G H ASHOK KUMAR KALRA versus WING CDR. SURENDRA AGNIHOTRI & ORS. on 19 November 2019

214

[2019] 17 S.C.R. 214

SUPREME COURT 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. SHANTANAGOUDARAND AJAY RASTOGI, JJ.]

Code of Civil Procedure, 1908 – Or. VIII, r. 6A – Filing ofcounter-claim by defendant after submitting written statement –CEmbargo on, if any – Respondent No.1 filed suit for specificperformance against the petitioner – Petitioner filed writtenstatement – Thereafter, filed counter-claim – Trial court rejectedthe objections on filing of the counter-claim after filing of thewritten statement and framing of issues – High Court quashed theDcounter-claim – Petitioner approached the Supreme Court –Reference order passed by two-Judge Bench seeking clarificationfrom larger bench as to the interpretation of Or. VIII, r.6A regardingthe filing of counter-claim by defendant in suit – Answering thereference, held: Per N.V. Ramana, Mohan M. Shantanagoudar andAjay Rastogi, JJ. To avoid multiplicity of proceedings, the counter-Eclaim by way of r.6A was inserted in the CPC by 1976 AmendmentAct – Or. VIII, r. 6A does not put an embargo on filing the counter-claim after filing the written statement, rather the restriction is onlywith respect to the accrual of the cause of action– However, thisdoes not give absolute right to the defendant to file the counter-Fclaim with substantive delay, even if the limitation periodprescribed has not elapsed – Court has to take into considerationthe outer limit for filing the counter-claim which is pegged till theissues are framed, after evaluating inclusive factors, which are onlyillustrative and not exhaustive, viz., period of delay; prescribedlimitation period for the cause of action pleaded; reason for theGdelay etc. – Per Mohan M. Shantanagoudar, J. (PartlySupplementing and Partly Dissenting) Court may exercise itsdiscretion and permit the filing of counter-claim after the writtenstatement, till the stage of framing of the issues of the trial –However, in exceptional circumstances, the subsequent filing ofHcounter-claim may be permitted till the stage of commencement of recording of the evidence on behalf of the plaintiff as there is nosignificant development in the legal proceedings during theintervening period between framing of issues and commencementof recording of evidence – Code of Civil Procedure (Amendment)Act of 1976 – Code of Civil Procedure (Amendment) Act, 2002 –Limitation Act, 1963 – s.3(2)(b)(ii).

Code of Civil Procedure, 1908 – Or. VIII – Scheme of –Held: Whole scheme of Or. VIII unequivocally points out at thelegislative intent to advance the cause of justice by placing embargoon the belated filing of written statement, set-off and counter-claim.

Code of Civil Procedure, 1908 – Filing of belated counter-claim – Factors to be considered – Discussed.

Jurisprudence – Procedural justice vis-a-vis substantivejustice – Balanced approach towards – Discussed – CivilProcedure Code, 1908 – Or. VIII, r. 6A – Limitation Act, 1963.

Code of Civil Procedure, 1908 – Or. VIII, rr. 6A, 9, 10 andOr. VI, r.17 – Power of Court under – Held: Per Mohan M.Shantanagoudar, J. (Supplementing) Conjoint and harmoniousreading of rr. 6A, 9 & 10 of Or. VIII and Or. VI, r. 17, CPC revealsthat the Court is vested with the discretion to allow the filing ofcounter-claim even after the filing of the written statement, as longas the same is within the limitation prescribed under the 1963 Act– Limitation Act, 1963.

Code of Civil Procedure, 1908 – Or. VIII, r. 6A, 6B – Pleaof respondent, relying on r.6B, that r.6A(1) requires that the causeof action for counter-claim should arise before the filing of thewritten statement – Held: Per Mohan M. Shantanagoudar, J.(Supplementing) Not agreed with, for two reasons- (i) It is possiblethat at the time of filing the written statement, the defendant isunaware of the facts giving rise to the cause of action for hiscounter-claim (ii) perusal of Or.VIII, r. 6B suggests that it is onlylimited to cases where the counter-claim is made along with thewritten statement – Provisions u/Or. VIII should not be read inisolation, but in a conjoint and harmonious manner – Rule 6Bcannot be read as limitation on the Court’s discretion to permit thefiling of belated counter-claim.

A

B

C

D

E

F

G

H

ACode 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 shouldbe 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.

BAnswering the Reference, the CourtHELD : Per N. V. RAMANA, MOHAN M.SHANTANAGOUDAR AND AJAY RASTOGI, JJ.

1.1 As per Order VIII Rule 6 CPC, the defendant can claimset-off of any ascertained sum of money legally recoverable byChim from the plaintiff, against the plaintiff’s demand, in a suit forrecovery of money. Whereas, Rule 6A deals with counter-claimby defendant, according to which a defendant in a suit may, inaddition 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 rightDor claim in respect of a cause of action accruing to the defendantagainst the plaintiff either before or after filing of the suit butbefore the defendant has delivered his defence or before thetime prescribed for delivering his defence has expired, whethersuch counter-claim is in the nature of a claim for damages or not.

The whole scheme of Order VIII CPC unequivocally points outEat the legislative intent to advance the cause of justice by placingembargo on the belated filing of written statement, set-off andcounter-claim. Rule 6A was introduced in the CPC by the Codeof Civil Procedure (Amendment) Act of 1976 (Act No.104 of1976), and before the amendment, except in money suits,Fcounter-claim or set-off could not be pleaded in other suits. Asper the recommendation of the Law Commission of India, toavoid multiplicity of proceedings, the counter-claim by way ofRule 6A was inserted in the Civil Procedure Code. The wholepurpose of the procedural law is to ensure that the legal processis made more effective in the process of delivering substantialGjustice. Particularly, the purpose of introducing Rule 6A in OrderVIII of the CPC is to avoid multiplicity of proceedings by drivingthe parties to file separate suit and see that the dispute betweenthe parties is decided finally. If the provision is interpreted in H

H

such a way, to allow delayed filling of the counter-claim, theprovision itself becomes redundant and the purpose for whichthe amendment is made will be defeated and ultimately it leadsto flagrant miscarriage of justice. At the same time, there cannotbe a rigid and hyper-technical approach that the provisionstipulates that the counter-claim has to be filed along with thewritten statement and beyond that, the Court has no power. TheCourts, taking into consideration the reasons stated in supportof the counter-claim, should adopt a balanced approach keepingin mind the object behind the amendment and to sub-serve theends of justice. There cannot be any hard and fast rule to saythat in a particular time the counter-claim has to be filed, bycurtailing the discretion conferred on the Courts. The trial courthas to exercise the discretion judiciously and come to a definiteconclusion that by allowing the counter-claim, no prejudice iscaused to the opposite party, process is not unduly delayed andthe same is in the best interest of justice and as per the objectssought to be achieved through the amendment. But however,the defendant cannot be permitted to file counter-claim after theissues are framed and after the suit has proceeded substantially.It would defeat the cause of justice and be detrimental to theprinciple of speedy justice as enshrined in the objects andreasons for the particular amendment to the CPC. [Paras 10, 12and 17] [227-D-F; 228-D-F; 230-D-H; 231-A-B]

Salem Advocate Bar Association, Tamil Nadu v. UnionOf India AIR 2005 SC 3353 ; [2005] 1 Suppl. SCR929 – relied on.

