SUPREME COURT HOLDS THAT COUNTER CLAIM CAN BE TAKEN ON RECORD AFTER FILING OF WRITTEN STATEMENT BUT BEFORE FRAMING OF THE ISSUES

Recently, a two Judge Bench of the Supreme Court comprising of Justice Dinesh Maheshwari and Justice Aniruddha Bose passed a Judgment dated 12.10.2022 in MAHESH GOVINDJI TRIVEDI       v. BAKUL MAGANLAL VYAS & ORS in CIVIL APPEAL NO. 7203 OF 2022, and observed that there is no bar in taking on record a Counter Claim that was filed 13 years after the Written Statement was filed by Appellant-Defendant.

Facts

This case is related to the Property situated at Vile Parley, Mumbai, for which the Respondents-Plaintiffs have filed the Suit no. 1821 of 2004 on 10.06.2004, seeking specific performance of an Agreement for transfer dated 28.05.2001 which have been executed by its Owner, Ramalaxmi Ravishankar Trivedi (Deceased). The Appellant filed his written statement in the Suit on 16.11.2005. It was the Appellant’s case that he had acquired all the rights in the Suit Property by settlement with other legal heirs of the deceased Owner on 05.04.2017. Later on, the Appellant-Defendant filed his Counter Claim in this Suit in the Bombay High Court.

When the Suit was taken up for framing of issue the learned Single Judge of the High Court dealing with the Suit took objection against such filing of Counter-Claim much after the defendant had filed his written statement and without taking leave of the Court, particularly with reference to Rule 95 of the Bombay High Court (Original Side) Rules. The learned Single Judge vide Order dated 05.12.2018, held that the Counter-Claim be de-registered.

The Appellant challenged the said aforementioned Order before the Division Bench of the High Court, which granted permission to the Appellant to file the Counter claim within 2 weeks, vide Order dated 29.03.2019, while leaving it open for the Single Judge to decide the same on its own merits. In view of the same, the Appellant filed notice of motion seeking leave to file the counter claim claiming possession of the Suit Property. While considering this notice of motion, the learned Single Judge granted leave to file the Counter-Claim to avoid multiplicity of proceedings. Therefore, vide Order dated 02.05.2019, the learned single judge made the notice of motion absolute.

On 28.06.2019, the Respondents-Plaintiffs sought extension of time for filing written statement to the Counter-Claim, which was granted and the matter was adjourned to 11.07.2019. Then, on 09.07.2019, the written statement to the Counter-Claim was filed by the Respondents. However, the Appellant-Defendant filed Notice of Motion No. 2601 of 2019 on 18.09.2019, seeking leave to transfer right, title and interest in the Suit Property to third parties, but was dismissed vide Order dated 21.01.2020. In the meantime, the Appellant filed appeal before the Division Bench of Bombay High Court against the aforesaid Order dated 21.01.2020, but was dismissed vide Order dated 20.01.2021. Being aggrieved, the Appellant approached the Supreme Court by filing a SLP (C) No. 1786 of 2021 which was dismissed on 26.02.2021.

Meanwhile, the Division Bench of the High Court in Suit no. 1821 of 2004 vide Order dated 30.11.2021 observed that Appellant-Defendant was not given adequate opportunity of contesting the notice of motion for taking the Counter-Claim on record.

ISSUE

Whether the Division Bench of the High Court was justified in interfering with the Order passed by the Single Judge for taking the Counter-Claim.

REASONING AND ANALYSIS

Aggrieved by the aforementioned Order dated 30.11.2021 of the Division Bench of High Court, the Appellant moved the Apex court under Article 136 of the Constitution of India (Special Leaved to Appeal by the Supreme Court).

The Apex Court made the following observations:

1. That the Impugned Order of the Division Bench of the High Court and the submissions made on behalf of the Respondent-Plaintiff against the legality and validity of the Order of the Single Judge of the High Court dated 05.2019 could not be accepted for the following reasons.
2. With respect to Order 8 Rule 6-A of the Code of Civil Procedure, 1908 (Counterclaim by Defendant) and Rule 95 of the Bombay High Court (Original Side) Rules, a 3-Judge Bench of the Supreme Court observed in Ashok Kumar Kalra v. Wing Cdr. Surendra Agnihotri and Ors, (2020) 2 SCC 394, about whether it is mandatory for a Counter-Claim of the defendant to be filed along with the written statement. The Apex Court held that the defendant cannot be permitted to file Counter-Claim after the issues have been framed and the Suit has been proceeded substantially.
3. The Apex Court herein observed that “while proceeding on the fundamental principles that the rules of procedure are intended to subserve the cause of justice rather than to punish the parties in conduct of their case, we are clearly of the view that the Counter-Claim in question could not have been removed out of consideration merely because it was presented after a long time since after filing of the written statement. Indisputably, the Counter-Claim was filed on 07.09.2018 and until that date, issues had not been framed in the Suit. we are clearly of the view that neither the requirements of Order VIII Rule 23 6-A CPC or Rule 95 of the Rules nor the principles enunciated operate as a bar over the prayer of the Appellant for taking the belatedly filed Counter-Claim on record, which was indeed filed before framing of issues.”

CONCLUSION

Thus, based on the aforesaid observations, the Apex Court allowed the Appeal and restored the Single Bench Order taking on record the Counter Claim, as until then the issues had not been framed in the Suit. The Impugned Order dated 30.11.2021 as passed by the Division Bench of the High Court was set aside; and Order dated 02.05.2019 as passed by the learned Single Judge was restored.

Devashish Kakkar

Legal Associate

The Indian Lawyer