Calcutta High Court
M/S. Oriental Ceramic Products Pvt. ... vs Calcutta Municipal Corporation on 23 April, 1999
Equivalent citations: (1999)3CALLT388(HC), AIR 2000 CALCUTTA 17, (1999) 2 CAL WN 565
JUDGMENT D.B. Dutta, J.
1. This is an application under section 115 of the CPC directed against the order dated July, 15, 1998 passed by the learned Assistant District Judge, first court. Barasat in Title Suit No. 876 of 1993 rejecting the counter-claim made by the defendants of the suit in their application under Order 8 Rule 6A of the CPC filed before the court on 5th May,1998.
2, The Calcutta Municipal Corporation filed the suit for eviction upon termination of licence and also for damages. The plaint case, in a nutshell, may be stated as follows.
The plaintiff is the owner of the suit land described in the schedule of the plaint. By an agreement dated 10.5.75 the plaintiff had granted leave and licence for a term of 21 years to one Moloy Kr. Banerjee, the defendant no. 2, carrying on business under the name and style of National Ceramic at Chowringhee Road, Calcutta, to use and occupy the suit land for the purpose of removing, at his own cost, silt deposits In the pre-settling tanks of the Corporation at its Palta Water Works for manufacturing bricks and allied products. Subsequently, the said Moloy Kr, Banerjee had assigned his rights and liability under the aforesaid agreement to the defendant No.1, M/s. Oriental Ceramic Products Private Limited, with permission of the plaintiff. The possession of the suit land was delivered first to the defendant No.2 and thereafter to the defendant No. 1 company. The defendant company failed to discharge its obligations under the agreement by reasons of their failure to raise boundary wall, to construct bridge over the settling tanks, to lay pipes, trolley lines etc. for the purpose of removal of the silts from the settling tanks to the defendant's factory and also to pay the licence fees in terms of the agreement. The plaintiff accordingly terminated the licence with a notice dated 13.12.86 upon the defendants but they have not vacacated the suit land in compliance with that notice and hence this suit for eviction from the suit land and also for damages to the extent of Rupees 3 lacs 69 thousand and odd.
3. The defendants filed written statement denying that they have violated terms and conditions of the agreement dated 10.5.75 and contended, inter alia, that laying pipe, trolley lines etc. were optional on their part. Their further case in the written statement is that the plaintiff had not dewatered the settling tanks as a result of which the defendants could not extract silts from the settling tanks and manufacture bricks and other allied products. Thus, shifting the resposibility for non-performance of the agreement upon the plaintiff, the defendants prayed for dismissal of the suit.
4. Issues were framed and recording of plaintiffs evidence commenced on 14.1.98 and the plaintiffs evidence was closed on 25.3.98. Recording of evidence of the defendants commenced, on the other hand, on 9.4.98. One witness was examined on behalf of the defendants in part on 9.4.98 and the suit was adjourned to 5.5.98 for further examination of other D.Ws.
5. At this stage of the suit, the defendants came forward with an application on 5.5.98 setting up a counter-claim and praying for a decree for damages amounting to an ascertained sum of Rs.2,39,54,900.59, the break up of which has been given in clauses (a) and (b) of the schedule of damages annexed with that application. It is alleged by the defendants that although the defendants were granted licence by the plaintiff for excavating the silt from the pre-settling tanks in the suit properties for the purpose of making the mechanised bricks with the help of that silt after the settling tank is de-watered by the plaintiff. The allegations in support of their counter-claim may be summerised as follows. After getting possession of the suit property the defendants duly cleared the same and made a fencing of barbed-wire for protection and preservation of the property after spending a good amount of money. Thereafter, they duly constructed a permanant factory shed and building, installed plants and machineries, tools and other implements, took electric connections and engaged employees for the purpose of manufacturing mechanised bricks and for all these they have already spent a total amount of Rs. 1,06,33,852.28 upto 31.3.95 as specified in clause (a) of the schedule, the break-up of which is given in the body of the application as under:
i) Rs.77,24,583.17 for factory shed and building
ii) Rs. 19,78,087.08 for machineries and plant.
iii) Rs.75,960.08 for electricity
iv) Rs.13,210.45 for tools and implements
v) Rs.7,41,653 for pallets handling
vi) Rs.1,00,357.50 for equipments.
