Introduction:

Mahesh Govindji Trivedi (“Appellant”) filed an Appeal[1] before the Hon’ble Supreme Court of India, Delhi challenging the order dated 30th November 2021 (“Impugned Order”) passed by the Division Bench of the Hon’ble Bombay High Court, Mumbai (“Division Bench”). As per the Impugned Order, the Division Bench set aside the order dated 02th May 2019 passed by the Single Bench of the Hon’ble Bombay High Court, Mumbai (“Single Judge”) whereby a Notice of Motion[2] filed by the Appellant was allowed for accepting the belatedly filed counter-claim by the Appellant.

Facts:

  1. Bakul Maganlal Vyas & Ors. (“Original Plaintiffs”) had filed a Suit[3] on 10th June 2004 for seeking specific performance of the alleged agreement for transfer dated 28th May 2001 by late Ramalaxmi Ravishankar Trivedi, who was the sister of Appellant. The Original Plaintiffs had also made other legal heirs of the deceased as party Defendants. The Appellant had filed his Written Statement on 16th November 2005. Thereafter, in and around April 2017, there was a settlement of succession of suit property by which the Appellant acquired ownership rights in the suit property.
  2. Subsequently, the Appellant filed his counter-claim on 07th September 2018 in the registry of the Hon’ble Bombay High Court without seeking leave of the court as per Rule 95 of the Bombay High Court (Original Side) Rules. As the counter-claim was filed without seeking proper leave of the court, the Single Judge de-registered and returned the counter-claim back to the Appellant. This decision of Single Judge was challenged by way of intra court appeal before the Division Bench whereby the Appellant was directed to file an appropriate application for seeking the leave of the court.
  3. Consequently, the Appellant filed the Notice of Motion seeking leave of the court to file the counter-claim. Vide an order dated 02th May 2019, the leave was granted by the Single Judge in order to avoid the multiplicity of proceedings. In the said order, the Single Judge also clarified that all the defences of the Plaintiffs, including the objection of limitation were kept open.
  4. Being aggrieved by the said order, the Original Plaintiffs filed an intra- court appeal before Division Bench challenging the order dated 02th May 2019. The appeal was allowed vide an order dated 30th November 2021. Hence, the Appellant filed the present Appeal.
  5. Meanwhile, the Appellant had also filed a notice of motion for seeking leave of the court to transfer right, title and interest in the suit property to third parties. The notice of motion was dismissed by Single Judge and Division Bench of the High Court of Bombay. However, the Hon’ble Supreme Court of India vide an order dated 26th February 2021 passed in Special Leave Petition (“SLP”)[4], allowed the transfer of suit property with conditions to expedite the remaining pending proceedings and the transfer of suit property will be subject to the outcome of the pending suit.

Submissions on behalf of Appellant:

  1. The question of re-agitating the counter-claim was no longer open when the Hon’ble Supreme Court of India approved the impleadment of the third party purchaser who would adopt the written statement and counter-claim filed by the Appellant and that Suit would continue from the stage it stood at the time of passing of the said order dated 26th February 2021 in SLP.
  2. Even though the Single Judge in its order dated 02nd May 2019 had enumerated various reasons for allowing the counter-claim including but not limited to keeping all the defences open for the Original Plaintiff, the Division Bench failed to provide reasons for setting aside the said order of the Single Judge.

Submissions on behalf of Original Plaintiffs (Respondents):

  1. As the Suit was filed in the year 2004 and the Written Statement was filed on 16th November 2005, the counter-claim could not have been allowed nearly after 13 years.
  2. The Appellant had surreptitiously filed the counter-claim and the Single Judge had rightly dismissed the same as it was in contravention of the Rule 95 of Bombay High Court Rules.
  3. In the SLP, the question regarding the counter-claim was never mentioned or argued. Therefore, the said order of 26th February 2021 does not operate against the objections concerning the counter-claim.

Findings:

  1. The Court considered the judgment passed in Ashok Kumar Karla vs Wind Cdr. Surendra Agnihotri & Ors.[5] which was relied upon by the Original Plaintiffs and observed that in the said judgment the court had considered the question as to whether it is mandatory to file the counter–claim along with the Written Statement. Even though there is no time limit for filing the counter-claim, the court observed that the majority opinion was that the counter-claim cannot be permitted to be filed by the defendant after the issues are framed and the suit has proceeded substantially. In the present case, the counter-claim was filed before the issues were framed.
  2. The Court observed that on the application of fundamental principles, the rules of procedure are intended to subserve the cause of justice rather than to punish the parties for their conduct.
  3. On considering the arguments with respect to order passed in SLP, the Court observed that even though the subject matter was not regarding the permissibility to file the counter-claim, however, the substance and impact of the order dated 26th February 2021 left no scope of upsetting the existing pleadings. Further, the Division Bench also did not consider the impact of the said order as there was no reason for re-opening the question relating to the filing of counter-claim.
  4. The Court further observed that there was no justified reason for Division Bench to interfere with the order dated 02nd May 2019, as the Single Judge had allowed the application considering proper progression of the proceedings whilst avoiding multiplicity of litigation. In fairness of all, the Single Judge had also kept all defences including the ground of limitation open to be argued at the relevant stage.

Conclusion:

In light of the aforesaid, the Hon’ble Court allowed the Appeal by setting aside the Impugned Order and restoring the order of the Single Judge which accepted the counter-claim filed by the Appellant. Thus, the Hon’ble Apex Court clarified that the provisions of Order VIII Rule 6-A of the Code of Civil Procedure, 1908 and Rule 95 of the Bombay High Court (Original Side) Rules do not operate as an embargo for taking the belatedly filed counter-claim on record which was filed before framing of the issues.