Sushmaben Wd/O Vinodbhai Patel vs Hitesh Narendrakumar Shah

Gujarat High Court

Sushmaben Wd/O Vinodbhai Patel vs Hitesh Narendrakumar Shah on 25 February, 2025

                                                                                                           NEUTRAL CITATION




                            C/SCA/2325/2025                               JUDGMENT DATED: 25/02/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                      R/SPECIAL CIVIL APPLICATION NO. 2325 of 2025


                       FOR APPROVAL AND SIGNATURE:


                       HONOURABLE MR. JUSTICE MAULIK J.SHELAT                       sd/-

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                                   Approved for Reporting                Yes          No
                                                                                     ✔
                       ==========================================================
                                        SUSHMABEN WD/O VINODBHAI PATEL & ORS.
                                                       Versus
                                            HITESH NARENDRAKUMAR SHAH
                       ==========================================================
                       Appearance:
                       MR DIPAK R DAVE(1232) for the Petitioner(s) No. 1,2,3
                       MR PR THAKKAR(899) for the Respondent(s) No. 1
                       MR.J P THAKKAR(7116) for the Respondent(s) No. 1
                       ==========================================================

                         CORAM:HONOURABLE MR. JUSTICE MAULIK J.SHELAT

                                                     Date : 25/02/2025

                                                     ORAL JUDGMENT

1. Though, the present petition is listed for admission, however, with the consent of learned advocates appearing for the respective parties, the matter is taken up for final hearing. Hence, Rule returnable forthwith. Learned advocate Mr. P.R. Thakkar, appearing on caveat, waives service of Rule on behalf of the respondent.

2. Heard learned advocate Mr. Dipak R. Dave appearing for the petitioners and learned advocate Mr. P.R. Thakkar Page 1 of 14 Uploaded by AMAR SINGH(HC01081) on Thu Feb 27 2025 Downloaded on : Thu Feb 27 22:19:46 IST 2025 NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined appearing for the respondent.

3. The present petition has been filed by the petitioners under Article 227 of the Constitution of India, seeking following reliefs : -

"8.(A) A writ of certiorari and/or a writ in the nature of certiorari and/or any other appropriate writ, order or direction be issued to quash and set aside the impugned order dated 31.01.2025 passed by learned 16th Additional Senior Civil Judge, Vadodara below Exh. 36 in Special Civil Suit No. 222 of 2022 at Annexure - A to the petition and further be pleased to allow the said application Exh. 36; (B) Pending the admission hearing and final disposal of this petition, this Hon'ble Court may be pleased to stay the further proceedings of Special Civil Suit No. 222 of 2022 pending before learned 16 th Additional Senior Civil Judge, Vadodara."

4. The parties will be referred as per their original position in the suit. The short controversy involved in the present petition is about not entertaining the impugned application Exh. 36 filed by the petitioners, who happens to be the defendants in Special Civil Suit No. 222 of 2022. The respondent herein is original plaintiff.

5. The impugned application came to be filed by the defendants, whereby it has requested the trial Court to condone the delay in filing the counterclaim and also sought leave of the trial Court to allow the defendants to file counterclaim. The plaintiff appears to have objected the impugned application by filing its reply below Exh. 39.

6. After hearing of the parties, the trial Court vide its Page 2 of 14 Uploaded by AMAR SINGH(HC01081) on Thu Feb 27 2025 Downloaded on : Thu Feb 27 22:19:46 IST 2025 NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined impugned judgment and order dated 31.01.2025, has rejected the impugned application filed below Ex.36.

7. Being aggrieved and dissatisfied with the aforesaid order dated 31.01.2025 passed by the 16 th Additional Senior Civil Judge, Vadodara below Exh. 36 in Special Civil Suit No. 222 of 2022, the defendants have preferred the present petition.

SUBMISSION OF PETITIONERS-DEFENDANTS

8. Learned advocate Mr. Dipak R. Dave appearing for the petitioners-defendants would submit that the trial Court has committed severe error of law by rejecting the impugned application of defendants, whereby it has not touched the merits of the application itself, but touch upon the merits of the counterclaim, which was never taken on record by the trial Court.

9. Learned advocate Mr. Dave would submit that while rejecting the impugned application filed below Exh. 36, the limited inquiry ought to have been undertaken by the trial Court as to consider the grounds set out in the impugned application by the defendants, whereby the defendants sought leave of the trial Court to file counterclaim.

