaim on 15.3.2009, in
the same suit. By order dated 12.05.2009, the trial court
rejected the objections, concerning filing of the counterclaim
after filing of the written statement and framing of issues.
Order dated 15.05.2009 was challenged before the High Court,
2
in Civil Revision No. 253 of 2009, the High Court allowed the
same and quashed the counterclaim. Aggrieved by the
aforesaid order of the High Court, the petitioner (defendant
No.2) herein approached the Division Bench of this court,
which has referred the matter to a threeJudge Bench.
4. The learned counsel appearing on behalf of the Petitioner
submitted that the intent behind Order VIII Rule 6A of the CPC
is to provide an enabling provision for the filing of counterclaim so as to avoid multiplicity of proceedings, thereby saving
the time of the Courts and avoiding inconvenience to the
parties. Therefore, no specific statutory bar or embargo has
been imposed upon the Court’s jurisdiction to entertain a
counterclaim except the limitation under the said provision
which provides that the cause of action in the counterclaim
must arise either before or after the filing of the suit but before
the defendant has delivered his defence. The learned counsel
also submitted that if permitting the counterclaim would lead
to protracting the trial and cause delay in deciding the suit, the
Court would be justified in exercising its discretion by not
permitting the filing of the counterclaim. Relying on the
judgments of this Court in Salem Advocate Bar Association,
3
Tamil Nadu v. Union Of India, AIR 2005 SC 3353, and Jai
Jai Ram Manohar Lal v. National Building Material
Supply, Gurgaon, (1969) 1 SCC 869, the learned counsel
lastly submitted that rules of procedure must not be
interpreted in a manner that ultimately results in failure of
justice.
5. On the other hand, the learned Senior counsel for the
respondent submitted that the language of the statute, and the
scheme of the Order, indicates that the counterclaim has to be
a part of the written statement. The learned senior counsel
strengthened the above submission by relying on the statutory
requirement that the cause of action relating to a counterclaim
must arise before the filing of the written statement, and
submitted that the counterclaim must therefore form a part of
the written statement. The learned senior counsel also relied
on the language of Order VIII Rule 6 of the CPC, which requires
a defendant’s claim to setoff to be a part of the written
statement, to suggest that the same rules should also apply to
the filing of a counterclaim, keeping in mind the placement of
the provision relating to counter claim in Order VIII Rule 6A of
the CPC.
4
6. We have heard the learned counsel on either side at length and
perused the material available on record. In the light of the
reference and the arguments advanced on behalf of the parties,
the following issues arise for consideration before this Court:
1) Whether Order VIII Rule 6A of the CPC mandates an
embargo on filing the counterclaim after filing the
written statement?
2) if the answer to the aforesaid question is in negative,
then what are the restrictions on filing the counterclaim after filing of the Written Statement?
7. At the outset, there is no gainsaying that the procedural justice
is imbibed to provide further impetus to the substantive
justice. It is this extended procedural fairness provided by the
national courts, which adds to the legitimacy and commends
support of general public. On the other hand, we must be
mindful of the legislative intention to provide for certainty and
clarity. In the name of substantive justice, providing unlimited
and unrestricted rights in itself will be detrimental to certainty
and would lead to the state of lawlessness. In this regard, this
Court needs to recognize and harmoniously stitch the two
types of justice, so as to have an effective, accurate and
participatory judicial system.
5
8. Having observed on nuances of procedural justice, we need to
turn our attention to the Order VIII of the CPC, which deals
with written statement, setoff and counterclaim. Rules 1 to 5
of Order VIII of the CPC deal with the written statement. This
Order dealing with the written statement was amended
extensively by the Code of Civil Procedure (Amendment) Act,
2002 (Act No. 22 of 2002) (hereinafter referred to as “Act 22 of
2002”), whereby the defendant shall, within thirty days from
the date of service of summons on him, present a written
statement of his defence. In case he fails to file the written
statement within the said period of thirty days, he shall be
allowed to file the same on such other day, as may be specified
by the Court, for reasons to be recorded in writing, but which
shall not be later than ninety days from the date of service of
summons.
9. Order VIII Rule 6 of the CPC specifies the particulars of setoff
to be given in written statement and the same reads as under:
Order VIII Rule 6:
6. Particulars of setoff to be given in
written statement: (1) Where in a suit for the
recovery of money the defendant claims to setoff
against the plaintiff’s demand any ascertained
sum of money legally recoverable by him from the
6
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 setoff.
(2) Effect of setoff: The written statement
shall have the same effect as a plaint in a crosssuit so as to enable the Court to pronounce a
final judgment in respect both of the original
claim and of the setoff; but this shall not affect
the lien, upon the amount decreed, of any pleader
in respect of the costs payable to him under the
decree.
(3) The rules relating to a written statement
by a defendant apply to a written statement in
answer to a claim of setoff.
Order VIII Rule 6A, which pertains to the counterclaim, reads
as under:
Order VIII Rule 6A:
6A. Counterclaim by Defendant(1) A
defendant in a suit may, in addition to his right
of pleading a setoff under rule 6, set up, by way
of counterclaim against the claim of the plaintiff,
any right or claim in respect of a cause of action
accruing to the defendant against the plaintiff
either before or after the filing of the suit, but
before the defendant has delivered his defence or
before the time limited for delivering his defence
has expired, whether such counterclaim is in the
nature of a claim for damages or not:
Provided that such counterclaim shall not
exceed the pecuniary limits of the jurisdiction of
the court.
7
(2) Such counterclaim shall have the
same effect as a crosssuit so as to enable the
Court to pronounce a final judgment in the same
suit, both on the original claim and on the
counterclaim.
(3) The plaintiff shall be at liberty to file a
written statement in answer to the counterclaim
of the defendant within such period as may be
fixed by the Court.
(4) The counterclaim shall be treated as
a plaint and governed by the rules applicable to
plaints.
10. Thus, as per Order VIII Rule 6 CPC, the defendant can claim
setoff of any ascertained sum of money legally recoverable by
him from the plaintiff, against the plaintiff’s demand, in a suit
for recovery of money. Whereas, Rule 6A deals with counterclaim by defendant, according to which a defendant in a suit
may, in addition to his right of pleading a setoff under Rule 6,
set up, by way of counterclaim against the claim of the
plaintiff, any right or claim in respect of a cause of action
accruing to the defendant against the plaintiff either before or
after filing of the suit but before the defendant has delivered
his defence or before the time prescribed for delivering his
defence has expired, whether such counterclaim is in the
nature of a claim for damages or not.
8
11. The counterclaim shall be treated as a plaint and governed by
the rules applicable to plaints. Order VIII Rule 6G says that
the rules relating to a written statement by a defendant shall
apply to a written statement filed in answer to a counterclaim.
As per Rule 8, any ground of defence which has arisen after the
institution of the suit or the presentation of a written statement
claiming a setoff or counterclaim may be raised by the
defendant or plaintiff, as the case may be, in his written
statement. Rule 9 of Order VIII prohibits presentation of
pleadings subsequent to the written statement of a defendant
other than by way of defence to setoff or counterclaim, except
by the leave of the Court, and upon such terms as the Court
thinks fit; and the provision further stipulates that the Court
may at any time require a written statement or additional
written statement from any of the parties and fix a time of not
more than thirty days for presenting the same. This
amendment with respect to subsequent pleadings was made to
the CPC by way of Act 22 of 2002. At the cost of repetition, we
may note the conditions for filing a counterclaim under Order
VIII Rule 6Ai. Counterclaim can be for claim of
damages or otherwise.
9
ii. Counterclaim should relate to the cause
of action, which may accrue before or
even after filing the suit.
iii. If the cause of action in the counterclaim
relates to one accrued after filing of suit,
it should be one accruing before filing of
the written statement or the time given
for the same.
When we look at the whole scheme of Order VIII CPC, it
unequivocally points out at the legislative intent to advance the
cause of justice by placing embargo on the belated filing of
written statement, setoff and counterclaim.
12. We have to take note of the fact that Rule 6A was introduced in
the CPC by the Code of Civil Procedure (Amendment) Act of
1976 (Act No.104 of 1976), and before the amendment, except
in money suits, counterclaim or setoff could not be pleaded in
other suits. As per the recommendation of the Law
Commission of India, to avoid multiplicity of proceedings, the
counterclaim by way of Rule 6A was inserted in the Civil
Procedure Code. The statement of objects and reasons for
enacting the Code of Civil Procedure (Amendment) Act, 1976
(Act No.104 of 1976), were1) A litigant should get a fair trial in accordance with
the accepted principles of natural justice.
10
2) Every effort should be made to expedite the
disposal of civil suits and proceedings, so that
justice may not be delayed;
3) The procedure should not be complicated and
should, to the utmost extent possible, ensure fair
deal to the poorer sections of the community who
do not have the means to engage a pleader to
defend their cases.
13. Before we proceed further, we deem it appropriate to note that
any provision under the procedural law should not be
construed in such a way that it would leave the Court helpless
[refer to Salem Advocate Bar Association Case (supra)]. In
fact a wide discretion has been given to the civil court
regarding the procedural elements of a suit. As held by this
Court, procedural law is not to be a tyrant but a servant, not
an obstruction but an aid to justice.
14. Now we need to observe certain earlier judgments of this Court
which have dealt with Order VIII Rule 6A. In Mahendra
Kumar and Anr. v. State Of Madhya Pradesh and Ors.,
(1987) 3 SCC 265 [hereinafter referred to as ‘Mahendra Kumar
Case’], where the appeals were preferred against concurrent
findings of the Courts below in dismissing the counterclaim as
barred under Section 14 of the Indian Treasure Trove Act,
11
1878, this Court, while considering the scope of Rule 6A(1) of
Order VIII of the CPC, has held that on the face of it, Rule 6A(1)
does not bar the filing of a counterclaim by the defendant after
he had filed the written statement. As the cause of action for
the counterclaim had arisen before the filing of the written
statement, the counterclaim was held to be maintainable. This
Court further observed that under Article 113 of the Limitation
Act, 1963, the period of limitation is three years from the date
of the right to sue accrues, when the period of limitation is not
provided elsewhere in the Schedule. As the counterclaim was
filed within three years from the date of accrual of the right to
sue, this Court held that the learned District Judge and the
High Court were wrong in dismissing the counterclaim. The
issue concerning applicability of limitation period for filing the
counterclaim was also discussed in Jag Mohan Chawla And
Another v. Dera Radha Swami Satsang & Ors., (1996) 4
SCC 699 and Shanti Rani Das Dewanjee (Smt.) v. Dinesh
Chandra Day (Dead) by LRs., (1997) 8 SCC 174.
15. In the case of Vijay Prakash Jarath v. Tej Prakash Jarath,
(2016) 11 SCC 800, this Court directed the Court below to
entertain the counterclaim which was filed 2½ years after
12
framing of issues, as the evidence was still pending and this
Court felt that no prejudice would be caused to the plaintiff.
However, in the case of Bollepanda P. Poonacha & Anr. v.
K.M. Madapa, (2008) 13 SCC 179 [hereinafter referred as
‘Bollepanda Poonacha Case’], this Court while referring to
Ramesh Chand Ardawatiya v. Anil Panjwani, (2003) 7 SCC
350, discouraged the belated filing of counterclaims. Further,
the Court elucidated on the serious harm caused by allowing
such delayed filing. In any case, in Bollepanda Poonacha
Case (supra), the Court could not expound any further as the
counterclaim was rejected on the basis that the cause of
action had arisen after the filing of the written statement.
