# ASHOK KUMAR KALRA v. WING CDR. SURENDRA AGNIHOTRI & ORS

- **Citation:** [2019] 17 S.C.R. 214
- **Court:** Supreme Court of India
- **Decided:** 2019-11-19
- **Case number:** Civil Revision No. 253 of 2009
- **Bench:** N. V. Ramana, Mohan M. Shantanagoudar, Ajay Rastogi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ashok-kumar-kalra-v-wing-cdr-surendra-agnihotri-ors-33653
- **Pages:** 33

## Headnote

Code of Civil Procedure, 1908 - Or. VIII, r. 6A - Filing of
counter-claim by defendant after submitting written statement -
Embargo on, if any - Respondent No.1 filed suit for specific
performance against the petitioner - Petitioner filed written
statement - Thereafter, filed counter-claim - Trial court rejected
the objections on filing of the counter-claim after filing of the
written statement and framing of issues - High Court quashed the
counter-claim - Petitioner approached the Supreme Court -
Reference order passed by two-Judge Bench seeking clarification
from larger bench as to the interpretation of Or. VIII, r.6A regarding
the filing of counter-claim by defendant in suit - Answering the
reference, held: Per N.V. Ramana, Mohan M. Shantanagoudar and
Ajay Rastogi, JJ. To avoid multiplicity of proceedings, the counterclaim by way of r.6A was inserted in the CPC by 1976 Amendment
Act - Or. VIII, r. 6A does not put an embargo on filing the counterclaim after filing the written statement, rather the restriction is only
with respect to the accrual of the cause of action- However, 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 - Court has to take into consideration
the outer limit for filing the counter-claim which is pegged till the
issues are framed, after evaluating inclusive factors, which are only
illustrative and not exhaustive, viz., period of delay; prescribed
limitation period for the cause of action pleaded; reason for the
delay etc. - Per Mohan M. Shantanagoudar, J. (Partly
Supplementing and Partly Dissenting) Court may exercise its
discretion and permit the filing of counter-claim after the written
statement, till the stage of framing of the issues of the trial -
However, in exceptional circumstances, the subsequent filing of
counter-claim may be permitted till the stage of commencement of
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recording of the evidence on behalf of the plaintiff as there is no
significant development in the legal proceedings during the
intervening period between framing of issues and commencement
of recording of evidence - Code of Civil Procedure (Amendment)
Act of 1976 - Code of Civil Procedure (Amendment) Act, 2002 -
Limitation Act, 1963 - s.3(2)(b)(ii).
Code of Civil Procedure, 1908 - Or. VIII - Scheme of -
Held: Whole scheme of Or. VIII unequivocally points out at the
legislative intent to advance the cause of justice by placing embargo
on the belated filing of written statement, set-off and counter-claim.
Code of Civil Procedure, 1908 - Filing of belated counterclaim - Factors to be considered - Discussed.
Jurisprudence - Procedural justice vis-a-vis substantive
justice - Balanced approach towards - Discussed - Civil
Procedure Code, 1908 - Or. VIII, r. 6A - Limitation Act, 1963.
Code of Civil Procedure, 1908 - Or. VIII, rr. 6A, 9, 10 and
Or. VI, r.17 - Power of Court under - Held: Per Mohan M.
Shantanagoudar, J. (Supplementing) Conjoint and harmonious
reading of rr. 6A, 9 & 10 of Or. VIII and Or. VI, r. 17, CPC reveals
that the Court is vested with the discretion to allow the filing of
counter-claim even after the filing of the written statement, as long
as the same is within the limitation prescribed under the 1963 Act
- Limitation Act, 1963.
Code of Civil Procedure, 1908 - Or. VIII, r. 6A, 6B - Plea
of respondent, relying on r.6B, that r.6A(1) requires that the cause
of action for counter-claim should arise before the filing of the
written statement - Held: Per Mohan M. Shantanagoudar, J.
