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‘NO EMBARGO’- ORDER VIII RULE 6A of CPC do not put bar on filing Counter-Claim after filing the writ

ASHOK KUMAR KALRA VS. WING CDR. SURENDRA AGNIHOTRI & ORS., SLP(C) NO. 23599 OF 2018. 19th November 2019.

The bench comprising of Justice N. V. Ramana, Justice Mohan M . Shantanagoudar and Justice Ajay Rastogi prounounced the judgment about the procedural justice regarding the clarification as to the interpretation of Order VIII Rule 6A of the Civil Procedure Code on November 19, 2019.

The issues considered before the honorable Supreme Court are whether Order VIII Rule 6A of the CPC mandates an embargo on filing the counter- claim after filing the written statement? And in case no bar is there in such filing, what are the restrictions on filing the counter- claim after filing of the written statement?

The contention made by the petitioner is that the intent behind Order VIII Rule 6A of the CPC is to provide an enabling provision for the filing of counter- claim so as to avoid multiplicity of proceedings, thereby saving the time of the court and avoiding inconvenience to the parties. Therefore, no specific statutory bar or embargo has been imposed upon the court’s jurisdiction to entertain a counter- claim except the limitation under the said provision which provides that the cause of action in the counter- claim must arise either before or after the filing of the suit but before the defendant has delivered his defence. Relying on the judgment in Salem Advocate Bar Association, Tamil Nadu vs. UOI, AIR 2005 SC 3353 and Jai Jai Ram Manohar Lal vs. National Building Material Supply, Gurgoan, (1969) 1 SCC 869 states that rules of procedure must not be interpreted in a manner that ultimately results in failure of justice.

The respondent submitted that the language of the statute and, and the scheme of the order, indicates that the counter- claim has to be a part of the written statement and by relying upon the statutory requirement that the cause of action relating to a counter- claim must arise before filing of the written statement and therefore the counter- claim must form a part of the written statement. Relied upon Mahendra Kumar and Anr. vs. State of Madhya Pradesh and Ors. (1987) 3 SCC 265, Vijay Prakash Jarath vs. Tej Prakash Jarath (2016) 11 SCC 800, Bollepanda P Poonacha &Anr vs. K.M Madapa (2008) 13 SCC 179 etc..

The Supreme Court observed the statutory provisions governing written statement, set- off and counter- claim under the Order VIII of the CPC. The time limitation for filing of the counter- claim is not explicitly provided by the legislature, rather only limitation as to the accrual of the cause of action is provided.

There are several considerations that must be borne in mind while allowing the filing of a belated counter­-claim. First, the Court must consider that no injustice or irreparable loss is being caused to the defendant due to a refusal to entertain the counter­-claim, or to the plaintiff by allowing the same. Of course,as the defendant would have the option to pursue his cause of action in a separate suit, the question of prejudice to the defendant would ordinarily not arise.  Second, the interest of justice must be given utmost importance and procedure should not outweigh substantive justice. Third, the specific objectives of reducing multiplicity of litigation and ensuring speedy trials underlying the provisions for counter-­claims, must be accorded

due consideration.

The whole purpose of the procedural law is to ensure that the legal process is made more effective in the process of delivering substantial. The court held that;

If Rule 6A in Order VIII of the CPC is interpreted in such a way, to allow delayed filing of the counter- claim, provision itself becomes redundant and the purpose for which the amendment is made will be defeated and ultimately it leads to flagrant miscarriage of justice.

The honorable Supreme Court finds that Order VIII Rule 6A of the CPC does not put an embargo on filing the counter- claim after filing the written statement, rather restriction is only with respect to the accrual of the cause of action.

Order VIII Rule 6A of the CPC does not put an embargo on filing the counter­claim after filing the written statement, rather the restriction is only with respect to the accrual of the cause of action. Having said so, this does not give absolute right to the defendant to file the counter ­claim with substantive delay, even if the limitation period prescribed has not elapsed. The court has to take into consideration the outer limit for filing the counter­claim, which is pegged till the issues are framed. The court in such cases have the discretion to entertain filing of the counter­claim, after taking into consideration and evaluating inclusive factors provided below which are only illustrative, though not exhaustive:
  1. Period of delay.

  2. Prescribed limitation period for the cause of action pleaded.

  3. Reason for the delay.

  4. Defendant’s assertion of his right.

  5. Similarity of cause of action between the main suit and the counter­claim.

  6. Cost of fresh litigation.

  7. Injustice and abuse of process.

  8. Prejudice to the opposite party.

  9. and facts and circumstances of each case.

  10. In any case, not after framing of the issues.

Further the bench observed that:

we are of the considered opinion that the defendant cannot be permitted to file counter­claim after the issues are framed and after the suit has proceeded substantially. It would defeat the cause of justice and be detrimental to the principle of speedy justice as enshrined in the objects and reasons for the particular amendment to the CPC.

However the Hon’ble Justice Mohan M. Shantanagoudar is of the view that in exceptional circumstances, a counter- claim may be permitted to be filed after a written statement till the stage of commencement of recording of the evidence on behalf of the plaintiff.

 In exceptional circumstances, to prevent multiplicity of proceedings and a situation of effective re-­trial, the Court may entertain a counter-­claim even after the framing of issues, so long as the Court has not started recording the evidence. This is because there is no significant development in the legal proceedings during the intervening period between framing of issues and commencement of recording of evidence. If a counter-­claim is brought during such period, a new issue can still be framed by the Court, if needed, and evidence can be recorded accordingly, without seriously prejudicing the rights of either party to the suit.

The Honorable bench stated that the instant Special Leave petition may be placed before an appropriate Bench after obtaining orders from the Hon’ble Chief Justice of India, for considering the case on merits.

Srutha R Elayidom

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