16. The time limitation for filing of the counterclaim, is not
explicitly provided by the Legislature, rather only limitation as
to the accrual of the cause of action is provided. As noted in
the above precedents, further complications stem from the fact
that there is a possibility of amending the written statement.
However, we can state that the right to file a counterclaim in a
suit is explicitly limited by the embargo provided for the
accrual of the cause of action under Order VIII Rule 6A. Having
said so, this does not mean that counterclaim can be filed at
13
any time after filing of the written statement. As counterclaim
is treated to be plaint, generally it needs to first of all be
compliant with the limitation provided under the Limitation
Act, 1963 as the timebarred suits cannot be entertained under
the guise of the counterclaim just because of the fact that the
cause of action arose as per the parameters of Order VIII Rule
6A.
17. As discussed by us in the preceding paragraphs, the whole
purpose of the procedural law is to ensure that the legal
process is made more effective in the process of delivering
substantial justice. Particularly, the purpose of introducing
Rule 6A in Order VIII of the CPC is to avoid multiplicity of
proceedings by driving the parties to file separate suit and see
that the dispute between the parties is decided finally. If the
provision is interpreted in such a way, to allow delayed filling of
the counterclaim, the provision itself becomes redundant and
the purpose for which the amendment is made will be defeated
and ultimately it leads to flagrant miscarriage of justice. At the
same time, there cannot be a rigid and hypertechnical
approach that the provision stipulates that the counterclaim
has to be filed along with the written statement and beyond
14
that, the Court has no power. The Courts, taking into
consideration the reasons stated in support of the counterclaim, should adopt a balanced approach keeping in mind the
object behind the amendment and to subserve the ends of
justice. There cannot be any hard and fast rule to say that in a
particular time the counterclaim has to be filed, by curtailing
the discretion conferred on the Courts. The trial court has to
exercise the discretion judiciously and come to a definite
conclusion that by allowing the counterclaim, no prejudice is
caused to the opposite party, process is not unduly delayed
and the same is in the best interest of justice and as per the
objects sought to be achieved through the amendment. But
however, we are of the considered opinion that the defendant
cannot be permitted to file counterclaim after the issues are
framed and after the suit has proceeded substantially. It would
defeat the cause of justice and be detrimental to the principle
of speedy justice as enshrined in the objects and reasons for
the particular amendment to the CPC.
18. In this regard having clarified the law, we may note that the
Mahendra Kumar Case (supra) needs to be understood and
restricted to the facts of that case. We may note that even if a
15
counterclaim is filed within the limitation period, the trial
court has to exercise its discretion to balance between the right
to speedy trial and right to file counterclaim, so that the
substantive justice is not defeated. The discretion vested with
the trial court to ascertain the maintainability of the counterclaim is limited by various considerations based on facts and
circumstances of each case. We may point out that there
cannot be a straitjacket formula, rather there are numerous
factors which needs to be taken into consideration before
admitting counterclaim.
19. We may note that any contrary interpretation would lead to
unnecessary curtailment of the right of a defendant to file
counterclaim. This Court needs to recognize the practical
difficulties faced by the litigants across the country. Attaining
the laudable goal of speedy justice itself cannot be the only
end, rather effective justice wherein adequate opportunity is
provided to all the parties, need to be recognized as well [refer
to Salem Advocate Bar Association Case (supra)].
20. We sum up our findings, that Order VIII Rule 6A of the CPC
does not put an embargo on filing the counterclaim after filing
the written statement, rather the restriction is only with
16
respect to the accrual of the cause of action. Having said so,
this does not give absolute right to the defendant to file the
counterclaim with substantive delay, even if the limitation
period prescribed has not elapsed. The court has to take into
consideration the outer limit for filing the counterclaim, which
is pegged till the issues are framed. The court in such cases
have the discretion to entertain filing of the counterclaim, after
taking into consideration and evaluating inclusive factors
provided below which are only illustrative, though not
exhaustive:
i. Period of delay.
ii. Prescribed limitation period for the cause of
action pleaded.
iii. Reason for the delay.
iv. Defendant’s assertion of his right.
v. Similarity of cause of action between the main
suit and the counterclaim.
vi. Cost of fresh litigation.
vii. Injustice and abuse of process.
viii. Prejudice to the opposite party.
ix. and facts and circumstances of each case.
x. In any case, not after framing of the issues.
17
21. We answer the reference accordingly. The instant Special
Leave Petition may be placed before an appropriate Bench after
obtaining orders from the Hon’ble Chief Justice of India, for
considering the case on merits.
.........................J.
(N.V. RAMANA)
.........................J.
(MOHAN M. SHANTANAGOUDAR)
........................J.
(AJAY RASTOGI)
NEW DELHI;
November 19, 2019.
18
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
S.L.P. (Civil) No. 23599 of 2018
Ashok Kumar Kalra …Petitioner
Versus
Wing Cdr. Surendra Agnihotri & Ors. …Respondents
J U D G M E N T
MOHAN M. SHANTANAGOUDAR, J.
1. I have read the opinion given in this reference by my learned
Brothers. I agree with their conclusion that a Court may exercise
its discretion and permit the filing of a counterclaim after the
written statement, till the stage of framing of the issues of the
trial. However, in addition to this, I find that in exceptional
circumstances, the subsequent filing of a counterclaim may be
permitted till the stage of commencement of recording of the
evidence on behalf of the plaintiff. I deem it fit to state the
reasons for arriving at this conclusion through this opinion.
2
2. This reference arises out of the order of this Court dated
10.09.2018 in SLP (C) No. 23599/2018 in Ashok Kumar Kalra
v. Wing CDR Surendra Agnihotri & Ors., which states as
follows:
“The papers to be placed before the Hon’ble Chief
Justice of India for constitution of a threejudge Bench
to look into the effect of our previous judgments as
well as whether the language of Order VIII Rule 6A of
the Code of Civil Procedure is mandatory in nature.”
Essentially, in light of the previous judgments of this Court,
the question referred to this Court is whether it is mandatory for
a counterclaim of the defendant to be filed along with the written
statement.
3. Counsel for both parties argued about the scope of Order
VIII Rule 6A of the Code of Civil Procedure, 1908 [hereinafter
“CPC”] and whether a counterclaim must necessarily be filed
along with the written statement. Since the arguments have been
elaborated upon by my learned Brother Judge, they are not
reproduced herein for the sake of brevity.
4. To fully understand the expanse of the legal questions in
this case, it is essential to appreciate the context in which the
rules relating to counterclaims were introduced in the CPC. The
originally enacted CPC of 1908 did not provide a statutory right
3
to file a counterclaim. At that time, Order VIII only pertained to
written statements and setoffs. Taking note of this omission, the
Law Commission of India, in its 27th and 54th Reports, had
recommended that express provisions on counterclaims should
be included in the CPC to avoid multiple proceedings and to
dispel ambiguity on whether counterclaims could be entertained
at all. These recommendations were implemented through the
Code of Civil Procedure (Amendment) Act, 1976, which
introduced the following rules to Order VIII of the CPC:
“Rule 6A. Counterclaim by defendant.—
(1) A defendant in a suit may, in addition to his right
of pleading a setoff under rule 6, set up, by way of
counterclaim against the claim of the plaintiff, any
right or claim in respect of a cause of action accruing
to the defendant against the plaintiff either before or
after the filing of the suit but before the defendant has
delivered his defence or before the time limited for
delivering his defence has expired, whether such
counterclaim is in the nature of a claim for damages
or not:
Provided that such counterclaim shall not exceed the
pecuniary limits of the jurisdiction of the Court.
(2) Such counterclaim shall have the same effect as a
crosssuit so as to enable the Court to pronounce a
final judgment in the same suit, both on the original
claim and on the counterclaim.
(3) The plaintiff shall be at liberty to file a written
statement in answer to the counterclaim of the
defendant within such period as may be fixed by the
Court.
4
(4) The counterclaim shall be treated as a plaint and
governed by the rules applicable to plaints.
6B. Counterclaim to be stated.—Where any
defendant seeks to rely upon any ground as
supporting a right of counterclaim, he shall, in his
written statement, state specifically that he does so by
way of counterclaim.
6C. Exclusion of counterclaim.—Where a defendant
sets up a counterclaim and the plaintiff contends that
the claim thereby raised ought not to be disposed of by
way of counterclaim but in an independent suit, the
plaintiff may, at any time before issues are settled in
relation to the counterclaim, apply to the Court for an
order that such counterclaim may be excluded, and
the Court may, on the hearing of such application
make such order as it thinks fit.
6D. Effect of discontinuance of suit.—If in any case
in which the defendant sets up a counterclaim, the
suit of the plaintiff is stayed, discontinued or
dismissed, the counterclaim may nevertheless be
proceeded with.
6E. Default of plaintiff to reply to counterclaim.—
If the plaintiff makes default in putting in a reply to the
counterclaim made by the defendant, the Court may
pronounce judgment against the plaintiff in relation to
the counterclaim made against him, or make such
order in relation to the counterclaim as it thinks fit.
6F. Relief to defendant where counterclaim
succeeds.—Where in any suit a setoff or counterclaim is established as a defence against the plaintiff's
claim, and any balance is found due to the plaintiff or
the defendant, as the case may be, the Court may give
judgment to the party entitled to such balance.
5
6G. Rules relating to written statement to apply—
The rules relating to a written statement by a
defendant shall apply to a written statement filed in
answer to a counterclaim.”
5. For the first time, through the introduction of Rules 6A6G
to Order VIII, an explicit right of filing a counterclaim was
accorded to the defendant, and rules governing the same were
laid down. In this scheme, Rule 6A(1) is the cornerstone
provision. It specifically grants the right of filing a counterclaim.
In addition to this, it also places a categorical limitation on the
accrual of the cause of action for a counterclaim. This is in the
form of the requirement that the cause of action pertaining to the
counterclaim must arise either before or after the filing of the
suit, but before the defendant has delivered his defence (i.e.
before the filing of the written statement), or before the expiry of
the time period for delivering such defence.
Further, under Rule 6A(2), a counterclaim is stated to have
the same effect as the plaint in a crosssuit, so as to enable the
Court to pronounce a final judgment on the original claim as well
as the counterclaim in the same suit itself. Thus, it is evident
that Rule 6A has been carefully designed to meet the purpose of
avoiding multiplicity of proceedings.
6
6. It is clear that Rule 6A(1) only places a limitation on the
time within which the cause of action for a counterclaim must
arise. Besides this limitation, there is no explicit guidance in Rule
6A(1) as to the time within which the counterclaim itself must be
filed. In this respect, Rule 6A(4) provides that a counterclaim is
governed by the rules applicable to plaints. It is wellestablished
that a plaint must be presented within the period prescribed
under the Limitation Act, 1963 [hereinafter “the Limitation Act”].
For counterclaims as well, the period within which they must be
filed can be inferred from Section 3(2)(b)(ii) of the Limitation Act,
1963, which states thus:
“(2) For the purposes of this Act,
(b) any claim by way of a set off or a counter claim,
shall be treated as a separate suit and shall be deemed
to have been instituted—
(ii) in the case of a counter claim, on the date on which
the counter claim is made in court;”
(emphasis supplied)
This provision mandates that in order to determine the
limitation period applicable to a counterclaim, it must be treated
as a separate suit, which is deemed to have been instituted on
the date on which it is made in Court. Thus, evidently, in
7
consonance with the provisions of Order VIII Rule 6A(4), the
Limitation Act also treats a counterclaim like a plaint. This
means that much like a plaint, the limitation for filing a counterclaim also depends on the nature of the claim and is accordingly
governed by the period of limitation stipulated in the Limitation
Act.
