Holding

A suit filed under section 8 of the Indian Treasure‑Trove Act is not subject to the limitation in section 14, and Rule 6A(1) of Order VIII CPC does not preclude a counter‑claim when the cause of action accrued before the written statement.

Summary

In 1976, respondents Nos. 2‑5 discovered a treasure of gold, silver ornaments and cash while renovating a house and reported it to the Collector, who issued a notification under the Indian Treasure‑Trove Act, 1878. The Collector, believing the treasure was hidden within the statutory period, adjourned the hearing and allowed the finders to file a suit under section 8, which they did. The appellants (Mahendra Kumar & Anr.) and other claimants were added as defendants, filed a written statement denying the finders' claim, and subsequently lodged a counter‑claim asserting title to the treasure. The trial court dismissed the counter‑claim on the ground that it was barred by section 14 of the Act and by Order VIII Rule 6A(1) of the CPC, a decision affirmed by the High Court. The Supreme Court held that section 14 applies only after a declaration of ownerlessness under section 9 and therefore cannot bar a suit filed under section 8, and that Rule 6A(1) does not prohibit a counter‑claim filed after the written statement if the cause of action accrued earlier. Consequently, the counter‑claim was maintainable and the appeal was allowed, directing the trial court to hear the suit and counter‑claim.

Issues considered

The applicability of section 14 of the Indian Treasure‑Trove Act, 1878 to a suit filed under section 8.
Whether Rule 6A(1) of Order VIII of the Code of Civil Procedure bars a counter‑claim filed after the written statement.
Whether the limitation period prescribed in section 14 applies to the counter‑claim.

Legislation cited

Code of Civil Procedure, 1908s. Order VIII Rule 6A(1)
Indian Treasure Trove Act, 1878s. 10, s. 13, s. 14, s. 4, s. 5, s. 7, s. 8, s. 9
Limitation Act, 1963s. Article 113

Subjects

treasure troveownership of treasuresection 8section 14counter‑claimCivil Procedure Codelimitation perioddeclaration of ownerless treasure

Judgment

MAHENDRA KUMAR & ANR.
A
v.
STATE OF MADHYA PRADESH & ORS.

MAY 4, 1987

[V. BALAKRISHNA ERADJ AND B
MURARI MOHON DUTT, JJ.]

Indian Treasure-Trove Act, 1878-Ss. 8, 9, 13 and 14-Suit-
Filing of-Determination of ownership of place where treasure found-
When arises-Filing of counter-claim-Period of limitation.
c
- Civil Procedure Code, 1908-0rder VIII, Rule 6A( 1)-Filing of
counter-Claim after filing of written statement-Whether maintain-
able.

The predecessor-in-interest of the appellants, namely, Babulal,
purchased a house in the year 1947 from the sons of one Mannulal. The D
appellants and the respondents No. 6 to 8 are the sons of the other three
brothers of Mannulal. In the year 1976 the respondents Nos. 2 to 5
started reconstructing or renovating their house and in the course ol'
digging the plinth a treasure consisting of gold and silver ornaments
and currency notes was found. They intimated the discovery of the trea·
sure to the Collector, who issued a notification under s. 5 ol' the Indian E
Treasure Trove Act, 1878. Respondents Nos. 2 to 5, the appellants and
the respondents Nos. 6 to 8 tiled claims before the Collector. The Col-
lector held that the respondents Nos. 2 to 5, the tinders of the treasure,
are the owners of the house from where the treasure was found and
permitted them under s. 8 to institute a suit to establish their right
before February 22, 1979. F

The respondents Nos. 2 to 5 instituted a snit for declaration of
their title to the treasure without making the other claimants before the
Collector, parties to the suit. On an application liled under Order I,
Fule IO of the Code of Civil Procedure by the appellants and respon-
dents Nos. 6 to 8, the District Judge made them defendents in the suit. G
Thereatler, they liled their written statement, denying the claim of the
respondents Nos. 2 to 5 to the treasure and claimed the title thereof to
f-- them.

Aller the tiling of the written statement, the appellants tiled a
counter-claim claiming title to the treasure. The respondents Nos. 2 to 5 H
155
156 SUPREME COURT REPORTS [1987] 3 S.C.R.

A tiled an application praying that the counter-claim should be dismissed ~ :_
contending that it was barred by limitation as prescribed in s. 14 of the
Act and that it was also not maintainable under Order VIII, Buie 6A(l)
of the Code of Civil Procedure. The District Judge dismissed the
counter-claim holding that it was barred by s. 14 of the Act. In the
Bevision, the High Court upheld the order of the District Judge and
B further held that the counter-claim having been filed aller the tiling of
the written statement, was not maintainable under Order VIII, Buie --4 _.
6A(l) of the Code of Civil Procedure.

