Bombay High Court
M/S Ashok Irrigation Equipments ... vs The Jalgaon Janta Sahakari Bank ... on 5 December, 2017
Bench: V.K. Jadhav
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 11786 OF 2017
1. M/s. Ashok Irrigation Equipments
Pvt. Ltd., as Private Limited Company
Through its Managing Director
Ashokkumar Gangaram Ranglani
Age 64 years, Occ. Business,
R/o. Plot No. C-9, MIDC, Jalgaon
Tq. and District Jalgaon
2. Ashokkumar Gangaram Ranglani
Age 64 years, Occ. Business,
R/o. Plot No.6, Shivram Nagar
M.J. College Road, Jalgaon
Tq. and District Jalgaon ...Petitioners
versus
1. The Jalgaon Janta Sahakari
Bank Limited, Jalgaon
Seva 117/119, Navi Peth, Jalgaon
Through its Manager
2. Harshad Ashok Rangalani
Age major, Occ. Business,
R/o. Plot No. C-9, MIDC,
Jalgaon, District Jalgaon
3. Amit Ashok Rangalani,
Age major, Occ. Business,
R/o. Plot No. C-9, MIDC,
Jalgaon, District Jalgaon
4. Hemant Nandlal Rangalani,
Age major, Occ. Business,
R/o. 1, Telephone Nagar,
Jalgaon, District Jalgaon
5. Nandlal Gangaram Rangalani,
Age major, Occ. Business,
R/o. 1, Telephone Nagar,
Jalgaon, District Jalgaon
6. Prabhudas Gangaram Rangalani,
Age major, Occ. Business,
R/o. 2, Telephone Nagar,
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Jalgaon, District Jalgaon
7. Chandrakant Khushiram Adwani
Age major, Occ. Business,
R/o. Hotel Poonam, Station Road,
Jalgaon, District Jalgaon ...Respondents
.....
Mr. Ajay G. Talhar, advocate for the petitioners
Mr. V.J. Dixit, senior counsel, i/b Mr. A.N. Nagargoje, advocate for
respondent No.1
.....
CORAM : V. K. JADHAV, J.
Date of Reserving
the Judgment : 22.11.2017
Date of pronouncing
the Judgment: 05.12.2017
JUDGMENT:-
1. Rule. Rule returnable forthwith. By consent, heard finally at
admission stage.
2. The Instant writ petition has been filed challenging the legality
and validity of the judgment and order dated 8.4.2017 passed by the
learned Member, Maharashtra State Co-operative Appellate Court,
Mumbai, Bench at Aurangabad in Revision No. 52 of 2016 and 18 of
2017, whereby the learned appellate court allowed the revision filed
by respondent No.1 Bank and quashed and set aside the order dated
26.9.2016 passed by the learned Judge, Co-operative Court,
Jalgaon below Exh.127 in Dispute No. 326 of 2010, accepting the
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counter claim of present petitioners.
3. Brief facts giving rise to the present writ petition are as
follows:-
a) The petitioner company has obtained loan facilities from
respondent No.1 Bank. However, the dispute arose in respect of said
loan transaction and after some proceedings initiated under the
provisions of Securitization and Reconstructions of Financial Assets
and Enforcement of Security Interest Act 2002, respondent No.1
Bank filed dispute as contemplated under Section 91 of Maharashtra
Co-operative Societies Act 1960 before the Co-operative Court at
Jalgaon for recovery of term loan of Rs.3,64,43,441/-, hypothecation
cash credit loan of Rs.1,41,81,547/- and WCTL loan of Rs.
1,58,08,942/- from the petitioner company.
b) Though the petitioner company was duly served and
appeared in the matter, failed to file written statement and therefore,
"No W.S." order came to be passed against the petitioner company
on 19.10.2011. On 12.11.2014, the petitioner company has moved
an application Exh.106 alongwith written statement for setting aside
the said order of "No W.S.". In the meantime, respondent bank led
its evidence and no cross order was passed. Even respondent bank
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had filed evidence close pursis on 11.5.2016. Application Exh.106
filed by the petitioner company for setting aside order of "No W.S."
came to be rejected by the Co-operative Court by order dated
15.7.2015. The petitioner company had therefore, filed Revision No.
6 of 2016, which came to be allowed on 5.8.2016 by directing the
petitioner to file written statement on or before 21.8.2016 subject to
deposit cost of Rs.1,00,000/- each by the petitioners herein. The
petitioners therefore, approached to this Court by filing writ petition
No. 8932 of 2016. However, this Court by order dated 19.8.2016 in
writ petition No. 8932 of 2016 disposed of the writ petition by only
extending the time of 8 days w.e.f. 21.8.2016 for filing written
statement. On 29.8.2016, the petitioners had filed their written
statement before the Co-operative Court. The petitioners have also
moved an application Exh.127 for taking counter claim on record and
for grant of time to pay the court fees. The learned Judge of the Co-
operative court by order dated 26.9.2016 has allowed the said
application Exh.127.