7. From the foregoing discussion, it is clear that a counterclaim can be filed if two conditions are met: first, its cause of
action complies with Order VIII Rule 6A(1); and second, it is filed
within the period specified under the Limitation Act. Clearly, by
itself, Rule 6A does not specifically require that a counterclaim
has to be filed along with the written statement. In the absence of
a particular mandate under this Rule, it is necessary to look to
other provisions of the CPC to determine whether a counterclaim
can be filed after a written statement.
8. It would be appropriate to begin with a reference to Order
VIII Rule 9, which states thus:
“9. Subsequent pleadings.—No pleading subsequent
to the written statement of a defendant other than by
way of defence to set off or counterclaim shall be
presented except by the leave of the Court and upon
such terms as the Court thinks fit; but the Court may
at any time require a written statement or additional
8
written statement from any of the parties and fix a
time of not more than thirty days for presenting the
same.”
(emphasis supplied)
According to this Rule, after the filing of the written
statement, it is open to plead a defence to a setoff or counterclaim without the leave of the Court. However, any other pleading
sought to be filed after the written statement requires the leave of
the Court. The Rule also vests the Court with a discretion to
allow filing of a written statement or additional written statement
within a period not exceeding thirty days.
A plain reading of Order VIII Rule 9 makes it clear that the
Court has the discretion to allow any subsequent pleading upon
such terms as it thinks fit. It is important to appreciate here that
such subsequent pleading or additional written statement may
include a counterclaim. This is because Rule 9 does not create a
bar on the nature of claims that can be raised as subsequent
pleadings. As long as the Court considers that it would be proper
to allow a counterclaim by way of a subsequent pleading, it is
possible to file a counterclaim after filing the written statement.
In addition to this, it is also possible to introduce a belated
counterclaim by way of an amendment to the original written
9
statement under Order VI Rule 17, CPC. However, as is the case
with Order VIII Rule 9, the filing of such a counterclaim through
an amended written statement is subject to the leave of the
Court, and not accorded to the defendant as a matter of right.
9. In this regard, it would be relevant to note the observations
of this Court in Ramesh Chand Ardawatiya v. Anil Panjwani,
(2003) 7 SCC 350:
“28. Looking to the scheme of Order 8 as amended by
Act 104 of 1976, we are of the opinion, that there are
three modes of pleading or setting up a counterclaim
in a civil suit. Firstly, the written statement filed under
Rule 1 may itself contain a counterclaim which in the
light of Rule 1 read with Rule 6A would be a counterclaim against the claim of the plaintiff preferred in
exercise of legal right conferred by Rule 6A. Secondly,
a counterclaim may be preferred by way of
amendment incorporated subject to the leave of the
court in a written statement already filed. Thirdly, a
counterclaim may be filed by way of a subsequent
pleading under Rule 9. In the latter two cases the
counterclaim though referable to Rule 6A cannot be
brought on record as of right but shall be governed by
the discretion vesting in the court, either under Order
6 Rule 17 CPC if sought to be introduced by way of
amendment, or, subject to exercise of discretion
conferred on the court under Order 8 Rule 9 CPC if
sought to be placed on record by way of subsequent
pleading.”
(emphasis supplied)
I fully agree with this proposition, and affirm on the basis of
the foregoing discussion that the Court has the discretion to
10
allow a counterclaim to be filed after the written statement in
exercise of its power under Order VIII Rule 9 and Order VI Rule
17 of the CPC.
10. It can also be gleaned from Order VIII Rule 10 that it is
permissible to file a belated counterclaim under the scheme of
Order VIII, CPC:
“10. Procedure when party fails to present written
statement called for by Court.—Where any party
from whom a written statement is required under rule
1 or rule 9 fails to present the same within the time
permitted or fixed by the Court, as the case may be,
the Court shall pronounce judgment against him, or
make such order in relation to the suit as it thinks fit
and on the pronouncement of such judgment a decree
shall be drawn up.”
(emphasis supplied)
Under this Rule, the Court is afforded with the discretion to
pass any order that it deems fit in the event that a written
statement is not filed within the prescribed statutory limit. To
determine whether this discretion extends to allowing the filing of
a belated counterclaim as well, it would be useful to appreciate
the scope of the discretion accorded under this provision.
In Salem Advocate Bar Association, T.N. v. Union of
India, (2005) 6 SCC 344, this Court, while construing the nature
11
of Order VIII Rule 1, relied on the broad discretionary power
under Order VIII Rule 10, and observed as follows:
“21. In construing this provision, support can also be
had from Order 8 Rule 10 which provides that where
any party from whom a written statement is required
under Rule 1 or Rule 9, fails to present the same
within the time permitted or fixed by the court, the
court shall pronounce judgment against him, or make
such other order in relation to the suit as it thinks fit...
In construing the provision of Order 8 Rule 1 and Rule
10, the doctrine of harmonious construction is
required to be applied. The effect would be that under
Rule 10 Order 8, the court in its discretion would have
the power to allow the defendant to file written
statement even after expiry of the period of 90 days
provided in Order 8 Rule 1. There is no restriction in
Order 8 Rule 10 that after expiry of ninety days,
further time cannot be granted. The court has wide
power to “make such order in relation to the suit as it
thinks fit”. Clearly, therefore, the provision of Order 8
Rule 1 providing for the upper limit of 90 days to file
written statement is directory.”
(emphasis supplied)
Thus, under Order VIII Rule 10, the Court has the power to
condone the delay in filing of a written statement, if it deems it fit
in the facts and circumstances of the case. If it is so, there is no
reason as to why the delay in filing a counterclaim cannot be
condoned by the Court as well.
11. A conjoint and harmonious reading of Rules 6A, 9 and 10 of
Order VIII as well as Order VI Rule 17, CPC thus reveals that the
12
Court is vested with the discretion to allow the filing of a counterclaim even after the filing of the written statement, as long as the
same is within the limitation prescribed under the Limitation Act,
1963. In this regard, I agree with the propositions laid down in
the decisions discussed below.
In Mahendra Kumar v. State of Madhya Pradesh, (1987)
3 SCC 265, it was held that:
“15. The next point that remains to be considered is
whether Rule 6A(1) of Order 8 of the Code of Civil
Procedure bars the filing of a counterclaim after the
filing of a written statement. This point need not detain
us long, for Rule 6A(1) does not, on the face of it, bar
the filing of a counterclaim by the defendant after he
had filed the written statement. What is laid down
under Rule 6A(1) is that a counterclaim can be filed,
provided the cause of action had accrued to the
defendant before the defendant had delivered his
defence or before the time limited for delivering his
defence has expired, whether such counterclaim is in
the nature of a claim for damages or not. The High
Court, in our opinion, has misread and misunderstood
the provision of Rule 6A(1) in holding that as the
appellants had filed the counterclaim after the filing of
the written statement, the counterclaim was not
maintainable…Under Article 113 of the Limitation Act,
1963, the period of limitation of three years from the
date the right to sue accrues, has been provided for
any suit for which no period of limitation is provided
elsewhere in the Schedule. It is not disputed that a
counterclaim, which is treated as a suit under Section
3(2)(b) of the Limitation Act has been filed by the
appellants within three years from the date of accrual
to them of the right to sue.”
(emphasis supplied)
13
In Shanti Rani Das Dewanjee v. Dinesh Chandra Day,
(1997) 8 SCC 174, it was held that the right to file a counterclaim is referable to the date of accrual of the cause of action:
“2. In our view, the impugned decision does not
warrant interference. Such question was specifically
raised before this Court in Mahendra Kumar v. State of
M.P. [(1987) 3 SCC 265] It has been held by this Court
that right to file a counterclaim under Order VIII Rule
6A of the Code of Civil Procedure is referable to the
date of accrual of the cause of action. If the cause of
action had arisen before or after the filing of the suit,
and such cause of action continued up to the date of
filing written statement or extended date of filing
written statement, such counterclaim can be filed
even after filing the written statement. The said Civil
Case No. 248 of 1982, in which the application under
Order VIII Rule 6A has been filed by the defendantrespondents was instituted on 1571982 and the
application under Order VIII Rule 6A was presented
on 2261985. It cannot be held that the cause of
action for the suit or counterclaim was ex facie barred
by limitation under the Limitation Act”
(emphasis supplied)
I am unable to persuade myself to arrive at a different
conclusion than the one found in the aforementioned judgments.
12. It was argued by Counsel for the Respondent that Order VIII
Rule 6A(1) requires that the cause of action for a counterclaim
should arise before the filing of the written statement, and hence
it is logical that the counterclaim, or the grounds upon which it
is based, should also find a mention in the written statement. To
14
support this, he relied on Order VIII Rule 6B, which states that a
defendant seeking to rely upon any ground in support of his right
of counterclaim, shall specifically state in his written statement
that he does so by way of a counterclaim.
I do not agree with this view for two reasons. First, it is
possible that at the time of filing the written statement, the
defendant is unaware of the facts giving rise to the cause of
action for his counterclaim. For instance, in a suit for
declaration of title brought by the plaintiff against his sister, the
defendant may be unaware that the plaintiff has wrongfully
detained her belongings kept at the said property, at the time of
filing her written statement. In such a situation, even though the
cause of action for her counterclaim of wrongful detention of
belongings may have arisen before the filing of the written
statement, it may not have been possible for her to raise the said
counterclaim. Similarly, limited access to justice, especially in
rural areas, shaped by the socioeconomic context of parties, may
compel the filing of belated counterclaims.
Second, a perusal of Order VIII Rule 6B suggests that it is
only limited to cases where the counterclaim is made along with
15
the written statement. In instances where a belated counterclaim is raised by way of an amendment to the written statement,
or as a subsequent pleading, Rule 6B cannot be said to be
applicable. This is because in any such case, if the Court relies
on a technical interpretation of Rule 6B to disallow the filing of a
belated counterclaim, the defendant would still be free to file a
fresh suit for such a claim. He may, in such matters, after filing
the separate suit, request the Court to club the suits or to hear
them simultaneously. This may further delay the process of
adjudication and would certainly not help the plaintiff in the first
suit, who may have opposed the filing of the belated counterclaim. Such multiplicity of proceedings goes against the object
with which Rules 6A6G were introduced to the CPC. Thus, the
provisions under Order VIII should not be read in isolation, but
in a conjoint and harmonious manner, and Rule 6B cannot be
read as a limitation on the Court’s discretion to permit the filing
of a belated counterclaim. Therefore, I do not find force in the
argument raised by Counsel for Respondent.
13. Further, the contention that the limitation on filing of setoffs under Order VIII Rule 6 should be read into Rule 6A(1) is
untenable. The nature of a setoff and a counterclaim is
16
different. For instance, a setoff must necessarily be of the same
nature as the claim of the plaintiff and arise out of the same
transaction. These requirements do not hold for counterclaims,
which may be related to “any right or claim in respect of a cause
of action accruing to the defendant against the plaintiff” as stated
in Order VIII Rule 6A(1). Further, in case of setoffs, there is no
provision akin to Order VIII Rule 6A(4), which provides that a setoff must be treated as a plaint. Thus, it appears that the
Legislature has consciously considered it fit to omit a specific
time limit for filing of counterclaims in Rule 6A. In such a
scenario, a limitation cannot be read into this Rule.
