Kusum Jain vs Vinay Kumar Agarwalla

Soumen Sen, J.—This revisional application is arising out of an order passed by the Civil Judge, Senior Division in connection with an application filed by the petitioner/defendant under Order 8 Rule 6-A CPC on 21st March, 2009. In or about 22nd September, 1999, the plaintiff instituted a suit for recovery of money lent and advanced. The petitioner/defendant entered appearance and filed a written statement in which the defendant essentially asked for a set off on the ground that the defendant made over valuable ornaments worth Rs. 20 lakhs to the plaintiff and the plaintiff wrongfully and illegally retained such ornaments. It was contended in the written statement that the plaintiff did not return such valuable ornaments and the value and worth of such ornaments far exceed the alleged claim in the plaint. Accordingly in Paragraph 8 of the written statement, the defendant contended that the plaintiff is not entitled to get any relief in the suit and the suit is liable to be dismissed, The defendant also contended that in spite of notice, the plaintiff had failed to return such valuable instruments and the defendant reserved the right to make a counter-claim by way of set off.

Almost after 9 years on 21st March, 2009, the defendant filed an application under Order 8 Rule 6A of the CPC making a counter-claim in which a prayer was made for a decree of mandatory order directing the plaintiff to return the diamond rings as set out in the Schedule and in the alternative decree for Rs. 20 lakhs being the price of the diamond rings which are claimed to have been illegally and wrongfully retained by the plaintiff.

The learned Court below rejected the said application filed under Order 8 Rule 6A of the CPC on the ground that although the written statement was filed in the year 2000 and the suit has progressed substantially, no attempt was made by the defendant/ petitioner in either amending the written statement or making a counter-claim. The written statement was filed on 13th July, 2000 and, thereafter, the issue was framed on 14th June, 2001. The matter was fixed for ex parte hearing due to the failure of the defendant to contest the said suit. Ultimately, on an application being preferred by the defendant for removing the matter from the Court, an order was passed on 22nd April, 2009 upon payment of cost of Rs. 4,000/ and thereafter the suit proceeded substantially. The trial of the suit has already commenced and, in fact, the cross-examination of the plaintiff was concluded and in such facts and circumstances, the Trial Judge held that it would not be proper to exercise a discretion in favour of the defendant in permitting her to raise such belated counter-claim.

In order to appreciate the said argument, Order 8 Rule 6-A and Order 6 Rule 17 of the CPC are required to be considered. Such provisions are set out hereinbelow:--

O.8 R. 6-A. 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 of action accruing to 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 damages or not:

Provided that such counter-claim shall not exceed the pecuniary limits of the jurisdiction of the Court.

(2) 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.

(3) 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.

(4) The counter-claim shall be treated as a plaint and governed by the rules applicable to plaints.

O.6 R. 17. Amendment of pleadings.- The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such matter and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties:

Provided that no application for amendment shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial.

The CPC was amended in 1977 by which Order 8 Rule 6 has been extensively amended. There have been new additions to Rule 6. Such new rules have been inserted by Amendment Act of 1976 with a view to making detailed provisions regarding counter-claim.

Counter-claim" may be defined as "a claim made by the defendant in a suit against the plaintiff. It is a claim independent of, and separable from, the plaintiff''s claim which can be enforced by a cross-action. It is a cause of action in favour of the defendant against the plaintiff. (Concise Oxford Dictionary (1995). p.306: Black''s Judicial Dictionary (1999), p.348; Stroud''s Judicial Dictionary (1986), Vol. 5, p.2388)

One of the pleas open to the defendant to defeat the relief sought by the plaintiff against him is a counter-claim. Counter-claim may be defined as a claim made by the defendant in a suit against the plaintiff. (Concise Oxford Dictionary (1995), p.306)

A counter-claim is substantially a cross-action and/or a cross-suit. Setoff in the strict sense of the term is a plea in defence, pure and simple which by adjustment either completely wipe off or reduce the claim of the plaintiff for money as made in the suit. In an enlarged sense it is a defence and counterclaim combined, defence to the extent of completely or substantially wiping off the plaintiffs claim and a claim by the defendant in the suit itself for the balance. Though, there was no provision in the Code before passing of the Amendment Act, 1976 for making a counter-claim, a Court, however, had the power to treat the counter-claim as the plaint in a cross-suit and hear the two together if the counter-claim was properly stamped. Under the Amendment Act, specific provisions have been made for counter-claim in Rule 6-A. Such provisions of Rule 6-A are intended to provide to the defendant sufficient safeguards and intended to ensure that there is unequal or unfair advantage derived by the plaintiff for the reason that he has brought an action in a Court of law. Although Order 8 Rule 6-A treated the counter-claim as a plaint in one place and as a cross claim in another place but, in effect, claim and counter-claim in a suit is to be regarded as constituting a unified proceeding. The written statement making counter-claim has the same effect as cross-suit. The plaintiff can even set up a counter-claim against the counter-claim of the defendant. A right to file a counter-claim is an additional right. The cause of action for filing counter-claim must accrue before the defendant has raised his defence. The cause of action for a counter-claim must arise before filing of the written statement or before the time when written statement is required to be filed. If the cause of action arises after the filing of the written statement or after the time for filing up had expired, then such a claim cannot be raised by way of counter-claim but can be raised by a separate suit.