(Supplementing) Not agreed with, for two reasons- (i) 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
counter-claim (ii) perusal of Or.VIII, r. 6B suggests that it is only
limited to cases where the counter-claim is made along with the
written statement - Provisions u/Or. VIII should not be rea

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ASHOK KUMAR KALRA
v.
WING CDR. SURENDRA AGNIHOTRI & ORS.
(Special Leave Petition (C) No. 23599 of 2018)
NOVEMBER 19, 2019
[N. V. RAMANA, MOHAN M. SHANTANAGOUDAR
AND AJAY RASTOGI, JJ.]
Code of Civil Procedure, 1908 - Or. VIII, r. 6A - Filing of
counter-claim by defendant after submitting written statement -
Embargo on, if any - Respondent No.1 filed suit for specific
performance against the petitioner - Petitioner filed written
statement - Thereafter, filed counter-claim - Trial court rejected
the objections on filing of the counter-claim after filing of the
written statement and framing of issues - High Court quashed the
counter-claim - Petitioner approached the Supreme Court -
Reference order passed by two-Judge Bench seeking clarification
from larger bench as to the interpretation of Or. VIII, r.6A regarding
the filing of counter-claim by defendant in suit - Answering the
reference, held: Per N.V. Ramana, Mohan M. Shantanagoudar and
Ajay Rastogi, JJ. To avoid multiplicity of proceedings, the counterclaim by way of r.6A was inserted in the CPC by 1976 Amendment
Act - Or. VIII, r. 6A does not put an embargo on filing the counterclaim after filing the written statement, rather the restriction is only
with respect to the accrual of the cause of action- However, 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 - Court has to take into consideration
the outer limit for filing the counter-claim which is pegged till the
issues are framed, after evaluating inclusive factors, which are only
illustrative and not exhaustive, viz., period of delay; prescribed
limitation period for the cause of action pleaded; reason for the
delay etc. - Per Mohan M. Shantanagoudar, J. (Partly
Supplementing and Partly Dissenting) Court may exercise its
discretion and permit the filing of counter-claim after the written
statement, till the stage of framing of the issues of the trial -
However, in exceptional circumstances, the subsequent filing of
counter-claim may be permitted till the stage of commencement of
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recording of the evidence on behalf of the plaintiff as there is no
significant development in the legal proceedings during the
intervening period between framing of issues and commencement
of recording of evidence - Code of Civil Procedure (Amendment)
Act of 1976 - Code of Civil Procedure (Amendment) Act, 2002 -
Limitation Act, 1963 - s.3(2)(b)(ii).
Code of Civil Procedure, 1908 - Or. VIII - Scheme of -
Held: Whole scheme of Or. VIII unequivocally points out at the
legislative intent to advance the cause of justice by placing embargo
on the belated filing of written statement, set-off and counter-claim.
Code of Civil Procedure, 1908 - Filing of belated counterclaim - Factors to be considered - Discussed.
Jurisprudence - Procedural justice vis-a-vis substantive
justice - Balanced approach towards - Discussed - Civil
Procedure Code, 1908 - Or. VIII, r. 6A - Limitation Act, 1963.
Code of Civil Procedure, 1908 - Or. VIII, rr. 6A, 9, 10 and
Or. VI, r.17 - Power of Court under - Held: Per Mohan M.
Shantanagoudar, J. (Supplementing) Conjoint and harmonious
reading of rr. 6A, 9 & 10 of Or. VIII and Or. VI, r. 17, CPC reveals
that the Court is vested with the discretion to allow the filing of
counter-claim even after the filing of the written statement, as long
as the same is within the limitation prescribed under the 1963 Act
- Limitation Act, 1963.
Code of Civil Procedure, 1908 - Or. VIII, r. 6A, 6B - Plea
of respondent, relying on r.6B, that r.6A(1) requires that the cause
of action for counter-claim should arise before the filing of the
written statement - Held: Per Mohan M. Shantanagoudar, J.