14. Lastly, as regards the Respondent’s reliance on Order VIII
Rule 1A, which requires the documents in support of a counterclaim to be presented along with the written statement itself, I am
of the view that this requirement should not be read as being
mandatory. Rule 1A(2) itself provides instances where such
documents are not in the possession of the defendant, by
requiring him to specify the person in whose possession the
documents rest. Accordingly, Rule 1A(3) (as amended in 2002)
also provides that these documents may be produced later, with
the leave of the Court. The discretion accorded in these
17
provisions goes on to support the conclusion that it is possible to
file a counterclaim even after the written statement, with the
leave of the Court.
15. Finally, then, the scope of discretion vested with the Court
under Order VI Rule 17 and Order VIII Rule 9 to allow for belated
counterclaims remains to be examined. It must be determined
when it may be proper for the Court to refuse a belated counterclaim, in spite of it being permissible within the scheme of Order
VIII Rule 6A and the Limitation Act, 1963.
16. In several cases, it is possible that the period of limitation
for filing of counterclaims may extend up to a long period of time
and prolong the trial. For instance, in a suit for declaration of
title, the defendant may bring a counterclaim for possession of
the immovable property based on previous possession. In terms
of Order VIII Rule 6A, such a claim would be admissible as long
as the dispossession had occurred before the filing of the written
statement, or before the expiry of the time provided for filing of
the written statement. However, as per the Limitation Act, such a
claim would be valid even if it were brought within twelve years
from the date of the defendant’s dispossession.
18
In such a situation, it is possible that by the time the
counterclaim is brought, the issues in the original suit have
already been framed, the evidence led, arguments made, and the
judgment reserved. Allowing a counterclaim to be filed at this
stage would effectively result in a retrial of the suit, since the
Court would have to frame new issues, both parties would have
to lead evidence, and only then would the judgment be
pronounced. If this is permitted, the very purpose of allowing
counterclaims, i.e. avoiding multiplicity of litigation, would be
frustrated.
17. It is wellsettled that procedural rules should not be
interpreted so as to defeat justice, rather than furthering it. This
is because procedural law is not meant to serve as a tyrant
against justice, but to act as a lubricant in its administration.
Thus, when Courts set out to do justice, they should not lose
sight of the end goal amidst technicalities. In some cases, this
means that rules that have traditionally been treated as
mandatory, may be moulded so that their object and substantive
justice is not obstructed. It would be apposite to remember that
equity and justice should be the foremost considerations while
construing procedural rules, without nullifying the object of the
19
Legislature in totality. Thus, rules under the Limitation Act which
may allow for filing of a belated counterclaim up to a long period
of time, should not be used to defeat the ends of justice.
18. Keeping this in mind, in Ramesh Chand Ardawatiya
(supra), this Court considered the scope of discretion in allowing
for belated counterclaims. It is useful to refer to the observations
made by the Court in the context of Order VIII Rule 6A (as it was
in 1976):
“28. …The purpose of the provision enabling filing of a
counterclaim is to avoid multiplicity of judicial
proceedings and save upon the court’s time as also to
exclude the inconvenience to the parties by enabling
claims and counterclaims, that is, all disputes
between the same parties being decided in the course
of the same proceedings. If the consequence of
permitting a counterclaim either by way of
amendment or by way of subsequent pleading would
be prolonging of the trial, complicating the otherwise
smooth flow of proceedings or causing a delay in the
progress of the suit by forcing a retreat on the steps
already taken by the court, the court would be justified
in exercising its discretion not in favour of permitting a
belated counterclaim. The framers of the law never
intended the pleading by way of counterclaim being
utilized as an instrument for forcing upon a reopening
of the trial or pushing back the progress of proceeding.
Generally speaking, a counterclaim not contained in
the original written statement may be refused to be
taken on record if the issues have already been framed
and the case set down for trial, and more so when the
trial has already commenced… A refusal on the part of
the court to entertain a belated counterclaim may not
prejudice the defendant because in spite of the
20
counterclaim having been refused to be entertained he
is always at liberty to file his own suit based on the
cause of action for counterclaim.”
(emphasis supplied)
To ensure that the objective of introducing the statutory
amendments with respect to counterclaims was not defeated, it
was rightly held that a belated counterclaim raised by way of an
amendment to the written statement (under Order VI Rule 17) or
as a subsequent pleading (under Order VIII Rule 9) should not be
allowed after the framing of issues and commencement of trial.
19. Later, in Rohit Singh v. State of Bihar, (2006) 12 SCC
734, this Court read in a similar limitation on the filing of belated
counterclaims:
“18. … A counterclaim, no doubt, could be filed even
after the written statement is filed, but that does not
mean that a counterclaim can be raised after issues
are framed and the evidence is closed. Therefore, the
entertaining of the socalled counterclaim of
Defendants 3 to 17 by the trial court, after the framing
of issues for trial, was clearly illegal and without
jurisdiction. On that short ground the socalled
counterclaim, filed by Defendants 3 to 17 has to be
held to be not maintainable.”
(emphasis supplied)
It is crucial to note that even though the Court held that a
counterclaim can be filed after the filing of a written statement,
it must necessarily be filed before the issues are framed and the
evidence is closed. In fact, since the counterclaim in the said
21
matter was filed at the stage where the judgment was reserved,
the Court went as far as saying that entertaining such a claim
was illegal and without jurisdiction.
20. The decision of this Court in Bollepanda P. Poonacha v.
K. M. Madapa, (2008) 13 SCC 179 is also significant in this
regard. Referring to Ramesh Chand Ardawatiya (supra), it
acknowledged that belated counterclaims were to be
discouraged, and called upon the Court to consider questions of
serious injustice and irreparable loss while permitting any such
claim. However, in Bollepanda (supra), the Court did not have
an occasion to expound further on this proposition, as the
counterclaim had been rejected on the basis that its cause of
action had arisen after the filing of the written statement.
21. It was in Gayathri Women’s Welfare Association v.
Gowramma, (2011) 2 SCC 330, that this Court once again had
the occasion to look into the filing of a belated counterclaim. In
this case, filing of the initial counterclaim was not in challenge.
Instead, the Court was considering the effect of an amendment to
an existing counterclaim. While the Trial Court had refused to
allow such an amendment, the High Court had granted the same.
22
Reiterating the concerns noted in Ramesh Chand Ardawatiya
(supra), this Court held as follows:
“44. The matter herein symbolises the concern
highlighted by this Court in Ramesh Chand [(2003) 7
SCC 350]. Permitting a counterclaim at this stage
would be to reopen a decree which has been granted in
favour of the appellants by the trial court. The
respondents have failed to establish any factual or
legal basis for modification/nullifying the decree of the
trial court.”
The Court also relied on Rohit Singh (supra) and observed
that a counterclaim cannot be filed after the framing of issues.
22. In Vijay Prakash Jarath v. Tej Prakash Jarath, (2016)
11 SCC 800, this Court further refined the limitation in Rohit
Singh (supra) that counterclaims cannot be raised after the
issues are framed and the evidence is closed. In the said case,
even though the issues had been framed, and the case was in the
early stages of recording of the plaintiff’s evidence, a counterclaim filed at that point was allowed, as no prejudice was caused
to the plaintiff.
23. The above discussion lends support to the conclusion that
even though Rule 6A permits the filing of a counterclaim after
the written statement, the Court has the discretion to refuse
such filing if it is done at a highly belated stage. However, in my
23
considered opinion, to ensure speedy disposal of suits, propriety
requires that such discretion should only be exercised till the
framing of issues for trial. Allowing counterclaims beyond this
stage would not only prolong the trial, but also prejudice the
rights that may get vested with the plaintiff over the course of
time.
At the same time, in exceptional circumstances, to prevent
multiplicity of proceedings and a situation of effective retrial, the
Court may entertain a counterclaim even after the framing of
issues, so long as the Court has not started recording the
evidence. This is because there is no significant development in
the legal proceedings during the intervening period between
framing of issues and commencement of recording of evidence. If
a counterclaim is brought during such period, a new issue can
still be framed by the Court, if needed, and evidence can be
recorded accordingly, without seriously prejudicing the rights of
either party to the suit.
At this juncture, I would like to address the observation in
Rohit Singh (supra) that a counterclaim, if filed after the
framing of the issues and closing of the evidence, would be illegal
and without jurisdiction. In my opinion, this is not a correct
24
statement of law, as the filing of counterclaims after the
commencement of recording of evidence is not illegal per se.
However, I hasten to add that permitting such a counterclaim
would be improper, as the Court’s discretion has to be exercised
wisely and pragmatically.
24. There are several considerations that must be borne in
mind while allowing the filing of a belated counterclaim. First,
the Court must consider that no injustice or irreparable loss is
being caused to the defendant due to a refusal to entertain the
counterclaim, or to the plaintiff by allowing the same. Of course,
as the defendant would have the option to pursue his cause of
action in a separate suit, the question of prejudice to the
defendant would ordinarily not arise. Second, the interest of
justice must be given utmost importance and procedure should
not outweigh substantive justice. Third, the specific objectives of
reducing multiplicity of litigation and ensuring speedy trials
underlying the provisions for counterclaims, must be accorded
due consideration.
25. Having considered the previous judgments of this Court on
counterclaims, the language employed in the rules related
25
thereto, as well as the intention of the Legislature, I conclude
that it is not mandatory for a counterclaim to be filed along with
the written statement. The Court, in its discretion, may allow a
counterclaim to be filed after the filing of the written statement,
in view of the considerations mentioned in the preceding
paragraph. However, propriety requires that such discretion
should ordinarily be exercised to allow the filing of a counterclaim till the framing of issues for trial. To this extent, I concur
with the conclusion reached by my learned Brothers. However,
for the reasons stated above, I am of the view that in exceptional
circumstances, a counterclaim may be permitted to be filed after
a written statement till the stage of commencement of recording
of the evidence on behalf of the plaintiff.
26. The reference is answered accordingly.
............................................J.
(Mohan M. Shantanagoudar)
New Delhi;
November 19, 2019.
Rule 9 of Order VIII prohibits presentation ofnpleadings subsequent to the written statement of a defendant other than by way of defence to setoff or counterclaim, except by the leave of the Court, and upon such terms as the Court thinks fit; and the provision further stipulates that the Court may at any time require a written statement or additional written statement from any of the parties and fix a time of not more than thirty days for presenting the same. This
amendment with respect to subsequent pleadings was made to the CPC by way of Act 22 of 2002.
it is not mandatory for a counterclaim to be filed along with the written statement. The Court, in its discretion, may allow a counterclaim to be filed after the filing of the written statement,
in view of the considerations mentioned in the preceding paragraph. However, propriety requires that such discretion should ordinarily be exercised to allow the filing of a counterclaim till the framing of issues for trial. To this extent, I concur with the conclusion reached by my learned Brothers. However, for the reasons stated above, I am of the view that in exceptional
circumstances, a counterclaim may be permitted to be filed after a written statement till the stage of commencement of recording of the evidence on behalf of the plaintiff.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SLP (C) NO. 23599 OF 2018
ASHOK KUMAR KALRA …PETITIONER
VERSUS
WING CDR. SURENDRA AGNIHOTRI
& ORS. …RESPONDENTS
JUDGMENT
N.V. RAMANA, J.