6. The further allegation of the defendants Is that although they have spent such a huge amount for starting the production of the mechanised bricks they could not start the production because the petitioner intentionally did not de-water the settling tanks despite several correspondences made by the defendants. It is the plaintiff who did not intentionally honour the terms and conditions of the agreement. For the purpose of starting their production, the defendants also gave appointments of several skilled employees and experts to whom they are still paying salaries month by month since 1976. They have also borrowed loans from the West Bengal Finance Corporation and Allahabad Bank. But as they could not start the production they suffered a grave financial loss to the extent of Rs. 1,33,21,075.31 upto 31.3.95 as specified in clause (b) of the schedule.
7. The plaintiff on filing a written objection denied all the allegations made in the counter-claim application contending, inter alia, that the claim is imaginary, false and frivolous and barred by limitation. The plaintiff also questioned its maintainability on the ground that it has been filed at a belated stage.
8. The trial court upon consideration of the written statement and the application In which the counter-claim was set up, came to the conclusion that the alleged breach of contract by the plaintiff was complete upon termination of the agreement by a notice dated 13.2.86 and that the alleged breach had at least occurred prior to November, 1995. Since the counter-claim constituted the damages arising out of the breach of contract made by the plaintiff, the Court below was of the view that the defedant's counter-claim was barred by law of limitation by reason of the fact that it was set up more than three years after the breach of contract. Moreover, the court below was also of the view that even though Order 8 Rule 6A did not prescribe any specific time limit for preferring a counter-claim, the present counter-claim having been preferred at a belated stage was likely to cause prejudice to the plaintiff in case it was acccepted at that belated stage of the suit. In such view of the matter, the Court below by the impugned order rejected the defendant's application setting up the counter claim.
9. Mr. Sadananda Ganguly, the learned senior counsel appearing for the petitioner, urged the following points. Order 8 Rule 6A to 6G confer a statutory right upon the defendant to file a counter-claim. They do not prescribe any time limit for filing of such claim. Sub rule (1) of the Rule 6A of Order 8 does prescribe a time limit within which the cause of action basing the counter-claim is to accrue. But it does not prescribe any time limit for filing of the counter-claim itself. He has placed reliance on two decisions namely a single Bench decision of our High Court reported in 90 CWN 898: Subodh Mitra v. Surja Prokash Sriuastau and a declson of the Supreme Court : Mahendra Kumar v. State of Madhya Pradesh. Citing these decisions. Mr. Ganguly urged that a conter-claim could be filed at any stage of the suit and is not required to be filed along with the written statement and that no exception could be taken to this counter-claim only because of the fact that it was filed long after the filing of the written statement. It is further urged by Mr. Ganguly that the learned Court below acted illegally in rejecting the counter-claim on the ground that if it were accepted at that stage of suit, it would cause prejudice to the plaintiff because of the fact that the plaintiff in his written objection did not specifical! raise any plea of prejudice. Mr. Ganguly further contended that the learned Court below was totally wrong in rejecting the counterclaim also on the ground of limitation at the very threshold in as much as the application for counter-claim could not be construed as one which appears from the statements made therein to be barred by limitation.
