Legal Blog: Counter Claim under the Code of Civil Procedure Code - Stage of Filing : Supreme Court

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Sunday, September 11, 2011

Counter Claim under the Code of Civil Procedure Code - Stage of Filing : Supreme Court

Justice S.S. Nijjar
Supreme Court of India
The Supreme Court in Gayathri Womens Welfare Association Vs. Gowramma was called upon to decide the appropriate stage in a proceeding at which a Counter Claim may be preferred by a Defendant. In the case in hand, the High Court had allowed the Defendant to raise a counter claim at the stage of appeal. The Supreme Court while examining the provisions relating to Counter Claim held as under;

27. In Nanduri Yogananda Lakshminarasimhachari Vs. Sri Agastheswaraswamivaru AIR 1960 SC 622, this Court observed that the amendment could be permitted in a plaint as there was no new fact to be alleged and the parties were alive to the real nature of the dispute. 

28. In the case of Pandit Ishwardas (supra), it has been observed as follows :- 
"There is no impediment or bar against an appellate Court permitting amendment of pleadings so as to enable a party to raise a new plea. All that is necessary is that the appellate Court should observe the well known principles subject to which amendments of pleadings are usually granted. Naturally one of the circumstances which will be taken into consideration before an amendment is granted is the delay in making the application seeking such amendment and, if made at the appellate stage, the reason why it was not sought in the trial court. If the necessary material on which the plea arising from the amendment may be decided is already there, the amendment may be more readily granted than otherwise. But, there is no prohibition against an appellate Court permitting an amendment at the appellate stage merely because the necessary material is not already before the Court." 
These observations clearly indicate that one of the circumstances which will be taken into consideration before an amendment is granted is the delay in making the application seeking such amendment and, if made at the appellate sage, the reason why it was not sought in the trial court. In the present case, not only there is wholly untenable delay in the application but the appellants had a decree for permanent injunction in their favour. 

29. In the case of Jagmohan Chawla (supra), this Court considered the scope of Rule 6A to 6G of Order VIII CPC and observed as follows:- 
"It is true that in money suits, decree must be conformable to Order 20, Rule 18, CPC but the object of the amendments introduced by Rules 6-A to 6-G are conferment of a statutory right on the defendant to set up a counter-claim independent of the claim on the basis of which the appellant laid the suit, on his own cause of action. In sub-rule (1) of Rule 6-A, the language is so couched with words of wide width as to enable the parties to bring his own independent cause of action in respect of any claim that would be the subject-matter of an independent suit. Thereby, it is no longer confined to money claim or to cause of action of the same nature as original action of the plaintiff. It need not relate to or be connected with the original cause of action or matter pleaded by the plaintiff. The words "any right or claim in respect of a cause of action accruing with the defendant" would show that the cause of action from which the counter- claim arises need not necessarily arise from or have any nexus with the cause of action of the plaintiff that occasioned to lay the suit. The only limitation is that the cause of action should arise before the time fixed for filing the written statement expires." 
The aforesaid observations, in our opinion, have no relevance to the controversy in the present case, as the claim of the respondent has been rejected by the trial court on the ground that the cause of action arose a long time ago. 

30. In the case of Revajeetu Builders (supra), this Court reiterated the very wide discretion the Courts have in the matter of amendment of pleadings. These observations were in the context of an application filed by the appellant, seeking amendment of the original plaint including the prayer clause being rejected by the High Court upon coming to a definite conclusion that the appellant while seeking permission to amend the plaint is trying to introduce a new case, which was not his case in the original plaint and the proposed amendment, if allowed, would certainly affect the rights of the respondents adversely. It was also held that any such amendment, which changes the entire character of the plaint, can not be permitted and that too, after a lapse of four years and after the institution of the suit. This Court, upon a detailed consideration of the historical background of Order VI Rule 17 and upon a comprehensive survey of the case law, concluded that the amendment can be permitted, if it was necessary for the determination of the real question in controversy. If that condition is not satisfied, the amendment can not be allowed. It was also observed as follows:- 
"22. .... The power to allow an amendment is undoubtedly wide and may at any stage be appropriately exercised in the interest of justice, the law of limitation notwithstanding. But the exercise of such far-reaching discretionary powers is governed by judicial considerations and wider the discretion, greater ought to be the care and circumspection on the part of the court." 
31. In our opinion, the decision of the trial court is in conformity with the aforesaid principles. The trial court has clearly held that the cause of action for the relief of possession arose to the respondents many years ago. They may, therefore, have a cause of action, if any, for an independent suit. In the aforesaid case, the Court further reiterated the principle in Ganga Bai Vs. Vijay Kumar 1974 2 SCC 393 wherein it was rightly observed : 
"The power to allow an amendment is undoubtedly wide and may at any stage be appropriately exercised in the interest of justice, the law of limitation notwithstanding. But the exercise of such far-reaching discretionary powers is governed by judicial considerations and wider the discretion, greater ought to be the care and circumspection on the part of the Court." 
32. Similarly in Dhanpal Balu (supra), this Court permitted the amendment in the facts and circumstances of that case. Thus the judgment would not advance the case of the appellant in any manner. 

