Order VIII Rule 6A CPC | Counter-Claim Permissible Even After Issues Framed if Substantive Justice Demands: Bombay HC

The Bombay High Court, in a significant ruling on counter-claims under Order VIII Rule 6A of the Code of Civil Procedure, 1908 (CPC), has clarified that judicial discretion must prioritize substantive justice over rigid procedural delays. The Court held that while delay is a relevant factor, it cannot be the sole ground for rejecting a counter-claim if issues in the main suit have not yet been framed. This judgment reaffirms the object of avoiding multiplicity of proceedings and underscores the need for courts to evaluate counter-claims on a case-specific basis, balancing prejudice to parties and the overarching goal of expeditious justice.

Background & Facts

The Dispute

The dispute involves two writ petitions filed under Article 227 of the Constitution of India challenging orders passed by a Civil Judge rejecting applications for permission to file counter-claims in two suits (RCS/2249/2019 and RCS/2248/2019). The suits were instituted by Shree Nav Vinayak Co-operative Housing Society Ltd. (the Plaintiff), a society registered under the Maharashtra Co-operative Societies Act, 1960, against Mandar Suresh Bhatwadekar (Defendant No. 1) and Dr. Shrirang Arun Limaye (Defendant No. 2, the Petitioners herein). The Plaintiff sought a declaration that the Agreement for Assignment of leasehold rights executed by Defendant No. 1 in favor of Defendant No. 2 was illegal, void ab initio, and not binding on the Society.

Key Facts

• Allotment and Share Certificate: The Plaintiff Society allotted Plot No. 3 (subject of RCS/2248/2019) and Plot No. 4 (subject of RCS/2249/2019) to Defendant No. 1, issuing a letter of allotment and share certificate. However, the Society allegedly failed to execute a lease deed despite repeated requests.
• Transfer of Leasehold Rights: Defendant No. 1 entered into a Memorandum of Understanding (MOU) with Defendant No. 2 for the transfer of leasehold rights. On 29th June, 2017, Defendant No. 1 sought a No Objection Certificate (NOC) from the Plaintiff for the transfer, which was rejected.
• Proceedings Before Registrar: Defendants filed an application before the Deputy Registrar, Co-operative Societies, seeking directions for the issuance of NOC. The Deputy Registrar allowed the application on 11th January, 2018, and this order was affirmed in revision by the Divisional Joint Registrar on 31st May, 2019. Pursuant to this, an authorized officer issued the NOC on 4th June, 2019, and Defendant No. 2 was admitted as a member of the Society.
• Agreement for Assignment: On 23rd October, 2019, Defendant No. 1 executed a registered Agreement for Assignment transferring leasehold rights in the subject plots to Defendant No. 2.
• Institution of Suits: The Plaintiff filed suits seeking a declaration that the Agreement for Assignment was illegal, void, and not binding on the Society. The Plaintiff also assailed the orders passed by the Registrar under the Act of 1960 before the State Government in revision, which set aside the Registrar’s orders.
• Writ Petitions and Supreme Court: Defendants challenged the State Government’s order in Writ Petition Nos. 3011 of 2024 and 3169 of 2024. A learned Single Judge dismissed the writ petitions on 19th November, 2025, observing that the Registrar lacked jurisdiction to decide disputed questions of fact. The Supreme Court, in Special Leave to Appeal (C) No(s). 36837/2025, declined to interfere with the High Court’s order on 18th December, 2025, and directed the trial court to dispose of the suits within one year.

