Order VIII Rule 6A CPC: No Embargo On Filing Counter-Claim After Filing Written Statement: SC [Read Judgment]

The Supreme Court has held that a Court can exercise its discretion and permit the filing of a counter-claim after the written statement, till the stage of framing of the issues of the trial.

The three judge bench headed by Justice NV Ramana held that Order VIII Rule 6A of the CPC does not pose an embargo on filing the counter-claim after filing the written statement.

The Reference

The three judge bench, also comprising of Justice Mohan M. Shanthanagoudar and Justice Ajay Rastogi answered a legal issue referred to it by a two judge bench i.e. Whether language of Order VIII Rule 6A of the Civil Procedure Code is mandatory in nature? In other words,whether Order VIII Rule 6A of the CPC mandates an embargo on filing the counter-claim after filing the written statement?

Order VIII Rule 6A CPC

Rule 6A deals with counterclaim by defendant, according to which a defendant in a suit may, in addition to his right of pleading a set-off under Rule 6, set up, by way of counter-claim against the claim of the plaintiff, any right or claim in respect of a cause of action accruing to the defendant against the plaintiff either before or after filing of the suit but before the defendant has delivered his defence or before the time prescribed for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not. 

Time-barred suits cannot be entertained under the guise of the counter-claim

The bench noted that 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. It said:

"Having said so, this does not mean that counter-claim can be filed at any time after filing of the written statement. As counter-claim is treated to be plaint, generally it needs to first of all be compliant with the limitation provided under the Limitation Act, 1963 as the time-barred suits cannot be entertained under the guise of the counter-claim just because of the fact that the cause of action arose as per the parameters of Order VIII Rule 6A. 

Outer limit for filing the counter-claim is pegged till the issues are framed

Answering the reference (Ashok Kumar Kalra vs. Wing Cdr. Surendra Agnihotri), the bench held as follows:

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

i. Period of delay.

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

iii. Reason for the delay.

iv. Defendant's assertion of his right.

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

vi. Cost of fresh litigation. vii. Injustice and abuse of process.

viii. Prejudice to the opposite party.

ix. and facts and circumstances of each case.

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

Can It Be Filed After Issues Are Framed? No, says Majority

In a separate concurring opinion, Justice Shanthanagoudar said that, in exceptional circumstances, the subsequent filing of a counter-claim may be permitted till the stage of commencement of recording of the evidence on behalf of the plaintiff. The majority, in this regard, observed thus:

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

Though Justice Shanthanagoudar observed that allowing counter-claims beyond this stage (framing of issues would not only prolong the trial, but also prejudice the rights that may get vested with the plaintiff over the course of time, but he opined that the filing of counter-claims after the commencement of recording of evidence is not illegal per se. The judge observed:

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.

 Click here to Read/Download Judgment