33. We may notice here the observations made by this Court in the case of Ramesh Chand (supra) which may be of some relevance. Upon considering the ratio of earlier cases in the case of Sangaram Singh Vs. Election Tribunal, Kotah AIR 1955 SC 425, Arjun Singh Vs. Mohindra Kumar AIR 1964 SC 993 and Laxmidas Dayabhai Kabrawala Vs. Nanabhai Chunilal Kabrawala AIR 1964 SC 11, it was held that a right to make a counter claim is statutory and a counter claim is not admissible in a case which is admittedly not within the statutory provisions. It is further observed that : 
"Looking to the scheme of Order 8 as amended by Act 104 of 1976, we are of the opinion, that there are three modes of pleading or setting up a counter-claim in a civil suit. Firstly, the written statement filed under Rule 1 may itself contain a counter-claim which in the light of Rule 1 read with Rule 6-A would be a counter- claim against the claim of the appellant preferred in exercise of legal right conferred by Rule 6-A. Secondly, a counter-claim may be preferred by way of amendment incorporated subject to the leave of the court in a written statement already filed. Thirdly, a counter- claim may be filed by way of a subsequent pleading under Rule 9. In the latter two cases the counter-claim though referable to Rule 6-A cannot be brought on record as of right but shall be governed by the discretion vesting in the court, either under Order 6 Rule 17 CPC if sought to be introduced by way of amendment, or, subject to exercise of discretion conferred on the court under Order 8 Rule 9 CPC if sought to be placed on record by way of subsequent pleading. The purpose of the provision enabling filing of a counter-claim is to avoid multiplicity of judicial proceedings and save upon the court's time as also to exclude the inconvenience to the parties by enabling claims and counter- claims, that is, all disputes between the same parties being decided in the course of the same proceedings. If the consequence of permitting a counter- claim either by way of amendment or by way of subsequent pleading would be prolonging of the trial, complicating the otherwise smooth flow of proceedings or causing a delay in the progress of the suit by forcing a retreat on the steps already taken by the court, the court would be justified in exercising its discretion not in favour of permitting a belated counter- claim. The framers of the law never intended the pleading by way of counter-claim being utilized as an instrument for forcing upon a reopening of the trial or pushing back the progress of proceeding. Generally speaking, a counter-claim not contained in the original written statement may be refused to be taken on record if the issues have already been framed and the case set down for trial, and more so when the trial has already commenced." 
These observations make it clear that generally speaking the counter claim not contained in the original written statement may be refused to be taken on record, especially if issues have already been framed. In the present case, the counter claim is sought to be introduced at the stage of appeal before the High Court. 

34. In such circumstances, we are unable to accept the conclusions of the High Court that the discretion exercised by the trial court was in any manner, illegal or arbitrary in rejecting the counter claim of the respondents. We may notice here the observations of this Court in the case of Rohit Singh (supra) which are as follows :- 
"A counterclaim, no doubt, could be filed even after the written statement is filed, but that does not mean that a counterclaim can be raised after issues are framed and the evidence is closed. Therefore, the entertaining of the so- called counterclaim of Respondents 3 to 17 by the trial court, after the framing of issues for trial, was clearly illegal and without jurisdiction." 
These observations would show that the dismissal of the counter claim by the trial court was neither illegal nor without jurisdiction. In fact the direction issued by the High Court would clearly run counter to the aforesaid observations. In the aforesaid case, this Court was considering a situation where the evidence had been closed, arguments on behalf of the respondents had been concluded, the suit was adjourned for arguments of the appellants, the suit was dismissed for default. Subsequently, it was restored. Thereafter the respondents filed an application for amending the written statement. The counter claim was filed by the intervener. In these circumstances, it was observed that at this stage no counter claim could be entertained. 

35. In the present case, after the matter had been remanded back, the trial court again decreed the suit of the appellants, the counter claim was dismissed for the reasons stated in the judgment of the trial court. We may restate here that the prayer in the original counter claim was only for a mandatory injunction to demolish the illegal structures in Sy.No.110/1. It was only when the Regular First Appeal was filed for challenging the original decree that the respondents made an application under Order VI Rule 17 for amendment of the original written statement to incorporate the counter claim with a prayer for possession of the land in dispute in Survey No.110/1. In such circumstances, the High Court erred in disturbing the findings recorded by the trial court. 

36. The matter herein symbolizes the concern highlighted by this Court in the case of Ramesh Chand (supra). Permitting a counter claim at this stage would be to reopen a decree which has been granted in favour of the appellants by the trial court. The respondents have failed to establish any factual or legal basis for modification/nullifying the decree of the trial court.

2 comments:

  1. The main issue not addressed in the blog is how do you define "commencement of trial"?

    ReplyDelete
  2. Research required as to when can the Court need apply its discretion as to admitting counter claim. Can Counter Claim be filed anytime? What are the grounds under which a Counter Claim can be filed later too. What are the grounds other than delay by parties, so as to be considered by a Court?

    ReplyDelete

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