Courts in India treat counterclaims as a plaint in a crosssuit. Counterclaims are a claim bought against the Plaintiff by the Defendant in a lawsuit. It is typically filed as part of a Defendant’s answer to the original claim. Counterclaim can contain a variety of material ranging from accusation of fraudulent activity to claims which would preempt any attempt at suit. The goal of counterclaim is to turn the table on the plaintiff by bringing up more issues in the case and demanding redress.
This article delves with the difference between an adjustment and a set-off and/ or counterclaim and focusing on the common features set off and counter claim. It also deals with the object of the amendments established by Rules 6-A to 6-G are conferment of a statutory right on the defendant to set up a counterclaim autonomous of the claim on the basis of which the Plaintiff laid the suit, on his own cause of action. Further the article deals with the effects and reliefs to Defendants through counterclaims.
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 action according to the defendant against the plaintiff either before or after the filing of the suit, but before 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 damage or not:
- Provided that such counter-claim shall not exceed the pecuniary limits of the jurisdiction of the court.
- 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.
- 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.
- The counter-claim shall be treated as a plaint and governed by the rules applicable to plaints.
The effect of this rule is from the point of view of pleading to assimilate a counter-claim with a plaint in a suit and is therefore governed by the same rules of pleading as a plaint. A counter-claim is substantially a cross-action, not merely a defence to the plaintiff’s claim. It must be of such a nature that the court would have jurisdiction to entertain it as a separate action.
The rights granted to the defendants to set up counter claim are not only limited for the claim put forth by the plaintiff in a suit itself, and even the cause of action need not be the same; there is nothing in Order VIII, Rule 6 or 6A, CPC restricting the nature of relief which the defendants might seek in the counter claim1. The essence of a counter claim is that defendant should have an independent cause of action in the nature of a cross action and not merely a defence to the plaintiff’s claim2. Where the defendant pays into court the full amount of plaintiff’s claim but denies liability to a portion thereof, the plea cannot be agitated in the suit.
The crucial date for determining when the plaint in a cross suit should be treated as having been filed is not the date when the conversion is ordered, but the date on which the written statement, containing the counter claim is filed3.
Limitation for counter- claim- Order VIII, rules 6A to 6G may not prescribe any period of limitation for filing of a counter-claim, but in view of Order 8, rule A (4), read with Order VII, Rule 11(d) and S. 3(2) (b) of the Limitation Act, it can be said that there is a time limit for filing a counter-claim and the time limit is what is prescribed by the law of limitation in relation to that particular counter-claim. If it appears from the statements made in the application wherein the counter-claim is set up that it is barred by the law of limitation, the counter claim would be liable to rejection4.
Counter Claim at appellate stage- An appellate authority has no power to entertain counter-claim made for the first time at the appellate stage5.
SET-OFF AND COUNTER CLAIM- COMMON FEATURES
- None should exceed the pecuniary limits of the jurisdiction of the court;
- Both are pleaded in the written statement, if the law governing the court permits such plea being raised by the defendant in the written statement;
- The plaintiff is expected to file a written statement in answer to claim for set off or to a counter claim;
- Even if permitted to be raised, the court may in appropriate cases direct a set off or counter claim being tried separately;
- A defendant cannot be compelled to plead a set off nor a counter claim: he may as well maintain an independent action for enforcing the claim forming subject matter of set-off or counter claim;
- Both are liable to pay court-fee;
- Dismissal of suit or its withdrawal would not debar a set off or counter claim being tried may be followed by a decree against the plaintiff6.
Claims by Financial Institutions- Recovery of Debts Due to Banks and Financial Institutions Act 1993.- if the claim of the financial institutions exceeds Rs. ten lakhs, then the civil court has no jurisdiction, it must be entertained and decided by the Debts Recovery Tribunal. The counter claim made by the defendants cannot be entertained by debts recovery tribunal, it has to be entertained and decided by the civil court. If such procedure is adopted, then both suits can be tried before the two different forums having jurisdiction to entertain the same. A similar view appears to have been expressed in a ruling7.
Rule 6B. Counter-claim to be stated
Where any defendant seeks to rely upon any ground as supporting a right of counter-claim, he shall, in his written statement, state specifically that he does so by way of counter-claim.
Rule 6C. Exclusion of counter-claim
Where a defendant sets up a counter-claim and the plaintiff contends that the claim thereby raised ought not to be disposed of by way of counter-claim but in an independent suit, the plaintiff may, at any time before issues are settled in relation to the counter-claim, apply to the Court for an order that such counter-claim may be excluded, and the Court may, on the hearing of such application make such order as it thinks fit.