Procedural History

• 15th March, 2019: Plaintiff files suits (RCS/2249/2019 and RCS/2248/2019) seeking declaration of illegality of the Agreement for Assignment.
• 11th January, 2018: Deputy Registrar allows Defendants’ application for NOC.
• 31st May, 2019: Divisional Joint Registrar affirms Deputy Registrar’s order.
• 4th June, 2019: NOC issued; Defendant No. 2 admitted as member.
• 23rd October, 2019: Defendant No. 1 executes Agreement for Assignment in favor of Defendant No. 2.
• State Government’s Order: Sets aside Registrar’s orders in revision.
• 19th November, 2025: High Court dismisses Writ Petition Nos. 3011 and 3169 of 2024, granting liberty to parties to pursue remedies before a competent court.
• 18th December, 2025: Supreme Court declines to interfere; directs expeditious disposal of suits.
• Applications for Counter-Claim: Defendants file applications seeking permission to file counter-claims under Order VIII Rule 6A CPC, asserting their right to seek enforcement of statutory obligations.
• Impugned Orders: Civil Judge rejects applications on dates not specified in judgment, holding the counter-claims barred by limitation, premature, and lacking privity of contract between Plaintiff and Defendant No. 2.
• 28th March, 2026: Defendants file present writ petitions (WP No. 4276 of 2026 and WP No. 4362 of 2026).

Relief Sought

The Petitioners sought:

• Permission to file counter-claims in the respective suits.
• A decree of specific performance, directing the Plaintiff Society to execute and register the lease deed in favor of Defendant No. 1.
• Directions to the Society’s Managing Committee to execute and register a deed of surrender and a subsequent lease deed in favor of Defendant No. 2.

The Parties’ Positions

The Plaintiff resisted the applications, contending:

• The proposed counter-claims were beyond the scope of Order VIII Rule 6A CPC.
• There was no privity of contract between the Plaintiff and Defendant No. 2.
• The counter-claims altered the subject matter of the suit and widened its scope.
• The counter-claims were barred by limitation, with no explanation for the delay of over five years.

The Legal Issue

The central question before the Court was whether Order VIII Rule 6A CPC permits a defendant to file a counter-claim after a substantial delay, particularly when:

1. The issues in the main suit have not yet been framed.
2. The counter-claim seeks reliefs that may be barred by limitation.
3. The counter-claim involves parties not originally in privity with the Plaintiff.
4. The judicial discretion to allow or reject the counter-claim should be exercised based on principles of substantive justice, avoiding multiplicity of proceedings, and balancing prejudice to the parties.

Arguments Presented

For the Petitioners

• Misconstruction of Order VIII Rule 6A: The Civil Judge erred in importing the aspect of delay into the interpretation of Order VIII Rule 6A CPC, which does not prescribe a strict time limit for filing counter-claims. The only limitation is that the cause of action must accrue before the defendant delivers his defense.
• Contradictory Findings: The Civil Judge’s observations that the counter-claim was both barred by limitation and premature were mutually destructive and incongruous.
• No Prescribed Limitation: There is no statutory period of limitation for filing a counter-claim. The only condition is that the cause of action must have arisen before or after the filing of the suit but before the defense is delivered.
• Liberty Granted by Higher Courts: The necessity to file the counter-claim arose after the State Government set aside the Registrar’s order, and this Court and the Supreme Court granted liberty to the Defendants to pursue appropriate proceedings. The counter-claim was filed in response to this liberty.
• Precedent Reliance: Cited Ashok Kumar Kalra vs Wing Commander Surendra Agnihotri ((2020) 2 SCC 394), where the Supreme Court held that Order VIII Rule 6A CPC does not impose an embargo on filing a counter-claim after the written statement, provided the cause of action accrued before the defense was delivered.

For the Respondent

• Delay in Filing: The counter-claim was filed after a delay of five years, with no explanation for the belated filing. The Civil Judge rightly exercised discretion in rejecting the application.
• Barred by Limitation: The cause of action for the counter-claim accrued as early as October 2012, rendering the counter-claim ex facie barred by limitation.
• No Privity of Contract: There was no contractual relationship between the Plaintiff and Defendant No. 2, making the counter-claim impermissible.
• Precedent Reliance: Cited Vijaymala Sidling Doijad v. State of Maharashtra and others (2005(3) Mh.L.J. 329), where this Court held that belated filing of a counter-claim is not permissible.
• Liberty Misconstrued: The liberty granted by the High Court and Supreme Court to pursue remedies did not amount to a carte blanche for the Defendants to file counter-claims belatedly and beyond the scope of the suit.