10. Mr. Bidyut Banerjee, the learned senior counsel appearing for the plaintiff-opposite party, contended that even though Rule 6A of Order 8 does not prescribe any specific time limit for filing of a counter-claim but if it is allowed to be filed at any stage of the suit, it would result in protracting the trial and would defeat the very object of treating the counter-claim as a cross suit and trying the same arising in the suit. According to Mr. Banerjee, the decision of the Karnataka High Court : Parvathamma v. K.R. Lokanath was rightly relied on by the learned Court below in rejecting the counterclaim. It is submitted by Mr. Banerjee that the question of prejudice is a matter to be looked into by every Court even though it is not in so many words pleaded in the written objection. It is submitted that having regard to the facts and circumstances of a particular case if a Court finds that prejudice is likely to be caused to one party, it is certainly competent to pass such orders that no prejudice is caused to that party by reason of the fact that the adversory has put forward the claim at the belated stage. In the circumstances, Mr. Banerjee submitted that no exception could be taken to the impugned order in which the question of likelihood of prejudice being caused by acceptance of the counterclaim at the belated stage was considered by the Court to be a relevant factor for rejection of the counter-claim. Finally, the Mr. Banerjee drew my attention to the copy of the application for counter-claim annexed with the present revisional application and submitted that a mere look to the prayer portion of the schedule would at once make it clear that the counter-claim which was made for a certain sum of money accured on the defendant petitioners' own pleading by 31.3.95 which was evidently more than three years prior to the filing of the counter-claim on 5.5.98 . In other words, Mr. Banerjee submits that the counter-claim ex facie appears to be barred by limitation and as such, was liable to be rejected under Order 7 Rule 11(d) of CPC. Mr. Banerjee also contended that even in the Supreme Court decision cited on behalf of the petitioners, the question of limitation of the counter-claim was gone into.
11. The point for my decision would be as to whether or not any interference with the Impugned order is called for in exercise of this court's revisional jurisdiction under section 115 CPC.
12. Sub rule (1) of Rule 6A of Order 8 CPC confers a right upon a defendant in a suit to set up, by way of counter claim against the claim of the plaintiff in the suit, a right or claim In respect of a cause of action which accrues to the defendant against the plaintiff during certain period and the clause "either before or after the filing of the suit but before the defendant has delivered his defence or before the time limit for delivering his defence has expired " specified that period. The propositon of law that the time prescribed in Order 8 Rule 6A(1) relates to the accrual of the cause of action for the counter claim and not to the filing of the counter-claim is well settled and finds support from the decisions cited on behalf of both the parties and from the impugned order itself it will be clear that the learned Court below had also proceeded to decide the question of acceptability of the counter-claim relying on such a proposition. Rules 6A to 6G of Order 8 are the rules governing the counter claim. Sub rule (4) of Rule 6A provides that the counter-claim shall be treated as a plaint and governed by the rules applicable to plaints. Order 7 provides, for the rules governing the plaints. Clause (d) of Rule 11 of Order 7 makes a plaint liable to rejection where the suit appears from the statement in the plaint to be barred by any law. Sub section (1) of section 3 of the Limitation Act provides that subject to the provisions contained in section 4 to 24 (inclusive), every suit instituted after the prescribed period shall be dismissed although limitation has not been set up as a defence. According to clause (a) of sub section (2) of section 3, a suit can be said to have been Instituted for the purpose of this Act, in any ordinary case, when the plaint is presented to the appropriate officer and according to clause (b) of sub section (2) of section 3, any claim by way of counter-claim shall be treated as separate suit and shall be deemed to have been instituted on the date on which it is made in court. From annexure C of the revisional application, it would appear that the said application setting up the counter-claim was verifed on 5th May, 1998. It goes without saying that the said application was filed at least not earlier than 5.5.98 before the court below. If we go by prayer (a) of the application, we would find that the defendant prayed for a decree for damages amounting to a specific sum of money. The break-up of the said specific sum has been given in the body of the plaint as also in paragraphs (a) and (b) of the schedule of damages annexed to the application. A bare perusal of the schedule will at once made it clear that the claim for the said sum of money by way of damages accrued latest by 31.3.95. In other words, this counter-claim can be said to have been based on a cause of action which did accrue on the face of the application on a date more than three years prior to the filing of the claim and can accordingly be said to have already been barred by limitation. Mr. Ganguly argued that the defendants' claim is not confined only to the damages suffered upto 31.3.95 but it extended to the banking interest due upon the said damages that accrued from 31.3.95 upto the date of the application and would also be accruing for the period from the date of the application till the recovery of the said damages and as such, at best a part of the counter-claim can not be said to be time barred. There is really no substance in this argument because if the principal amount, for which the counter-claim is made, stood already barred by limits of time when the counter-claim was made, the claim for interest due upon such time barred amount would also necessarily be time barred and as such, the question of grant of any relief by way of interest due upon the said amount for the period from 31.3.95 till the recovery therof would not arise.