There is no jurisdiction to exclude a counter claim merely on the ground that in the circumstances security cannot be ordered to be given by the defendants, though it has been ordered against plaintiffs. The fact that the defendant cannot bring an independent action is not a sufficient ground for refusing to strike out a counter claim. In a suit for injunction, the defendant can plead counter-claim for injunction in respect of the same suit property or a different property based on a different cause of action is maintainable8.
Only application for counter-claim but adjustment is not maintainable under r 6C9.
Rule 6D. Effect of discontinuance of suit
If in any case in which the defendant sets up a counterclaim, the suit of the plaintiff is stayed, discontinued or dismissed, the counter-claim may nevertheless be proceeded with.
This further illustrates the principle that a counter-claim is to be treated as a cross action, and is not affected by anything which relates solely to the plaintiff’s claim. Thus, where the plaintiff discontinues action the counter-claim has been served, he cannot prevent the defendant from enforcing against him the causes of action contained in the counter-claim. So if an action is dismissed being frivolous, the counter claim is not affected and the defendant may be granted the relief which he seeks thereby. In a suit for eviction even if landlord wants to discontinue the suit or get it stayed or dismissed the counter claim by the tenant in respect of rent can nevertheless be proceeded with10.
Rule 6E. Default of Plaintiff to reply to counter-claim.
If the plaintiff makes default in putting in reply to the counter-claim made by the defendant, the Court may pronounce judgment against the plaintiff in relation to the counter-claim made against him or make such order in relation to the counter-claim as it thinks fit.
Though the failure of the plaintiff to file a written statement in answer to the counter-claim of the defendant will make the provisions of Order 8, Rule 5(2) applicable enabling the court to treat the allegations in the counter-claim as admitted and pronounce judgment on that basis as per provisions of r 6G below, this specific provision has empowered the court also to make snap decision against the plaintiff for failure to file written statement to the counter-claim of the defendant. In view of the rival claim of cruelty and desertion against each other, the refusal to grant divorce on the mere ground of not filing reply to the counter claim by the non-petitioner was not held improper11.
Rule 6F. Relief to Defendant where counter-claim succeeds
Where in any suit a set-off or counter-claim is established as defence against the plaintiff’s claim and any balance is found due to the plaintiff or the defendant, as the case may be, the Court may give judgment to the party entitled to such balance.
Since order 8, rule 6(2) read with order 20, rule 19 confers power on the court to adjudicate upon the claim to setoff made by the defendant and to pass a decree in his favour in case the balance turns in his favour, reference to a set-off also in this rule seems to have been unnecessarily made.
Rule 6G. Rules relating to written statement to apply
The rules relating to a written statement by a defendant shall apply to a written statement filed in answer to a counter-claim.
The effect of this rule is, from the point of view of pleading, to assimilate a written statement filed by the plaintiff in answer to a counter-claim with a written statement by a defendant to plaintiff’s claim, and written statement in answer to a counter-claim is therefore governed by the same rules of pleading as a written statement by the defendant.
Rules 6A to 6G are new and confer in addition to a right of set off under Rule 6, a statutory right to file a counter claim. Before their addition in Order VIII, a set off and counter claim were stringent unless they fell within the limited compass of Rule 6. A reading of rules 6A to 6G of the Civil Procedure Code makes it clear that the counter claim has to be treated as a cross-suit and it has to be tried along with the original claim and all the rules of pleading apply to counterclaim. The scope has now widened and covers the cases of an equitable set off where the defendant’s claim made in the set off was larger than the plaintiff’s claim and courts in view of Order 20, rule 19 allowed a counter claim for the balance amount as a cross suit, such procedure was admitted only where the claim was in plaint. The new rules now confer a statutory right to a defendant to set up a counter claim. The wide words in which Rule 6A is couched shows that it can be brought in respect of any claim that could be the subject of an independent suit. Unless otherwise restricted, a counter claim for divorce is also be maintainable in proceedings for grants of maintenance under Section 18 of the Hindu Adoption and Maintenance Act 1956. Similarly in a suit for judicial separation by the wife, the husband can have a counter claim of divorce on any grounds stated in Section 13 of the Hindu Marriage Act 195512.
The effect of a counter claim is to place the plaintiff in a position of a defendant who must defend himself and put in a reply thereto or suffer judgment in relation to the counter claim. Since a counter claim is an independent suit allowed to be heard together with a plaintiff’s suit to enable the Court to pronounce one judgment, it would appear that where there are several co-plaintiff’s, a counter claim would be allowable either against all of them or some of them only.