Allowing the Appeal to this Court,

HE~D: 1. The order of the District Judge and the Judgment of
c the High Court are set aside. The District Judge is directed to proceed
with the hearing of the suit and !ht counter-claim in accordance with
law. [164F-G]

2. Under the scheme ot'the Indian Treasure Trove Act, 1878 two
D kinds of suits can be tiled at two stages, namely, one under s. 8 and the
other under s. 14. Section 8 provides that if the Collector has reason to
believe that the treasure was hidden by any person appearing before the
Collector within one hundred years or by some other person under
whom such person claims, the Collector shall adjourn the hearing for
such period as he deems sufticient to allow the claimant to institute a
E suit to establish his right to the treasure. [161G-H; 162A]

3. On the other hand, the question of filing a suit under s. 14 will ·-<
not arise unless the Collector makes a declaration under s. 9 that the
treasure is ownerless. Such a declaration under s. 9 will be made by the
Collector if he sees no reason to believe that the treasure was not hidden y·
F within one hundred years or if no suit is instituted under s. 8 within the
period for which the hearing is adjourned by the Collector or if the
plaintiff's claim is rejected. [1628]

4. If no such contingencies as mentioned in s. 9 take place, the
Collector will have no jurisdiction to make a declaration that the trea-
G sure is ownerless. If, however, any of such contingencies happens and
the Collector makes a declaration under s. 9 and two or more persons
have appeared before the Collector each claiming the ownership of the
place where such treasure was found or the tinder of the treasure dis-
putes the right of any person who has so appeared and claimed, the
Collector shall make an order under s. 13 staying the proceedings with
H a view to the matter being enquired into by a Civil Court.
MAHENDRA v. STATE OF M.P. 157

5. The object of an enquiry as to the ownership of the place by the A
Civil Court is necessary inasmuch ass. 10 of the Act provides that when
a declaration has been made in respect of any treasure under s. 9, such
treasure shall either be delivered to the tinder or be divided between
him and the owner of the place in which it has been found. [162F]

6. A suit under s. 14 relates to the establishment ol'the ownership B
of the place where the treasure was found for the purpose of division of
the treasure between the tinder and the owner of the place and that such
a suit has to be tiled within one month from the date of such ,order to
obtain a decree declaring his right aller the Collector had declared the
treasure to be ownerless under s. 9 atler making a claim before the
Collector ·under s. 13. The words "such order" in s. 14, refer to the C
order passed by the Collector under s. 13. [163B]

.- 7. Section 8 ands. 13 ands. 14 contemplate two different situa-
tions. While under s. 8 the suit has to be tiled within the period during
which the hearing stands adjourned, the suit under s. 14 has to be
tiled within one month of the order of the Collector under s. 13 of the D
Ad. [163C-D]

8. To hold that suits under s. 8 ands. 13 are both governed by the
" limitation prescribed bys. 14, will be to do violence to the provisions of
the Act and the clear intention of the Legislature as indicated in the
provisions. [163E] E

9. In the instant case, as the respondents Nos. 2 to 5 have
instituted the suit within the period during which the hearing before the
Collector stood adjourned under s. 8, the question of making a declara-
tion by the Collector under s. 9 of the Act does not arise and, consequently,
there is no scope for filing any snit under s. 14 of the Act. Thuss. 14 has no F
manner of application to a suit filed under s. 8 of the Act. [163G-H; 164A]

10. Rule 6A(l) of Order VIII of Code of Civil Procedure does not
bar the tiling of a counter-claim by the defendant after he had liled the
written statement. What is laid down under Rule 6A(I) is that a
counter-claim can be tiled, provided the cause of action had accrued to G
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 of the claim for damages or not. [164B-C]

11. The High Court has misread and misunderstood the provision
of Rule 6A(l) in holding that as the appellants had tiled the counter- H
158 SUPREME COURT REPORTS [1987] 3 S.C.R.

A claim after the tiling of the written statement, the counter-claim was not J.9im
maintainable. Under Article 113 of the Limitation Act, 1963, the period \ '
of limitation of three years from the date the right to sue accrues, has
been provided for any suit for which no period of limitation is provided
elsewhere in the Schedule. In the instant case, the counter-claim has
been tiled by the appellants within three years and as the cause of action
B for the counter-claim had arisen before the riling of the written state-
ment, the connter-claim was, therefore quite maintainable. [164C-E] -.;. -~

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4053 ,._.
of 1985. ·

c From the Judgment and Order dated 25.1.1985 of the. Madhya
Pradesh High Court in Civil Revision No. 378 of 1984.
-
U.R. Lalit, S.S. Khanduja, Y.P. Dhingra and Mrs. Madhu
Kapoor for the Appellants.

