Counterclaim under CPC, its meaning, object, effects etc.

September 29, 2018 Naresh Kumar

Table of Contents

Counterclaim

Under Order 8, Rules 6A to 6G

This article deals with the counterclaim, its meaning, object, nature and scope, modes of setting up counterclaim, who may file, when it may be set up, effect, etc..

In every lawsuit, there is plaint by the plaintiff and a written statement by the defendant. In the written statement defendant can make a plea of set-off and counterclaim against the plaintiff.

For more detail about set-off please click here.

A defendant in a lawsuit may, in addition to the right of pleading a set-off under Order 8 Rule 6, claim a right of counterclaim against the plaintiff in his written statement.

Meaning of counterclaim:-

Counterclaim means a claim made by the defendant in a suit against the plaintiff. It is a claim independent of, and separable from, the claim of the plaintiff which can be enforced by a cross-action. Generally, it is a cause of action against the plaintiff but in favour of the defendant. It is treated as plaint of the defendant against the plaintiff and governed by the rules applicable to the plaints. A plaintiff may file a written statement against the counterclaim of the defendant.

Doctrine of counterclaim explained:-

Defendant has a plea to defeat the relief sought by the plaintiff against him is a counterclaim. Therefore, in addition to his right of set-off, a defendant in a suit may set up a counterclaim. It may be set up only in respect of a claim for which the defendant is entitled to file a separate suit. But, before the amendment act 1976, there was no specific provision for a counterclaim in the code. The Supreme Court, however, held in the case of Laxmidas vs. Nanabhai, AIR 1964 SC11, that the right to make a counterclaim statutory.

Object:-

Before the Amendment Act of 1976, no counterclaim or set-off could be claimed except in money suits. Law commission’s 27^th report at pp.150-51 the Law Commission recommended avoiding multiplicity of proceedings, right to the defendant to raise a plea of set-off in addition to a counterclaim in the same suit.

The main objects of counterclaim are as follows:-

1. For the save the time of the courts,
2.   For avoiding the multiplicity of the suit,
3.      For excluding the inconvenience to the parties to the litigation,
4.      For deciding the all disputes between the same parties to avoid the multiplicity of the suit,
5. To avoid prolong trials, etc.

Modes of setting up counterclaim:-

There are three modes of pleading or setting up a counterclaim in civil suits, which are as follows:-

1 1.   In the written statement filed under Order 8 Rule 1;
2.      By amending written statement with the leave of the court and setting up counterclaim; and
3.      In a subsequent pleading under Order 8 Rule 9.

Who may file? :-

Normally, the counterclaim may be filed by the defendant against the plaintiff. But sometime or incidentally and along with the plaintiff, the defendant may also claim relief against the co-defendants in the suit. But a counterclaim solely against co-defendants is not maintainable.

When it may be set up?:-

A counterclaim may be set up by a defendant against a plaintiff in respect of the cause of action accruing either before or after filing of the suit, provided such claim is not barred by limitation.

Effect of counterclaim:-

Under this rule a counterclaim has the effect of a cross- suit and the court can pronounce a final judgment both in the original claim and the counterclaim. Counterclaim of the defendant will be treated as a plaint and the plaintiff can file a written statement in answer to the counterclaim of the defendant and the rules of the file a plaint will also apply to it. Similarly, a reply filed in answer to a counterclaim shall be treated as a written statement and governed by the rules of the written statement.

In a case where even if the suit of the plaintiff is stayed, discontinued, dismissed, or withdrawn, the counterclaim will be decided on merits, and the defendant will have entitled to get a decree for a counterclaim as claimed in the written statement. In the case where the plaintiff does not file any reply to the counterclaim, the court may pronounce the judgment against the plaintiff in relation to the counterclaim filed by the defendant.

Counterclaim at the appellate stage:-

An appellate authority has no power to entertain counter-claim at the appellate stage made for the first time.

Conclusion:-

The code of Civil Procedure makes it clear that the counterclaim has to be treated as a cross-suit and to be tried along with the original claim and it will be governed by the rules of the pleading. It will also be considered as plaint of the defendant against the plaintiff. The counterclaim only will be admitted where a separate suit can be filed on that matter of the counterclaim. It changes the position of the plaintiff and defendant vice-versa.