(Supplementing) Not agreed with, for two reasons- (i) 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
counter-claim (ii) perusal of Or.VIII, r. 6B suggests that it is only
limited to cases where the counter-claim is made along with the
written statement - Provisions u/Or. VIII should not be read in
isolation, but in a conjoint and harmonious manner - Rule 6B
cannot be read as limitation on the Court's discretion to permit the
filing of belated counter-claim.
ASHOK KUMAR KALRA v. WING CDR. SURENDRA
AGNIHOTRI & ORS.
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Code of Civil Procedure, 1908 - Or. VIII, r.6, 6A(1), (4) -
Plea that the limitation on filing of set-offs u/Or. VIII, r. 6 should
be read into r. 6A(1) - Held: Per Mohan M. Shantanagoudar, J.
(Supplementing) Untenable - Nature of a set-off and a counterclaim is different - Distinctions enumerated.
Answering the Reference, the Court
HELD
:
Per
N.
V.
RAMANA,
MOHAN
M.
SHANTANAGOUDAR AND AJAY RASTOGI, JJ.
1.1 As per Order VIII Rule 6 CPC, the defendant can claim
set-off 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 counter-claim
by defendant, according to which a defendant in a suit may, in
addition to his right of pleading a set-off under Rule 6, set up,
by way of counter-claim 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 counter-claim is in the nature of a claim for damages or not.
The whole scheme of Order VIII CPC unequivocally points out
at the legislative intent to advance the cause of justice by placing
embargo on the belated filing of written statement, set-off and
counter-claim. 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,
counter-claim or set-off could not be pleaded in other suits. As
per the recommendation of the Law Commission of India, to
avoid multiplicity of proceedings, the counter-claim by way of
Rule 6A was inserted in the Civil Procedure Code. 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
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such a way, to allow delayed filling of the counter-claim, 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 hyper-technical approach that the provision
stipulates that the counter-claim has to be filed along with the
written statement and beyond that, the Court has no power. The
Courts, taking into consideration the reasons stated in support
of the counter-claim, should adopt a balanced approach keeping
in mind the object behind the amendment and to sub-serve the
ends of justice. There cannot be any hard and fast rule to say
that in a particular time the counter-claim 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 counter-claim, 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,
the defendant cannot be permitted to file counter-claim 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. [Paras 10, 12
and 17] [227-D-F; 228-D-F; 230-D-H; 231-A-B]
Salem Advocate Bar Association, Tamil Nadu v. Union
Of India AIR 2005 SC 3353 ; [2005] 1 Suppl. SCR
929 - relied on.
Jai Jai Ram Manohar Lal v. National Building Material
Supply, Gurgaon (1969) 1 SCC 869 : [1970] 1 SCR
22 ; Mahendra Kumar and Anr. v. State Of Madhya
Pradesh and Ors. (1987) 3 SCC 265 : [1987] 3 SCR
155 ; Jag Mohan Chawla And Another v. Dera Radha
Swami Satsang & Ors., (1996) 4 SCC 699 : [1996] 2
Suppl. SCR 509 ; Shanti Rani Das Dewanjee (Smt.) v.
Dinesh Chandra Day (Dead) by LRs. (1997) 8 SCC
174 : [1997] 4 Suppl. SCR 177 ; Vijay Prakash
Jarath v. Tej Prakash Jarath (2016) 11 SCC 800;
Bollepanda P. Poonacha & Anr. v. K.M. Madapa
(2008) 13 SCC 179 : [2008] 4 SCR 1011 ; Ramesh
ASHOK KUMAR KALRA v. WING CDR. SURENDRA
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Chand Ardawatiya v. Anil Panjwani (2003) 7 SCC
350 : [2003] 3 SCR 1149 - referred to.