1. Questions about procedural justice are remarkably persistent
and usual in the life of Common Law Courts. However,
achieving a perfect procedural system may be feasible or
affordable, rather more manageable standards of meaningful
participation needs to be aspired while balancing cost, time
and accuracy at the same time.
2. The present reference placed before us arises out of the order
dated 10.09.2018 passed by a twoJudge Bench of this Court,
wherein clarification has been sought as to the interpretation of
REPORTABLE
1
Order VIII Rule 6A of the Civil Procedure Code (hereinafter
referred to as “the CPC”), regarding the filing of counterclaim
by a defendant in a suit. The reference order dated 10.09.2018
is extracted below:
“.........
The papers to be placed before the Hon’ble Chief Justice of
India for constitution of a threeJudge Bench to look into
the effect of our previous judgments as well as whether
the language of Order VIII Rule 6A of the Civil
Procedure Code is mandatory in nature.”
(emphasis supplied)
3. Before we proceed further, we need to allude to the brief factual
background necessary for the disposal of this reference. A
dispute arose between the Petitioner (defendant no. 2) and
Respondent No. 1 (plaintiff) concerning performance of
agreement to sell dated 20.11.1987 and 04.10.1989.
Respondent No.1 (plaintiff) filed the suit for specific
performance against the petitioner (defendant no. 2) on
02.05.2008. Petitioner (defendant No.2) herein filed a written
statement on 2.12.2008 and counterclaim on 15.3.2009, in
the same suit. By order dated 12.05.2009, the trial court
rejected the objections, concerning filing of the counterclaim
after filing of the written statement and framing of issues.
Order dated 15.05.2009 was challenged before the High Court,
2
in Civil Revision No. 253 of 2009, the High Court allowed the
same and quashed the counterclaim. Aggrieved by the
aforesaid order of the High Court, the petitioner (defendant
No.2) herein approached the Division Bench of this court,
which has referred the matter to a threeJudge Bench.
4. The learned counsel appearing on behalf of the Petitioner
submitted that the intent behind Order VIII Rule 6A of the CPC
is to provide an enabling provision for the filing of counterclaim so as to avoid multiplicity of proceedings, thereby saving
the time of the Courts and avoiding inconvenience to the
parties. Therefore, no specific statutory bar or embargo has
been imposed upon the Court’s jurisdiction to entertain a
counterclaim except the limitation under the said provision
which provides that the cause of action in the counterclaim
must arise either before or after the filing of the suit but before
the defendant has delivered his defence. The learned counsel
also submitted that if permitting the counterclaim would lead
to protracting the trial and cause delay in deciding the suit, the
Court would be justified in exercising its discretion by not
permitting the filing of the counterclaim. Relying on the
judgments of this Court in Salem Advocate Bar Association,
3
Tamil Nadu v. Union Of India, AIR 2005 SC 3353, and Jai
Jai Ram Manohar Lal v. National Building Material
Supply, Gurgaon, (1969) 1 SCC 869, the learned counsel
lastly submitted that rules of procedure must not be
interpreted in a manner that ultimately results in failure of
justice.
5. On the other hand, the learned Senior counsel for the
respondent submitted that the language of the statute, and the
scheme of the Order, indicates that the counterclaim has to be
a part of the written statement. The learned senior counsel
strengthened the above submission by relying on the statutory
requirement that the cause of action relating to a counterclaim
must arise before the filing of the written statement, and
submitted that the counterclaim must therefore form a part of
the written statement. The learned senior counsel also relied
on the language of Order VIII Rule 6 of the CPC, which requires
a defendant’s claim to setoff to be a part of the written
statement, to suggest that the same rules should also apply to
the filing of a counterclaim, keeping in mind the placement of
the provision relating to counter claim in Order VIII Rule 6A of
the CPC.
4
6. We have heard the learned counsel on either side at length and
perused the material available on record. In the light of the
reference and the arguments advanced on behalf of the parties,
the following issues arise for consideration before this Court:
1) Whether Order VIII Rule 6A of the CPC mandates an
embargo on filing the counterclaim after filing the
written statement?
2) if the answer to the aforesaid question is in negative,
then what are the restrictions on filing the counterclaim after filing of the Written Statement?
7. At the outset, there is no gainsaying that the procedural justice
is imbibed to provide further impetus to the substantive
justice. It is this extended procedural fairness provided by the
national courts, which adds to the legitimacy and commends
support of general public. On the other hand, we must be
mindful of the legislative intention to provide for certainty and
clarity. In the name of substantive justice, providing unlimited
and unrestricted rights in itself will be detrimental to certainty
and would lead to the state of lawlessness. In this regard, this
Court needs to recognize and harmoniously stitch the two
types of justice, so as to have an effective, accurate and
participatory judicial system.
5
8. Having observed on nuances of procedural justice, we need to
turn our attention to the Order VIII of the CPC, which deals
with written statement, setoff and counterclaim. Rules 1 to 5
of Order VIII of the CPC deal with the written statement. This
Order dealing with the written statement was amended
extensively by the Code of Civil Procedure (Amendment) Act,
2002 (Act No. 22 of 2002) (hereinafter referred to as “Act 22 of
2002”), whereby the defendant shall, within thirty days from
the date of service of summons on him, present a written
statement of his defence. In case he fails to file the written
statement within the said period of thirty days, he shall be
allowed to file the same on such other day, as may be specified
by the Court, for reasons to be recorded in writing, but which
shall not be later than ninety days from the date of service of
summons.
9. Order VIII Rule 6 of the CPC specifies the particulars of setoff
to be given in written statement and the same reads as under:
Order VIII Rule 6:
6. Particulars of setoff to be given in
written statement: (1) Where in a suit for the
recovery of money the defendant claims to setoff
against the plaintiff’s demand any ascertained
sum of money legally recoverable by him from the
6
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 setoff.
(2) Effect of setoff: The written statement
shall have the same effect as a plaint in a crosssuit so as to enable the Court to pronounce a
final judgment in respect both of the original
claim and of the setoff; but this shall not affect
the lien, upon the amount decreed, of any pleader
in respect of the costs payable to him under the
decree.
(3) The rules relating to a written statement
by a defendant apply to a written statement in
answer to a claim of setoff.
Order VIII Rule 6A, which pertains to the counterclaim, reads
as under:
Order VIII Rule 6A:
6A. Counterclaim by Defendant(1) A
defendant in a suit may, in addition to his right
of pleading a setoff under rule 6, set up, by way
of counterclaim against the claim of the plaintiff,
any right or claim in respect of a cause of action
accruing to the defendant against the plaintiff
either before or after the filing of the suit, but
before the defendant has delivered his defence or
before the time limited for delivering his defence
has expired, whether such counterclaim is in the
nature of a claim for damages or not:
Provided that such counterclaim shall not
exceed the pecuniary limits of the jurisdiction of
the court.
7
(2) Such counterclaim shall have the
same effect as a crosssuit so as to enable the
Court to pronounce a final judgment in the same
suit, both on the original claim and on the
counterclaim.
(3) The plaintiff shall be at liberty to file a
written statement in answer to the counterclaim
of the defendant within such period as may be
fixed by the Court.
(4) The counterclaim shall be treated as
a plaint and governed by the rules applicable to
plaints.
10. Thus, as per Order VIII Rule 6 CPC, the defendant can claim
setoff of any ascertained sum of money legally recoverable by
him from the plaintiff, against the plaintiff’s demand, in a suit
for recovery of money. Whereas, Rule 6A deals with counterclaim by defendant, according to which a defendant in a suit
may, in addition to his right of pleading a setoff under Rule 6,
set up, by way of counterclaim against the claim of the
plaintiff, any right or claim in respect of a cause of action
accruing to the defendant against the plaintiff either before or
after filing of the suit but before the defendant has delivered
his defence or before the time prescribed for delivering his
defence has expired, whether such counterclaim is in the
nature of a claim for damages or not.
8
11. The counterclaim shall be treated as a plaint and governed by
the rules applicable to plaints. Order VIII Rule 6G says that
the rules relating to a written statement by a defendant shall
apply to a written statement filed in answer to a counterclaim.
As per Rule 8, any ground of defence which has arisen after the
institution of the suit or the presentation of a written statement
claiming a setoff or counterclaim may be raised by the
defendant or plaintiff, as the case may be, in his written
statement. Rule 9 of Order VIII prohibits presentation of
pleadings subsequent to the written statement of a defendant
other than by way of defence to setoff or counterclaim, except
by the leave of the Court, and upon such terms as the Court
thinks fit; and the provision further stipulates that the Court
may at any time require a written statement or additional
written statement from any of the parties and fix a time of not
more than thirty days for presenting the same. This
amendment with respect to subsequent pleadings was made to
the CPC by way of Act 22 of 2002. At the cost of repetition, we
may note the conditions for filing a counterclaim under Order
VIII Rule 6Ai. Counterclaim can be for claim of
damages or otherwise.
9
ii. Counterclaim should relate to the cause
of action, which may accrue before or
even after filing the suit.
iii. If the cause of action in the counterclaim
relates to one accrued after filing of suit,
it should be one accruing before filing of
the written statement or the time given
for the same.
When we look at the whole scheme of Order VIII CPC, it
unequivocally points out at the legislative intent to advance the
cause of justice by placing embargo on the belated filing of
written statement, setoff and counterclaim.
12. We have to take note of the fact that Rule 6A was introduced in
the CPC by the Code of Civil Procedure (Amendment) Act of
1976 (Act No.104 of 1976), and before the amendment, except
in money suits, counterclaim or setoff could not be pleaded in
other suits. As per the recommendation of the Law
Commission of India, to avoid multiplicity of proceedings, the
counterclaim by way of Rule 6A was inserted in the Civil
Procedure Code. The statement of objects and reasons for
enacting the Code of Civil Procedure (Amendment) Act, 1976
(Act No.104 of 1976), were1) A litigant should get a fair trial in accordance with
the accepted principles of natural justice.
10
2) Every effort should be made to expedite the
disposal of civil suits and proceedings, so that
justice may not be delayed;
3) The procedure should not be complicated and
should, to the utmost extent possible, ensure fair
deal to the poorer sections of the community who
do not have the means to engage a pleader to
defend their cases.
13. Before we proceed further, we deem it appropriate to note that
any provision under the procedural law should not be
construed in such a way that it would leave the Court helpless
[refer to Salem Advocate Bar Association Case (supra)]. In
fact a wide discretion has been given to the civil court
regarding the procedural elements of a suit. As held by this
Court, procedural law is not to be a tyrant but a servant, not
an obstruction but an aid to justice.
14. Now we need to observe certain earlier judgments of this Court
which have dealt with Order VIII Rule 6A. In Mahendra
Kumar and Anr. v. State Of Madhya Pradesh and Ors.,
(1987) 3 SCC 265 [hereinafter referred to as ‘Mahendra Kumar
Case’], where the appeals were preferred against concurrent
findings of the Courts below in dismissing the counterclaim as
barred under Section 14 of the Indian Treasure Trove Act,
11
1878, this Court, while considering the scope of Rule 6A(1) of
Order VIII of the CPC, has held that on the face of it, Rule 6A(1)
does not bar the filing of a counterclaim by the defendant after
he had filed the written statement. As the cause of action for
the counterclaim had arisen before the filing of the written
statement, the counterclaim was held to be maintainable. This
Court further observed that under Article 113 of the Limitation
Act, 1963, the period of limitation is three years from the date
of the right to sue accrues, when the period of limitation is not
provided elsewhere in the Schedule. As the counterclaim was
filed within three years from the date of accrual of the right to
sue, this Court held that the learned District Judge and the
High Court were wrong in dismissing the counterclaim. The
issue concerning applicability of limitation period for filing the
counterclaim was also discussed in Jag Mohan Chawla And
Another v. Dera Radha Swami Satsang & Ors., (1996) 4
SCC 699 and Shanti Rani Das Dewanjee (Smt.) v. Dinesh
Chandra Day (Dead) by LRs., (1997) 8 SCC 174.