13. Since the counter-calim is to be treated as an independent plaint, the question whether it is ex facie barred by limits of time undoubtedly falls within the jurisdiction of the court for determination at the stage when it is filed and if on the basis of the averments made in such a plaint, the claim appears to be barred by law of limitation, it would at once be liable to rejection under Order 7 Rule 1 l(d) of CPC and even in the Supreme Court case of Mahendra Kumar v. State of Madhya Pradesh cited on behalf of the petitioners, we would find that the question whether the counter-claim was barred by the law of limitation was specifically gone into. In paragraph 15, the Supreme Court observed.
"Under Article 113 of the Limitation Act, 1963, the period of limitation of three years from the date the right to sue accrues, has been provided for any suit for which no period of limitation is provided elsewhere in the Schedule. It is not disputed that a counter-claim, which is treated as a suit under section 3(2)(b) of the Limitation Act had been filed by the appellants within three years from the date of accrual to them of the right to sue."
14. As such, it cannot be said that there is absolutely no time limit for filing of a counter-claim and that it is for the defendant to choose the time for filing it. It is true that Order 8 Rules 6A to 6G may not in so many words prescribe any particular period of limitation for filing of a counter-claim. But in view to Order 8 Rule 6C(4) read with Order 7 Rule 11(d) of CPC and section 3(2)(b) of the Limitation Act, It can safely be said that there is a time limit for filing a counter-claim and the time limit is what is prescribed by the Limitation Act 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 law of limitation the counter-claim would be liable to rejection.
15. In Mahendra Kumar v. State of Madhya Pradesh (supra), the appellants filed the counter-claim after the filing of the written statement and objection was raised against that counter-claim on the ground that it was barred by limitation as prescribed by certain provision of a Special Act and that it was also not maintainable under Order 8 Rule 6A(t) of CPC. The learned District Judge dismissed the counter claim on a finding that it was barred by limitation prescribed by the Special Act. The High Court in revision upheld the finding of the District Judge and further held that the counter claim having been filed after the filing of written statement was not maintainable under Order 8 Rule 6A(i) of CPC. In the appeal by special leave the Supreme Court reversed the concurrent findings of the Courts below on the question of bar of limitation as pleaded under the Special Act and also held that Order 8 Rule 6A(i) does not on the face of it bar the filing of the counter claim after the filing of the written statement and as the cause of action for the counter-claim had arisen before the filing of the written statement, the counter-claim was quite maintainable. The Supreme Court proceeded further to examine the question as to whether the counter-claim was barred by limits of time as prescribed by the Limitation Act whereupon it was not disputed before the Supreme Court that the counter claim in that case was governed by the residuary Article 113 of the Limitation Act and that it had been filed within 3 years from the date of accrual of the right to sue. Under such circumstances, the Supreme Court allowed the appeal. This decision of the Supreme Court is thus an authority for the proposition that filing of a counter-claim will be maintainable even after filing of the written statement but not after it becomes barred by limitation.
16. Of course, how long after the filing of the written statement the counter-claim was filed is not ascertainable from the above decision. It is also not clear from the above decision as to exactly at what stage of the suit the counter-claim was filed in that case-whether before of after the Issues were settled or whether before or after the recording of evidence began or whether before or after the evidence of the plaintiff was closed. The question as to how long after the filing of written statement the counter claim could be set up did come up for consideration before the Karnataka High Court in , a decision relied on by the learned Court below. The Karnataka High Court was of the view that a counter-claim should be filed before the issues are settled and at most before the evidence is adduced and that if it is permitted to be filed even after the recording of evidence begins it would take the plaintiff by surprise and is bound to cause prejudice to the plaintiff.