Since a counter claim is in its nature a cross suit, a defendant seeking to aim himself of a counter claim must set out all the material facts on which he relies in support thereof with the same particularity as he would as a plaintiff in an independent suit. In essence, set-off is a form of defence while counter claim is substantially a cross suit. it was also held by Kerala High Court that, “It is really a weapon of offence and enables a defendant to enforce a claim against the plaintiff as effectively as in an independent action. It need not be an action of the same nature as the original action or even analogous thereto, though the counter claim has to be one entertainable by the Court in India.”13
Section 1. How to compute time. — In computing any period of time prescribed or allowed by these Rules, or by order of the court, or by any applicable statute, the day of the act or event from which the designated period of time begins to run is to be excluded and the date of performance included. If the last day of the period, as thus computed, falls on a Saturday a Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day. (a)
Section 2. Effect of interruption. — Should an act be done which effectively interrupts the running of the period, the allowable period after such interruption shall start to run on the day after notice of the cessation of the cause thereof.
The day of the act that caused the interruption shall be excluded in the computation of the period. (n)
Depositions Pending Action
Section 1. Depositions pending action, when may be taken. — By leave of court after jurisdiction has been obtained over any defendant or over property which is the subject of the action, or without such leave after an answer has been served, the testimony of any person, whether a party or not, may be taken, at the instance of any party, by deposition upon oral examination or written interrogatories. The attendance of witnesses may be compelled by the use of a subpoena as provided in Rule 21. Depositions shall be taken only in accordance with these Rules. The deposition of a person confined in prison may be taken only by leave of court on such terms as the court prescribes. (1a, R24)
Section 2. Scope of examination. — Unless otherwise ordered by the court as provided by section 16 or 18 of this Rule, the deponent may be examined regarding any matter, not privileged, which is relevant to the subject of the pending action, whether relating to the claim or defense of any other party, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts. (2, R24)
Section 3. Examination and cross-examination. — Examination and cross-examination of deponents may proceed as permitted at the trial under sections 3 to 18 of Rule 132. (3a, R24)
Section 4. Use of depositions. — At the trial or upon the hearing of a motion or an interlocutory proceeding, any part or all of a deposition, so far as admissible under the rules of evidence, may be used against any party who was present or represented at the taking of the deposition or who had due notice thereof, in accordance with any one of the following provisions;
Section 5. Effect of substitution of parties. — Substitution of parties does not affect the right to use depositions previously taken; and, when an action has been dismissed and another action involving the same subject is afterward brought between the same parties or their representatives or successors in interest, all depositions lawfully taken and duly filed in the former action may be used in the latter as if originally taken therefor. (5, R24)
Section 6. Objections to admissibility. — Subject to the provisions of section 29 of this Rule, objection may be made at the trial or hearing, to receiving in evidence any deposition or part thereof for any reason which would require the exclusion of the evidence if the witness were then present and testifying (6, R24)
Section 7. Effect of taking depositions. — A party shall not be deemed to make a person his own witness for any purpose by taking his deposition. (7, R24)
Section 8. Effect of using depositions. — The introduction in evidence of the deposition or any part thereof for any purpose other than that of contradicting or impeaching the deponent makes the deponent the witness of the party introducing the deposition, but this shall not apply to the use by an adverse party of a deposition as described in paragraph (b) of section 4 of this Rule. (8, R24)
Section 9. Rebutting deposition. — At the trial or hearing any party may rebut any relevant evidence contained in a deposition whether introduced by him or by any other party. (9, R24)
Section 10. Persons before whom depositions may be taken within the Philippines. — Within the Philippines depositions may be taken before any judge, notary public, or the person referred to in section 14 hereof. (10a, R24)
Section 11. Persons before whom depositions may be taken in foreign countries. — In a foreign state or country, depositions may be taken (a) on notice before a secretary of embassy or legation, consul general, consul, vice-consul, or consular agent of the Republic of the Philippines, (b) before such person or officer as may be appointed by commission or under letters rogatory; or (c) the person referred to in section 14 hereof. (11a, R24)
Section 12. Commission or letters rogatory. — A commission or letters rogatory shall be issued only when necessary or convenient, on application and notice, and on such terms, and with such direction as are just and appropriate. Officers may be designated in notices or commissions either by name or descriptive title and letters rogatory may be addressed to the appropriate judicial authority in the foreign country. (12a, R24)
Section 13. Disqualification by interest. — No deposition shall be taken before a person who is a relative within the sixth degree of consanguinity or affinity, or employee or counsel of any of the parties, or who is a relative within the same degree, or employee of such counsel; or who is financially interested in the action. (13a, R24)