A counter-claim can be filed before the filing of a written statement or before the time prescribed for filing a written statement has expired e.g. if the time allowed for filing a written statement is one month then the counter-claim has to be filed within a period of one month. ( Himachal Fruit Growers Co-operative Marketing and Processing Society Ltd., Simla Vs. Upper India Food Preservers and Processors (P.) Ltd., Parwanu and Another, )

Although Order 8 Rule 6-A to 6-G may not in so many words describe any particular period of limitation for filing of a counter-claim. It cannot be contended that there is absolutely no time limit for filing of a counter-claim and that it is for the defendant to choose its own time for filing it. Such perception is erroneous and misconceived, in view of Order 8 Rule 6A(4) read with Order 7, Rule 11(d) of CPC and section 3(2)(b) of the Limitation Act. On a conjoined reading of such provisions, 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 Limitation Act in relation to that particular counter-claim. If it appears from the statements made in the application in which the counter-claim is raised that it is barred by law of limitation the counter-claim would be liable to be rejected. After all, as observed by Brown, L.J. in Amton v. Bobbett:

A counter-claim is, therefore, to be treated for all purposes for which justice requires it to be so treated, as an independent action.

It is settled law that for counter-claim, the period of limitation does not have a same elasticity as in the case of set-off.

The counter-claim also normally should not be allowed to be raised after issues are framed and evidence is closed or after arguments are closed and matter is placed for judgment. Rohit Singh and Others Vs. State of Bihar (Now State of Jharkhand) and Others,

It is also equally settled that the time barred counter-claim cannot be permitted to be raised by way of amendment to written statement. ( Nagnath Jagannath Lomate and Another Vs. Narsing Sambha More and Others, ).

In Mahendra Kumar and Another Vs. State of Madhya Pradesh and Others, it was held that the counter-claim can be filed even after a written statement is filed, provided the cause of action had accrued to the defendant before the defendant had delivered his defence or before the time limited for delivering his defence has expired. The relevant observation is reproduced hereinbelow:--

The next point that remains to be considered is whether Rule 6-A(1) of Order VIII of the CPC bars the filing of a counterclaim after the filing of a written statement. This point need not detain us long, for Rule 6-A(1) does not, on the face of it, bar the fling of a counter-claim by the defendant after he had filed the written statement What is laid down under Rule 6-A(1) is that a counterclaim can be filed, provided the cause of action had accrued to the defendant before the defendant had 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 damages or not. The High Court, in our opinion, has misread and misunderstood the provision of Rule 6-A(1) in holding that as the appellants had filed the counter claim after the filing of the written statement, the counter-claim was not maintainable. The finding of the High Court does not get any support from Rule 6-A(1) of the Code of Civil Procedure. As the cause of action for the counter-claim had arisen before the filing of the written statement, the counter-claim was, therefore, quite maintainable. 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 u/s 3(2)(b) of the Limitation Act has been filed by the appellants within three years from the date of accrual to them of the right to sue. The learned District Judge and the High Court were wrong in dismissing the counter-claim.

In Gayathri Womens Welfare Association Vs. Gowramma and Another, the Hon''ble Supreme Court while considering the amendment of written statement at the appellate stage in order to bring a counter-claim made the following observations:-

In our opinion, the judgments relied upon by the respondents are really of no assistance in the facts and circumstances of this case. In Nanduri Yogananda Lakshminarasimhachari and Others Vs. Sri Agastheswaraswamivaru, ), this Court observed that the amendment could be permitted in a plaint as there was no new fact to be alleged and the parties were alive to the real nature of the dispute.

In Pandit Ishwardas Vs. State of Madhya Pradesh and Others, , it has been observed as follows:

There is no impediment or bar against an Appellate Court permitting amendment of pleadings so as to enable a party to raise a new plea. All that is necessary is that the Appellate Court should observe the well-known principles subject to which amendments of pleadings are usually granted. Naturally one of the circumstances which will be taken into consideration before an amendment is granted is the delay in making the application seeking such amendment and, if made at the appellate stage, the reason why it was not sought in the Trial Court. If the necessary material on which the plea arising from the amendment may be decided is already there, the amendment may be more readily granted than otherwise. But, there is no prohibition against an Appellate Court permitting an amendment at the appellate stage merely because the necessary material is not already before the Court.

These observations clearly indicate that one of the circumstances which will be taken into consideration before an amendment is granted is the delay in making the application seeking such amendment and, if made at the appellate stage, the reason why it was not sought in the trial Court In the present case, not only there is wholly untenable delay in the application but the appellants had a decree for permanent injunction in their favour.