17. In support of this view, the Karnataka High Court assigned at para 8 of the decision the following reasons with which I respectfully agree.
"A reading of Rules 6A and 6G of Order 8 of the CPC 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 made in the suit. When the counter-claim has to he tried along with the original claim and all the rules of pleading apply to a counter-claim and it becomes a plaint in the cross-suit and the plaintiff is entitled to file a written statement in answer to the counter-claim of the defendant, it necessarily follows that a counter-claim, if not set up in the written statement, has to be set up before the issues are framed and at any rate, before recording of the evidence commences. If a counter claim is permitted to be set up after the evidence is adduced, it would cause great prejudice to the plaintiff in the suit because at the time of adducing evience, he will not be aware of the counter-claim, as it will not be on record. Therefore, it cannot be expected to, and he is not required to, adduce evidence having" a bearing on the counter-claim. Further allowing the counter-claim to be set up after the evidence is accorded would be doing nothing but ignoring Rules GA to 6C of Order VIII of the CPC. It would also result in protracting the trial and would defeat the very object of treating the counter-claim as a cross-suit and trying the issues arising therefrom along with the issues arising in the suit. The object of this is to avoid delay not only in the trial of the suit but also to decide all the controversies arising between the parties to the suit before filing the written statement or before the last date fixed for filing the written statement in as much as by directing the counter claim to be tried along with the main suit, the controversies or the disputes between the parties can be settled in one proceeding. Therefore, even though the Rules do not specifically lay down that a counter claim should be filed within a particular date but, reading of Rules 6A and 6G together would make it clear that the counter claim cannot be permitted to be filed when once recording of evidence commences."
18. No authority was cited on behalf of the petitioner which goes to militate against the aforesaid view of the Karnataka High Court.
19. In 90 CWN 898, the time fixed for filing of the written statement was extended by the trial court till certain date on which along with the written statement the application purported to be one under Order 8 Rule 6A setting up by way of counter-claim against the claim of the plaintiff was made. The trial Court rejected the said application of counter-claim upon a finding that the said application ought to have been filed before the delivery of the defence of the petitioner. The trial Court rejected it only because it was filed along with the written statement and it could not be said that it was filed before the delivery of the defence of the petitioner. Against such an order of the trial Court, the petitoner moved the High Court in revision and the only point that arose before the learned single Judge of our High Court in that case was whether an application of counter-claim is to be filed before the delivery of defence or it can be filed along with the written statement or even afterwards and the learned Judge set aside the order of the trial Court and directed him to accept the counter-claim along with his written statement in case it was otherwise in form. The question of bar of limitation under the Limitation Act or under Order 7 Rule 11(d) CPC as has been raised in the instant case did not arise for consideration in that case nor was it a case wher the counter-claim was filed after the Issues were settled or for that matter, after the recording of the evidence commenced or after the closure of plaintiffs evidence. As such, the decision in 90 CWN 898 would be of no help in deciding the question that has arisen in the present case.
20. From annexure B to the revisional application, it would appear that the written statement in the suit was filed not earlier than 12th August, 1996 while the application for counter-claim was filed not earlier than 5th May, 1998 when the issues were already settled and the plaintiff went to trial with no notice of any counter claim of the defendants to meet and had even closed his evidence. It is also pertinent to note that the defendants have nowhere cared to disclose any reason whatsoever as to why they did not make this counter-claim when they had to wait so long before putting forward this counter-claim. If at this belated stage, the defendant petitioner' counter-claim be accepted, it is needless to comment that the plalintiff would be taken by surprise and would be seriously prejudiced in defending the counter-claim.
21. Thus, upon careful consideration of all the relevant aspects of the matter, I am of the view that the learned court below did not commit any jurisdictional error in rejecting the counter claim so as to justify any interference in exercise of this court's revisional jurisdiction. The application is accordingly dismissed on contest but in the circumstances without any cost.
22. Application is dismissed