Jai Jai Ram Manohar Lal v. National Building MaterialSupply, Gurgaon (1969) 1 SCC 869 : [1970] 1 SCR22 ; Mahendra Kumar and Anr. v. State Of MadhyaPradesh and Ors. (1987) 3 SCC 265 : [1987] 3 SCR155 ; Jag Mohan Chawla And Another v. Dera RadhaSwami Satsang & Ors., (1996) 4 SCC 699 : [1996] 2Suppl. SCR 509 ; Shanti Rani Das Dewanjee (Smt.) v.Dinesh Chandra Day (Dead) by LRs. (1997) 8 SCC174 : [1997] 4 Suppl. SCR 177 ; Vijay PrakashJarath 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 AB

C

D

E

F

G

H

[2019] 17 S.C.R.

AChand Ardawatiya v. Anil Panjwani (2003) 7 SCC350 : [2003] 3 SCR 1149 – referred to.

1.2 Findings- Order VIII Rule 6A of the CPC does not putan embargo on filing the counter-claim after filing the writtenstatement, rather the restriction is only with respect to theBaccrual of the cause of action. Having said so, this does not giveabsolute right to the defendant to file the counter-claim withsubstantive delay, even if the limitation period prescribed hasnot elapsed. The court has to take into consideration the outerlimit for filing the counter-claim, which is pegged till the issuesare framed. The court in such cases have the discretion toCentertain filing of the counter-claim, after taking intoconsideration and evaluating inclusive factors provided belowwhich are only illustrative, though not exhaustive: (i) Period ofdelay; (ii) Prescribed limitation period for the cause of actionpleaded; (iii) Reason for the delay; (iv) Defendant’s assertionDof his right; (v) Similarity of cause of action between the mainsuit and the counter-claim; (vi) Cost of fresh litigation; (vii)Injustice and abuse of process; (viii) Prejudice to the oppositeparty; (ix) and facts and circumstances of each case; (x) In anycase, not after framing of the issues. [Paras 19, 20] [231-E-H;E232-A-D]Per MOHAN M. SHANTANAGOUDAR, J. (PartlySupplementing and Partly Dissenting)

1.1 A plain reading of Order VIII Rule 9 makes it clearthat the Court has the discretion to allow any subsequentFpleading upon such terms as it thinks fit. Such subsequentpleading or additional written statement may include a counter-claim. This is because Rule 9 does not create a bar on the natureof claims that can be raised as subsequent pleadings. As longas the Court considers that it would be proper to allow acounter-claim by way of a subsequent pleading, it is possible toGfile a counter-claim after filing the written statement. In additionto this, it is also possible to introduce a belated counter-claimby way of an amendment to the original written statement underOrder VI Rule 17, CPC. However, as is the case with Order VIIIRule 9, the filing of such a counter-claim through an amendedHwritten statement is subject to the leave of the Court, and not accorded to the defendant as a matter of right. The Court hasthe discretion to allow a counter-claim to be filed after the writtenstatement in exercise of its power under Order VIII Rule 9 andOrder VI Rule 17 of the CPC. Under Order VIII Rule 10, theCourt has the power to condone the delay in filing of a writtenstatement, if it deems it fit in the facts and circumstances of thecase. If it is so, there is no reason as to why the delay in filinga counter-claim cannot be condoned by the Court as well. Aconjoint and harmonious reading of Rules 6A, 9 and 10 of OrderVIII as well as Order VI Rule 17, CPC thus reveals that theCourt is vested with the discretion to allow the filing of a counter-claim even after the filing of the written statement, as long asthe same is within the limitation prescribed under the LimitationAct, 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 writtenstatement, the defendant is unaware of the facts giving rise tothe cause of action for his counter-claim. For instance, in a suitfor declaration of title brought by the plaintiff against his sister,the defendant may be unaware that the plaintiff has wrongfullydetained her belongings kept at the said property, at the timeof filing her written statement. In such a situation, even thoughthe cause of action for her counter-claim of wrongful detentionof belongings may have arisen before the filing of the writtenstatement, it may not have been possible for her to raise thesaid counter-claim. Similarly, limited access to justice, especiallyin rural areas, shaped by the socio-economic context of parties,may compel the filing of belated counter-claims. Second, a perusalof Order VIII Rule 6B suggests that it is only limited to caseswhere the counter-claim is made along with the writtenstatement. In instances where a belated counter-claim is raisedby way of an amendment to the written statement, or as asubsequent pleading, Rule 6B cannot be said to be applicable.This is because in any such case, if the Court relies on atechnical interpretation of Rule 6B to disallow the filing of abelated counter-claim, the defendant would still be free to file afresh suit for such a claim. He may, in such matters, after filingthe separate suit, request the Court to club the suits or to hearthem simultaneously. This may further delay the process of A

B

C

D

E

F

GH

Aadjudication and would certainly not help the plaintiff in the firstsuit, who may have opposed the filing of the belated counter-claim. Such multiplicity of proceedings goes against the objectwith which Rules 6A-6G were introduced to the CPC. Thus, theprovisions under Order VIII should not be read in isolation, butin a conjoint and harmonious manner, and Rule 6B cannot beBread as a limitation on the Court’s discretion to permit the filingof a belated counter-claim. Therefore, I do not find force in theargument 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.CFor instance, a set-off must necessarily be of the same natureas the claim of the plaintiff and arise out of the same transaction.These requirements do not hold for counter-claims, which maybe related to “any right or claim in respect of a cause of actionaccruing to the defendant against the plaintiff” as stated in OrderDVIII Rule 6A(1). Further, in case of set-offs, there is no provisionakin to Order VIII Rule 6A(4), which provides that a set-off mustbe treated as a plaint. Thus, it appears that the Legislature hasconsciously considered it fit to omit a specific time limit for filingof counter-claims in Rule 6A. In such a scenario, a limitation cannot be read into this Rule. Respondent relied on Order VIIIERule 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. Rule1A(2) itself provides instances where such documents are notin the possession of the defendant, by requiring him to specifythe person in whose possession the documents rest. Accordingly,FRule 1A(3) (as amended in 2002) also provides that thesedocuments may be produced later, with the leave of the Court.The discretion accorded in these provisions goes on to supportthe conclusion that it is possible to file a counter-claim even afterthe written statement, with the leave of the Court. ProceduralGrules should not be interpreted so as to defeat justice, ratherthan furthering it. When Courts set out to do justice, they shouldnot lose sight of the end goal amidst technicalities. In somecases, this means that rules that have traditionally been treatedas mandatory, may be moulded so that their object andsubstantive justice is not obstructed. Equity and justice shouldHbe 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 filingof a belated counter-claim up to a long period of time, shouldnot 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-claim after the written statement, the Court has the discretionto refuse such filing if it is done at a highly belated stage.However, to ensure speedy disposal of suits, propriety requiresthat such discretion should only be exercised till the framing ofissues for trial. Allowing counter-claims beyond this stage wouldnot only prolong the trial, but also prejudice the rights that mayget vested with the plaintiff over the course of time. At the sametime, in exceptional circumstances, to prevent multiplicity ofproceedings and a situation of effective re-trial, the Court mayentertain a counter-claim even after the framing of issues, solong as the Court has not started recording the evidence. Thisis because there is no significant development in the legalproceedings during the intervening period between framing ofissues and commencement of recording of evidence. There areseveral considerations that must be borne in mind while allowingthe filing of a belated counter-claim. First, the Court mustconsider that no injustice or irreparable loss is being caused tothe defendant due to a refusal to entertain the counter-claim, orto the plaintiff by allowing the same. Of course, as the defendantwould have the option to pursue his cause of action in a separatesuit, the question of prejudice to the defendant would ordinarilynot arise. Second, the interest of justice must be given utmostimportance and procedure should not outweigh substantivejustice. Third, the specific objectives of reducing multiplicity oflitigation and ensuring speedy trials underlying the provisionsfor counter-claims, must be accorded due consideration. [Paras23, 24] [245-D-H; 246-A-D]

