Supreme Court of India
G H ASHOK KUMAR KALRAversusWING CDR. SURENDRA AGNIHOTRI & ORS.
- Citation
- 2019 INSC 1266
- Decided
- 19 November 2019
- Disposal
- Reference answered
Holding
Order VIII Rule 6A does not bar a counter‑claim after the written statement; such a claim may be entertained at the court’s discretion up to the framing of issues, and in exceptional cases until the commencement of evidence.
Summary
The plaintiff filed a suit for specific performance and the defendant filed a written statement followed by a counter‑claim. The trial court allowed the counter‑claim, but the High Court quashed it, prompting a reference to the Supreme Court on the interpretation of Order VIII Rule 6A of the CPC. The Court held that Rule 6A does not impose an embargo on filing a counter‑claim after the written statement; the only restriction is that the cause of action must have accrued before the defence is delivered. However, the Court may exercise discretion to permit a belated counter‑claim only up to the stage of framing of issues, with exceptional circumstances allowing it until the commencement of evidence. The Court listed illustrative factors for exercising this discretion and emphasized a balanced approach between procedural and substantive justice. The reference was answered, directing that the SLP be placed before an appropriate bench after obtaining the Chief Justice’s orders.
Issues considered
- Whether Order VIII Rule 6A of the CPC mandates an embargo on filing a counter‑claim after the written statement has been filed.
- If not, what are the permissible limits and discretion for filing a counter‑claim after the written statement?
Legislation cited
- Code of Civil Procedure, 1908s. Order VIII Rule 10, s. Order VIII Rule 6A, s. Order VIII Rule 6B, s. Order VIII Rule 9, s. Order VI Rule 17
- Code of Civil Procedure (Amendment) Act, 1976
- Code of Civil Procedure (Amendment) Act, 2002
- Limitation Act, 1963s. Section 3(2)(b)(ii)
Subjects
Counter‑claimOrder VIII Rule 6ACivil Procedure CodeWritten statementLimitation ActProcedural justiceSubstantive justiceJudicial discretionFraming of issuesMultiplicity of proceedings
Judgment
214 [2019]
SUPREME COURT 17 S.C.R. 214
REPORTS [2019] 17 S.C.R.
A ASHOK KUMAR KALRA
v.
WING CDR. SURENDRA AGNIHOTRI & ORS.
(Special Leave Petition (C) No. 23599 of 2018)
B 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 –
C
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
D 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 counter-
E
claim 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 counter-
claim 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 counter-
F claim 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
G
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
H counter-claim may be permitted till the stage of commencement of
214
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 215
AGNIHOTRI & ORS.
recording of the evidence on behalf of the plaintiff as there is no A
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).
B
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 counter- C
claim – 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.
D
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
E
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 F
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 G
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. H
216 SUPREME COURT REPORTS [2019] 17 S.C.R.
A 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 counter-
claim is different – Distinctions enumerated.
B 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
C 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
D 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
E
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,
F 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
G
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
H
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 217
AGNIHOTRI & ORS.
such a way, to allow delayed filling of the counter-claim, the A
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
B
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 C
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
D
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 E
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 F
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 G
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 H
218 SUPREME COURT REPORTS [2019] 17 S.C.R.
A 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
B 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
C
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
D 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;
E 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
F pleading upon such terms as it thinks fit. Such subsequent
pleading or additional written statement may include a counter-
claim. 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
G
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
H written statement is subject to the leave of the Court, and not
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 219
AGNIHOTRI & ORS.
accorded to the defendant as a matter of right. The Court has A
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
B
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 counter-
claim even after the filing of the written statement, as long as C
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 D
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 E
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 F
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 G
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 H
220 SUPREME COURT REPORTS [2019] 17 S.C.R.
A adjudication and would certainly not help the plaintiff in the first
suit, who may have opposed the filing of the belated counter-
claim. 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
B
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-F-
H; 241-A-E]
2. The nature of a set-off and a counter-claim is different.
C 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
D 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
E Rule 1A, which requires the documents in support of a counter-
claim 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,
F
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
G 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
H be the foremost considerations while construing procedural
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 221
AGNIHOTRI & ORS.
rules, without nullifying the object of the Legislature in totality. A
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 counter- B
claim 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 C
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 D
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 E
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 F
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]
G
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 H
222 SUPREME COURT REPORTS [2019] 17 S.C.R.
A reached by the learned Brothers is concurred with. However,
in exceptional circumstances, a counter-claim may be permitted
to be filed af ter a written statement till the stage of
commencement of recording of the evidence on behalf of the
plaintiff. [Para 25] [246-E-G]
B 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.