In Jag Mohan Chawla and another Vs. Dera Radha Swami Satsang and others, this Court considered the scope of Rules 6-A to 6-G of Order 8 CPC and observed as follows:

5.... It is true that in money suits, decree must be conformable to Order 20 Rule 18 CPC but the object of the amendments introduced by Rules 6-A to 6-G are conferment of a statutory right on the defendant to set up a counter claim independent of the claim on the basis of which the appellant laid the suit, on his own cause of action. In sub-rule (1) of Rule 6-A, the language is so couched with words of wide width as to enable the parties to bring his own independent cause of action in respect of any claim that would be the subject-matter of an independent suit. Thereby, it is no longer confined to money claim or to cause of action of the same nature as original action of the plaintiff. It need not relate to or be connected with the original cause of action or matter pleaded by the plaintiff. The words any right or claim in respect of a cause of action accruing with the defendant would show that the cause of action from which the counter-claim, arises need not necessarily arise from or have any nexus with the cause of action of the plaintiff that occasioned to lay the suit The only limitation is that the cause of action should arise before the time fixed for filing the written statement expires.

The aforesaid observations, in our opinion, have no relevance to the controversy in the present case, as the claim of the respondent has been rejected by the Trial Court on the ground that the cause of action arose a long time ago.

In Revajeetu Builders and Developers Vs. Narayanaswamy and Sons and Others, , this Court reiterated the very wide discretion the Courts have in the matter of amendment of pleadings. These observations were in the context of an application filed by the appellant, seeking amendment of the original plaint including the prayer clause being rejected by the High Court upon coming to a definite conclusion that the appellant while seeking permission to amend the plaint is trying to introduce a new case, which was not his case in the original plaint and the proposed amendment, if allowed, would certainly affect the rights of the respondents adversely. It was also held that any such amendment which changes the entire character of the plaint, cannot be permitted and that too, after a lapse of four years and after the institution of the suit.

This Court, upon a detailed consideration of the historical background of Order 6 Rule 17 and upon a comprehensive survey of the case law, concluded that the amendment can be permitted, if it was necessary for the determination of the real question in controversy. If that condition is not satisfied, the amendment cannot be allowed. It was also observed as follows:

60.... ''2.... The power to allow an amendment is undoubtedly wide and may at any stage be appropriately exercised in the interest of justice, the law of limitation notwithstanding. But the exercise of such far-reaching discretionary powers is governed by judicial considerations and wider the discretion, greater ought to be the care and circumspection on the part of the Court.

In our opinion, the decision of the trial Court is in conformity with the aforesaid principles. The trial Court has clearly held that the cause of action for the relief of possession arose to the respondents many years ago. They may, therefore, have a cause of action, if any, for an independent suit In the aforesaid case, the Court further reiterated the principle in Smt. Ganga Bai Vs. Vijay Kumar and Others, where it was rightly observed:

22....The power to allow an amendment is undoubtedly wide and may at any stage be appropriately exercised in the interest of justice, the law of limitation notwithstanding. But the exercise of such far-reaching discretionary powers is governed by judicial considerations and wider the discretion, greater ought to be the care and circumspection on the part of the Court.

Similarly in Dhanpal Balu Lhawale and Others Vs. Adagouda Nemagouda Patil (D) by Prop. Lr., this Court permitted the amendment in the facts and circumstances of the case. Thus the judgment would not advance the case of the appellant in any manner.

We may notice here the observations made by this Court in Ramesh Chand Ardawatiya Vs. Anil Panjwani, which may be of some relevance. Upon considering the ratio of earlier cases in Sangram Singh Vs. Election Tribunal, Kotah, Bhurey Lal Baya, ), Arjun Singh Vs. Mohindra Kumar and Others, and Laxmidas Dahyabhai Kabarwala Vs. Nanabhai Chunilal Kabarwala and Others, , it was held that a right to make a counter-claim is statutory and a counter-claim is not admissible in a case which is admittedly not within the statutory provisions.

It was further observed that: (Ramesh Chand Case)

Looking to the scheme of Order 8 as amended by Act 104 of 1976, we are of the opinion, that there are three modes of pleading or setting up a counter-claim in a civil suit Firstly, the written statement filed under Rule 1 may itself contain a counter-claim which in the light of Rule 1 read with Rule 6-A would be a counter-claim against the claim of the appellant preferred in exercise of legal right conferred by Rule 6-A. Secondly, a counter-claim may be preferred by way of amendment incorporated subject to the leave of the Court in a written statement already filed. Thirdly, a counter-claim may be fled by way of a subsequent pleading under Rule 9. In the latter two cases the counter-claim though referable to Rule 6-A cannot be brought on record as of right but shall be governed by the discretion vesting in the Court, either under Order 6 Rule 17 CPC if sought to be introduced by way of amendment or subject to exercise of discretion conferred on the Court under Order 8 Rule 9 CPC if sought to be placed on record by way of subsequent pleading. The purpose of the provision enabling filing of a counter-claim is to avoid multiplicity of judicial proceedings and save upon the Court''s time as also to exclude the inconvenience to the parties by enabling claims and counter-claims, that is, all disputes between the same parties being decided in the course of the same proceedings. If the consequence of permitting a counter-claim either by way of amendment or by way of subsequent pleading would be prolonging of the trial, complicating the otherwise smooth flow of proceedings or causing a delay in the progress of the suit by forcing a retreat on the steps already taken by the Court, the Court would be justified in exercising its discretion not in favour of permitting a belated counter-claim. The framers of the law never intended the pleading by way of counter-claim being utilized as an instrument for forcing upon a reopening of the trial or pushing back the process of proceeding. Generally speaking, a counter-claim not contained in the original written statement may be refused to be taken on record if the issues have already been framed and the case set down for trial and more so when the trial has already commenced.