D T.C. Sharma and S.K. Gambhir for the Respondents.

The Judgment of the Court was delivered by

DUTT, J. This appeal by special leave is directed against the
judgment of the Madhya Pradesh High Court, whereby the High
E Court affirmed the order of the District Judge, Bhopal, dismissing the
counter-claim by the appellants on the ground that it was barred by
section 14 of the Indian Treasure-Trove Act, 1878, hereinafter refer-
red to as 'the Act'. The High Court also held that the counter-claim
was not maintainable under sub-rule ( 1) of Rule 6A of Order VIII of
the Code of Civil Procedure, as the same was filed by the appellants
F after the filing of the written statement.

The predecessor-in-interest of the appellants, namely, Babula!,
purchased a house in Bhopal in the year 1947 from the sons of one
Mannulal. The appellants and the respondents Nos. 6 to 8 are the sons
of the other three brothers of Mannulal. In the year 1976, the respon-
G dents Nos. 2 to 5, who were the heirs and legal representatives of the
said Babula!, started reconstructing or renovating the house and for
that purpose they commenced digging the plinth. In the course of
digging, a treasure consisting of gold and silver ornaments and also
Government currency notes amounting to Rs.2,900 was found. The
respondents Nos. 2 to 5 intimated the discovery of the treasure to the
H Collector of the District, who issued a notification under section 5 of
MAHE:-iDRA v. STATE Of M.P. [DUTT. J.] 159

the Act requiring all persons claiming the treasure,. or any part A
thereof, to appear personally or by agent before him on the day and
place mentioned in the notification. Pursuant to the said notification,
the respondents Nos. 2 to 5, and the appellants and the respondents
Nos. 6 to 8 filed claims before the Collector. It has been held by the
Collector that the respondents Nos. 2 to 5, the finders of the treasure,
are the owners of the house from where the treasure was found during B
excavation undertaken by them with a view to starting reconstruction,
and he permitted them under section 8 of the Act to institute a suit in
the Civil Court to establish their right before February 22, 1979.

The respondents Nos. 2 to 5 instituted a suit being Civil Suit No.
1-A of 1979, in the Court of the District Judge, Bhopal, for a declara- C
tion of their title to the treasure found by them. The respondents Nos.
2 to 5 did not, however, make the other claimants before the Collector
including the appellants, parties to the suit. The appellants and the
respondents Nos. 6 to 8 made an application for their addition as
parties to the suit under the provision of Order I, Rule 10 of the Code
of Civil Procedure. The learned District Judge allowed the said appli- D
cation and, accordingly, they were made defendants in the suit.

Thereafter, the appellants and the respondents Nos. 6 to 8 filed
their written statement, inter alia, denying the claim of the respon-
dents Nos. 2 to 5 to the treasure. They claimed title to the treasure.
E
After the filing of the written statement, the appellants filed a
counter-claim claiming title to the treasure. It is not necessary for us to
state the basis of the claims of the parties to the treasure. The respon-
. dents Nos. 2 to 5 filed an application praying that the counter-claim
should be dismissed contending that it was barred by limitation as
prescribed under section 14 of the Act and that it was also not main- F
tainable under Order VIII, Rule 6A(l) of the Code of Civil Procedure.
The learned District Judge came to the finding that the counter-claim
·was barred by section 14 of the Act and, in that view of the matter.
dismissed the counter-claim. Being aggrieved by the said order of the
learned District Judge, the appellants and the said respondents Nos. 6
to 8 moved the High Court in revision against the same. The High G
t Court upheld the order of the learned District Judge that the counter-
claim was barred by limitation as prescribed by section 14 of the Act.
The High Court fur.her held that the counter-claim having been filed
after the filing of the written statement, it was not maintainable under
Order VIII, Rule 6A(l) of the Code of Civil Procedure. Hence this
appeal by special leave. H
160 SLPREME COURT REPORTS [ 1987) 3 S.C.R.