b) Being aggrieved by the same, the respondent bank has
preferred Revision No. 52 of 2016 before the Co-operative Appellate
court, Aurangabad. Aggrieved by the very same order to some
extent, the present petitioners have also filed Revision application
No. 18 of 2017. The Co-operative Appellate Court, by common order
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dated 8.4.2017 in Revision No. 52 of 2016 and Revision No. 18 of
2017 allowed the Revision No. 52 of 2016 filed by respondent No.1
Bank and set aside the order passed by Co-operative Court below
Exh.127 in Dispute No. 326 of 2010 and rejected application Exh.127
filed by the petitioner. Revision No. 18 of 2017 came to be rejected.
It is not out of place to mention here that in the counter claim, two
respondents are added as party respondents and the petitioners
moved an application below Exh.134-A for issuance of summons to
the added respondents i.e. Reserve Bank of India and District
Industry Center. The said application came to be rejected vide order
dated 24.10.2016 with further direction to the petitioners to delete the
said added respondents. Against the said order, the petitioners
herein preferred aforesaid Revision No. 18 of 2017 which came to be
rejected by the aforesaid common order. Hence, this writ petition.
4. Learned counsel for the petitioners submits that the
petitioners being aggrieved by rejection of application Exh.106 filed
for setting aside "No W.S." order, preferred Revision No. 6 of 2016
before the Co-operative Appellate court, Bench at Aurangabad and
appellate court by order dated 5.8.2016 allowed the said revision and
set aside the order passed by the co-operative court below Exh.106
in Dispute No. 326 of 2010 and allowed application Exh.106 subject
to deposit of costs of Rs.1,00,000/- each, to be deposited on or
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before 21.8.2016, with the trial court. The said time of depositing the
cost amount only came to be extended by this court in writ petition
No. 8932 of 2016 for 8 days from 21.8.2016 and thus, after fulfilling
the said condition of deposit of costs, written statement came to be
accepted by the co-operative court on 29.8.2016. The petitioners
have filed their counter claim on 29.8.2016 itself and also requested
for grant of time to pay the requisite court fees. The learned Judge
Co-operative court has directed the other side to file say and
accordingly kept the matter on 8.9.2016. Thus, by order dated
26.9.2016 the learned Judge of the Co-operative court has allowed
application Exh.127 filed by the present petitioners for taking counter
claim on record and for permission to grant time to affix the court
fees. The learned counsel submits that filing of counter claim by the
petitioners after filing of written statement is not barred. On the other
hand, on the day on which written statement was accepted the
petitioners have filed their counter claim. The cause of action, as
shown in the counter claim, arises either before or after filing of the
suit and before filing of the written statement. Rule 6A(1) of Order
VIII of C.P.C. does not, on the face of it, bar filing of counter claim by
the defendants after he had filed the written statement. Learned
counsel submits that though the Co-operative court has rightly
allowed application Exh.127 and accepted the counter claim, filed by
the petitioners, the Co-operative appellate court has failed to
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consider the legal aspects and rejected application Exh.127.
Learned counsel submits that the respondent bank has closed its
evidence before the written statement filed by the petitioners. Under
these circumstances, the petitioners would be entitled to call witness
of respondent No.1 Bank for cross examination in the light of the
pleadings and even issues are likely to be recasted in terms of
pleadings of the counter claim filed by the petitioners. In view of the
same, no prejudice is likely to be caused to the respondent Bank.
The petitioners' evidence is yet to commence and the respondent
No.1 Bank's evidence in strict sense, is not closed.
5. Learned counsel for the petitioners, in order to substantiate
his contentions, placed reliance on the following cases:-
i) Vijay Prakash Jarath vs. Tej Prakash Jarath, reported in 2016
AIR (SC) 1304,
ii) Shanti Rani Das Dewanjee vs. Dineshchandra Day, reported in
1997 AIR (SC) 3985
iii) Mahendra Kumar vs. State of Madhya Pradesh, reported in
1987 AIR (SC) 1395,
iv) Sharad Dinkar Padalkar and others vs. Sugandha Balasaheb
Jadhav and Anr, reported in 2014 (1) AIR Bom.R. 107,
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v) Sugesan and Co. Pvt. Ltd. Madras vs. Hindustan Machine Tools
Ltd., reported in AIR 2004 AP 428;
vi) Gulf Oil India Limited vs. Tube Investment of India Limited,
reported in 2013 (2) ALL MR 206
vii) Baburam Sharma vs. District Judge Hardoi and others, reported
in 2011 (85) ALR 195.