These observations make it clear that generally speaking the counter-claim not contained in the original written statement may be refused to be taken on record especially if issues have already been framed. In the present case, the counterclaim is sought to be introduced at the stage of appeal before the High Court.

In such circumstances, we are unable to accept the conclusions of the High Court that the discretion exercised by the trial Court was in any manner, illegal or arbitrary in rejecting the counter-claim of the respondents. We may notice here the observations of this Court in Rohit Singh which are as follows:

...A counterclaim, no doubt, could be filed even after the written statement is filed, but that does not mean that a counter-claim can be raised after issues are framed and the evidence is closed. Therefore, the entertaining of the so-called counter-claim of Respondents 3 to 17 by the trial Court, after the framing of issues for trial, was clearly illegal and without jurisdiction.

These observations would show that the dismissal of the counter-claim by the Trial Court was neither illegal nor without jurisdiction. In fact, the discretion issued by the High Court would clearly run counter to the aforesaid observations. In the aforesaid case, this Court was considering a situation where the evidence had been closed, arguments on behalf of the respondents had been concluded, the suit was adjourned for arguments of the appellants, and the suit was dismissed for default Subsequently, it was restored. Thereafter the respondents filed an application for amending the written statement. The counter-claim was filed by the intervener. In these circumstances, it was observed that at this stage no counter-claim could be entertained.

In Bollepanda P. Poonacha and Another Vs. K.M. Madapa, , while considering the case of belated counter-claim and the provisions of Order 6 Rule 17 of the Code of Civil Procedure, the Hon''ble Supreme Court considered the earlier decisions and held that a belated counter-claim must be discouraged although in some cases it may be allowed. The relevant observations are reproduced hereinbelow:-

The provision of Order 8 Rule 6-A must be considered having regard to the aforementioned provisions. A right to file counter-claim is an additional right. It may be filed in respect of any right or claim, the cause of action therefor, however, must accrue either before or after the filing of the suit but before the defendant has raised his defence. The respondent in his application for amendment of written statement categorically raised the plea that the appellants had trespassed on the lands in question in the summer of 1998. Cause of action for filing the counter-claim inter alia was said to have arisen at that time. It was so explicitly stated in the said application. The said application, in our opinion, was, thus, clearly not maintainable. The decision of Ryaz Ahmed is based on the decision of this Court in Baldev Singh and Others, etc. Vs. Manohar Singh and Another, etc.,

Further, the facts of the instant case are distinguishable from those of Ryaz Ahmed. In that case, the proposed amendment by the defendant was allowed to be filed as he wanted to make a counter-claim by way of a decree for grant of mandatory injunction to remove the built-up area on the disputed portion of land. It was therein held that instead of driving the defendant to file a separate suit therefor, it was more appropriate to, allow the counter-claim keeping in mind the prayer for a negative declaration in the plaint. However, in the instant case, the counter-claim was purported to have been filed for passing of a decree for recovery of possession of the disputed land after the suit had been filed.

Baldev Singh is not an authority for the proposition that the Court while allowing an application for amendment will permit the defendant to raise a counter-claim although the same would run counter to the statutory interdicts contained in Order 8 Rule 6-A. Some of the decisions of this Court in no uncertain terms held to be impermissible.

In Gurbachan Singh Vs. Bhag Singh and others, this Court clearly held:

3.... The limitation was that the counter-claim or set-off must he pleaded by way of defence in the written statement before the defendant filed his written statement or before the time-limit for delivering the written statement has expired, whether such counter-claim is in the nature of a claim for damages or not.

A belated counter-claim must be discouraged by this Court. We are however, not unmindful of the decisions of this Court where a defendant has been allowed to amend his written statement so as to enable him to elaborate his defence or to take additional pleas in support of his case. The Court in such matters has a wide discretion. It must however, subserve the ultimate cause of justice. It may be true that further litigation should be endeavoured to be avoided. It may also be true that joinder of several causes of action in a suit is permissible. The Court, must, however, exercise the discretionary jurisdiction in a judicious manner. While considering that subservience of justice is the ultimate goal the statutory limitation shall not be overstepped. Grant of relief will depend upon the factual background involved in each case. The Court, white undoubtedly would take into consideration the questions of serious injustice or irreparable loss, but nevertheless should bear in mind that a provision for amendment of pleadings is not available as a matter of right under all circumstances. One cause of action cannot be allowed to be substituted by another. Primarily, effect of an admission made in earlier pleadings shall not be permitted to taken away.

We for the reasons stated hereinbefore, are of the opinion that the learned Civil Judge was not correct in allowing the application for amendment of the written statement.

Even prior to coming into force of the CPC (Amendment) Act, 1976, the Court could treat a counter-claim or a cross-suit.

