Counter-Claim in Civil Suits: Legal Determinations and Court Orders

This case addresses a dispute over the filing of a counter-claim in an ongoing civil suit for specific performance, Suit No. 1821 of 2004, involving Mahesh Govindji Trivedi as the appellant and Bakul Maganlal Vyas & Ors. as the respondents. The appellant sought to introduce a counter-claim regarding the possession of the suit property, but the matter faced multiple legal hurdles due to the delayed filing of the counter-claim and procedural objections raised by the plaintiffs. The key issue in this case revolves around whether the appellant should be allowed to file the counter-claim after the issues were framed in the suit, and if such a filing is permissible under the applicable rules of procedure and the principles of justice.

Background:
The appellant filed the counter-claim after a significant delay, nearly 13 years after filing the written statement. The counter-claim sought possession of the suit property in question, which was located in Vile Parle, Mumbai. The suit itself was filed by the plaintiffs seeking specific performance of a contract for the sale of the property. The appellant’s defense was that he had acquired ownership of the property through succession, which was finalized in 2017. The counter-claim was initially filed in 2018 but was objected to by the plaintiffs, leading to a legal battle over whether the counter-claim could be admitted into the proceedings.

The learned Single Judge of the High Court initially rejected the counter-claim on the grounds that it was filed too late, without seeking prior leave of the court, and in violation of Rule 95 of the Bombay High Court (Original Side) Rules. The appellant appealed this decision, and the Division Bench of the High Court, while acknowledging the appellant’s right to seek a counter-claim, directed that the matter be reconsidered. The appellant then moved a Notice of Motion seeking permission to file the counter-claim, which was accepted by the learned Single Judge in May 2019.

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Appellant’s Arguments:
The appellant, represented by senior counsel Mr. Shyam Divan, argued that the counter-claim was crucial for the effective adjudication of the dispute between the parties. The appellant asserted that filing the counter-claim at a later stage in the proceedings would help avoid multiplicity of suits and ensure a complete and final resolution of the issues. He emphasized that the counter-claim was directly related to the ownership and possession of the suit property and should be allowed to be included in the same suit.

The appellant further argued that there was no intentional delay in filing the counter-claim, as the appellant only acquired full rights to the suit property in 2017 following the resolution of a dispute over succession. The appellant also noted that the plaintiffs had not been prejudiced by the delay, as they were already aware of the claim to the property. The appellant urged the Court to allow the counter-claim to proceed, as it would be in the interest of justice and avoid the need for separate proceedings.

Respondent’s Arguments:
The respondents, represented by senior counsel Mr. Shekhar Naphade, opposed the filing of the counter-claim, arguing that it was filed too late and should not be allowed. They pointed out that the counter-claim had been filed 13 years after the appellant’s written statement and without obtaining prior permission from the court, which violated the procedural rules set out in Rule 95 of the Bombay High Court (Original Side) Rules and Order VIII Rule 6-A of the Code of Civil Procedure (CPC). The respondents contended that allowing such a belated counter-claim would cause unnecessary delays and prejudice the plaintiffs.

The respondents also argued that the appellant had failed to provide a valid reason for the significant delay in filing the counter-claim. They emphasized that the appellant had not sought permission to file the counter-claim before the issues were framed in the suit, which should have been the proper course of action. The respondents further argued that the issues in the suit had already been framed, and it was too late to introduce a counter-claim at this stage. They urged the court to reject the counter-claim and allow the suit to proceed on its merits.

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Court’s Analysis:
The Supreme Court examined the procedural rules governing the filing of counter-claims and the circumstances surrounding the delay in this case. The Court noted that Rule 95 of the Bombay High Court (Original Side) Rules, which is in line with Order VIII Rule 6-A of the CPC, mandates that a counter-claim should be filed along with the written statement or within a time prescribed by the court. However, the Court also observed that there is no absolute prohibition on filing a counter-claim after issues are framed, as long as the delay is justified and does not cause undue prejudice to the opposing party.

The Court emphasized that procedural rules should not be applied rigidly, and the ultimate goal of the legal process is to ensure a fair and just resolution of disputes. In this case, the Court noted that the counter-claim was filed before the issues in the suit had been framed, and the delay in filing the counter-claim was due to the appellant’s delayed acquisition of ownership rights to the property. The Court acknowledged that the counter-claim was not unrelated to the main suit but was directly linked to the appellant’s right to possession of the property.

Judgment:
The Supreme Court allowed the appeal, setting aside the order of the Division Bench of the High Court and restoring the order of the learned Single Judge allowing the appellant to file the counter-claim. The Court held that the appellant should be permitted to file the counter-claim, as the delay in filing it was justified, and allowing it would prevent multiplicity of proceedings. The Court emphasized that the counter-claim was directly related to the subject matter of the suit, and its inclusion would facilitate the final resolution of all issues between the parties in a single suit.

The Court also clarified that the respondents’ objections to the delay did not outweigh the interest of justice, as no prejudice had been caused by the belated filing. The Court directed the trial to proceed with the counter-claim on record, and the parties were instructed to cooperate in ensuring the expeditious disposal of the suit.

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Conclusion:
This case reinforces the principle that procedural rules should serve the ends of justice rather than create obstacles to fair adjudication. The Court’s decision highlights the importance of flexibility in applying procedural requirements when the delay in filing a counter-claim is justifiable and when the claim is directly related to the dispute in the main suit. The judgment also underscores the Court’s discretion in ensuring that cases are resolved efficiently and in a manner that prevents unnecessary legal complications or delays.

Petitioner Name: Mahesh Govindji Trivedi.
Respondent Name: Bakul Maganlal Vyas & Ors..
Judgment By: Justice Dinesh Maheshwari, Justice Aniruddha Bose.
Place Of Incident: New Delhi.
Judgment Date: 12-10-2022.

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