C 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
D – 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
E 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
F 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
G
[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
H [2003] 3 SCR 1149 referred to Para 15
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 223
AGNIHOTRI & ORS.
In the Judgment of Mohan M. Shantanagoudar, J. (Partly A
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 B
[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 C
[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. D
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, E
Yasharth Kant, Nishant Singh, Rohit Kumar Singh, Advs. for the
Respondents.
The Judgments of the Court were delivered by
N. V. RAMANA, J.
F
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.
G
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: H
224 SUPREME COURT REPORTS [2019] 17 S.C.R.
A “.........
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
B 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
C 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
D 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
E 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
F 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
G 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
H Nadu v. Union Of India, AIR 2005 SC 3353, and Jai Jai Ram
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 225
AGNIHOTRI & ORS. [N. V. RAMANA, J.]
Manohar Lal v. National Building Material Supply, Gurgaon, A
(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 B
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
C
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 counter-
claim, keeping in mind the placement of the provision relating to counter-
claim in Order VIII Rule 6A of the CPC. D
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:
E
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
F
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
G
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. H
226 SUPREME COURT REPORTS [2019] 17 S.C.R.
A 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
B 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
C 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 set-
off to be given in written statement and the same reads as under:
Order VIII Rule 6:
D 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
E 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
F
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.
G
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,
H in addition to his right of pleading a set-off under rule 6, set up, by way
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 227
AGNIHOTRI & ORS. [N. V. RAMANA, J.]
of counter-claim against the claim of the plaintiff, any right or claim in A
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:
B
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 cross-
suit 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. C
(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. D
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 E
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, F
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
G
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 counter-
claim 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 H
228 SUPREME COURT REPORTS [2019] 17 S.C.R.
A 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
B
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 6A-
i. Counter-claim can be for claim of damages or otherwise.
ii. Counter-claim should relate to the cause of action, which
C 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.
D 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
E 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
F reasons for enacting the Code of Civil Procedure (Amendment) Act,
1976 (Act No.104 of 1976), were-
1) 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
G 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
H means to engage a pleader to defend their cases.
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 229
AGNIHOTRI & ORS. [N. V. RAMANA, J.]
13. Before we proceed further, we deem it appropriate to note A
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
B
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 C
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 D
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 counter-
claim was filed within three years from the date of accrual of the right E
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 F
(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 2½ years after framing of issues, as
the evidence was still pending and this Court felt that no prejudice would
G
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. H
230 SUPREME COURT REPORTS [2019] 17 S.C.R.
A 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
B 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
C 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 counter-
claim 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 time-
barred suits cannot be entertained under the guise of the counter-claim
D 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.
E 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
F 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,
G 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
H to the opposite party, process is not unduly delayed and the same is in
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 231
AGNIHOTRI & ORS. [N. V. RAMANA, J.]
the best interest of justice and as per the objects sought to be achieved A
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. 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
B
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 counter-claim is
filed within the limitation period, the trial court has to exercise its C
discretion to balance between the right to speedy trial and right to file
counter-claim, so that the substantive justice is not defeated. The
discretion vested with the trial court to ascertain the maintainability of
the counter-claim 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 D
to be taken into consideration before admitting counter-claim.
19. We may note that any contrary interpretation would lead to
unnecessary curtailment of the right of a defendant to file counter-claim.
This Court needs to recognize the practical difficulties faced by the
litigants across the country. Attaining the laudable goal of speedy justice E
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 counter-claim after filing the F
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, G
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. H
232 SUPREME COURT REPORTS [2019] 17 S.C.R.
A ii. Prescribed limitation period for the cause of action
pleaded.
iii. Reason for the delay.
iv. Defendant’s assertion of his right.
B 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.
C
ix. and facts and circumstances of each case.
x. In any case, not after framing of the issues.
21. We answer the reference accordingly. The instant Special
Leave Petition may be placed before an appropriate Bench after
D obtaining orders from the Hon’ble Chief Justice of India, for considering
the case on merits.
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
E discretion and permit the filing of a counter-claim 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 counter-claim may be permitted till the stage of
commencement of recording of the evidence on behalf of the plaintiff.
F I deem it fit to state the reasons for arriving at this conclusion through
this opinion.