4. It is not mandatory for a counter-claim to be filed alongwith the written statement. The Court, in its discretion, may allowa counter-claim to be filed after the filing of the writtenstatement. However, propriety requires that such discretionshould ordinarily be exercised to allow the filing of counter-claimtill the framing of issues for trial. To this extent, the conclusion A

B

C

D

E

F

G

H

Areached by the learned Brothers is concurred with. However,in exceptional circumstances, a counter-claim may be permittedto be filed after a written statement till the stage ofcommencement of recording of the evidence on behalf of theplaintiff. [Para 25] [246-E-G]

BRamesh Chand Ardawatiya v. Anil Panjwani (2003) 7SCC 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. DineshChandra Day (1997) 8 SCC 174 : [1997] 4 Suppl.SCR 177 ; Gayathri Women’s Welfare Association v.CGowramma (2011) 2 SCC 330 : [2011] 2 SCR47 ; Vijay Prakash Jarath v. Tej Prakash Jarath (2016)11 SCC 800 – affirmed.

Salem Advocate Bar Association, T.N. v. Union ofIndia (2005) 6 SCC 344 : [2005] 1 Suppl. SCR 929D– 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. StateEof Bihar (2006) 12 SCC 734 : [2006] 7 Suppl. SCR278 ; Bollepanda P. Poonacha v. K. M. Madapa,(2008) 13 SCC 179 : [2008] 4 SCR 1011 – referredto.

Case Law Reference

FIn the Judgment of N. V. Ramana, Mohan M. Shantanagoudarand Ajay Rastogi, JJ.

[2005] 1 Suppl. SCR 929

relied onPara 4

[1970] 1 SCR 22

referred toreferred to

Para 4

[1987] 3 SCR 155

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 toPara 15referred toPara 15

H[2003] 3 SCR 1149

A

In the Judgment of Mohan M. Shantanagoudar, J. (PartlySupplementing and Partly Dissenting)

CIVIL APPELLATE JURISDICTION : Special Leave Petition(Civil) No. 23599 of 2018.

D

From the Judgment and Order dated 01.05.2018 of the HighCourt of Judicature at Allahabad in Civil Revision No. 253 of 2009.

K. K. Tyagi, Sarvam Ritam Khare, Advs. for the Appellant.

Dinesh Dwivedi, Sr. Adv., Syed Hasan Isfahani, Krishnan Mishra,Yasharth Kant, Nishant Singh, Rohit Kumar Singh, Advs. for theRespondents.

E

The Judgments of the Court were delivered by

N. V. RAMANA, J.

F

1. Questions about procedural justice are remarkably persistentand usual in the life of Common Law Courts. However, achieving aperfect procedural system may be feasible or affordable, rather moremanageable standards of meaningful participation needs to be aspiredwhile balancing cost, time and accuracy at the same time.

G

2. The present reference placed before us arises out of the orderdated 10.09.2018 passed by a two-Judge Bench of this Court, whereinclarification has been sought as to the interpretation of Order VIII Rule6A of the Civil Procedure Code (hereinafter referred to as “the CPC”),regarding the filing of counter-claim by a defendant in a suit. Thereference order dated 10.09.2018 is extracted below:

H

A

“.........

The papers to be placed before the Hon’ble Chief Justiceof India for constitution of a three-Judge Benchto look intothe effect of our previous judgments as well as whether thelanguage of Order VIII Rule 6A of the Civil Procedure Codeis mandatory in nature.”

B

3. Before we proceed further, we need to allude to the brieffactual background necessary for the disposal of this reference. Adispute arose between the Petitioner (defendant no. 2) and RespondentCNo. 1 (plaintiff) concerning performance of agreement to sell dated20.11.1987 and 04.10.1989. Respondent No.1 (plaintiff) filed the suitfor specific performance against the petitioner (defendant no. 2) on02.05.2008. Petitioner (defendant No.2) herein filed a written statementon 2.12.2008 and counter-claim on 15.3.2009, in the same suit. By orderDdated 12.05.2009, the trial court rejected the objections, concerning filingof the counter-claim after filing of the written statement and framingof issues. Order dated 15.05.2009 was challenged before the HighCourt, in Civil Revision No. 253 of 2009, the High Court allowed thesame and quashed the counter-claim. Aggrieved by the aforesaid orderof the High Court, the petitioner (defendant No.2) herein approachedEthe Division Bench of this court, which has referred the matter to athree-Judge Bench.

4. The learned counsel appearing on behalf of the Petitionersubmitted that the intent behind Order VIII Rule 6A of the CPC is toprovide an enabling provision for the filing of counter-claim so as toFavoid multiplicity of proceedings, thereby saving the time of the Courtsand avoiding inconvenience to the parties. Therefore, no specificstatutory bar or embargo has been imposed upon the Court’s jurisdictionto entertain a counter-claim except the limitation under the said provisionwhich provides that the cause of action in the counter-claim must ariseGeither before or after the filing of the suit but before the defendant hasdelivered his defence. The learned counsel also submitted that ifpermitting the counter-claim would lead to protracting the trial and causedelay in deciding the suit, the Court would be justified in exercising itsdiscretion by not permitting the filing of the counter-claim. Relying onthe judgments of this Court in Salem Advocate Bar Association, TamilHNadu v. Union Of India, AIR 2005 SC 3353, and Jai Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon,(1969) 1 SCC 869, the learned counsel lastly submitted that rules ofprocedure must not be interpreted in a manner that ultimately resultsin failure of justice.

5. On the other hand, the learned Senior counsel for therespondent submitted that the language of the statute, and the schemeof the Order, indicates that the counter-claim has to be a part of thewritten statement. The learned senior counsel strengthened the abovesubmission by relying on the statutory requirement that the cause ofaction relating to a counter-claim must arise before the filing of thewritten statement, and submitted that the counter-claim must thereforeform a part of the written statement. The learned senior counsel alsorelied on the language of Order VIII Rule 6 of the CPC, which requiresa defendant’s claim to set-off to be a part of the written statement, tosuggest 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.

6. We have heard the learned counsel on either side at lengthand perused the material available on record. In the light of the referenceand the arguments advanced on behalf of the parties, the followingissues arise for consideration before this Court:

1) Whether Order VIII Rule 6A of the CPC mandates anembargo on filing the counter-claim after filing thewritten statement?

2) if the answer to the aforesaid question is in negative,then what are the restrictions on filing the counter-claimafter filing of the Written Statement?

7. At the outset, there is no gainsaying that the procedural justiceis imbibed to provide further impetus to the substantive justice. It is thisextended procedural fairness provided by the national courts, which addsto the legitimacy and commends support of general public. On the otherhand, we must be mindful of the legislative intention to provide forcertainty and clarity. In the name of substantive justice, providingunlimited and unrestricted rights in itself will be detrimental to certaintyand would lead to the state of lawlessness. In this regard, this Courtneeds to recognize and harmoniously stitch the two types of justice, soas to have an effective, accurate and participatory judicial system.