1.2 Findings- Order VIII Rule 6A of the CPC does not put
an embargo on filing the counter-claim after filing the written
statement, rather the restriction is only with respect to the
accrual of the cause of action. Having said so, this does not give
absolute right to the defendant to file the counter-claim 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 counter-claim, which is pegged till the issues
are framed. The court in such cases have the discretion to
entertain filing of the counter-claim, 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 counter-claim; (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. [Paras 19, 20] [231-E-H;
232-A-D]
Per MOHAN M. SHANTANAGOUDAR, J. (Partly
Supplementing and Partly Dissenting)
1.1 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. 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
counter-claim by way of a subsequent pleading, it is possible to
file a counter-claim after filing the written statement. In addition
to this, it is also possible to introduce a belated counter-claim
by way of an amendment to the original written statement under
Order VI Rule 17, CPC. However, as is the case with Order VIII
Rule 9, the filing of such a counter-claim through an amended
written statement is subject to the leave of the Court, and not
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accorded to the defendant as a matter of right. The Court has
the discretion to allow a counter-claim 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. 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 counter-claim cannot be condoned by the Court as well. 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
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. [Paras 8, 10 and 11] [236-G-H; 237-A-B; 237-F-H;
238-H; 239-A-B]
1.2 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 counter-claim. 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 counter-claim 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 counter-claim. Similarly, limited access to justice, especially
in rural areas, shaped by the socio-economic context of parties,
may compel the filing of belated counter-claims. Second, a perusal
of Order VIII Rule 6B suggests that it is only limited to cases
where the counter-claim is made along with the written
statement. In instances where a belated counter-claim 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 counter-claim, 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
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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 6A-6G 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 counter-claim. Therefore, I do not find force in the
argument raised by Counsel for Respondent. [Para 12] [240-FH; 241-A-E]
2. The nature of a set-off and a counter-claim is different.
For instance, a set-off 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 counter-claims, 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 set-offs, there is no provision
akin to Order VIII Rule 6A(4), which provides that a set-off 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 counter-claims in Rule 6A. In such a scenario, a limitation
cannot be read into this Rule. Respondent relied on Order VIII
Rule 1A, which requires the documents in support of a counterclaim to be presented along with the written statement itself.
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 provisions goes on to support
the conclusion that it is possible to file a counter-claim even after
the written statement, with the leave of the Court. Procedural
rules should not be interpreted so as to defeat justice, rather
than furthering it. 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. Equity and justice should
be the foremost considerations while construing procedural
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rules, without nullifying the object of the Legislature in totality.
Thus, rules under the Limitation Act which may allow for filing
of a belated counter-claim up to a long period of time, should
not be used to defeat the ends of justice. [Paras 13, 14 and 17]
[241-D-H; 242-A-B; 242-G-H; 243-A-B]
3. 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, to ensure speedy disposal of suits, propriety requires
that such discretion should only be exercised till the framing of
issues for trial. Allowing counter-claims 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 re-trial, the Court may
entertain a counter-claim 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. There are
several considerations that must be borne in mind while allowing
the filing of a belated counter-claim. First, the Court must
consider that no injustice or irreparable loss is being caused to
the defendant due to a refusal to entertain the counter-claim, 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 counter-claims, must be accorded due consideration. [Paras
23, 24] [245-D-H; 246-A-D]
4. It is not mandatory for a counter-claim to be filed along
with the written statement. The Court, in its discretion, may allow
a counter-claim to be filed after the filing of the written
statement. However, propriety requires that such discretion
should ordinarily be exercised to allow the filing of counter-claim
till the framing of issues for trial. To this extent, the conclusion
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reached by the learned Brothers is concurred with. However,
in exceptional circumstances, a counter-claim 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. [Para 25] [246-E-G]
Ramesh Chand Ardawatiya v. Anil Panjwani (2003) 7
SCC 350 : [2003] 3 SCR 1149 ; Mahendra Kumar v.