A At this stage, it is necessary to refer to some of the provisions of ~-
the Act. Section 4 of the Act provides, inter alia, for the giving of
notice by the finder of treasure to the Collector containing the details
of the treasure. The treasure may be deposited in the nearest Govern·
ment Treasury or the finder may give the Collector such security as the
Collector thinks fit to produce the treasure at such time and place, as
B he may, from time to time, require. Under section 5, the Collector
shall, after making such enquiry, if any, as he thinks fit, issue a notifi· ~ ·"'
cation requiring the claimants to the treasure to appear before him on
a day and at a place mentioned in the notification, such day not being ~
earlier than four days or later than six months, after the date of the
publication of such notification. Section 6 provides that any person
C having claimed any right to such treasure or any part thereof, as owner
of the place in which it was found or otherwise, and not appearing as
required by the notification issued under section 5, shall forfeit such y;
right. Sections 7, 8, 9, 13 and 14 which are relevant for our purpose are
extracted below:·

D "S. 7 On the day notified under section 5, the Collector
shall cause the treasure to be produced before him, and
shall enquire as to and determine

(a) the person by whom, the place in which, and the
circumstances under which, such treasure was
E found; and
(b) as far as is possible, the person by whom, and the
circumstances under which, such treasure was
hidden.

S.8. If, upon an enquiry made under section 7, the Col-
F lector sees reason to believe that the treasure was hidden
within one hundred years before the date of the finding, by
a person appearing as required by the said notification and
claiming such treasure, or by some other person under
whom such person claims, the Collector shall make an
order adjourning the hearing of the case for such period as
G he deems sufficient, to allow of a suit being instituted in the
Civil Court by the claimant, to establish his right.

S.9. If upon such enquiry the Collector sees no reason to
believe that the treasure was so hidden; or
H If; where a period is fixed under section 8, no suit is
MAHENDRA v. STATE OF M.P. [DUTf. J.J 161

instituted as aforesaid within such period to the knowledge A
of the Collector; or

if such suit is instituted within such period, and the
plaintiff's claim is finally rejected;

the Collector may declare the treasure to be owner- B
less.

Any person aggrieved by a declaration made under
this section may appeal against the same within two months
from the date thereof to the Chief Controlling Revenue-
authority. c
Subject to such appe~l, every such declaration shall
be final and conclusive."

"S.13. When a declaration has been made as aforesaid in
respect of any treasure, and two or more persons have D
appeared as aforesaid and each of them claimed as owner
·Y of the place where such treasure was found, or the right of
any person who has so appeared and claimed is disputed by
the finder of such treasure, the Collector shall retain such
treasure and shall make an order staying his proceedings
with a view to the matter being enquired into and deter- E
mined by a Civil Court.

S.14. Any person who has so appeared and claimed may,
within one month from the date of such order, institute a
suit in the Civil Court to obtain a decree declaring his right:
and in every such suit the finder of the treasure and all F
· persons disputing such claim before the Collector shall be
made defendants."

Under the scheme of the Act, two kinds of suits can be filed at
two stages, namely, one under section 8 and the other under section 14
of the Act. Section 8 provides that if the Collector has reason to G
believe that the treasure was hidden by any person appearing before
the Colltctor within one hundred years or by some other person under
whom such person claims, the Collector shall adjourn the hearing for
such period as he deems sufficient to allow the claimant to institute a
suit to establish his right to the treasure. So under section 8, the suit
has to be filed by the claimant within the period for which the hearing H
162 SUPP.E\IE COUP.T REPORTS [19R7] 3 S.C.R.

of the case is adjourned for the establishment of his right to the
A treasure.

On the other hand, the question of filing a suit under section 14
will not arise unless the Collector makes a declaration under section 9
that the treasure is ownerless. Such a declaration under section 9 will
B be made by the Collector if he sees no reason to believe that the
treasure was not hidden within one hundred years or if no suit is
instituted under section 8 within the period for which the hearing is
adjourned by the Collector or if the plaintiff's claim is rejected. An
appeal lies against a declaration by the Collector to the Chief Control-
ling Revenue Authority and subject to the appeal, such declaration
shall be final and conclusive. If, however, no such contingencies as
c mentioned in section 9 take place, the Collector will have no jurisdic- •
tion to make a declaration that the treasure is ownerless.

If however, any of such contingencies happens and the Collector
makes a declaration under section 9 and two or more persons have
D appeared before the Collector each claiming the ownership of the
place where such treasure was found or the finder of the treasure y,
disputes the right of any person who has so appeared and claimed, the
Collector shall make an order under section 13 staying the proceedings
witti a view to the matter being enquired into by a Civil Court. It may
be noticed here that the claim made under section 13 by the rival
E claimants relate to the ownership of the place and not to the ownership
of the treasure for, it has been already noticed that the declaration by .._
the Collector under section 9 that the treasure is ownerless shall, sub- --..(
ject to the appeal to the Chief Controlling Revenue Authority, be final
and conclusive. The object of an enquiry as to the ownership of the
place by the Civil Court is necessary isasmuch as section 10 of the Act )---
F provides inter alia that when a declaration has been made in respect of
any treasure under section 9, such treasure shall either be delivered to
the finder or be divided between him and the owner of the place in
which it has been found.