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:
G “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 Code of Civil Procedure is mandatory
in nature.”
H
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 233
AGNIHOTRI & ORS. [MOHAN M. SHANTANAGOUDAR, J.]
Essentially, in light of the previous judgments of this Court, the A
question referred to this Court is whether it is mandatory for a counter-
claim 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 counter-claim must necessarily be filed along with the B
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 C
to counter-claims were introduced in the CPC. The originally enacted
CPC of 1908 did not provide a statutory right to file a counter-claim.
At that time, Order VIII only pertained to written statements and set-
offs. Taking note of this omission, the Law Commission of India, in its
27th and 54th Reports, had recommended that express provisions on
counter-claims should be included in the CPC to avoid multiple D
proceedings and to dispel ambiguity on whether counter-claims 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. Counter-claim by defendant.— E
(1) 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 the F
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 G
pecuniary limits of the jurisdiction of the Court.
(2) Such counter-claim shall have the same effect as a
cross-suit 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. H
234 SUPREME COURT REPORTS [2019] 17 S.C.R.
A (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.
B 6B. Counter-claim to be stated.—Where any defendant seeks
to rely upon any ground as supporting a right of counter-claim,
he shall, in his written statement, state specifically that he does
so by way of counter-claim.
6C. Exclusion of counter-claim.—Where a defendant sets up
C a counter-claim and the plaintiff contends that the claim thereby
raised ought not to be disposed of by way of counter-claim but
in an independent suit, the plaintiff may, at any time before issues
are settled in relation to the counter-claim, apply to the Court
for an order that such counter-claim may be excluded, and the
Court may, on the hearing of such application make such order
D as it thinks fit.
6D. Effect of discontinuance of suit.—If in any case in which
the defendant sets up a counter-claim, the suit of the plaintiff is
stayed, discontinued or dismissed, the counter-claim may
nevertheless be proceeded with.
E
6E. Default of plaintiff to reply to counter-claim.—If the
plaintiff makes default in putting in a reply to the counter-claim
made by the defendant, the Court may pronounce judgment
against the plaintiff in relation to the counter-claim made against
him, or make such order in relation to the counter-claim as it
F thinks fit.
6F. Relief to defendant where counter-claim succeeds.—
Where in any suit a set-off or counter-claim 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
G Court may give judgment to the party entitled to such balance.
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 counter-claim.”
5. For the first time, through the introduction of Rules 6A-6G to
H Order VIII, an explicit right of filing a counter-claim was accorded to
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 235
AGNIHOTRI & ORS. [MOHAN M. SHANTANAGOUDAR, J.]
the defendant, and rules governing the same were laid down. In this A
scheme, Rule 6A(1) is the cornerstone provision. It specifically grants
the right of filing a counter-claim. In addition to this, it also places a
categorical limitation on the accrual of the cause of action for a counter-
claim. This is in the form of the requirement that the cause of action
pertaining to the counter-claim must arise either before or after the filing
B
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 counter-claim is stated to have the
same effect as the plaint in a cross-suit, so as to enable the Court to
C
pronounce a final judgment on the original claim as well as the counter-
claim 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. It is clear that Rule 6A(1) only places a limitation on the time
D
within which the cause of action for a counter-claim must arise.
Besides this limitation, there is no explicit guidance in Rule 6A(1) as to
the time within which the counter-claim itself must be filed. In this
respect, Rule 6A(4) provides that a counter-claim is governed by the
rules applicable to plaints. It is well-established that a plaint must be
presented within the period prescribed under the Limitation Act, 1963 E
[hereinafter “the Limitation Act”]. For counter-claims 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,—
F
(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;”
G
(emphasis supplied)
This provision mandates that in order to determine the limitation
period applicable to a counter-claim, 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 consonance with the provisions of H
236 SUPREME COURT REPORTS [2019] 17 S.C.R.
A Order VIII Rule 6A(4), the Limitation Act also treats a counter-claim
like a plaint. This means that much like a plaint, the limitation for filing
a counter-claim also depends on the nature of the claim and is
accordingly governed by the period of limitation stipulated in the
Limitation Act.
B 7. From the foregoing discussion, it is clear that a counter-claim
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 counter-claim has to be filed along with the
written statement. In the absence of a particular mandate under this
C Rule, it is necessary to look to other provisions of the CPC to determine
whether a counter-claim 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
D written statement of a defendant other than by way of defence
to set off or counter-claim 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
written statement from any of the parties and fix a time of not
E 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 set-off or counter-claim without the
leave of the Court. However, any other pleading sought to be filed after
F 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
G as it thinks fit. It is important to appreciate here that such subsequent
pleading or additional written statement may include a counter-claim.