A

B

C

D

E

F

G

H

A8. Having observed on nuances of procedural justice, we needto turn our attention to the Order VIII of the CPC, which deals withwritten statement, set-off and counter-claim. Rules 1 to 5 of Order VIIIof the CPC deal with the written statement. This Order dealing withthe written statement was amended extensively by the Code of CivilProcedure (Amendment) Act, 2002 (Act No. 22 of 2002) (hereinafterBreferred to as “Act 22 of 2002”), whereby the defendant shall, withinthirty days from the date of service of summons on him, present awritten statement of his defence. In case he fails to file the writtenstatement within the said period of thirty days, he shall be allowed tofile the same on such other day, as may be specified by the Court, forCreasons to be recorded in writing, but which shall not be later than ninetydays 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 toset-off against the plaintiff’s demand any ascertained sum of moneylegally recoverable by him from the plaintiff, not exceeding thepecuniary limits of the jurisdiction of the Court, and both parties fill theEsame character as they fill in the plaintiff’s suit, the defendant may, atthe first hearing of the suit, but not afterwards unless permitted by theCourt, present a written statement containing the particulars of the debtsought to be set-off.

(2) Effect of set-off: - The written statement shall have the sameeffect as a plaint in a cross-suit so as to enable the Court to pronounceFa 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 pleaderin respect of the costs payable to him under the decree.

(3) The rules relating to a written statement by a defendant applyto a written statement in answer to a claim of set-off.GOrder VIII Rule 6A, which pertains to the counter-claim, readsas under:

Order VIII Rule 6A:

6A. Counter-claim by Defendant-(1) A defendant in a suit may,Hin 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 inrespect of a cause of action accruing to the defendant against theplaintiff either before or after the filing of the suit, but before thedefendant has delivered his defence or before the time limited fordelivering his defence has expired, whether such counter-claim is inthe nature of a claim for damages or not:

Provided that such counter-claim shall not exceed the pecuniarylimits 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 samesuit, both on the original claim and on the counter-claim.

(3) The plaintiff shall be at liberty to file a written statement inanswer to the counter-claim of the defendant within such period as maybe fixed by the Court.

(4) The counter-claim shall be treated as a plaint and governedby the rules applicable to plaints.

10. Thus, as per Order VIII Rule 6 CPC, the defendant can claimset-off of any ascertained sum of money legally recoverable by himfrom the plaintiff, against the plaintiff’s demand, in a suit for recoveryof money. Whereas, Rule 6A deals with counter-claim by defendant,according to which a defendant in a suit may, in addition to his right ofpleading a set-off under Rule 6, set up, by way of counter-claim againstthe claim of the plaintiff, any right or claim in respect of a cause ofaction accruing to the defendant against the plaintiff either before orafter filing of the suit but before the defendant has delivered his defenceor before the time prescribed for delivering his defence has expired,whether such counter-claim is in the nature of a claim for damages ornot.

11. The counter-claim shall be treated as a plaint and governedby the rules applicable to plaints. Order VIII Rule 6-G says that therules relating to a written statement by a defendant shall apply to awritten statement filed in answer to a counter-claim. As per Rule 8,any ground of defence which has arisen after the institution of the suitor 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 presentationof pleadings subsequent to the written statement of a defendant other A

B

C

D

EF

G

H

Athan by way of defence to set-off or counter-claim, except by the leaveof the Court, and upon such terms as the Court thinks fit; and theprovision further stipulates that the Court may at any time require awritten statement or additional written statement from any of the partiesand fix a time of not more than thirty days for presenting the same.This amendment with respect to subsequent pleadings was made to theBCPC by way of Act 22 of 2002. At the cost of repetition, we may notethe 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, whichCmay accrue before or even after filing the suit.

iii. If the cause of action in the counter-claim relates to oneaccrued after filing of suit, it should be one accruingbefore filing of the written statement or the time givenfor the same.

DWhen we look at the whole scheme of Order VIII CPC, itunequivocally points out at the legislative intent to advance the causeof 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 introducedEin the CPC by the Code of Civil Procedure (Amendment) Act of 1976(Act No.104 of 1976), and before the amendment, except in moneysuits, counter-claim or set-off could not be pleaded in other suits. Asper the recommendation of the Law Commission of India, to avoidmultiplicity of proceedings, the counter-claim by way of Rule 6A wasinserted in the Civil Procedure Code. The statement of objects andFreasons 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 theaccepted principles of natural justice.

2) Every effort should be made to expedite the disposal ofGcivil suits and proceedings, so that justice may not bedelayed;

3) The procedure should not be complicated and should,to the utmost extent possible, ensure fair deal to thepoorer sections of the community who do not have theHmeans to engage a pleader to defend their cases.

13. Before we proceed further, we deem it appropriate to notethat any provision under the procedural law should not be construed insuch a way that it would leave the Court helpless [refer to SalemAdvocate Bar Association Case (supra)]. In fact a wide discretionhas been given to the civil court regarding the procedural elements ofa suit. As held by this Court, procedural law is not to be a tyrant buta servant, not an obstruction but an aid to justice.

14. Now we need to observe certain earlier judgments of thisCourt which have dealt with Order VIII Rule 6A. In Mahendra Kumarand Anr. v. State Of Madhya Pradesh and Ors., (1987) 3 SCC 265[hereinafter referred to as ‘Mahendra Kumar Case’], where theappeals were preferred against concurrent findings of the Courts belowin dismissing the counter-claim as barred under Section 14 of the IndianTreasure Trove Act, 1878, this Court, while considering the scope ofRule 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 defendantafter he had filed the written statement. As the cause of action for thecounter-claim had arisen before the filing of the written statement, thecounter-claim was held to be maintainable. This Court further observedthat under Article 113 of the Limitation Act, 1963, the period of limitationis three years from the date of the right to sue accrues, when the periodof limitation is not provided elsewhere in the Schedule. As the counter-claim was filed within three years from the date of accrual of the rightto sue, this Court held that the learned District Judge and the High Courtwere wrong in dismissing the counter-claim. The issue concerningapplicability of limitation period for filing the counter-claim was alsodiscussed in Jag Mohan Chawla And Another v. Dera Radha SwamiSatsang & Ors., (1996) 4 SCC 699 and Shanti Rani Das Dewanjee(Smt.) v. Dinesh Chandra Day (Dead) by LRs., (1997) 8 SCC 174.

15. In the case of Vijay Prakash Jarath v. Tej Prakash Jarath,(2016) 11 SCC 800, this Court directed the Court below to entertainthe counter-claim which was filed 2½ years after framing of issues, asthe evidence was still pending and this Court felt that no prejudice wouldbe caused to the plaintiff. However, in the case of Bollepanda P.Poonacha & Anr. v. K.M. Madapa, (2008) 13 SCC 179 [hereinafterreferred as ‘Bollepanda Poonacha Case’], this Court while referringto Ramesh Chand Ardawatiya v. Anil Panjwani, (2003) 7 SCC 350,discouraged the belated filing of counter-claims. Further, the Courtelucidated on the serious harm caused by allowing such delayed filing.

AB

C

D

E

F

G

H

AIn any case, in Bollepanda Poonacha Case (supra), the Court couldnot expound any further as the counter-claim was rejected on the basisthat the cause of action had arisen after the filing of the writtenstatement.