6. Learned senior counsel for the respondent Bank submits that
the dispute was filed on 6.6.2010 and the petitioners have put their
appearance on 13.10.2010 but failed to file their written statement.
Consequently, "No W.S." order came to be passed on 19.10.2011.
In the meantime, the respondent Bank led its evidence and also filed
evidence close pursis. On 12.11.2014 the petitioners filed an
application Exh.106 for setting aside the "No W.S." order and to
accept the written statement. However, the said application came to
be rejected on 15.7.2015. Alongwith application Exh.106, though
written statement was filed on 12.11.2014, the counter claim was not
filed. Though cause of action shown to have been arisen prior to
filing of written statement, the petitioners have not filed counter claim
at the time of filing of written statement. The petitioners have filed
counter claim on 8.9.2016. Learned senior counsel submits that
order passed by the revisional court thereby allowing revision No.52
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of 2016 is well within four corners of law. It is well settled that the
counter claim has to be filed at the time of filing of written statement
and counter claim filed after written statement cannot be accepted.
7. Learned senior counsel for respondent No.1 Bank in order to
substantiate his submissions placed reliance on the judgment in the
case of Ramesh Chand Ardawatiya vs. Anil Panjwani, reported
in (2003) 7 SCC 350.
8. Learned senior counsel appearing for respondent bank has
vehemently submitted that the belated counter claim must be
discouraged by the court. Learned counsel for the petitioner has
submitted that even the court in many cases has allowed the
defendant to amend his written statement so as to enable him to
elaborate his defence and take additional plea in support of his case.
Further litigation should be endeavoured to be avoided and even the
joining several cause of actions in the suit is permissible.
9. In the backdrop of these submissions, Rule 6-A of Order VIII
of C.P.C. is reproduced herein below:-
"6A. Counter claim by defendant.- (1) 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
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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 counter claim is in
the nature of a claim for damages or not;
Provided that such counter claim shall not exceed the pecuniary
limits of the jurisdiction of the court.
(2) Such counter claim shall have the same effect as a cross suit so
as to enable the court to pronounce a final judgment in the same suit,
both on the original claim and on the counter claim.
(3) The plaintiff shall be at liberty to file a written statement in answer
to the counter claim of the defendant within such period as may be
fixed by the court.
(4) The counter claim shall be treated as a plaint and governed by
the rules applicable to plaints."
10. A perusal of sub-Rule (1) of Rule 6A of Order VIII, it leaves no
room to a doubt that cause of action in respect of which counter
claim can be filed, accrued before the defendant has delivered his
defence i.e. before the defendant has filed written statement. Right
to file counter claim is additional right and thus the cause of action
must accrue either before or after filing the suit but before the
defendant has raised his defence.
11. In the instant case, in para 28 of the counter claim the cause
of action shown to have been occurred on 15.3.2012 when the
petitioners submitted "O.T.S." proposal on or before 15.4.2012 the
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same was refused on 2.5.2012 by the Bank branding the petitioners
as willful defaulters. Even though assuming that in the year 2014 the
petitioners have filed their written statement alongwith application
Exh.106 filed for setting aside "No W.S." order, the aforesaid cause
of action shown to have been arose before or after filing of the
dispute but certainly before the petitioners original defendants have
tendered their defence in the suit. It is well settled that the counter
claim, being suit in status subject to law of limitation can be
entertained even after the written statement is filed by defendant and
however, subject to condition that such cause of action arises either
before or after filing of the suit, upper limit of which, is filing of the
written statement.
12. Learned senior counsel for the respondents bank has placed
his reliance on the judgment in the case of Ramesh Chand
Ardawatiya vs. Anil Panjwani, (supra). In para 28 of the said
judgment, the Supreme Court has made the following observations:-
"28. Looking to the scheme of Order VIII as amended by Act No.