10. Learned advocate Mr. Dave would further submit that it is a settled legal position of law that when a party seeking condonation of delay and/or leave of the Court, the trial Court is required to consider the merit of the application, rather than touching the merit of the main matter.

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11. Learned advocate Mr. Dave, would further submit that as such, the defendants is having good prima facie case on merits, so far as the counterclaim is concerned, but having not granted leave to file counterclaim, the defendants would be remedy-less to challenge the indirect rejection of their counterclaim because in absence of any order passed on counterclaim itself, right of appeal of the defendants would be frustrated.

12. Learned advocate Mr. Dave, would request this Court that the matter may be remanded back to the trial Court to re-decide and re-adjudicate the impugned application filed below Exh36 on its own merits. Making the above submissions, learned advocate requested this Court to allow the present petition. No further submissions have been made.

SUBMISSION OF RESPONDENT-PLAINTIFF

13. Per contra, learned advocate Mr. P.R. Thakkar, appearing for the respondent - original plaintiff, appeared on caveat, has vehemently objected to the present petition, thereby would submit that there is no error, much-less jurisdictional error committed by the trial Court while rejecting the impugned application filed by the defendants.

14. Learned advocate Mr. Thakkar would submit that as such there is no question of filing any delay application would arise, when counterclaim has been presented by the defendants after filing of the written statement, but inquiry to be undertaken by the trial Court in regards to accrual of cause of action to file Page 4 of 14 Uploaded by AMAR SINGH(HC01081) on Thu Feb 27 2025 Downloaded on : Thu Feb 27 22:19:46 IST 2025 NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined such a counterclaim by the defendant in time or not, which is correctly undertaken by the trial Court, whereby no error can be said to have been committed by the trial Court.

15. Learned advocate Mr. Thakkar would submit that when the defendants have failed to submit the counterclaim within requisite period, which is envisaged under Order VIII Rule 6A of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the CPC' for short), it would be discretion of the trial Court to allow such counterclaim to be taken on record or not.

16. Learned advocate Mr. Thakkar would further submit that when on a preliminary inquiry undertaken by the trial Court, if the counterclaim is barred by law of limitation, has filed much after accrual of its cause of action, it would be within the jurisdiction of the trial Court, not to entertain the impugned application.

17. To buttress his argument, he would rely upon the decision of the Supreme Court of India in the case of Ashok Kumar Kalra Vs. Wing CDR. Surendra Agnihotri and others reported in (2020) 2 SCC 394, paragraph Nos.17, 18, 21, 30 and 31.

18. Making the above submissions, he would request this Court not to entertain the present petition and the same may be dismissed by imposing costs.

19. No other and further submissions advanced by the learned advocates appearing for the respective parties.

NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined ANALYSIS

20. It is remained undisputed fact that the defendants have not filed counterclaim along with the written statement as the written statement was filed on 04.03.2023. The counterclaim was presented/introduced by the defendants on 20.07.2024 filed along with impugned application at Exh.36. In such a situation, question would arise as to Whether the defendants would have been permitted to file a counterclaim on record or not ?

21. To better understand the controversy, I would like to refer Order VIII Rule 6-A reads as under : -

"Rule 6A. Counterclaim by defendant.--

(1) A defendant in a suit may, in addition to his right of pleading a setoff under rule 6, set up, by way of counterclaim 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 the filing of the suit but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counterclaim is in the nature of a claim for damages or not :

Provided that such counterclaim shall not exceed the pecuniary limits of the jurisdiction of the Court.

(2) Such counterclaim shall have the same effect as a crosssuit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the counterclaim.

(3) The plaintiff shall be at liberty to file a written statement in answer to the counterclaim of the defendant within such period as may be fixed by the Court.

(4) The counterclaim shall be treated as a plaint Page 6 of 14 Uploaded by AMAR SINGH(HC01081) on Thu Feb 27 2025 Downloaded on : Thu Feb 27 22:19:46 IST 2025 NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined and governed by the rules applicable to plaints."

22. It has been settled by now that counterclaim is required to be treated as a cross-suit and the procedure, which is envisaged at the time of presentation of the plaint requires to be considered by the Court, when the counterclaim has been presented. As per plain reading of Order 8 Rule 6A (4) of CPC clearly state that counterclaim shall be treated as a plaint and governed by the rules applicable to the plaints.