15. In the case of Vijay Prakash Jarath v. Tej Prakash Jarath,
(2016) 11 SCC 800, this Court directed the Court below to
entertain the counterclaim which was filed 2½ years after
12
framing of issues, as the evidence was still pending and this
Court felt that no prejudice would be caused to the plaintiff.
However, in the case of Bollepanda P. Poonacha & Anr. v.
K.M. Madapa, (2008) 13 SCC 179 [hereinafter referred as
‘Bollepanda Poonacha Case’], this Court while referring to
Ramesh Chand Ardawatiya v. Anil Panjwani, (2003) 7 SCC
350, discouraged the belated filing of counterclaims. Further,
the Court elucidated on the serious harm caused by allowing
such delayed filing. In any case, in Bollepanda Poonacha
Case (supra), the Court could not expound any further as the
counterclaim was rejected on the basis that the cause of
action had arisen after the filing of the written statement.
16. The time limitation for filing of the counterclaim, is not
explicitly provided by the Legislature, rather only limitation as
to the accrual of the cause of action is provided. As noted in
the above precedents, further complications stem from the fact
that there is a possibility of amending the written statement.
However, we can state that the right to file a counterclaim in a
suit is explicitly limited by the embargo provided for the
accrual of the cause of action under Order VIII Rule 6A. Having
said so, this does not mean that counterclaim can be filed at
13
any time after filing of the written statement. As counterclaim
is treated to be plaint, generally it needs to first of all be
compliant with the limitation provided under the Limitation
Act, 1963 as the timebarred suits cannot be entertained under
the guise of the counterclaim just because of the fact that the
cause of action arose as per the parameters of Order VIII Rule
6A.
17. As discussed by us in the preceding paragraphs, the whole
purpose of the procedural law is to ensure that the legal
process is made more effective in the process of delivering
substantial justice. Particularly, the purpose of introducing
Rule 6A in Order VIII of the CPC is to avoid multiplicity of
proceedings by driving the parties to file separate suit and see
that the dispute between the parties is decided finally. If the
provision is interpreted in such a way, to allow delayed filling of
the counterclaim, the provision itself becomes redundant and
the purpose for which the amendment is made will be defeated
and ultimately it leads to flagrant miscarriage of justice. At the
same time, there cannot be a rigid and hypertechnical
approach that the provision stipulates that the counterclaim
has to be filed along with the written statement and beyond
14
that, the Court has no power. The Courts, taking into
consideration the reasons stated in support of the counterclaim, should adopt a balanced approach keeping in mind the
object behind the amendment and to subserve the ends of
justice. There cannot be any hard and fast rule to say that in a
particular time the counterclaim has to be filed, by curtailing
the discretion conferred on the Courts. The trial court has to
exercise the discretion judiciously and come to a definite
conclusion that by allowing the counterclaim, no prejudice is
caused to the opposite party, process is not unduly delayed
and the same is in the best interest of justice and as per the
objects sought to be achieved through the amendment. But
however, we are of the considered opinion that the defendant
cannot be permitted to file counterclaim after the issues are
framed and after the suit has proceeded substantially. It would
defeat the cause of justice and be detrimental to the principle
of speedy justice as enshrined in the objects and reasons for
the particular amendment to the CPC.
18. In this regard having clarified the law, we may note that the
Mahendra Kumar Case (supra) needs to be understood and
restricted to the facts of that case. We may note that even if a
15
counterclaim is filed within the limitation period, the trial
court has to exercise its discretion to balance between the right
to speedy trial and right to file counterclaim, so that the
substantive justice is not defeated. The discretion vested with
the trial court to ascertain the maintainability of the counterclaim is limited by various considerations based on facts and
circumstances of each case. We may point out that there
cannot be a straitjacket formula, rather there are numerous
factors which needs to be taken into consideration before
admitting counterclaim.
19. We may note that any contrary interpretation would lead to
unnecessary curtailment of the right of a defendant to file
counterclaim. This Court needs to recognize the practical
difficulties faced by the litigants across the country. Attaining
the laudable goal of speedy justice itself cannot be the only
end, rather effective justice wherein adequate opportunity is
provided to all the parties, need to be recognized as well [refer
to Salem Advocate Bar Association Case (supra)].
20. We sum up our findings, that Order VIII Rule 6A of the CPC
does not put an embargo on filing the counterclaim after filing
the written statement, rather the restriction is only with
16
respect to the accrual of the cause of action. Having said so,
this does not give absolute right to the defendant to file the
counterclaim with substantive delay, even if the limitation
period prescribed has not elapsed. The court has to take into
consideration the outer limit for filing the counterclaim, which
is pegged till the issues are framed. The court in such cases
have the discretion to entertain filing of the counterclaim, after
taking into consideration and evaluating inclusive factors
provided below which are only illustrative, though not
exhaustive:
i. Period of delay.
ii. Prescribed limitation period for the cause of
action pleaded.
iii. Reason for the delay.
iv. Defendant’s assertion of his right.
v. Similarity of cause of action between the main
suit and the counterclaim.
vi. Cost of fresh litigation.
vii. Injustice and abuse of process.
viii. Prejudice to the opposite party.
ix. and facts and circumstances of each case.
x. In any case, not after framing of the issues.
17
21. We answer the reference accordingly. The instant Special
Leave Petition may be placed before an appropriate Bench after
obtaining orders from the Hon’ble Chief Justice of India, for
considering the case on merits.
.........................J.
(N.V. RAMANA)
.........................J.
(MOHAN M. SHANTANAGOUDAR)
........................J.
(AJAY RASTOGI)
NEW DELHI;
November 19, 2019.
18
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
S.L.P. (Civil) No. 23599 of 2018
Ashok Kumar Kalra …Petitioner
Versus
Wing Cdr. Surendra Agnihotri & Ors. …Respondents
J U D G M E N T
MOHAN M. SHANTANAGOUDAR, J.
1. I have read the opinion given in this reference by my learned
Brothers. I agree with their conclusion that a Court may exercise
its discretion and permit the filing of a counterclaim after the
written statement, till the stage of framing of the issues of the
trial. However, in addition to this, I find that in exceptional
circumstances, the subsequent filing of a counterclaim may be
permitted till the stage of commencement of recording of the
evidence on behalf of the plaintiff. I deem it fit to state the
reasons for arriving at this conclusion through this opinion.
2
2. This reference arises out of the order of this Court dated
10.09.2018 in SLP (C) No. 23599/2018 in Ashok Kumar Kalra
v. Wing CDR Surendra Agnihotri & Ors., which states as
follows:
“The papers to be placed before the Hon’ble Chief
Justice of India for constitution of a threejudge Bench
to look into the effect of our previous judgments as
well as whether the language of Order VIII Rule 6A of
the Code of Civil Procedure is mandatory in nature.”
Essentially, in light of the previous judgments of this Court,
the question referred to this Court is whether it is mandatory for
a counterclaim of the defendant to be filed along with the written
statement.
3. Counsel for both parties argued about the scope of Order
VIII Rule 6A of the Code of Civil Procedure, 1908 [hereinafter
“CPC”] and whether a counterclaim must necessarily be filed
along with the written statement. Since the arguments have been
elaborated upon by my learned Brother Judge, they are not
reproduced herein for the sake of brevity.
4. To fully understand the expanse of the legal questions in
this case, it is essential to appreciate the context in which the
rules relating to counterclaims were introduced in the CPC. The
originally enacted CPC of 1908 did not provide a statutory right
3
to file a counterclaim. At that time, Order VIII only pertained to
written statements and setoffs. Taking note of this omission, the
Law Commission of India, in its 27th and 54th Reports, had
recommended that express provisions on counterclaims should
be included in the CPC to avoid multiple proceedings and to
dispel ambiguity on whether counterclaims could be entertained
at all. These recommendations were implemented through the
Code of Civil Procedure (Amendment) Act, 1976, which
introduced the following rules to Order VIII of the CPC:
“Rule 6A. Counterclaim by defendant.—
(1) A defendant in a suit may, in addition to his right
of pleading a setoff under rule 6, set up, by way of
counterclaim against the claim of the plaintiff, any
right or claim in respect of a cause of action accruing
to the defendant against the plaintiff either before or
after the filing of the suit but before the defendant has
delivered his defence or before the time limited for
delivering his defence has expired, whether such
counterclaim is in the nature of a claim for damages
or not:
Provided that such counterclaim shall not exceed the
pecuniary limits of the jurisdiction of the Court.
(2) Such counterclaim shall have the same effect as a
crosssuit so as to enable the Court to pronounce a
final judgment in the same suit, both on the original
claim and on the counterclaim.
(3) The plaintiff shall be at liberty to file a written
statement in answer to the counterclaim of the
defendant within such period as may be fixed by the
Court.
4
(4) The counterclaim shall be treated as a plaint and
governed by the rules applicable to plaints.
6B. Counterclaim to be stated.—Where any
defendant seeks to rely upon any ground as
supporting a right of counterclaim, he shall, in his
written statement, state specifically that he does so by
way of counterclaim.
6C. Exclusion of counterclaim.—Where a defendant
sets up a counterclaim and the plaintiff contends that
the claim thereby raised ought not to be disposed of by
way of counterclaim but in an independent suit, the
plaintiff may, at any time before issues are settled in
relation to the counterclaim, apply to the Court for an
order that such counterclaim may be excluded, and
the Court may, on the hearing of such application
make such order as it thinks fit.
6D. Effect of discontinuance of suit.—If in any case
in which the defendant sets up a counterclaim, the
suit of the plaintiff is stayed, discontinued or
dismissed, the counterclaim may nevertheless be
proceeded with.
6E. Default of plaintiff to reply to counterclaim.—
If the plaintiff makes default in putting in a reply to the
counterclaim made by the defendant, the Court may
pronounce judgment against the plaintiff in relation to
the counterclaim made against him, or make such
order in relation to the counterclaim as it thinks fit.
6F. Relief to defendant where counterclaim
succeeds.—Where in any suit a setoff or counterclaim is established as a defence against the plaintiff's
claim, and any balance is found due to the plaintiff or
the defendant, as the case may be, the Court may give
judgment to the party entitled to such balance.
5
6G. Rules relating to written statement to apply—
The rules relating to a written statement by a
defendant shall apply to a written statement filed in
answer to a counterclaim.”
5. For the first time, through the introduction of Rules 6A6G
to Order VIII, an explicit right of filing a counterclaim was
accorded to the defendant, and rules governing the same were
laid down. In this scheme, Rule 6A(1) is the cornerstone
provision. It specifically grants the right of filing a counterclaim.
In addition to this, it also places a categorical limitation on the
accrual of the cause of action for a counterclaim. This is in the
form of the requirement that the cause of action pertaining to the
counterclaim must arise either before or after the filing of the
suit, but before the defendant has delivered his defence (i.e.
before the filing of the written statement), or before the expiry of
the time period for delivering such defence.