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 plaintiff preferred in exercise
of legal right conferred by Rule 6-A. Secondly, a counter-claim may
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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
VI Rule 17 of the CPC if sought to be introduced by way of
amendment, or, subject to exercise of discretion conferred on the
Court under Order VIII Rule 9 of the 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 re-opening 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. But
certainly a counter-claim is not entertainable when there is no
written statement on record. There being no written statement filed
in the suit, the counter-claim was obviously not set up in the written
statement within the meaning of Rule 6-A. There is no question of
such counter-claim being introduced by way of amendment; for
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there is no written statement available to include a counter claim
therein. Equally there would be no question of a counter-claim
being raised by way of 'subsequent pleading' as there is no
'previous pleading' on record. In the present case, the defendant
having felled to file any written statement and also having forfeited
his right to filing the same the Trial Court was fully justified in not
entertaining the counter-claim filed by the defendant-appellant. A
refusal on the part of the Court to entertain a belated counter-claim
may not prejudice the defendant because in spite of the counter-
claim having been refused to be entertained he is always at liberty
to file his own suit based on the cause of action for counter-claim."
13. In para 30 of said judgment, the Supreme Court has following
observations by referring some other cases which are relevant for
discussion in the present matter:-
"30. In Mahender Kumar and Anr's case (supra) counter- claim
was sought to be brought on record after the filling of a written
statement which was turned down by the Trial Court upon a
misreading of Rule 6-A(1) that the counter-claim filed after the filing
of the written statement was ipso facto not maintainable. This
Court upset such erroneous view by clarifying the legal position,
apparent on a bare reading of the relevant provision that the only
requirement of Rule 6-A(1) was that the cause of action for the
counter-claim should have arisen before the filing of the written
statement and if that was so, the counter-claim was not simply
excluded. In Shanti Rani Das Dewanji's case (supra), the brief
order of this Court deals with the situation that the right to file a
counter-claim does not come to an end by filing of the written
statement once. None of the two decisions deals with a situation
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as before us and the question of law arising therefrom namely
whether it is permissible to raise and plead a counter-claim though
the defendant has not filed a written statement and has also lost
his right to file the same. On the contrary, in both the cases cited
by the learned senior counsel for the appellant, there was a written
statement filed by the defendant available on record and the
counter-claim was sought to be pleaded in addition to the defence
taken in the written statement. It is difficult to conceive the
defendant being conferred with a right to attack the plaintiff by way
of a counter-claim in that very suit in which he has been held
entitled not even to defend himself by filing a written statement and
pleading a positive defence to defend himself against the relief
sought for by the plaintiff."
14. In the case cited above, the Supreme court has dealt with the
issue wherein the counter claim alone filed without filing any written
statement. The Supreme Court has observed that there being no
written statement filed in the suit, the counter claim obviously not set
up in the written statement within the meaning of Rule 6-A of Order
VIII of C.P.C. Thus, the issue is altogether different and the
aforesaid case relied upon by learned senior counsel cannot be
made applicable to the facts and circumstances of the present case.
15. In view of above discussion, I find that the impugned order
passed by the Maharashtra State Co-operative Appellate Court is not
sustainable. Writ petition thus deserves to be allowed by setting
aside the order passed by the Co-operative appellate court.
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16. At this stage, learned counsel for the petitioners, on
instructions, submits that the petitioners are not pressing their prayer
to the extent of quashing and setting aside the order passed by the
appellate court in revision No 18 of 2017. In view of the same, the
order dated 26.10.2016 passed by the Co-operative Court below
Exh.134-A filed by the present petitioners directing deletion of
additional parties in the counter claim i.e. Reserve Bank of India and
the District Industry Center would stand as it is.
17. Learned senior counsel at this stage submits that the dispute
is pending since long and thus Co-operative court may be directed to
dispose of the pending dispute expeditiously. In view of above,
following order is passed:-
ORDER
I. The writ petition is hereby partly allowed. No costs.
II. The judgment and order dated 8.4.2017 passed by the
Member, Maharashtra State Co-operative Appellate court,
Bench at Aurangabad in Revision application No. 52 of 2016 is
hereby quashed and set aside and revision application No. 52
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of 2016 filed by respondent No.1 Bank is hereby dismissed.
The order dated 26.9.2016 passed below Exh.127 in Dispute
No. 326 of 2010 by the Co-operative Court, Jalgaon stands
confirmed.
III. The writ petition is hereby dismissed to the extent of rejection
of Revision No.18 of 2017 by the Member, Maharashtra State
Co-operative Appellate court, Bench at Aurangabad. Needless
to say that the order passed by the Co-operative court dated
26.10.2016 below Exh.134-A stands confirmed.
IV. The Co-operative Court, Jalgaon is hereby directed to dispose
of Dispute No. 326 of 2010, as expeditiously as possible and
preferably within period of six months from the date of receipt
of this order.
V. Writ petition is accordingly disposed of.
VI. Rule is made absolute in the above terms.
( V. K. JADHAV, J.)
rlj/