23. The impugned application is filed by the defendants as they missed to file counterclaim at the time of filing their written statement. The judgment of the Hon'ble Apex Court in the case of Ashok Kumar Kalra (supra) has cleared the controversy in relation to the presentation of counterclaim after filing written statement thereby, it has been so held that the counterclaim claim can be presented after filing of written statement and before issues are framed and in exceptional cases, after framing of the issues as well. The relevant observations made by Hon'ble Apex Court in its judgment in the case of Ashok Kumar Kalra (supra) reads as under : -

"17. 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. As noted in the above precedents, further complications stem from the fact that there is a possibility of amending the written statement. However, we can state that the right to file a counterclaim in a suit is explicitly limited by the embargo provided for the accrual of the cause of action under Order VIII Rule 6A. Having said so, this does not mean that counterclaim can be filed at any time after filing of the written statement. As counterclaim is Page 7 of 14 Uploaded by AMAR SINGH(HC01081) on Thu Feb 27 2025 Downloaded on : Thu Feb 27 22:19:46 IST 2025 NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined 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 counterclaim just because of the fact that the cause of action arose as per the parameters of Order VIII Rule 6-A.

18. As discussed by us in the preceding paragraphs, the whole purpose of the procedural law is to ensure that the legal process is made more effective in the process of delivering substantial justice. Particularly, the purpose of introducing Rule 6A in Order VIII of the CPC is to avoid multiplicity of proceedings by driving the parties to file separate suit and see that the dispute between the parties is decided finally. If the provision is interpreted in such a way, to allow delayed filling of the counter- claim, the 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. At the same time, there cannot be a rigid and hypertechnical approach that the provision stipulates that the counterclaim has to be filed along with the written statement and beyond that, the Court has no power. The Courts, taking into consideration the reasons stated in support of the counter claim, should adopt a balanced approach keeping in mind the object behind the amendment and to subserve the ends of justice. There cannot be any hard and fast rule to say that in a particular time the counterclaim has to be filed, by curtailing the discretion conferred on the Courts. The trial court has to exercise the discretion judiciously and come to a definite conclusion that by allowing the counterclaim, no prejudice is caused to 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 achieved through the amendment. But however, 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.

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21. We sum up our findings, that 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 counterclaim 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:

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 counterclaim. 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."

30. It is clear that Rule 6A (1) only places a limitation on the time within which the cause of action for a counterclaim must arise. Besides this limitation, there is no explicit guidance in Rule 6A( 1) as to the time within which the counterclaim itself must be filed. In this respect, Rule 6A (4) provides that a counterclaim is governed by the rules applicable to plaints. It is well established that a plaint must be presented within the period prescribed under the Limitation Act, 1963 [hereinafter "the Limitation Act"]. For counterclaims as well, the period within which they must be filed can be inferred from Section 3(2)(b)

(ii) of the Limitation Act, 1963, which states thus:

"3. (2) For the purposes of this Act, Page 9 of 14 Uploaded by AMAR SINGH(HC01081) on Thu Feb 27 2025 Downloaded on : Thu Feb 27 22:19:46 IST 2025 NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined

(b) any claim by way of a set off or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted--

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

(emphasis supplied) This provision mandates that in order to determine the limitation period applicable to a counterclaim, it must be treated as a separate suit, which is deemed to have been instituted on the date on which it is made in Court. Thus, evidently, in consonance with the provisions of Order VIII Rule 6A(4), the Limitation Act also treats a counterclaim like a plaint. This means that much like a plaint, the limitation for filing a counter claim also depends on the nature of the claim and is accordingly governed by the period of limitation stipulated in the Limitation Act.

31. From the foregoing discussion, it is clear that a counter claim can be filed if two conditions are met: first, its cause of action complies with Order VIII Rule 6A(1); and second, it is filed within the period specified under the Limitation Act. Clearly, by itself, Rule 6A does not specifically require that a counterclaim has to be filed along with the written statement. In the absence of a particular mandate under this Rule, it is necessary to look to other provisions of the CPC to determine whether a counterclaim can be filed after a written statement."