The Court's Analysis

The Court undertook a detailed examination of Order VIII Rule 6A CPC, its object, and the judicial precedents governing counter-claims:

Interpretation of Order VIII Rule 6A CPC

The Court extracted Order VIII Rule 6A CPC, which provides:

“Order 8 Rule 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 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.”

The Court observed that Order VIII Rule 6A CPC does not prescribe a strict time limit for filing a counter-claim. Instead, the right to file a counter-claim is linked to the accrual of the cause of action, which must arise either before or after the filing of the suit but before the defendant delivers his defense. The outer limit for filing a counter-claim is thus the framing of issues in the suit.

Object of Order VIII Rule 6A CPC

The Court emphasized that the primary object of Order VIII Rule 6A CPC is to:

• Avoid multiplicity of judicial proceedings.
• Save judicial time and reduce inconvenience to parties.
• Enable determination of claims and counter-claims in a single proceeding, thereby resolving all disputes between the same parties.

Precedents on Counter-Claims

The Court relied on several key judgments to elucidate the principles governing counter-claims:

1. Ramesh Chand Ardawatiya v. Anil Panjwani ((2003) 7 SCC 350):

   • The Supreme Court held that while a counter-claim can be filed even after the written statement, courts must exercise discretion judiciously.
   • If permitting a counter-claim would prolong the trial, complicate proceedings, or cause delay, the court may refuse to entertain it.
   • Generally, counter-claims filed after issues are framed or trial has commenced may be rejected.

2. Bollepanda P. Poonacha and Anr. v. K.M. Madapa ((2008) 13 SCC 179):

   • The Supreme Court discouraged belated counter-claims, emphasizing that courts must exercise discretion to subserve justice.
   • A counter-claim cannot be allowed if it substitutes one cause of action for another or defeats the object of speedy justice.

3. Vijay Prakash Jarath v. Tej Prakash Jarath ((2016) 11 SCC 800):

   • The Supreme Court allowed a counter-claim filed two and a half years after framing of issues, noting that the Plaintiffs’ evidence was still being recorded and no prejudice would be caused.

4. Ashok Kumar Kalra vs Wing Commander Surendra Agnihotri ((2020) 2 SCC 394):

   • The Supreme Court, in a reference to a larger bench, addressed the following questions:
     • Whether Order VIII Rule 6A CPC mandates an embargo on filing a counter-claim after the written statement.
     • If not, what are the restrictions on filing a counter-claim after the written statement.
   • The Court held that Order VIII Rule 6A CPC does not impose a strict embargo on filing a counter-claim after the written statement. However, the defendant cannot be permitted to file a counter-claim after issues are framed and the suit has proceeded substantially.
   • The Court culled out illustrative factors for exercising discretion, including:
     • Period of delay.
     • Prescribed limitation period for the cause of action.
     • Reason for the delay.
     • Defendant’s assertion of his right.
     • Similarity of cause of action between the main suit and counter-claim.
     • Cost of fresh litigation.
     • Injustice and abuse of process.
     • Prejudice to the opposite party.
     • Facts and circumstances of each case.
     • Outer limit: Counter-claim must be filed before issues are framed.

Application to the Present Case

The Court applied the principles from Ashok Kumar Kalra to the facts of the case:

• Outer Limit Not Crossed: The applications for counter-claim were filed before the issues in the main suit were framed, thus satisfying the outer limit prescribed in Ashok Kumar Kalra.
• Delay of Five Years: The Court acknowledged the delay of approximately five years but noted that the cause of action for the counter-claim was asserted to have arisen on multiple occasions between 22nd October, 2012, and 28th July, 2015, with a continuing cause of action due to the Plaintiff’s alleged failure to execute the lease deed.
• Plaintiff’s Stand: The Plaintiff’s stand in the plaint was inconsistent. On one hand, it challenged the very allotment of the plots to Defendant No. 1. On the other hand, it alleged default in payment of dues as the reason for refusing to execute the lease deed and issue NOC.
• Registrar’s Orders and Subsequent Litigation: The Registrar’s orders directing issuance of NOC and admission of Defendant No. 2 as a member held the field until they were set aside by the State Government. The Plaintiff’s suit sought to declare the Agreement for Assignment illegal, which necessitated the Defendants’ counter-claim for enforcement of statutory obligations.
• Liberty Granted by Higher Courts: The High Court and Supreme Court had granted liberty to the parties to pursue remedies before a competent court. The Court rejected the Plaintiff’s contention that this liberty did not enure to the Defendants’ benefit.
• Similarity of Cause of Action: The counter-claim involved common questions of fact and law with the main suit, including:
  • Whether Defendant No. 1 was entitled to execution of the lease deed.
  • Whether the Plaintiff could refuse to execute the lease deed or grant NOC for transfer of leasehold rights.
• Prejudice to Plaintiff: The Court found no irretrievable prejudice to the Plaintiff if the counter-claim was allowed. The fate of the counter-claim hinged on the outcome of the main suit.
• Limitation: The Court observed that the question of limitation was a mixed question of fact and law, which should be adjudicated at trial rather than being a ground for rejecting the counter-claim at this stage.

The Verdict

The Court allowed the writ petitions and set aside the impugned orders passed by the Civil Judge. The key directions were:

• The Defendants were permitted to file the counter-claim within one week from the date of uploading of the order.
• The Plaintiff was entitled to file a written statement to the counter-claim within 30 days thereafter.
• The issues of limitation and whether the Defendants were otherwise entitled to the reliefs claimed in the counter-claim were kept open for adjudication at trial.
• The parties were directed to co-operate with the Civil Judge for expeditious disposal of the suits and counter-claims in conformity with the Supreme Court’s direction to dispose of the suits within one year.
• No order as to costs was passed.

What This Means For Similar Cases

Judicial Discretion Must Prioritize Substantive Justice

This judgment reaffirms that Order VIII Rule 6A CPC is an enabling provision designed to avoid multiplicity of proceedings and promote substantive justice. Courts must exercise discretion judiciously, considering:

• The outer limit for filing a counter-claim is till issues are framed.
• Delay alone is not sufficient to reject a counter-claim if issues have not been framed.
• The object of the provision - resolving all disputes between parties in a single proceeding - should guide the exercise of discretion.

Limitation Is a Trial Court Question

• The question of whether a counter-claim is barred by limitation should generally be left open for adjudication at trial, especially when it involves mixed questions of fact and law.
• Courts should avoid premature adjudication of limitation at the stage of deciding whether to permit a counter-claim.

Counter-Claims and Privity of Contract

• The absence of privity of contract between the Plaintiff and a third party (e.g., Defendant No. 2) may not be an absolute bar to filing a counter-claim, particularly when the counter-claim involves common questions of fact and law with the main suit.
• Courts should assess whether allowing the counter-claim would widen the scope of the suit or cause prejudice to the Plaintiff. If the reliefs in the counter-claim are interlinked with the main suit, permitting the counter-claim may be justified.

Practical Takeaways for Practitioners

• File Counter-Claims Timely: While delay may not be fatal, practitioners should file counter-claims as soon as the necessity arises to avoid objections on grounds of delay.
• Plead Cause of Action Clearly: Ensure the counter-claim specifically pleads the dates of accrual of the cause of action and explains any delay to preempt objections on limitation.
• Leverage Liberty Granted by Higher Courts: If higher courts grant liberty to pursue remedies, use this as a basis to file counter-claims, but ensure they are within the scope of the main suit.
• Argue Prejudice: When opposing a counter-claim, practitioners should demonstrate specific prejudice (e.g., protraction of trial, irreparable loss) rather than relying solely on delay or limitation.
• Seek Adjudication at Trial: If the counter-claim involves complex questions of fact or law, argue for these issues to be kept open for trial rather than being decided at the permission stage.