16. The time limitation for filing of the counter-claim, is notBexplicitly provided by the Legislature, rather only limitation as to theaccrual of the cause of action is provided. As noted in the aboveprecedents, further complications stem from the fact that there is apossibility of amending the written statement. However, we can statethat the right to file a counter-claim in a suit is explicitly limited by theembargo provided for the accrual of the cause of action under OrderCVIII Rule 6A. Having said so, this does not mean that counter-claimcan 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 compliantwith the limitation provided under the Limitation Act, 1963 as the time-barred suits cannot be entertained under the guise of the counter-claim Djust because of the fact that the cause of action arose as per theparameters of Order VIII Rule 6A.

17. As discussed by us in the preceding paragraphs, the wholepurpose of the procedural law is to ensure that the legal process is mademore effective in the process of delivering substantial justice.EParticularly, the purpose of introducing Rule 6A in Order VIII of theCPC is to avoid multiplicity of proceedings by driving the parties to fileseparate suit and see that the dispute between the parties is decidedfinally. If the provision is interpreted in such a way, to allow delayedfilling of the counter-claim, the provision itself becomes redundant andthe purpose for which the amendment is made will be defeated andFultimately it leads to flagrant miscarriage of justice. At the same time,there cannot be a rigid and hyper-technical approach that the provisionstipulates that the counter-claim has to be filed along with the writtenstatement and beyond that, the Court has no power. The Courts, takinginto consideration the reasons stated in support of the counter-claim,should adopt a balanced approach keeping in mind the object behindGthe amendment and to sub-serve the ends of justice. There cannot beany hard and fast rule to say that in a particular time the counter-claimhas to be filed, by curtailing the discretion conferred on the Courts. Thetrial court has to exercise the discretion judiciously and come to a definiteconclusion that by allowing the counter-claim, no prejudice is causedHto the opposite party, process is not unduly delayed and the same is in the best interest of justice and as per the objects sought to be achievedthrough the amendment. But however, we are of the considered opinionthat the defendant cannot be permitted to file counter-claim after theissues are framed and after the suit has proceeded substantially. It woulddefeat the cause of justice and be detrimental to the principle of speedyjustice as enshrined in the objects and reasons for the particularamendment to the CPC.

18. In this regard having clarified the law, we may note that theMahendra Kumar Case (supra) needs to be understood and restrictedto the facts of that case. We may note that even if a counter-claim isfiled within the limitation period, the trial court has to exercise itsdiscretion to balance between the right to speedy trial and right to filecounter-claim, so that the substantive justice is not defeated. Thediscretion vested with the trial court to ascertain the maintainability ofthe counter-claim is limited by various considerations based on factsand circumstances of each case. We may point out that there cannotbe a straitjacket formula, rather there are numerous factors which needsto be taken into consideration before admitting counter-claim.

19. We may note that any contrary interpretation would lead tounnecessary curtailment of the right of a defendant to file counter-claim.This Court needs to recognize the practical difficulties faced by thelitigants across the country. Attaining the laudable goal of speedy justiceitself cannot be the only end, rather effective justice wherein adequateopportunity 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 CPCdoes not put an embargo on filing the counter-claim after filing thewritten statement, rather the restriction is only with respect to theaccrual of the cause of action. Having said so, this does not giveabsolute right to the defendant to file the counter-claim with substantivedelay, even if the limitation period prescribed has not elapsed. The courthas 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 havethe discretion to entertain filing of the counter-claim, after taking intoconsideration and evaluating inclusive factors provided below which areonly illustrative, though not exhaustive:

i. Period of delay.

AB

CD

E

F

G

H

Aii. Prescribed limitation period for the cause of actionpleaded.

iii. Reason for the delay.

iv. Defendant’s assertion of his right.

v. Similarity of cause of action between the main suit andthe counter-claim.

B

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 SpecialLeave Petition may be placed before an appropriate Bench afterDobtaining orders from the Hon’ble Chief Justice of India, for consideringthe case on merits.

MOHAN M. SHANTANAGOUDAR, J.

1. I have read the opinion given in this reference by my learnedBrothers. I agree with their conclusion that a Court may exercise itsEdiscretion and permit the filing of a counter-claim after the writtenstatement, till the stage of framing of the issues of the trial. However,in addition to this, I find that in exceptional circumstances, thesubsequent filing of a counter-claim may be permitted till the stage ofcommencement of recording of the evidence on behalf of the plaintiff.FI deem it fit to state the reasons for arriving at this conclusion throughthis opinion.

2. This reference arises out of the order of this Court dated10.09.2018 in SLP (C) No. 23599/2018 in Ashok Kumar Kalra v. WingCDR Surendra Agnihotri & Ors., which states as follows:

G“The papers to be placed before the Hon’ble Chief Justice ofIndia for constitution of a three-judge Bench to look into the effectof our previous judgments as well as whether the language ofOrder VIII Rule 6A of the Code of Civil Procedure is mandatoryin nature.”

H

Essentially, in light of the previous judgments of this Court, thequestion 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 VIIIRule 6A of the Code of Civil Procedure, 1908 [hereinafter “CPC”]and whether a counter-claim must necessarily be filed along with thewritten statement. Since the arguments have been elaborated upon bymy learned Brother Judge, they are not reproduced herein for the sakeof brevity.

4. To fully understand the expanse of the legal questions in thiscase, it is essential to appreciate the context in which the rules relatingto counter-claims were introduced in the CPC. The originally enactedCPC 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 its27[th] and 54[th] Reports, had recommended that express provisions oncounter-claims should be included in the CPC to avoid multipleproceedings and to dispel ambiguity on whether counter-claims couldbe entertained at all. These recommendations were implementedthrough the Code of Civil Procedure (Amendment) Act, 1976, whichintroduced the following rules to Order VIII of the CPC:

“Rule 6A. Counter-claim by defendant.—

(1) A defendant in a suit may, in addition to his right ofpleading a set-off under rule 6, set up, by way ofcounter-claim against the claim of the plaintiff, any rightor claim in respect of a cause of action accruing to thedefendant against the plaintiff either before or after thefiling of the suit but before the defendant has deliveredhis defence or before the time limited for delivering hisdefence has expired, whether such counter-claim is inthe nature of a claim for damages or not:

Provided that such counter-claim shall not exceed thepecuniary limits of the jurisdiction of the Court.

(2) Such counter-claim shall have the same effect as across-suit so as to enable the Court to pronounce a finaljudgment in the same suit, both on the original claim andon the counter-claim.

A

B

C

D

E

F

G

H

(3) The plaintiff shall be at liberty to file a written statementin answer to the counter-claim of the defendant withinsuch period as may be fixed by the Court.

A

(4) The counter-claim shall be treated as a plaint andgoverned by the rules applicable to plaints.

B

6B. Counter-claim to be stated.—Where any defendant seeksto rely upon any ground as supporting a right of counter-claim,he shall, in his written statement, state specifically that he doesso by way of counter-claim.

6C. Exclusion of counter-claim.—Where a defendant sets upa counter-claim and the plaintiff contends that the claim therebyraised ought not to be disposed of by way of counter-claim butin an independent suit, the plaintiff may, at any time before issuesare settled in relation to the counter-claim, apply to the Courtfor an order that such counter-claim may be excluded, and theCourt may, on the hearing of such application make such orderas it thinks fit.

C

D

6D. Effect of discontinuance of suit.—If in any case in whichthe defendant sets up a counter-claim, the suit of the plaintiff isstayed, discontinued or dismissed, the counter-claim maynevertheless be proceeded with.