Further, under Rule 6A(2), a counterclaim is stated to have
the same effect as the plaint in a crosssuit, so as to enable the
Court to pronounce a final judgment on the original claim as well
as the counterclaim in the same suit itself. Thus, it is evident
that Rule 6A has been carefully designed to meet the purpose of
avoiding multiplicity of proceedings.
6
6. It is clear that Rule 6A(1) only places a limitation on the
time within which the cause of action for a counterclaim must
arise. Besides this limitation, there is no explicit guidance in Rule
6A(1) as to the time within which the counterclaim itself must be
filed. In this respect, Rule 6A(4) provides that a counterclaim is
governed by the rules applicable to plaints. It is wellestablished
that a plaint must be presented within the period prescribed
under the Limitation Act, 1963 [hereinafter “the Limitation Act”].
For counterclaims as well, the period within which they must be
filed can be inferred from Section 3(2)(b)(ii) of the Limitation Act,
1963, which states thus:
“(2) For the purposes of this Act,
(b) any claim by way of a set off or a counter claim,
shall be treated as a separate suit and shall be deemed
to have been instituted—
(ii) in the case of a counter claim, on the date on which
the counter claim is made in court;”
(emphasis supplied)
This provision mandates that in order to determine the
limitation period applicable to a counterclaim, it must be treated
as a separate suit, which is deemed to have been instituted on
the date on which it is made in Court. Thus, evidently, in
7
consonance with the provisions of Order VIII Rule 6A(4), the
Limitation Act also treats a counterclaim like a plaint. This
means that much like a plaint, the limitation for filing a counterclaim also depends on the nature of the claim and is accordingly
governed by the period of limitation stipulated in the Limitation
Act.
7. From the foregoing discussion, it is clear that a counterclaim can be filed if two conditions are met: first, its cause of
action complies with Order VIII Rule 6A(1); and second, it is filed
within the period specified under the Limitation Act. Clearly, by
itself, Rule 6A does not specifically require that a counterclaim
has to be filed along with the written statement. In the absence of
a particular mandate under this Rule, it is necessary to look to
other provisions of the CPC to determine whether a counterclaim
can be filed after a written statement.
8. It would be appropriate to begin with a reference to Order
VIII Rule 9, which states thus:
“9. Subsequent pleadings.—No pleading subsequent
to the written statement of a defendant other than by
way of defence to set off or counterclaim shall be
presented except by the leave of the Court and upon
such terms as the Court thinks fit; but the Court may
at any time require a written statement or additional
8
written statement from any of the parties and fix a
time of not more than thirty days for presenting the
same.”
(emphasis supplied)
According to this Rule, after the filing of the written
statement, it is open to plead a defence to a setoff or counterclaim without the leave of the Court. However, any other pleading
sought to be filed after the written statement requires the leave of
the Court. The Rule also vests the Court with a discretion to
allow filing of a written statement or additional written statement
within a period not exceeding thirty days.
A plain reading of Order VIII Rule 9 makes it clear that the
Court has the discretion to allow any subsequent pleading upon
such terms as it thinks fit. It is important to appreciate here that
such subsequent pleading or additional written statement may
include a counterclaim. This is because Rule 9 does not create a
bar on the nature of claims that can be raised as subsequent
pleadings. As long as the Court considers that it would be proper
to allow a counterclaim by way of a subsequent pleading, it is
possible to file a counterclaim after filing the written statement.
In addition to this, it is also possible to introduce a belated
counterclaim by way of an amendment to the original written
9
statement under Order VI Rule 17, CPC. However, as is the case
with Order VIII Rule 9, the filing of such a counterclaim through
an amended written statement is subject to the leave of the
Court, and not accorded to the defendant as a matter of right.
9. In this regard, it would be relevant to note the observations
of this Court in Ramesh Chand Ardawatiya v. Anil Panjwani,
(2003) 7 SCC 350:
“28. Looking to the scheme of Order 8 as amended by
Act 104 of 1976, we are of the opinion, that there are
three modes of pleading or setting up a counterclaim
in a civil suit. Firstly, the written statement filed under
Rule 1 may itself contain a counterclaim which in the
light of Rule 1 read with Rule 6A would be a counterclaim against the claim of the plaintiff preferred in
exercise of legal right conferred by Rule 6A. Secondly,
a counterclaim may be preferred by way of
amendment incorporated subject to the leave of the
court in a written statement already filed. Thirdly, a
counterclaim may be filed by way of a subsequent
pleading under Rule 9. In the latter two cases the
counterclaim though referable to Rule 6A cannot be
brought on record as of right but shall be governed by
the discretion vesting in the court, either under Order
6 Rule 17 CPC if sought to be introduced by way of
amendment, or, subject to exercise of discretion
conferred on the court under Order 8 Rule 9 CPC if
sought to be placed on record by way of subsequent
pleading.”
(emphasis supplied)
I fully agree with this proposition, and affirm on the basis of
the foregoing discussion that the Court has the discretion to
10
allow a counterclaim to be filed after the written statement in
exercise of its power under Order VIII Rule 9 and Order VI Rule
17 of the CPC.
10. It can also be gleaned from Order VIII Rule 10 that it is
permissible to file a belated counterclaim under the scheme of
Order VIII, CPC:
“10. Procedure when party fails to present written
statement called for by Court.—Where any party
from whom a written statement is required under rule
1 or rule 9 fails to present the same within the time
permitted or fixed by the Court, as the case may be,
the Court shall pronounce judgment against him, or
make such order in relation to the suit as it thinks fit
and on the pronouncement of such judgment a decree
shall be drawn up.”
(emphasis supplied)
Under this Rule, the Court is afforded with the discretion to
pass any order that it deems fit in the event that a written
statement is not filed within the prescribed statutory limit. To
determine whether this discretion extends to allowing the filing of
a belated counterclaim as well, it would be useful to appreciate
the scope of the discretion accorded under this provision.
In Salem Advocate Bar Association, T.N. v. Union of
India, (2005) 6 SCC 344, this Court, while construing the nature
11
of Order VIII Rule 1, relied on the broad discretionary power
under Order VIII Rule 10, and observed as follows:
“21. In construing this provision, support can also be
had from Order 8 Rule 10 which provides that where
any party from whom a written statement is required
under Rule 1 or Rule 9, fails to present the same
within the time permitted or fixed by the court, the
court shall pronounce judgment against him, or make
such other order in relation to the suit as it thinks fit...
In construing the provision of Order 8 Rule 1 and Rule
10, the doctrine of harmonious construction is
required to be applied. The effect would be that under
Rule 10 Order 8, the court in its discretion would have
the power to allow the defendant to file written
statement even after expiry of the period of 90 days
provided in Order 8 Rule 1. There is no restriction in
Order 8 Rule 10 that after expiry of ninety days,
further time cannot be granted. The court has wide
power to “make such order in relation to the suit as it
thinks fit”. Clearly, therefore, the provision of Order 8
Rule 1 providing for the upper limit of 90 days to file
written statement is directory.”
(emphasis supplied)
Thus, under Order VIII Rule 10, the Court has the power to
condone the delay in filing of a written statement, if it deems it fit
in the facts and circumstances of the case. If it is so, there is no
reason as to why the delay in filing a counterclaim cannot be
condoned by the Court as well.
11. A conjoint and harmonious reading of Rules 6A, 9 and 10 of
Order VIII as well as Order VI Rule 17, CPC thus reveals that the
12
Court is vested with the discretion to allow the filing of a counterclaim even after the filing of the written statement, as long as the
same is within the limitation prescribed under the Limitation Act,
1963. In this regard, I agree with the propositions laid down in
the decisions discussed below.
In Mahendra Kumar v. State of Madhya Pradesh, (1987)
3 SCC 265, it was held that:
“15. The next point that remains to be considered is
whether Rule 6A(1) of Order 8 of the Code of Civil
Procedure bars the filing of a counterclaim after the
filing of a written statement. This point need not detain
us long, for Rule 6A(1) does not, on the face of it, bar
the filing of a counterclaim by the defendant after he
had filed the written statement. What is laid down
under Rule 6A(1) is that a counterclaim can be filed,
provided the cause of action had accrued to the
defendant before the defendant had delivered his
defence or before the time limited for delivering his
defence has expired, whether such counterclaim is in
the nature of a claim for damages or not. The High
Court, in our opinion, has misread and misunderstood
the provision of Rule 6A(1) in holding that as the
appellants had filed the counterclaim after the filing of
the written statement, the counterclaim was not
maintainable…Under Article 113 of the Limitation Act,
1963, the period of limitation of three years from the
date the right to sue accrues, has been provided for
any suit for which no period of limitation is provided
elsewhere in the Schedule. It is not disputed that a
counterclaim, which is treated as a suit under Section
3(2)(b) of the Limitation Act has been filed by the
appellants within three years from the date of accrual
to them of the right to sue.”
(emphasis supplied)
13
In Shanti Rani Das Dewanjee v. Dinesh Chandra Day,
(1997) 8 SCC 174, it was held that the right to file a counterclaim is referable to the date of accrual of the cause of action:
“2. In our view, the impugned decision does not
warrant interference. Such question was specifically
raised before this Court in Mahendra Kumar v. State of
M.P. [(1987) 3 SCC 265] It has been held by this Court
that right to file a counterclaim under Order VIII Rule
6A of the Code of Civil Procedure is referable to the
date of accrual of the cause of action. If the cause of
action had arisen before or after the filing of the suit,
and such cause of action continued up to the date of
filing written statement or extended date of filing
written statement, such counterclaim can be filed
even after filing the written statement. The said Civil
Case No. 248 of 1982, in which the application under
Order VIII Rule 6A has been filed by the defendantrespondents was instituted on 1571982 and the
application under Order VIII Rule 6A was presented
on 2261985. It cannot be held that the cause of
action for the suit or counterclaim was ex facie barred
by limitation under the Limitation Act”
(emphasis supplied)
I am unable to persuade myself to arrive at a different
conclusion than the one found in the aforementioned judgments.
12. It was argued by Counsel for the Respondent that Order VIII
Rule 6A(1) requires that the cause of action for a counterclaim
should arise before the filing of the written statement, and hence
it is logical that the counterclaim, or the grounds upon which it
is based, should also find a mention in the written statement. To
14
support this, he relied on Order VIII Rule 6B, which states that a
defendant seeking to rely upon any ground in support of his right
of counterclaim, shall specifically state in his written statement
that he does so by way of a counterclaim.
I do not agree with this view for two reasons. First, it is
possible that at the time of filing the written statement, the
defendant is unaware of the facts giving rise to the cause of
action for his counterclaim. For instance, in a suit for
declaration of title brought by the plaintiff against his sister, the
defendant may be unaware that the plaintiff has wrongfully
detained her belongings kept at the said property, at the time of
filing her written statement. In such a situation, even though the
cause of action for her counterclaim of wrongful detention of
belongings may have arisen before the filing of the written
statement, it may not have been possible for her to raise the said
counterclaim. Similarly, limited access to justice, especially in
rural areas, shaped by the socioeconomic context of parties, may
compel the filing of belated counterclaims.