State of Madhya Pradesh (1987) 3 SCC 265 : [1987]
3 SCR 155 ; Shanti Rani Das Dewanjee v. Dinesh
Chandra Day (1997) 8 SCC 174 : [1997] 4 Suppl.
SCR 177 ; Gayathri Women's Welfare Association v.
Gowramma (2011) 2 SCC 330 : [2011] 2 SCR
47 ; Vijay Prakash Jarath v. Tej Prakash Jarath (2016)
11 SCC 800 - affirmed.
Salem Advocate Bar Association, T.N. v. Union of
India (2005) 6 SCC 344 : [2005] 1 Suppl. SCR 929
- relied on.
Rohit Singh v. State of Bihar (2006) 12 SCC 734 :
[2006] 7 Suppl. SCR 278- explained.
Ashok Kumar Kalra v. Wing CDR Surendra Agnihotri
& Ors. [2020] 2 SCC 394 ; Rohit Singh v. State
of Bihar (2006) 12 SCC 734 : [2006] 7 Suppl. SCR
278 ; Bollepanda P. Poonacha v. K. M. Madapa,
(2008) 13 SCC 179 : [2008] 4 SCR 1011 - referred
to.
Case Law Reference
In the Judgment of N. V. Ramana, Mohan M. Shantanagoudar
and Ajay Rastogi, JJ.
[2005] 1 Suppl. SCR 929
relied on
Para 4
[1970] 1 SCR 22
referred to
Para 4
[1987] 3 SCR 155
referred to
Para 14
[1996] 2 Suppl. SCR 509
referred to
Para 14
[1997] 4 Suppl. SCR 177
referred to
Para 14
(2016) 11 SCC 800
referred to
Para 15
[2008] 4 SCR 1011
referred to
Para 15
[2003] 3 SCR 1149
referred to
Para 15
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In the Judgment of Mohan M. Shantanagoudar, J. (Partly
Supplementing and Partly Dissenting)
(2020) 2 SCC 394
referred to
Para 2
[2003] 3 SCR 1149
affirmed
Para 9
[2005] 1 Suppl. SCR 929
relied on
Para 10
[1987] 3 SCR 155
affirmed
Para 11
[1997] 4 Suppl. SCR 177
affirmed
Para 11
[2006] 7 Suppl. SCR 278
referred to
Para 18
[2008] 4 SCR 1011
referred to
Para 20
[2011] 2 SCR 47
affirmed
Para 21
(2016) 11 SCC 800
affirmed
Para 22
CIVIL APPELLATE JURISDICTION : Special Leave Petition
(Civil) No. 23599 of 2018.
From the Judgment and Order dated 01.05.2018 of the High
Court of Judicature at Allahabad in Civil Revision No. 253 of 2009.
K. K. Tyagi, Sarvam Ritam Khare, Advs. for the Appellant.
Dinesh Dwivedi, Sr. Adv., Syed Hasan Isfahani, Krishnan Mishra,
Yasharth Kant, Nishant Singh, Rohit Kumar Singh, Advs. for the
Respondents.
The Judgments of the Court were delivered by
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 two-Judge Bench of this Court, wherein
clarification has been sought as to the interpretation of Order VIII Rule
6A of the Civil Procedure Code (hereinafter referred to as "the CPC"),
regarding the filing of counter-claim by a defendant in a suit. The
reference order dated 10.09.2018 is extracted below:
ASHOK KUMAR KALRA v. WING CDR. SURENDRA
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".........