E

6E. Default of plaintiff to reply to counter-claim.—If theplaintiff makes default in putting in a reply to the counter-claimmade by the defendant, the Court may pronounce judgmentagainst the plaintiff in relation to the counter-claim made againsthim, or make such order in relation to the counter-claim as itthinks fit.

F

6F. Relief to defendant where counter-claim succeeds.—Where in any suit a set-off or counter-claim is established as adefence against the plaintiff’s claim, and any balance is founddue to the plaintiff or the defendant, as the case may be, theCourt may give judgment to the party entitled to such balance.

G

6G. Rules relating to written statement to apply—The rulesrelating to a written statement by a defendant shall apply to awritten statement filed in answer to a counter-claim.”

5. For the first time, through the introduction of Rules 6A-6G toHOrder VIII, an explicit right of filing a counter-claim was accorded to the defendant, and rules governing the same were laid down. In thisscheme, Rule 6A(1) is the cornerstone provision. It specifically grantsthe right of filing a counter-claim. In addition to this, it also places acategorical 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 actionpertaining to the counter-claim must arise either before or after the filingof the suit, but before the defendant has delivered his defence (i.e.before the filing of the written statement), or before the expiry of thetime period for delivering such defence.

Further, under Rule 6A(2), a counter-claim is stated to have thesame effect as the plaint in a cross-suit, so as to enable the Court topronounce 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 beencarefully designed to meet the purpose of avoiding multiplicity ofproceedings.

6. It is clear that Rule 6A(1) only places a limitation on the timewithin which the cause of action for a counter-claim must arise.Besides this limitation, there is no explicit guidance in Rule 6A(1) as tothe time within which the counter-claim itself must be filed. In thisrespect, Rule 6A(4) provides that a counter-claim is governed by therules applicable to plaints. It is well-established that a plaint must bepresented within the period prescribed under the Limitation Act, 1963[hereinafter “the Limitation Act”]. For counter-claims as well, theperiod within which they must be filed can be inferred from Section3(2)(b)(ii) of the Limitation Act, 1963, which states thus:

“(2) For the purposes of this Act,—

(b) any claim by way of a set off or a counter claim, shall betreated as a separate suitand shall be deemed to have beeninstituted—

(ii) in the case of a counter claim, on the date on which thecounter claim is made in court;”

This provision mandates that in order to determine the limitationperiod applicable to a counter-claim, it must be treated as a separatesuit, which is deemed to have been instituted on the date on which it ismade in Court. Thus, evidently, in consonance with the provisions of A

B

C

D

E

F

G

H

AOrder VIII Rule 6A(4), the Limitation Act also treats a counter-claimlike a plaint. This means that much like a plaint, the limitation for filinga counter-claim also depends on the nature of the claim and isaccordingly governed by the period of limitation stipulated in theLimitation Act.

B7. From the foregoing discussion, it is clear that a counter-claimcan be filed if two conditions are met: first, its cause of action complieswith Order VIII Rule 6A(1); and second, it is filed within the periodspecified under the Limitation Act. Clearly, by itself, Rule 6A does notspecifically require that a counter-claim has to be filed along with thewritten statement. In the absence of a particular mandate under thisCRule, it is necessary to look to other provisions of the CPC to determinewhether a counter-claim can be filed after a written statement.

8. It would be appropriate to begin with a reference to OrderVIII Rule 9, which states thus:

“9. Subsequent pleadings.—No pleading subsequent to theDwritten statement of a defendant other than by way of defenceto set off or counter-claim shall be presented except by the leaveof the Court and upon such terms as the Court thinks fit; but theCourt may at any time require a written statement or additionalwritten statement from any of the partiesand fix a time of notEmore than thirty days for presenting the same.”

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 theleave of the Court. However, any other pleading sought to be filed afterFthe written statement requires the leave of the Court. The Rule alsovests the Court with a discretion to allow filing of a written statementor additional written statement within a period not exceeding thirty days.

A plain reading of Order VIII Rule 9 makes it clear that the Courthas the discretion to allow any subsequent pleading upon such termsGas it thinks fit. It is important to appreciate here that such subsequentpleading or additional written statement may include a counter-claim.This is because Rule 9 does not create a bar on the nature of claimsthat can be raised as subsequent pleadings. As long as the Courtconsiders that it would be proper to allow a counter-claim by way of asubsequent pleading, it is possible to file a counter-claim after filing theHwritten 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 underOrder VI Rule 17, CPC. However, as is the case with Order VIII Rule9, the filing of such a counter-claim through an amended writtenstatement is subject to the leave of the Court, and not accorded to thedefendant as a matter of right.

9. In this regard, it would be relevant to note the observationsof 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 104of 1976, we are of the opinion, that there are three modes ofpleading or setting up a counter-claim in a civil suit. Firstly, thewritten statement filed under Rule 1 may itself contain a counter-claim which in the light of Rule 1 read with Rule 6-A would bea counter-claim against the claim of the plaintiff preferred inexercise of legal right conferred by Rule 6-A. Secondly, acounter-claim may be preferred by way of amendmentincorporated subject to the leave of the court in a written-statement already filed. Thirdly, a counterclaim may be filed byway of a subsequent pleading under Rule 9. In the latter twocases the counter-claim though referable to Rule 6-A cannot bebrought on record as of right but shall be governed by thediscretion vesting in the court, either under Order 6 Rule 17 CPCif sought to be introduced by way of amendment, or, subject toexercise of discretion conferred on the court under Order 8 Rule9 CPC if sought to be placed on record by way of subsequentpleading.”

I fully agree with this proposition, and affirm on the basis of theforegoing discussion that the Court has the discretion to allow a counter-claim to be filed after the written statement in exercise of its powerunder Order VIII Rule 9 and Order VI Rule 17 of the CPC.

10. It can also be gleaned from Order VIII Rule 10 that it ispermissible to file a belated counter-claim under the scheme of OrderVIII, CPC:

“10. Procedure when party fails to present writtenstatement called for by Court.—Where any party from whom A

B

C

D

E

F

G

H

Aa written statement is required under rule 1 or rule 9 fails topresent the same within the time permitted or fixed by the Court,as the case may be, the Court shall pronounce judgment againsthim, or make such order in relation to the suit as it thinks fit andon the pronouncement of such judgment a decree shall be drawnup.”

B

Under this Rule, the Court is afforded with the discretion to passany order that it deems fit in the event that a written statement is notfiled within the prescribed statutory limit. To determine whether thisCdiscretion extends to allowing the filing of a belated counter-claim aswell, it would be useful to appreciate the scope of the discretionaccorded 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 VIIIDRule 1, relied on the broad discretionary power under Order VIII Rule10, and observed as follows:

“21. In construing this provision, support can also be had fromOrder 8 Rule 10 which provides that where any party fromwhom a written statement is required under Rule 1 or Rule 9,Efails to present the same within the time permitted or fixed bythe court, the court shall pronounce judgment against him, or makesuch other order in relation to the suit as it thinks fit... In construingthe provision of Order 8 Rule 1 and Rule 10, the doctrine ofharmonious construction is required to be applied. The effectwould be that under Rule 10 Order 8, the court in its discretionFwould have the power to allow the defendant to file writtenstatement even after expiry of the period of 90 days provided inOrder 8 Rule 1. There is no restriction in Order 8 Rule 10 thatafter expiry of ninety days, further time cannot be granted. Thecourt has wide power to “make such order in relation to the suitGas it thinks fit”. Clearly, therefore, the provision of Order 8 Rule1 providing for the upper limit of 90 days to file written statementis directory.”