Second, a perusal of Order VIII Rule 6B suggests that it is
only limited to cases where the counterclaim is made along with
15
the written statement. In instances where a belated counterclaim is raised by way of an amendment to the written statement,
or as a subsequent pleading, Rule 6B cannot be said to be
applicable. This is because in any such case, if the Court relies
on a technical interpretation of Rule 6B to disallow the filing of a
belated counterclaim, the defendant would still be free to file a
fresh suit for such a claim. He may, in such matters, after filing
the separate suit, request the Court to club the suits or to hear
them simultaneously. This may further delay the process of
adjudication and would certainly not help the plaintiff in the first
suit, who may have opposed the filing of the belated counterclaim. Such multiplicity of proceedings goes against the object
with which Rules 6A6G were introduced to the CPC. Thus, the
provisions under Order VIII should not be read in isolation, but
in a conjoint and harmonious manner, and Rule 6B cannot be
read as a limitation on the Court’s discretion to permit the filing
of a belated counterclaim. Therefore, I do not find force in the
argument raised by Counsel for Respondent.
13. Further, the contention that the limitation on filing of setoffs under Order VIII Rule 6 should be read into Rule 6A(1) is
untenable. The nature of a setoff and a counterclaim is
16
different. For instance, a setoff must necessarily be of the same
nature as the claim of the plaintiff and arise out of the same
transaction. These requirements do not hold for counterclaims,
which may be related to “any right or claim in respect of a cause
of action accruing to the defendant against the plaintiff” as stated
in Order VIII Rule 6A(1). Further, in case of setoffs, there is no
provision akin to Order VIII Rule 6A(4), which provides that a setoff must be treated as a plaint. Thus, it appears that the
Legislature has consciously considered it fit to omit a specific
time limit for filing of counterclaims in Rule 6A. In such a
scenario, a limitation cannot be read into this Rule.
14. Lastly, as regards the Respondent’s reliance on Order VIII
Rule 1A, which requires the documents in support of a counterclaim to be presented along with the written statement itself, I am
of the view that this requirement should not be read as being
mandatory. Rule 1A(2) itself provides instances where such
documents are not in the possession of the defendant, by
requiring him to specify the person in whose possession the
documents rest. Accordingly, Rule 1A(3) (as amended in 2002)
also provides that these documents may be produced later, with
the leave of the Court. The discretion accorded in these
17
provisions goes on to support the conclusion that it is possible to
file a counterclaim even after the written statement, with the
leave of the Court.
15. Finally, then, the scope of discretion vested with the Court
under Order VI Rule 17 and Order VIII Rule 9 to allow for belated
counterclaims remains to be examined. It must be determined
when it may be proper for the Court to refuse a belated counterclaim, in spite of it being permissible within the scheme of Order
VIII Rule 6A and the Limitation Act, 1963.
16. In several cases, it is possible that the period of limitation
for filing of counterclaims may extend up to a long period of time
and prolong the trial. For instance, in a suit for declaration of
title, the defendant may bring a counterclaim for possession of
the immovable property based on previous possession. In terms
of Order VIII Rule 6A, such a claim would be admissible as long
as the dispossession had occurred before the filing of the written
statement, or before the expiry of the time provided for filing of
the written statement. However, as per the Limitation Act, such a
claim would be valid even if it were brought within twelve years
from the date of the defendant’s dispossession.
18
In such a situation, it is possible that by the time the
counterclaim is brought, the issues in the original suit have
already been framed, the evidence led, arguments made, and the
judgment reserved. Allowing a counterclaim to be filed at this
stage would effectively result in a retrial of the suit, since the
Court would have to frame new issues, both parties would have
to lead evidence, and only then would the judgment be
pronounced. If this is permitted, the very purpose of allowing
counterclaims, i.e. avoiding multiplicity of litigation, would be
frustrated.
17. It is wellsettled that procedural rules should not be
interpreted so as to defeat justice, rather than furthering it. This
is because procedural law is not meant to serve as a tyrant
against justice, but to act as a lubricant in its administration.
Thus, when Courts set out to do justice, they should not lose
sight of the end goal amidst technicalities. In some cases, this
means that rules that have traditionally been treated as
mandatory, may be moulded so that their object and substantive
justice is not obstructed. It would be apposite to remember that
equity and justice should be the foremost considerations while
construing procedural rules, without nullifying the object of the
19
Legislature in totality. Thus, rules under the Limitation Act which
may allow for filing of a belated counterclaim up to a long period
of time, should not be used to defeat the ends of justice.
18. Keeping this in mind, in Ramesh Chand Ardawatiya
(supra), this Court considered the scope of discretion in allowing
for belated counterclaims. It is useful to refer to the observations
made by the Court in the context of Order VIII Rule 6A (as it was
in 1976):
“28. …The purpose of the provision enabling filing of a
counterclaim is to avoid multiplicity of judicial
proceedings and save upon the court’s time as also to
exclude the inconvenience to the parties by enabling
claims and counterclaims, that is, all disputes
between the same parties being decided in the course
of the same proceedings. If the consequence of
permitting a counterclaim either by way of
amendment or by way of subsequent pleading would
be prolonging of the trial, complicating the otherwise
smooth flow of proceedings or causing a delay in the
progress of the suit by forcing a retreat on the steps
already taken by the court, the court would be justified
in exercising its discretion not in favour of permitting a
belated counterclaim. The framers of the law never
intended the pleading by way of counterclaim being
utilized as an instrument for forcing upon a reopening
of the trial or pushing back the progress of proceeding.
Generally speaking, a counterclaim not contained in
the original written statement may be refused to be
taken on record if the issues have already been framed
and the case set down for trial, and more so when the
trial has already commenced… A refusal on the part of
the court to entertain a belated counterclaim may not
prejudice the defendant because in spite of the
20
counterclaim having been refused to be entertained he
is always at liberty to file his own suit based on the
cause of action for counterclaim.”
(emphasis supplied)
To ensure that the objective of introducing the statutory
amendments with respect to counterclaims was not defeated, it
was rightly held that a belated counterclaim raised by way of an
amendment to the written statement (under Order VI Rule 17) or
as a subsequent pleading (under Order VIII Rule 9) should not be
allowed after the framing of issues and commencement of trial.
19. Later, in Rohit Singh v. State of Bihar, (2006) 12 SCC
734, this Court read in a similar limitation on the filing of belated
counterclaims:
“18. … A counterclaim, no doubt, could be filed even
after the written statement is filed, but that does not
mean that a counterclaim can be raised after issues
are framed and the evidence is closed. Therefore, the
entertaining of the socalled counterclaim of
Defendants 3 to 17 by the trial court, after the framing
of issues for trial, was clearly illegal and without
jurisdiction. On that short ground the socalled
counterclaim, filed by Defendants 3 to 17 has to be
held to be not maintainable.”
(emphasis supplied)
It is crucial to note that even though the Court held that a
counterclaim can be filed after the filing of a written statement,
it must necessarily be filed before the issues are framed and the
evidence is closed. In fact, since the counterclaim in the said
21
matter was filed at the stage where the judgment was reserved,
the Court went as far as saying that entertaining such a claim
was illegal and without jurisdiction.
20. The decision of this Court in Bollepanda P. Poonacha v.
K. M. Madapa, (2008) 13 SCC 179 is also significant in this
regard. Referring to Ramesh Chand Ardawatiya (supra), it
acknowledged that belated counterclaims were to be
discouraged, and called upon the Court to consider questions of
serious injustice and irreparable loss while permitting any such
claim. However, in Bollepanda (supra), the Court did not have
an occasion to expound further on this proposition, as the
counterclaim had been rejected on the basis that its cause of
action had arisen after the filing of the written statement.
21. It was in Gayathri Women’s Welfare Association v.
Gowramma, (2011) 2 SCC 330, that this Court once again had
the occasion to look into the filing of a belated counterclaim. In
this case, filing of the initial counterclaim was not in challenge.
Instead, the Court was considering the effect of an amendment to
an existing counterclaim. While the Trial Court had refused to
allow such an amendment, the High Court had granted the same.
22
Reiterating the concerns noted in Ramesh Chand Ardawatiya
(supra), this Court held as follows:
“44. The matter herein symbolises the concern
highlighted by this Court in Ramesh Chand [(2003) 7
SCC 350]. Permitting a counterclaim at this stage
would be to reopen a decree which has been granted in
favour of the appellants by the trial court. The
respondents have failed to establish any factual or
legal basis for modification/nullifying the decree of the
trial court.”
The Court also relied on Rohit Singh (supra) and observed
that a counterclaim cannot be filed after the framing of issues.
22. In Vijay Prakash Jarath v. Tej Prakash Jarath, (2016)
11 SCC 800, this Court further refined the limitation in Rohit
Singh (supra) that counterclaims cannot be raised after the
issues are framed and the evidence is closed. In the said case,
even though the issues had been framed, and the case was in the
early stages of recording of the plaintiff’s evidence, a counterclaim filed at that point was allowed, as no prejudice was caused
to the plaintiff.
23. The above discussion lends support to the conclusion that
even though Rule 6A permits the filing of a counterclaim after
the written statement, the Court has the discretion to refuse
such filing if it is done at a highly belated stage. However, in my
23
considered opinion, to ensure speedy disposal of suits, propriety
requires that such discretion should only be exercised till the
framing of issues for trial. Allowing counterclaims beyond this
stage would not only prolong the trial, but also prejudice the
rights that may get vested with the plaintiff over the course of
time.
At the same time, in exceptional circumstances, to prevent
multiplicity of proceedings and a situation of effective retrial, the
Court may entertain a counterclaim even after the framing of
issues, so long as the Court has not started recording the
evidence. This is because there is no significant development in
the legal proceedings during the intervening period between
framing of issues and commencement of recording of evidence. If
a counterclaim is brought during such period, a new issue can
still be framed by the Court, if needed, and evidence can be
recorded accordingly, without seriously prejudicing the rights of
either party to the suit.
At this juncture, I would like to address the observation in
Rohit Singh (supra) that a counterclaim, if filed after the
framing of the issues and closing of the evidence, would be illegal
and without jurisdiction. In my opinion, this is not a correct
24
statement of law, as the filing of counterclaims after the
commencement of recording of evidence is not illegal per se.
However, I hasten to add that permitting such a counterclaim
would be improper, as the Court’s discretion has to be exercised
wisely and pragmatically.
24. There are several considerations that must be borne in
mind while allowing the filing of a belated counterclaim. First,
the Court must consider that no injustice or irreparable loss is
being caused to the defendant due to a refusal to entertain the
counterclaim, or to the plaintiff by allowing the same. Of course,
as the defendant would have the option to pursue his cause of
action in a separate suit, the question of prejudice to the
defendant would ordinarily not arise. Second, the interest of
justice must be given utmost importance and procedure should
not outweigh substantive justice. Third, the specific objectives of
reducing multiplicity of litigation and ensuring speedy trials
underlying the provisions for counterclaims, must be accorded
due consideration.
25. Having considered the previous judgments of this Court on
counterclaims, the language employed in the rules related
25
thereto, as well as the intention of the Legislature, I conclude
that it is not mandatory for a counterclaim to be filed along with
the written statement. The Court, in its discretion, may allow a
counterclaim to be filed after the filing of the written statement,
in view of the considerations mentioned in the preceding
paragraph. However, propriety requires that such discretion
should ordinarily be exercised to allow the filing of a counterclaim till the framing of issues for trial. To this extent, I concur
with the conclusion reached by my learned Brothers. However,
for the reasons stated above, I am of the view that in exceptional
circumstances, a counterclaim may be permitted to be filed after
a written statement till the stage of commencement of recording
of the evidence on behalf of the plaintiff.
26. The reference is answered accordingly.
............................................J.
(Mohan M. Shantanagoudar)
New Delhi;
November 19, 2019.