Thus it is manifestly clear that if no declaration is made under
G section 9, there is no question of filing a smt under section 14 of the -+·
Act. While a suit under section 8 relates to the establishment of the
right of the claimant to the treasure, a suit under section 14 relates to
the establishment of the ownership of the place where the treasure was
found for the purpose of division of the treasure between the finder
and the owner of the place.
H
Section 14 lays down that such a suit has to be filed within one
MAHENDRA v. STATE OF M.P. [DUTT. J.J 163

month from the date of such order to obtain a decree declaring his A
right.

It is manifestly clear from section 14 that the suit referred to
therein is a suit to be filed by a person for the establishment of his right
after the Collector had declared the treasure to be ownerless under
section 9 after making a claim before the Collector under section 13. B
The words "such order" in section 14, in our view, refer to the order
passed by the Collector under section 13. Further, the placement of
section 14 after section 13 of the Act points only to the filing of the suit
by a person after the Collector had made an order staying the proceed-
ings under section 13. The suit contemplated by section 8 of the Act
has to be filed by the claimant within the period for which the hearing C
of the case is adjourned. Such period for which the hearing under
section 8 is adjourned by the Collector, may be more than a month. It
is absurd to think that although section 8 provides that the suit has to
be filed within the period for which the hearing is adjourned, yet it has
to be filed within one month under section 14. Section 8 and sections
13 and 14 contemplate two different situations. While under section 8 D
the suit has to be filed within the peiod during which the hearing stands
adourned, the suit under section 14 has to be filed within one month of
the order of the Collector under section 13 of the Act. To hold that
suits under section 8 and section 13, are both governed by the limita-
tion prescribed hy section 14, will be to do violence to the provisions of
the Act and the clear intention of the Legislature as indicated in the E
provisions.

Another aspect in this regard may be considered. It may be
argued that as the Collector had not allowed the appellants and the
respondents Nos. 6 to 8 to file a counter-claim or a suit, the suit was
not maintainable. In our opinion, the question of filing a counter-claim F
arises after a suit is filed by the claimant under section 8. It may be that
there is no substantial difference between a counter-claim and a suit,
but nO'netheless a defendant cannot be prevented from filing a
counter-claim under the Code of Civil Procedure.

In the instant case, as the respondents Nos. 2 to 5 have instituted G
t the suit within the period during which the hearing before the Col-
lector stands adjourned under section 8, the question of making a
declaration by the Collector under section 9 of the Act does not arise
and, consequently, there is no scope for filing any suit under section 14
of the Act for the establishment of the right to ownership of the place
where the treasure was found by the respondents Nos. 2 to 5. Thus H
'
164 SL'PREME COURT REPORTS [1987) 3 S.C.R.

A section 14 has no manner of application to a suit filed under section 8 ~
of the Act.

The next point that remains to be considered is whether Rule
6A( 1) of Order VIII of the Code of Civil Procedure bars the filing of a
B counter-claim after the filing of a written statement. This point need
not detain us long, for Rule 6A(l) does not, on the face of it, bar the
filing of a counter-claim by the defendant after he had filed the written -.{
statement. \\!hat is laid down under Rule 6A(l) 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-
C claim is in the nature of a claim for damages or not. The High Court, in
our opinion, has misread and misunderstood the provision of Rule
6A(l) in holding that as the appellants had filed the counter-claim
after the filing of the written statement, the counter-claim was not
maintainable. The finding of the High Court does not get any support
from Rule 6A(l) of the Code of Civil Procedure. As the cause of
0 action for the counter-claim had arisen before the filing of the written
statement, the counter-claim was, therefore, quite maintainable.
Under Article 113 of the Limitation Act, 1963, the period of limitation
of three years from the date the right to sue accrues, has been provided
for any suit for which no period of limitation is provided elsewhere in
the Schedule. It is not disputed that a counter-claim, which is treated
E as a suit under section 3(2)(b) of the Limitation Act has been filed by
the appellants within three years from the date of accrual to them of
the right to sue. The learned District Judge and the High Court were _
wrong in dismissing the counter-claim.

For the reasons aforesaid, the appeal is allowed. The order of the
F learned District Judge and the judgment of the High Court are set
aside. The learned District Judge is directed to proceed with the hear-
ing of the suit and the counter-claim in accordance with law. The
appellants shall pay court fee on the counter-claim, if not already paid,
within such time as may be fixed by the learned District Judge.

A.P.J. Appeal allowed.
..+