This Court in Laxmidas Dayabhai Kabrawala v. Nanabhai Chunilal Kabrawala held:

The question has therefore to be considered on principle as to whether there is anything in law - statutory or otherwise which precludes as Court from treating a counter-claim as a plaint in a cross-suit. We are unable to see any. No doubt, the CPC prescribes the contents of a plaint and it might very well be that a counter-claim which is to be treated as a cross-suit might not conform to all these requirements but this by itself is not sufficient to deny to the Court the power and the jurisdiction to read and construe the pleadings in a reasonable manner. If, for instance, what is really a plaint in a cross-suit is made part of a written statement either by being made an annexure to it or as part and parcel thereof, though described as a counter-claim, there could be no legal objection to the Court treating the same as a plaint and granting such relief to the defendant as would have been open if the pleading had taken the form of a plaint Mr. Desai had to concede that in such a case the Court was not prevented from separating the written statement proper from what was described as a counter-claim and treating the latter as a cross-suit. If so much is conceded it would then become merely a matter of degree as to whether the counterclaim contains all the necessary requisites sufficient to be treated as a plaint making a claim for the relief sought and if it did it would seem proper to hold that it would be open to a Court to convert or treat the counter-claim as a plaint in a cross suit. To hold otherwise would be to erect what in substance is a mere defect in the form of pleading into an instrument/or denying what justice manifestly demands. We need only add that it was not suggested that there was anything in Order 8 Rule 6 or in any other provision of the Code which laid an embargo on a Court adopting such a course.

Parliament, however, has placed an embargo while giving effect to the decision of this Court in inserting Order 8 Rule 6-A of the Code of Civil Procedure. While there exists a statutory bar, the Court''s jurisdiction cannot be exercised.

The learned Counsel for the petitioner submits that the said application for counter-claim is essentially an application for amendment of the written statement. It is submitted that even under the amended provision, the Court may at any stage of the proceedings allow either of the party to alter or amend his pleadings in such a manner and on such terms and conditions as the Court may deem fit and proper if such amendment is as may be just necessary for the purpose of determining the real questions in controversy between the parties and/ or to avoid multiplicity of proceedings.

This aspect of the matter has recently come up for consideration in State of Maharashtra Vs. Hindustan Construction Company Ltd., . While considering an application for amendment by way of introduction of additional grounds in the application u/s 34 of the Arbitration and Conciliation Act. In considering such application for amendment no amendment in the application for setting aside the award howsoever material or relevant it may be fixed by the Court can be added nor existing ground amended after expiry of the period of limitation for filing application for setting aside the arbitral award it was observed:--

Pleadings and particulars are required to enable the Court to decide true rights of the parties in trial Amendment in the pleadings is a matter of procedure. Grant or refusal thereof is in the discretion of the Court. But like any other discretion, such discretion has to be exercised consistent with settled legal principles-. In Ganesh Trading Co. Vs. Moji Ram, , this Court stated;

Procedural law is intended to facilitate and not to obstruct the course of substantive justice. Provisions relating to pleadings in civil cases are meant to give to each side intimation of the case of the other so that it may be met to enable Courts to determine what is really at issue between parties, and to prevent deviations from the course which litigation on particular cases of action must take.

Insofar as the Code of Civil Procedure, 1908 is concerned. Order 6 Rule 17 provides for amendment of pleadings. It says that the Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such mariner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.

The matters relating to amendment of pleadings have come up for consideration before the Courts from time to time. As far back as in 1884 in Clarapede & Co. v. Commercial union Assn. (1883) 32 WR 262 (CA) -an appeal that came up before the Court of Appeal Brett M.R. stated:

... the rule of conduct of the Court in such a case is that however negligent or careless may have been the first omission, and, however late the proposed amendment, the amendment should be allowed if it can be made without in justice to the other side. There is no injustice if the other side can be compensated by costs; but, if the amendment will put them into such a position that they must be injured, it ought not to be made....

In AIR 1921 50 (Privy Council) the Privy Council exposited the legal position that although power of a Court to amend the plaint in a suit should not as a rule be exercised where the effect is to take away from the defendant a legal right which has accrued to him by lapse of time, yet there are cases in which that consideration is outweighed by the special circumstances of the case.

A four-Judge Bench of this Court in L.J. Leach & Co. Ltd. v. Jardine Skinner & Co. while dealing with the prayer for amendment of the plaint made before this Court whereby the plaintiff sought to raise, in the alternative, a claim for damages for breach of contract for non-delivery of the goods relied upon the decision of the Privy Council in Charan Das granted leave at that stage and held:

It is no doubt true that Courts would, as a rule, decline to allow amendments, if afresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered and does not affect the power of the Court to order it, if that is required in the interests of justice.

Again, a three-Judge Bench of this Court in Pirgonda Hongonda Pant in the matter of amendment of the plaint at the appellate stage reiterated the legal principles exposited in L.J. Leach & Co. Ltd. and Charan Das. This Court observed:

Recently, we have had occasion to consider a similar prayer for amendment in L.J. Leach & Co. Ltd. v. Jardine Skinner & Co., where, in allowing an amendment of the plaint in an appeal before us, we said:

It is no doubt true that Courts would, as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the Court to order it, if that is required in the interests of justice.