Section 14. Stipulations regarding taking of depositions. — If the parties so stipulate in writing, depositions may be taken before any person authorized to administer oaths, at any time or place, in accordance with these Rules and when so taken may be used like other depositions. (14a, R24)
Section 15. Deposition upon oral examination; notice; time and place. — A party desiring to take the deposition of any person upon oral examination shall give reasonable notice in writing, to every other party to the action. The notice shall state the time and place for taking the deposition and the name and address of each person to be examined, if known, and if the name is not known, a general description sufficient to identify him or the particular class or group to which he belongs. On motion of any party upon whom the notice is served, the court may for cause shown enlarge or shorten the time. (15, R24)
Section 16. Orders for the protection of parties and deponents. — After notice is served for taking a deposition by oral examination, upon motion seasonably made by any party or by the person to be examined and for good cause shown, the court in which the action is pending may make an order that the deposition shall not be taken, or that it may be taken only at some designated place other than that stated in the notice, or that it may be taken only on written interrogatories, or that certain matters shall not be inquired into, or that the scope of the examination shall be held with no one present except the parties to the action and their officers or counsel, or that after being sealed the deposition shall be opened only by order of the court, or that secret processes, developments, or research need not be disclosed, or that the parties shall simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the court or the court may make any other order which justice requires to protect the party or witness from annoyance, embarrassment, or oppression. (16a, R24)
Section 17. Record of examination, oath; objections. — The officer before whom the deposition is to be taken shall put the witness on oath and shall personally, or by some one acting under his direction and in his presence, record the testimony of the witness. The testimony shall be taken stenographically unless the parties agree otherwise. All objections made at the time of the examination to the qualifications of the officer taking the deposition, or to the manner of talking it, or to the evidence presented, or to the conduct of any party, and any other objection to the proceedings, shall be noted by the officer upon the deposition. Evidence objected to shall be taken subject to the objections. In lieu of participating in the oral examination, parties served with notice of taking a deposition may transmit written interrogatories to the officers, who shall propound them to the witness and record the answers verbatim. (17, R24)
Section 18. Motion to terminate or limit examination. — At any time during the taking of the deposition, on motion or petition of any party or of the deponent, and upon a showing that the examination is being conducted in bad faith or in such manner as unreasonably to annoy, embarrass, or oppress the deponent or party, the court in which the action is pending or the Regional Trial Court of the place where the deposition is being taken may order the officer conducting the examination to cease forthwith from taking the deposition, or may limit the scope and manner of the taking of the deposition, as provided in section 16 of this Rule. If the order made terminates the examination, it shall be resumed thereafter only upon the order of the court in which the action is pending. Upon demand of the objecting party or deponent, the taking of the deposition shall be suspended for the time necessary to make a notice for an order. In granting or refusing such order, the court may impose upon either party or upon the witness the requirement to pay such costs or expenses as the court may deem reasonable. (18a, R24)
Section 19. Submission to witness; changes; signing. — When the testimony is fully transcribed, the deposition shall be submitted to the witness for examination and shall be read to or by him, unless such examination and reading are waived by the witness and by the parties. Any changes in form or substance which the witness desires to make shall be entered upon the deposition by the officer with a statement of the reasons given by the witness for making them. The deposition shall then be signed by the witness, unless the parties by stipulation waive the signing or the witness is ill or cannot be found or refuses to sign. If the deposition is not signed by the witness, the officer shall sign it and state on the record the fact of the waiver or of the illness or absence of the witness or the fact of the refusal to sign together with the reason be given therefor, if any, and the deposition may then be used as fully as though signed, unless on a motion to suppress under section 29 (f) of this Rule, the court holds that the reasons given for the refusal to sign require rejection of the deposition in whole or in part. (19a, R24)
Section 20. Certification, and filing by officer. — The officer shall certify on the deposition that the witness was duly sworn to by him and that the deposition is a true record of the testimony given by the witness. He shall then securely seal the deposition in an envelope indorsed with the title of the action and marked "Deposition of (here insert the name of witness)" and shall promptly file it with the court in which the action is pending or send it by registered mail to the clerk thereof for filing. (20, R24)
Section 21. Notice of filing. — The officer taking the deposition shall give prompt notice of its filing to all the parties. (21, R24)
Section 22. Furnishing copies