The papers to be placed before the Hon'ble Chief Justice
of India for constitution of a three-Judge 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 counter-claim on 15.3.2009, in the same suit. By order
dated 12.05.2009, the trial court rejected the objections, concerning filing
of the counter-claim after filing of the written statement and framing
of issues. Order dated 15.05.2009 was challenged before the High
Court, in Civil Revision No. 253 of 2009, the High Court allowed the
same and quashed the counter-claim. 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
three-Judge 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 counter-claim 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 counter-claim except the limitation under the said provision
which provides that the cause of action in the counter-claim 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 counter-claim 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 counter-claim. Relying on
the judgments of this Court in Salem Advocate Bar Association, Tamil
Nadu v. Union Of India, AIR 2005 SC 3353, and Jai Jai Ram
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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 counter-claim 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 counter-claim must arise before the filing of the
written statement, and submitted that the counter-claim 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 set-off 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 counterclaim in Order VIII Rule 6A of the CPC.
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 counter-claim after filing the
written statement?
2) if the answer to the aforesaid question is in negative,
then what are the restrictions on filing the counter-claim
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.
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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, set-off and counter-claim. 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 set-off to be given in written statement:-
(1) Where in a suit for the recovery of money the defendant claims to
set-off against the plaintiff's demand any ascertained sum of money
legally recoverable by him from the 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 set-off.
(2) Effect of set-off: - The written statement shall have the same
effect as a plaint in a cross-suit so as to enable the Court to pronounce
a final judgment in respect both of the original claim and of the set-off;
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 set-off.
Order VIII Rule 6A, which pertains to the counter-claim, reads
as under:
Order VIII Rule 6A:
6A. Counter-claim by Defendant-(1) A defendant in a suit may,
in addition to his right of pleading a set-off under rule 6, set up, by way
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of counter-claim 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 counter-claim is in
the nature of a claim for damages or not:
Provided that such counter-claim shall not exceed the pecuniary
limits of the jurisdiction of the court.
(2) Such counter-claim 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 counter-claim.
(3) The plaintiff shall be at liberty to file a written statement in
answer to the counter-claim of the defendant within such period as may
be fixed by the Court.
(4) The counter-claim 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
set-off 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 counter-claim by defendant,
according to which a defendant in a suit may, in addition to his right of
pleading a set-off under Rule 6, set up, by way of counter-claim 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 counter-claim is in the nature of a claim for damages or
not.
11. The counter-claim shall be treated as a plaint and governed
by the rules applicable to plaints. Order VIII Rule 6-G says that the
rules relating to a written statement by a defendant shall apply to a
written statement filed in answer to a counter-claim. 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 set-off 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
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than by way of defence to set-off or counter-claim, 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 counter-claim under Order VIII Rule 6Ai. Counter-claim can be for claim of damages or otherwise.
ii. Counter-claim 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 counter-claim 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,
set-off and counter-claim.
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, counter-claim or set-off could not be pleaded in other suits. As
per the recommendation of the Law Commission of India, to avoid
multiplicity of proceedings, the counter-claim 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.
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.
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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 counter-claim as barred under Section 14 of the Indian
Treasure Trove Act, 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 counter-claim by the defendant
after he had filed the written statement. As the cause of action for the
counter-claim had arisen before the filing of the written statement, the
counter-claim 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 counter-claim. The issue concerning
applicability of limitation period for filing the counter-claim 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 counter-claim which was filed 21⁄2 years after 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 counter-claims. Further, the Court
elucidated on the serious harm caused by allowing such delayed filing.
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In any case, in Bollepanda Poonacha Case (supra), the Court could
not expound any further as the counter-claim 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 counter-claim, 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 counter-claim 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 counter-claim
can be filed at 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 counter-claim
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 counter-claim, 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 hyper-technical approach that the provision
stipulates that the counter-claim has to be filed along with the written
statement and beyond that, the Court has no power. The Courts, taking
into consideration the reasons stated in support of the counter-claim,
should adopt a balanced approach keeping in mind the object behind
the amendment and to sub-serve the ends of justice. There cannot be
any hard and fast rule to say that in a particular time the counter-claim
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 counter-claim, no prejudice is caused
to the opposite party, process is not unduly delayed and the same is in
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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 counter-claim after the
issues are framed and after the suit has proceeded substantially.