24. Thus, whenever the counterclaim has been filed after the period so prescribed under Order VIII Rule 6-A of CPC, the trial Court is required to take note of several factors and some of the said illustrations, which have been so narrated by Hon'ble Apex Court in the case of Ashok Kumar Kalra (supra), whereby it can decide as to whether counterclaim can be taken on record Page 10 of 14 Uploaded by AMAR SINGH(HC01081) on Thu Feb 27 2025 Downloaded on : Thu Feb 27 22:19:46 IST 2025 NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined or not.

25. Now, coming back to the issue, so germane in the present petition, when the impugned application has been filed by the defendants, whereby seeking condonation of delay in filing counterclaim, thereby seek leave of the trial Court to permit the defendants to submit the counterclaim, the trial Court was required to confine itself to the inquiry of as to whether the impugned application can be entertained or not, and for that trial Court was required to consider the grounds so stated in the impugned application, is justified or not, thereby the trial Court could have considered the request made by the defendants and answered it appropriately be it in favour of petitioners or against them. In a case where, trial Court would have accepted impugned application thereafter surely, it could have decided fate of counterclaim on its merit including not entertain it if barred by law of limitation then such order would have been passed on the counterclaim itself thereby, defendants would have right to challenge by way of first appeal as if like not entertaining/rejecting the plaint.

26. It appears from the impugned order that rather going into the merit of the impugned application and confined itself to the inquiry to be undertaken by the trial Court as to whether a justified reasons have been assigned by the defendants to submit the counterclaim after a period, which is envisaged under Order VIII Rule 6A of CPC, the trial Court has touched upon the merits of the counterclaim itself, as if the counterclaim is on the record.

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27. According to this Court, the trial Court has travelled beyond its jurisdiction to examine the merits of the counterclaim itself, while answering and adjudicating the impugned application filed by the defendants seeking leave of the trial Court to file counterclaim. The trial Court could not have overlooked the grounds so stated by defendants in impugned application Ex.36 while rejecting such application as after its rejection, question of passing any order upon the counterclaim would not have occasioned having not taken on record.

28. The upshot of the aforesaid observation and discussion, the impugned order suffers from procedural irregularity, whereby the trial Court has exceeded its jurisdiction to reject the application without deciding the application on its own merits but decided the maintainability of the counterclaim itself, which according to the trial Court, filed beyond the period of limitation so prescribed under the law, whereby the counterclaim is treated to be time barred but impugned order was not passed on the counterclaim itself.

29. It is well settled law that High Court should sparingly exercise its power under Article 227 of the Constitution of India only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority [Waryam Singh v/s Amarnath - AIR 1954 SC 215]. Having arrived at the aforesaid conclusion and having found that trial Court has committed procedural irregularity which requires to be corrected by this Court while exercising its power under Article 227 of the Constitution of India thereby, an interference requires in the impugned order.

NEUTRAL CITATION C/SCA/2325/2025 JUDGMENT DATED: 25/02/2025 undefined CONCLUSION

30. Thus, in view of aforesaid, the impugned order is hereby quashed and set aside. The matter is requires to be remanded back to the trial Court to re-decide and re-adjudicate the impugned application at Exh. 36 on its own merits.

30.1 The trial Court is hereby requested to adjudicate as to whether in the facts and circumstances of the case, leave which is sought by the defendant by filing impugned application Exh. 36 thereby delay in filing the counterclaim can be condoned and leave can be granted in favour of defendants to present counterclaim or not?

30.2 It is open for the respective parties to submit their arguments in support as well as oppose to impugned application.

30.3 The trial Court is hereby directed to re-adjudicate the impugned application filed at Exh. 36 without being influenced by its earlier order impugned in the present petition which is now quashed/set aside thereby, to decide the impugned application Exh. 36 afresh in accordance with law on its own merit.

30.4 It is made clear that this Court has neither gone into nor examined merit of impugned application Exh.36 filed by defendants which shall be examined afresh by trial Court.

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31. With the aforementioned observations, discussions, reasons and directions, the present petition is hereby partly ALLOWED. Rule is made absolute to the aforesaid extent. No order as to costs.

sd/-

(MAULIK J.SHELAT,J) AMAR SINGH Page 14 of 14 Uploaded by AMAR SINGH(HC01081) on Thu Feb 27 2025 Downloaded on : Thu Feb 27 22:19:46 IST 2025