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
H written statement.
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 237
AGNIHOTRI & ORS. [MOHAN M. SHANTANAGOUDAR, J.]
In addition to this, it is also possible to introduce a belated counter- A
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 accorded to the
defendant as a matter of right.
B
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 C
pleading or setting up a counter-claim in a civil suit. Firstly, the
written statement filed under Rule 1 may itself contain a counter-
claim which in the light of Rule 1 read with Rule 6-A would be
a counter-claim against the claim of the plaintiff preferred in
exercise of legal right conferred by Rule 6-A. Secondly, a
counter-claim may be preferred by way of amendment D
incorporated subject to the leave of the court in a written
statement already filed. Thirdly, a counter-claim may be filed by
way of a subsequent pleading under Rule 9. In the latter two
cases the counter-claim though referable to Rule 6-A cannot be
brought on record as of right but shall be governed by the E
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.”
F
(emphasis supplied)
I fully agree with this proposition, and affirm on the basis of the
foregoing discussion that 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. G
10. It can also be gleaned from Order VIII Rule 10 that it is
permissible to file a belated counter-claim 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 H
238 SUPREME COURT REPORTS [2019] 17 S.C.R.
A 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.”
B
(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
C discretion extends to allowing the filing of a belated counter-claim 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 of Order VIII
D 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,
E 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
F 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
G 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
H condone the delay in filing of a written statement, if it deems it fit in
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 239
AGNIHOTRI & ORS. [MOHAN M. SHANTANAGOUDAR, J.]
the facts and circumstances of the case. If it is so, there is no reason A
as to why the delay in filing a counter-claim 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
Court is vested with the discretion to allow the filing of a counter-claim B
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 C
SCC 265, it was held that:
“15. The next point that remains to be considered is whether Rule
6-A(1) of Order 8 of the Code of Civil Procedure bars the filing
of a counter-claim after the filing of a written statement. This
point need not detain us long, for Rule 6-A(1) does not, on the
D
face of it, bar the filing of a counter-claim by the defendant after
he had filed the written statement. What is laid down under Rule
6-A(1) is that a counter-claim 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 counter-claim is in the nature E
of a claim for damages or not. The High Court, in our opinion,
has misread and misunderstood the provision of Rule 6-A(1) in
holding that as the appellants had filed the counter-claim after
the filing of the written statement, the counter-claim 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 F
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 counter-claim, 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 G
to sue.”
(emphasis supplied)
In Shanti Rani Das Dewanjee v. Dinesh Chandra Day, (1997)
8 SCC 174, it was held that the right to file a counter-claim is referable
to the date of accrual of the cause of action: H
240 SUPREME COURT REPORTS [2019] 17 S.C.R.
A “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 counter-claim
under Order VIII Rule 6-A of the Code of Civil Procedure is
referable to the date of accrual of the cause of action. If the
B
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
counter-claim can be filed even after filing the written statement.
The said Civil Case No. 248 of 1982, in which the application
C under Order VIII Rule 6-A has been filed by the defendant-
respondents was instituted on 15-7-1982 and the application under
Order VIII Rule 6-A was presented on 22-6-1985. It cannot be
held that the cause of action for the suit or counter-claim was
ex facie barred by limitation under the Limitation Act”
D (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 counter-claim should
E arise before the filing of the written statement, and hence it is logical
that the counter-claim, or the grounds upon which it is based, should
also find a mention in the written statement. To 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 counter-claim, shall specifically
F state in his written statement that he does so by way of a counter-
claim.
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 counter-claim.
G 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
H been possible for her to raise the said counter-claim. Similarly, limited
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 241
AGNIHOTRI & ORS. [MOHAN M. SHANTANAGOUDAR, J.]
access to justice, especially in rural areas, shaped by the socio-economic A
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, B
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
C
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 counter-claim. 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, D
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.
13. Further, the contention that the limitation on filing of set-offs
under Order VIII Rule 6 should be read into Rule 6A(1) is untenable. E
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
F
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. G
14. Lastly, as regards the Respondent’s reliance on Order VIII
Rule 1A, which requires the documents in support of a counter-claim
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 H
242 SUPREME COURT REPORTS [2019] 17 S.C.R.
A 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.