These observations were made in a case where damages were originally claimed on the footing of conversion of goods. We held, in agreement with the learned Judges of the High Court, that on the evidence the claim for damages on the footing of conversion must fail. The plaintiffs then applied to this Court for amendment of the plaint by raising, in the alternative, a claim for damages for breach of contract for non-delivery of the goods. The application was resisted by the respondents and one of the grounds of resistance was that the period of limitation had expired. We accepted as correct the decision in Charon Das v. Amir Khan, which laid down that:

Though there was full power to make the amendment, such a power should not as a rule be exercised where the effect was to take away from a defendant a legal right which had accrued to him by lapse of time; yet there were cases where such considerations were outweighed by the special circumstances of the case.

As pointed out in Charan Das case the power exercised was undoubtedly one within the discretion of the learned Judges. All that can be urged is that the discretion was exercised on a wrong principle. We do not think that it was so exercised in the present case. The facts of the present case are very similar to those of the case before Their Lordships of the Privy Council In the latter, the respondents sued for a declaration of their right of pre-emption over certain land, a form of suit which would not lie having regard to the proviso to section 42 of the Specific Relief Act (1 of 1877). The trial Judge and the First Appellate Court refused to allow the plaint to be amended by claiming possession on pre-emption, since the time had expired for bringing a suit to enforce the right. Upon a second appeal the Court allowed the amendment to be made, there being no ground for suspecting that the plaintiffs had not acted in good faith, and the proposed amendment not altering the nature of the relief sought. In the case before us, there was a similar defect in the plaint, and the Trial Judge refused to allow the plaint to be amended on the ground that the period of limitation for a suit under Order 21 Rule 103 of the Code of Civil Procedure, had expired. The learned Judges of the High Court rightly pointed out that the mistake in the trial Court was more that of the learned pleader and the proposed amendment did not alter the nature of the reliefs sought.

In Jai Jai Ram Manohar Lal this Court was concerned with a matter wherein amendment in the plaint was refused on the ground that the amendment could not take effect retrospectively and on the date of the amendment the action was barred by the law of limitation. It was held:

5.... Rules of procedure are intended to be a handmaid to the administration of justice. A party cannot be refused just relief merely because of some mistake, negligence, inadvertence or even infraction of the rules of procedure. The Court always gives leave to amend the pleading of a party, unless it is satisfied that the party applying was acting mala fide, or that by his blunder, he had caused injury to his opponent which may not be compensated for by an order of costs. However, negligent or careless may have been the first omission, and, it can be made without injustice to the other side.

This Court further sated:

7.... The power to grant amendment of the pleadings is intended to serve the ends of justice and is not governed by any such narrow or technical limitations.

It was also highlighted in the said decision that amendment if it is related to material facts, the same could not be allowed after expiry of limitation.

In Steward v. North Metropolitan Tramways Co., (1886) 16 QBD 556 : (1886-90) All ER Rep Ext. 1759 (CA), Justice Pollock quoting with approval the observation of Bremwell, L.J. rightly observed:

... The test as to whether the amendment should be allowed is whether or not the defendants can amend without placing the plaintiff in such a position that he cannot be recouped, as it were, by any allowance of costs, or otherwise.

In L.J. Leach & Co. Ltd. v. Jardine Skinner & Co. (1933) 35 Bom LR 569, a suit for damages for "conversion of goods" filed by the plaintiff was decreed by the Trial Court but the decree was set aside by the High Court. In an appeal before this Court, the plaintiff applied for amendment of the plaint by raising an alternative claim for damages for breach of contract for "non-delivery of goods". The amendment was resisted by the defendant contending that it sought to introduce a new cause of action which was barred by limitation on the day the amendment was sought and hence, it would seriously prejudice the defendant. Though the Court noticed "considerable force" in the objection, keeping in view the prayer in the amendment which was not "foreign to the scope of the suit" and all necessary facts were on record, it allowed the amendment.

In similar circumstances, in a subsequent case Ganesh Trading Co. Vs. Moji Ram, the Hon''ble Supreme Court reiterated the law laid down in Purushottam Umedbhai and Co. Vs. Manilal and Sons, The Hon''ble Court observed:

It is true that, if a plaintiff seeks to alter the cause of action itself and to introduce indirectly, through an amendment of his pleadings, an entirely new or inconsistent cause of action, amounting virtually to the substitution of a new plaint or a new cause of action in place of what was originally there, the Court will refuse to permit it if it amounts to depriving the party against which a suit is pending of any right which may have accrued in its favour due to lapse of time. But, mere failure to set out even an essential fact does not, by itself constitute a new cause of action. A cause of action is constituted by the whole bundle of essential facts which the plaintiff must prove before he can succeed in his suit. It must be antecedent to the institution of the suit. If any essential fact is lacking from averments in the plaint the cause of action will be defective. In that case, an attempt to supply the omission has been and could sometimes be viewed as equivalent to an introduction of a new cause of action which, cured of its shortcomings has really become a good cause of action. This, however, is not the only possible interpretation to be put on every defective statement of pleadings. Defective pleadings are generally curable if the cause of action sought to be brought out was not ab initio completely absent. Even very defective pleadings may be permitted to be cured, so as to constitute a cause of action where there was none, provided necessary conditions such as payment of either any additional Court fees, which may be payable, or, of costs of the other side are complied with. It is only if lapse of time has barred the remedy on a newly constituted cause of action that the Courts should, ordinarily, refuse prayers for amendment of pleadings.