Thus, under Order VIII Rule 10, the Court has the power toHcondone the delay in filing of a written statement, if it deems it fit in the facts and circumstances of the case. If it is so, there is no reasonas to why the delay in filing a counter-claim cannot be condoned bythe Court as well.

11. A conjoint and harmonious reading of Rules 6A, 9 and 10 ofOrder VIII as well as Order VI Rule 17, CPC thus reveals that theCourt is vested with the discretion to allow the filing of a counter-claimeven after the filing of the written statement, as long as the same iswithin the limitation prescribed under the Limitation Act, 1963. In thisregard, I agree with the propositions laid down in the decisionsdiscussed below.

In Mahendra Kumar v. State of Madhya Pradesh, (1987) 3SCC 265, it was held that:

“15. The next point that remains to be considered is whether Rule6-A(1) of Order 8 of the Code of Civil Procedure bars the filingof a counter-claim after the filing of a written statement. Thispoint need not detain us long, for Rule 6-A(1) does not, on the-face of it, bar the filing of a counterclaim by the defendant afterhe had filed the written statement. What is laid down under Rule6-A(1) is that a counter-claim can be filed, provided the causeof action had accrued to the defendant before the defendant haddelivered his defence or before the time limited for delivering hisdefence has expired, whether such counter-claim is in the natureof a claim for damages or not. The High Court, in our opinion,has misread and misunderstood the provision of Rule 6-A(1) inholding that as the appellants had filed the counter-claim afterthe filing of the written statement, the counter-claim was notmaintainable…Under Article 113 of the Limitation Act, 1963, theperiod of limitation of three years from the date the right to sueaccrues, has been provided for any suit for which no period oflimitation is provided elsewhere in the Schedule. It is not disputedthat a counter-claim, which is treated as a suit under Section3(2)(b) of the Limitation Act has been filed by the appellantswithin three years from the date of accrual to them of the rightto sue.”

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 referableto the date of accrual of the cause of action:

A

B

C

D

EFG

H

A

A“2. In our view, the impugned decision does not warrantinterference. Such question was specifically raised before thisCourt 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-claimunder Order VIII Rule 6-A of the Code of Civil Procedure isreferable to the date of accrual of the cause of action. If theBcause of action had arisen before or after the filing of the suit,and such cause of action continued up to the date of filing writtenstatement or extended date of filing written statement, suchcounter-claim can be filed even after filing the written statement.The said Civil Case No. 248 of 1982, in which the applicationCunder Order VIII Rule 6-A has been filed by the defendant-respondents was instituted on 15-7-1982 and the application underOrder VIII Rule 6-A was presented on 22-6-1985. It cannot beheld that the cause of action for the suit or counter-claim wasex facie barred by limitation under the Limitation Act”

D

I am unable to persuade myself to arrive at a different conclusionthan the one found in the aforementioned judgments.

12. It was argued by Counsel for the Respondent that Order VIIIRule 6A(1) requires that the cause of action for a counter-claim shouldEarise before the filing of the written statement, and hence it is logicalthat the counter-claim, or the grounds upon which it is based, shouldalso find a mention in the written statement. To support this, he reliedon Order VIII Rule 6B, which states that a defendant seeking to relyupon any ground in support of his right of counter-claim, shall specificallyFstate 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 possiblethat at the time of filing the written statement, the defendant is unawareof the facts giving rise to the cause of action for his counter-claim.GFor instance, in a suit for declaration of title brought by the plaintiffagainst his sister, the defendant may be unaware that the plaintiff haswrongfully detained her belongings kept at the said property, at the timeof filing her written statement. In such a situation, even though the causeof action for her counter-claim of wrongful detention of belongings mayhave arisen before the filing of the written statement, it may not haveHbeen possible for her to raise the said counter-claim. Similarly, limited access to justice, especially in rural areas, shaped by the socio-economiccontext of parties, may compel the filing of belated counter-claims.

Second, a perusal of Order VIII Rule 6B suggests that it is onlylimited to cases where the counter-claim is made along with the writtenstatement. In instances where a belated counter-claim is raised by wayof an amendment to the written statement, or as a subsequent pleading,Rule 6B cannot be said to be applicable. This is because in any suchcase, if the Court relies on a technical interpretation of Rule 6B todisallow the filing of a belated counter-claim, the defendant would stillbe 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 tohear them simultaneously. This may further delay the process ofadjudication and would certainly not help the plaintiff in the first suit,who may have opposed the filing of the belated counter-claim. Suchmultiplicity of proceedings goes against the object with which Rules 6A-6G were introduced to the CPC. Thus, the provisions under Order VIIIshould not be read in isolation, but in a conjoint and harmonious manner,and Rule 6B cannot be read as a limitation on the Court’s discretion topermit the filing of a belated counter-claim. Therefore, I do not findforce in the argument raised by Counsel for Respondent.

13. Further, the contention that the limitation on filing of set-offsunder Order VIII Rule 6 should be read into Rule 6A(1) is untenable.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 theplaintiff and arise out of the same transaction. These requirements donot hold for counter-claims, which may be related to “any right or claimin respect of a cause of action accruing to the defendant againstthe plaintiff” as stated in Order VIII Rule 6A(1). Further, in case ofset-offs, there is no provision akin to Order VIII Rule 6A(4), whichprovides that a set-off must be treated as a plaint. Thus, it appears thatthe Legislature has consciously considered it fit to omit a specific timelimit for filing of counter-claims in Rule 6A. In such a scenario, alimitation cannot be read into this Rule.

14. Lastly, as regards the Respondent’s reliance on Order VIIIRule 1A, which requires the documents in support of a counter-claimto be presented along with the written statement itself, I am of the viewthat this requirement should not be read as being mandatory. Rule 1A(2)itself provides instances where such documents are not in the possession A

B

CD

E

F

G

H

Aof the defendant, by requiring him to specify the person in whosepossession the documents rest. Accordingly, Rule 1A(3) (as amendedin 2002) also provides that these documents may be produced later, withthe leave of the Court. The discretion accorded in these provisions goeson to support the conclusion that it is possible to file a counter-claimeven after the written statement, with the leave of the Court.B

15. Finally, then, the scope of discretion vested with the Courtunder Order VI Rule 17 and Order VIII Rule 9 to allow for belatedcounter-claims remains to be examined. It must be determined when itmay be proper for the Court to refuse a belated counter-claim, in spiteof it being permissible within the scheme of Order VIII Rule 6A andCthe Limitation Act, 1963.

16. In several cases, it is possible that the period of limitationfor filing of counter-claims may extend up to a long period of time andprolong the trial. For instance, in a suit for declaration of title, thedefendant may bring a counter-claim for possession of the immovableDproperty based on previous possession. In terms of Order VIII Rule6A, such a claim would be admissible as long as the dispossession hadoccurred before the filing of the written statement, or before the expiryof the time provided for filing of the written statement. However, asper the Limitation Act, such a claim would be valid even if it wereEbrought within twelve years from the date of the defendant’sdispossession.