B
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
counter-claims remains to be examined. It must be determined when it
may be proper for the Court to refuse a belated counter-claim, in spite
of it being permissible within the scheme of Order VIII Rule 6A and
C the Limitation Act, 1963.
16. In several cases, it is possible that the period of limitation
for filing of counter-claims 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 counter-claim for possession of the immovable
D 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
E brought within twelve years from the date of the defendant’s
dispossession.
In such a situation, it is possible that by the time the counter-
claim is brought, the issues in the original suit have already been framed,
the evidence led, arguments made, and the judgment reserved. Allowing
F a counter-claim to be filed at this stage would effectively result in a
re-trial 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 counter-claims, i.e. avoiding multiplicity of litigation, would be
frustrated.
G
17. It is well-settled 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
H technicalities. In some cases, this means that rules that have traditionally
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 243
AGNIHOTRI & ORS. [MOHAN M. SHANTANAGOUDAR, J.]
been treated as mandatory, may be moulded so that their object and A
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
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,
B
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 counter-claims. 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):
C
“28. …The purpose of the provision enabling filing of a counter-
claim 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 counter-claims, that is, all disputes
between the same parties being decided in the course of the same
proceedings. If the consequence of permitting a counter-claim D
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 E
in favour of permitting a belated counter-claim. The framers of
the law never intended the pleading by way of counter-claim
being utilized as an instrument for forcing upon a reopening of
the trial or pushing back the progress of proceeding. Generally
speaking, a counter-claim not contained in the original written
statement may be refused to be taken on record if the issues F
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 counter-claim may
not prejudice the defendant because in spite of the counter-claim
having been refused to be entertained he is always at liberty to G
file his own suit based on the cause of action for counter-claim.”
(emphasis supplied)
To ensure that the objective of introducing the statutory
amendments with respect to counter-claims was not defeated, it was
rightly held that a belated counter-claim raised by way of an amendment H
244 SUPREME COURT REPORTS [2019] 17 S.C.R.
A 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 counter-
B claims:
“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 so-called
C 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 so-called counterclaim, filed
by Defendants 3 to 17 has to be held to be not maintainable.”
(emphasis supplied)
D
It is crucial to note that even though the Court held that a counter-
claim 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 counter-claim in the said matter was filed at
the stage where the judgment was reserved, the Court went as far as
E 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 counter-claims were to be discouraged, and called upon
F
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 counter-claim had been rejected on the basis that its cause of
action had arisen after the filing of the written statement.
G
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 counter-claim. In this case,
filing of the initial counter-claim was not in challenge. Instead, the Court
was considering the effect of an amendment to an existing counter-
H claim. While the Trial Court had refused to allow such an amendment,
ASHOK KUMAR KALRA v. WING CDR. SURENDRA 245
AGNIHOTRI & ORS. [MOHAN M. SHANTANAGOUDAR, J.]
the High Court had granted the same. Reiterating the concerns noted A
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. B
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 counter-claim cannot be filed after the framing of issues.
C
22. In Vijay Prakash Jarath v. Tej Prakash Jarath, (2016) 11
SCC 800, this Court further refined the limitation in Rohit Singh (supra)
that counter-claims 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 counter-claim filed at that point was allowed, as D
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 counter-claim after the
written statement, the Court has the discretion to refuse such filing if it
E
is done at a highly belated stage. However, in my 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
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. F
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 G
intervening period between framing of issues and commencement of
recording of evidence. If a counter-claim 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. H
246 SUPREME COURT REPORTS [2019] 17 S.C.R.
A At this juncture, I would like to address the observation in Rohit
Singh (supra) that a counter-claim, 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 statement of law, as the
filing of counter-claims after the commencement of recording of
evidence is not illegal per se. However, I hasten to add that permitting
B
such a counter-claim 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 counter-claim. First, the Court must
consider that no injustice or irreparable loss is being caused to the
C 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
D 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.
25. Having considered the previous judgments of this Court on
counter-claims, the language employed in the rules related thereto, as
E well as the intention of the Legislature, I conclude that 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, in view of the
considerations mentioned in the preceding paragraph. However,
propriety requires that such discretion should ordinarily be exercised to
F allow the filing of a counter-claim 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 counter-claim may be permitted to be
filed after a written statement till the stage of commencement of
G recording of the evidence on behalf of the plaintiff.
26. The reference is answered accordingly.
Divya Pandey Reference answered.
H
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