The aforesaid decisions were considered in Revajeetu Builders and Developers Vs. Narayanaswamy and Sons and Others, The Hon''ble Supreme Court in Paragraph 63 laid down some basic principles which the Courts are required to follow in dealing, with the application for amendments:--

On critically analysing both the English and Indian cases, some basic principles emerge which ought to be taken into consideration while allowing or rejecting the application for amendment:

(1) whether the amendment sought is imperative for proper and effective adjudication of the case;

(2) whether the application for amendment is bona fide or mala fide:

(3) the amendment should not cause prejudice to the other side which cannot be compensated adequately in terms of money;

(4) refusing amendment would in fact lead to injustice or lead to-multiple litigation:

(5) whether the proposed amendment constitutionally or fundamentally changes the nature and character of the case; and

(6) as a general rule, the Court should decline amendments if a fresh suit on the amended claims would be barred by limitation on the date of application.

These are some of the important factors which may he kept in mind while dealing with application filed under Order 6 Rule 17. These are only illustrative and not exhaustive.

In Seema Dasgupta Vs. Gopal Banerjee, it was held:

The provisions of Rule 6-A of Order 8 of the CPC are inserted by the CPC (Amendment) Act, 1976. The object of enacting the said Rule 6A is to reduce multiplicity of proceedings by providing that causes of action and cross-claims can be clubbed together and disposed of by a common judgment.

Prior to insertion of the said Rule there was no express provision in the'' CPC for filing of a counter-claim except the rule making power in Section 128(2)(c) of the Code of Civil Procedure. The Law Commission in its 27th report observed as under:

There is at present no express provision for the filing of a counterclaim except the rule making power in section 128(2)(c). The present position has been summed up by Mulla thus:

Though the Code does not provide for counter-claims, there is nothing to prevent a Court from treating the counter-claim as a plaint in a cross-suit and hearing the two suits together, provided the requisite Court-fee on the counter-claim has been paid.''

High Courts which exercise original jurisdiction have made rules which provide for counter-claims (e.g. Bombay High Court Original Side Rules, 1957, Rule 137 et seq.). We are of the opinion that in order to avoid multiplicity of proceedings and to dispel doubts that counter-claim cannot be entertained, an express provision should be inserted in the Code for this purpose.

In the case in hand, the plaintiff-tenant instituted a suit for permanent injunction to restrain the defendant-landlord from interfering with the free supply of water in the tenanted premises. The defendant in such a suit filed a counter-claim for a decree for recovery of possession and for damages against the said plaintiff. The counter-claim made by the defendant in the suit for permanent injunction by setting up the claim of recovery of possession and mesne profits is maintainable,

In Mahendra Kumar and Another Vs. State of Madhya Pradesh and Others,

Rule 6A(1) does not, on the face of it, bar the filing of a counter-claim by the defendant after he had filed the written statement. What is laid down wider R.6A(1) is that a counter-claim can be filed, provided the cause of action had accrued to the defendant before the defendant had 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 damages or not Therefore, the counter-claim filed by the appellant after filing of the written statement cannot be said to be not maintainable, as the cause of action for the counter-claim had arisen before the filing of the written statement Under Art. 113, 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 S. 3(2)(b), Limitation Act, had been filed by the appellants within three years from the date of accrual to them of the right to sue.

In Smt. Shanti Rani Das Dewanjee Vs. Dinesh Chandra Day (dead) by LRs., , it was held that the application under Order 8 Rule 6A is not ex facie barred after filing of written statement.

In South Konkan Distilleries and Another Vs. Prabhakar Gajanan Naik and Others, - it was held that amendment of written statement and counter-claim barred by limitation can be allowed when amendment merely adds to facts already on record.

Learned Counsel has relied on paragraphs 11 to 14 of the said report which is reproduced hereunder:--

P.11 - Before we deal with the orders of the Courts below, as to whether the application for amendment of the written statement and counter-claim was rightly rejected or not, let us consider the laws on the question of allowing or rejecting a prayer for amendment of the pleadings when the plea of limitation was taken up by one of the parties in the suit It is well-settled that the Court must be extremely liberal in granting the prayer for amendment, if the Court is of the view that if such amendment is not allowed, a party, who has prayed for such an amendment, shall suffer irreparable loss and injury. It is also equally well settled that there is no absolute rule that in every case where a relief is barred because of limitation, amendment should not be allowed. It is always open to the Court to allow an amendment if it is of the view that allowing of an amendment shall really subserve the ultimate cause of justice and avoid further litigation.

P.12. In L.J. Leach & Co. Ltd. v. Jardine Skinner & Co. this Court at para 16 of the said decision observed as follows: (AIR p.362)

It is no doubt true that Courts would, as a rule, decline to allow amendment if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the Court to order it, if that is required in the interests of justice.

P.13. Again, in T.N. Alloy Foundry Co. Ltd. v. T.N. Electricity Board this Court observed as follows; (SCC p.393, paras 2-3)

2... The law as regards permitting amendment to the plaint, is well settled. In L.J. Leach and Co. Ltd. v. Jardine Skinner and Co. it was held that the Court would as a rule decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But this is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the Court to order it.