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. AllowingFa counter-claim to be filed at this stage would effectively result in are-trial of the suit, since the Court would have to frame new issues,both parties would have to lead evidence, and only then would thejudgment be pronounced. If this is permitted, the very purpose ofallowing counter-claims, i.e. avoiding multiplicity of litigation, would befrustrated.G

17. It is well-settled that procedural rules should not beinterpreted so as to defeat justice, rather than furthering it. This isbecause procedural law is not meant to serve as a tyrant against justice,but to act as a lubricant in its administration. Thus, when Courts setout to do justice, they should not lose sight of the end goal amidstHtechnicalities. In some cases, this means that rules that have traditionally been treated as mandatory, may be moulded so that their object andsubstantive justice is not obstructed. It would be apposite to rememberthat equity and justice should be the foremost considerations whileconstruing procedural rules, without nullifying the object of theLegislature in totality. Thus, rules under the Limitation Act which mayallow for filing of a belated counter-claim up to a long period of time,should not be used to defeat the ends of justice.

18. Keeping this in mind, in Ramesh Chand Ardawatiya(supra), this Court considered the scope of discretion in allowing forbelated counter-claims. It is useful to refer to the observations madeby the Court in the context of Order VIII Rule 6A (as it was in 1976):

“28. …The purpose of the provision enabling filing of a counter-claim is to avoid multiplicity of judicial proceedings and save uponthe court’s time as also to exclude the inconvenience to the partiesby enabling claims and counter-claims, that is, all disputesbetween the same parties being decided in the course of the sameproceedings. If the consequence of permitting a counter-claimeither by way of amendment or by way of subsequent pleadingwould be prolonging of the trial, complicating the otherwisesmooth flow of proceedings or causing a delay in the progressof the suit by forcing a retreat on the steps already taken by thecourt, the court would be justified in exercising its discretion notin favour of permitting a belated counter-claim.The framers ofthe law never intended the pleading by way of counter-claimbeing utilized as an instrument for forcing upon a reopening ofthe trial or pushing back the progress of proceeding. Generally-speaking, a counterclaim not contained in the original writtenstatement may be refused to be taken on record if the issueshave already been framed and the case set down for trial, andmore so when the trial has already commenced… A refusal onthe part of the court to entertain a belated counter-claim maynot prejudice the defendant because in spite of the counter-claimhaving been refused to be entertained he is always at liberty tofile his own suit based on the cause of action for counter-claim.”

To ensure that the objective of introducing the statutoryamendments with respect to counter-claims was not defeated, it wasrightly held that a belated counter-claim raised by way of an amendment AB

C

D

E

FG

H

Ato the written statement (under Order VI Rule 17) or as a subsequentpleading (under Order VIII Rule 9) should not be allowed after theframing 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-Bclaims:

“18. … A counterclaim, no doubt, could be filed even after thewritten statement is filed, but that does not mean that acounterclaim can be raised after issues are framed and theevidence is closed.Therefore, the entertaining of the so-calledCcounterclaim of Defendants 3 to 17 by the trial court, after theframing of issues for trial, was clearly illegal and withoutjurisdiction. On that short ground the so-called counterclaim, filedby Defendants 3 to 17 has to be held to be not maintainable.”

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 mustnecessarily be filed before the issues are framed and the evidence isclosed. In fact, since the counter-claim in the said matter was filed atthe stage where the judgment was reserved, the Court went as far asEsaying 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 acknowledgedthat belated counter-claims were to be discouraged, and called uponthe Court to consider questions of serious injustice and irreparable losswhile permitting any such claim. However, in Bollepanda (supra), theCourt did not have an occasion to expound further on this proposition,as the counter-claim had been rejected on the basis that its cause ofaction had arisen after the filing of the written statement.

F

G

F

G

21. It was in Gayathri Women’s Welfare Association v.Gowramma, (2011) 2 SCC 330, that this Court once again had theoccasion 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 Courtwas considering the effect of an amendment to an existing counter-Hclaim. While the Trial Court had refused to allow such an amendment, the High Court had granted the same. Reiterating the concerns notedin Ramesh Chand Ardawatiya (supra), this Court held as follows:

“44. The matter herein symbolises the concern highlighted by thisCourt in Ramesh Chand [(2003) 7 SCC 350]. Permitting acounterclaim at this stage would be to reopen a decree whichhas been granted in favour of the appellants by the trial court.The respondents have failed to establish any factual or legal basisfor modification/nullifying the decree of the trial court.”

The Court also relied on Rohit Singh (supra) and observed thata counter-claim cannot be filed after the framing of issues.

22. In Vijay Prakash Jarath v. Tej Prakash Jarath, (2016) 11SCC 800, this Court further refined the limitation in Rohit Singh (supra)that counter-claims cannot be raised after the issues are framed andthe evidence is closed. In the said case, even though the issues hadbeen framed, and the case was in the early stages of recording of theplaintiff’s evidence, a counter-claim filed at that point was allowed, asno prejudice was caused to the plaintiff.

23. The above discussion lends support to the conclusion thateven though Rule 6A permits the filing of a counter-claim after thewritten statement, the Court has the discretion to refuse such filing if itis done at a highly belated stage. However, in my considered opinion,to ensure speedy disposal of suits, propriety requires that such discretionshould only be exercised till the framing of issues for trial. Allowingcounter-claims beyond this stage would not only prolong the trial, butalso prejudice the rights that may get vested with the plaintiff over thecourse of time.

At the same time, in exceptional circumstances, to preventmultiplicity of proceedings and a situation of effective re-trial, the Courtmay entertain a counter-claim even after the framing of issues, so longas the Court has not started recording the evidence. This is becausethere is no significant development in the legal proceedings during theintervening period between framing of issues and commencement ofrecording of evidence. If a counter-claim is brought during such period,a new issue can still be framed by the Court, if needed, and evidencecan be recorded accordingly, without seriously prejudicing the rights ofeither party to the suit.

A

B

C

D

EF

G

H

AAt this juncture, I would like to address the observation in RohitSingh (supra) that a counter-claim, if filed after the framing of theissues and closing of the evidence, would be illegal and withoutjurisdiction. In my opinion, this is not a correct statement of law, as thefiling of counter-claims after the commencement of recording ofevidence is not illegal per se. However, I hasten to add that permittingBsuch a counter-claim would be improper, as the Court’s discretion hasto be exercised wisely and pragmatically.

24. There are several considerations that must be borne in mindwhile allowing the filing of a belated counter-claim. First, the Court mustconsider that no injustice or irreparable loss is being caused to theCdefendant due to a refusal to entertain the counter-claim, or to the plaintiffby allowing the same. Of course, as the defendant would have theoption to pursue his cause of action in a separate suit, the question ofprejudice to the defendant would ordinarily not arise. Second, theinterest of justice must be given utmost importance and procedure shouldDnot outweigh substantive justice. Third, the specific objectives ofreducing multiplicity of litigation and ensuring speedy trials underlyingthe provisions for counter-claims, must be accorded due consideration.

25. Having considered the previous judgments of this Court oncounter-claims, the language employed in the rules related thereto, asEwell as the intention of the Legislature, I conclude that it is notmandatory for a counter-claim to be filed along with the writtenstatement. The Court, in its discretion, may allow a counter-claim tobe filed after the filing of the written statement, in view of theconsiderations mentioned in the preceding paragraph. However,propriety requires that such discretion should ordinarily be exercised toFallow the filing of a counter-claim till the framing of issues for trial. Tothis extent, I concur with the conclusion reached by my learnedBrothers. However, for the reasons stated above, I am of the view thatin exceptional circumstances, a counter-claim may be permitted to befiled after a written statement till the stage of commencement ofGrecording of the evidence on behalf of the plaintiff.

26. The reference is answered accordingly.

Divya Pandey

Reference answered.

H