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QUESTION | Explain the meaning, nature, scope and modes of setting up counter claim. Who may file counter claim and upto which stage a counter claim may be set up? Discuss the effect of counter claim.
Importance of this question : This concept has been asked several times in various state judicial service exams. Especially recently asked in Madhya Pradesh Judicial Service Exam.
QUESTION POSTED ON | 25.09.2021
MODEL ANSWER WILL BE POSTED ON | 25.09.2021
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How to answer this question?
This question can be attempted in two parts:
- First part- Discuss the meaning of counter claim, the relevant provisions dealing with counter claim, its nature and scope, ways to set aside counter claim and under which Rules, person eligible to file a counter claim, at what stage it can set up.
- In second part- discuss the effects and relevant cases.
Discuss the relevant landmark case.
Answer: Provision: Order 8, Rule 6-A to 6-G which were added by the CPC (Amendment) Act, 1976 deal with provisions relating to counter-claim by the defendant.
It is substantially a cross action by defendant against plaintiff and secures to the defendant full relief with a separate action at law. Meaning of counter claim: Counter claim means a claim made by the defendant in a suit against the plaintiff. Counter claim is independent and separate from plaintiff’s claim. It is a cause of action in favor of the defendant against the plaintiffs.
In relation this the Apex Court in the case of Laxmidas v. Nanabhai (AIR 1964 SC 11)held that the court has power to treat the counter claim as a cross- suit and hear the original suit and counter claim together if the counter- claim is properly stamped.
Nature and scope of counter claim: The provisions related to counter claim saves the time of courts. It Excludes inconvenience to the parties to suit and decide all the suits between same parties avoiding unnecessary multiplicity of judicial proceedings and prolonged trials.
Modes of Setting aside counter claim: There are three modes of setting aside a counter claim as given under:
a) In the written statement filed under Order 8 Rule 1,
b) By amendment written statement with the leave of the court and setting up counter claim, and
c) In a subsequent pleading under Order 8 Rule 9.
Furthermore, Order 8, Rule 6A(1) states that the defendant may set up by way of counterclaim against the plaintiff’s claim any right or claim in respect of action accruing to defendant against the plaintiff.
Who can file counter claim?
The general rule is that defendant can file a counter claim against plaintiff. Defendant may claim relief against plaintiff and co-defendants in the suit.
Point to Note: Counter claim solely against co-defendants is not maintainable.
Setting up counter claim: It may be set up by a defendant against the plaintiff in respect of cause of action accruing either before or after filing of the suit, but such claim should not be barred by limitation.
Effect of Counter claim:
a) It has effects of a cross suit and court can pronounce final judgment on the original claim and counter- claim.
b) The counter claim of the defendant is treated as a plaint and plaintiff can file a written statement in answer to that.
c) Its effect is that even if the suit of plaintiff is stayed, discontinued, dismissed or withdrawn then the counter claim will be decided on merits.
d) Defendant will have a right to get a decree for counter claim as claimed in written statement.
Point of View: Oriental Ceramic Pvt. Ltd. v. Calcutta Municipal Corporation (AIR 2000 Cal 17): A counter claim shall have the same effect as a cross suit and it has to be tried with the original claim in 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. FOR JUDICIAL SERVICE COURSE CLICK HERE