It is not disputed that the appellate Court has a coextensive power of the Trial Court. We find that the discretion exercised by the High Court in rejecting the plaint was in conformity with law.

P.14. From the above therefore,one of the cardinal principles of law in allowing or rejecting an application for amendment of the pleading is that the Courts generally, as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred bit limitation on the date of filing of the application. But that would be a factor to be taken into account in the exercise of the discretion as to whether the amendment should be ordered, and does not affect the power of the Court to order it if that is required in the interest of justice.

In Bollepanda P. Poonacha and Another Vs. K.M. Madapa, , it was held that "a belated counter-claim must be discouraged although in some cases it may be allowed. Grant of relief will depend upon the factual background involved in each case. A right to file counter-claim is an additional right It may be filed in respect of any right or claim, the cause of action therefore, however, must accrue either before or after the filing of the suit but before the defendant has raised his defence. The respondent in his application for amendment of written statement categorically raised the plea that the appellants had trespassed on the lands in question in the summer of 1998. It explicitly stated in the counter-claim that the cause of action for filing the counter claim arose at that time."

"In the present case, the Civil Judge was not correct in allowing the application for amendment of the written statement under Order 6 Rule 17 CPC. It may be true that further litigation should be endeavoured to be avoided. It may also be true that joinder of several causes of action in a suit is permissible. The Court, undoubtedly would take into consideration the questions of serious injustice or irreparable loss, but nevertheless should bear in mind that a provision for amendment of pleadings is not available as a matter of right under all circumstances. One cause of action cannot be allowed to be substituted by another. Ordinarily, effect of an admission made in earlier pleadings shall not be permitted to be taken away. The Court must exercise its wide discretionary jurisdiction in a judicious manner. While considering that subservience of justice is the ultimate goal, the statutory limitation should not be overstepped."

In the instant case, in the original written statement without counterclaim, the following averments have been made:-

The defendant states that the plaintiff has suppressed materials facts and the fact is that the defendant on good faith entrusted -

(1) Item No. 11.

1 (one) ring set with a rectangular diamond in gold, gross wt. 5,100 grams one piece 5 ct. rectangular shape diamond set in 18 ct. gold wt. 4.100 grams.

(2) Item No-. 12.

(one) ring set with an Oval diamond round and baguettes diamond set in gold gross wt. 7.400 grams 1 (one) piece 5 ct. Oval shape diamond 30 pieces R/B diamonds Net wt. 1 ct. set in 18 ct. gold wt. 6.200 grams.

(3) Item No. 14.

1 (one) ring set with a Heart Shape diamond set in gold gross wt 4.700 grams 1 (one) piece 4 ct. Heart Shape diamond set in 18 ct. gold wt. 3.900 grams.

In the application under Order 8 Rule 6A read with section 151 of the Code of Civil Procedure, the petitioner made the following averments:--

That the counter claim of the defendant against the plaintiff are as follows:-

(a) That on 16.1.1997 plaintiff on a typed paper being duly signed by the plaintiff acknowledged receipt of three diamond rings set in 18 ct. gold from the defendant as security of handing over cheque of Rs. 10,00,000/- (Rupees Ten Lakhs) only to the defendant

One xerox copy of plaintiff''s acknowledgment receipt of three diamond rings of the defendant is annexed herewith being part of the counter-claim of the defendant.

(b) Defendant on several occasions made demand to the plaintiff for return of three aforesaid diamond rings (particulars of diamond rings and present market value of those three diamond rings are given in the Schedule ''A'' hereunder) but plaintiff flatly denied acceptance of any diamond rights from the defendant In the instant suit plaintiff in the plaint did not make any averment, whisper of keeping in plaintiff''s custody three diamond rings of the defendant as security and plaintiff makes illegal and deliberate suppression of facts.

On the basis of such averment, a counter-claim was made in Paragraph 5 of the said application for return of three diamond rings of the defendant. The cause of action for return of the diamond rings accrued to the defendant prior to the filing of the written statement. There is no subsequent events which could form the basis for raising such counter-claim. Even if it is assumed that the said application for counter-claim is in the nature of amendment of the existing written statement, still then a fresh suit on such amended claims would be barred by limitation on the date of the application. Although, in the original written statement the defendant referred to such diamond rings and on the basis of such pleading, the defendant could have prayed for return of the diamond rings but the defendant for some unknown reasons did not make a claim for return of such diamond rings. It was after 9 years from the date of the institution of the suit and after the said suit was fixed for ex parte hearing, such an attempt was made. Moreover, the suit is almost at the argument stage. In view of the fact that the defendant slept over her right and a very belated attempt was made to raise such counter-claim, this Court finds no reason to interfere with the discretion exercised by the trial Court in refusing to raise such counter-claim. In view thereof, the revisional application is dismissed.

In view of such belated claim and having regard to the fact that it was open for the defendant to raise such counter-claim when the original written statement was filed on 13th July, 2000, or at least soon thereafter this Court feels that the discretion exercised by the trial Judge in refusing to allow such counter-claim to be raised at such a belated stage does not suffer from any illegality or any material irregularity. The revisional application fails. There shall be no order as to costs.

Urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.