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SUPREME COURT OF INDIA
DIPAK MISRA & V. GOPALA GOWDA, JJ.
Rajni Rani & Another - Appellants
Versus
Khairati Lal & Others - Respondents
Civil Appeal No. 6862 of 2014 [Arising out of S.L.P. (C) No. 6757 of 2012)
Decided On : 14-10-2014
(b) Code of Civil Procedure, 1908 – Section 2(2) – Conclusive determination of rights of parties upon adjudication in certain circumstances can have the status of a decree – Instantly counter-claim, after adjudication and decision on merits, held to be barred by principle of Order II, Rule 2 – Matter of counter claim having been finally decided, the order attained status of decree – Therefore it could be assailed before appropriate forum by way of appeal – It could not be agitated before the High Court under Article 227 of the Constitution. (Para 15, 16, 17)
(1999) 4 SCC 89; (1996) 4 SCC 699; AIR 1967 SC 1344 AIR 1961 SC 794; AIR 1933 PC 58 – Relied upon
Facts of the case:
The question arising in this appeal is whether an order of dismissal of the counter-claim being barred by principles of Order 2, Rule 2 of the Code of Civil Procedure (C.P.C.) can be set aside in exercise of revisional jurisdiction under Section 115 of the C.P.C. or in exercise of power of superintendence under Article 227 of the Constitution of India or is it required to be assailed by preferring an appeal.
One Phoolan Rani, wife of Om Prakash, and another instituted Civil Suit seeking a declaration that they are the owners in possession of the land admeasuring 1/9th share in the suit land and further praying for permanent injunction against the defendants. After issue of notice, the defendants entered contest and the defendant Nos.12 to 14 filed a counter-claim putting forth that they had the right, title and interest as the original owner, Jeth Ram, had executed a Will dated 18.5.1995 in their favour.
Defendant Nos. 1 and 2 filed an application for dismissal of the counter-claim on the foundation that the same did not merit consideration as it was barred by Order II, Rule 2 of C.P.C.
It was averred that a suit for declaration was earlier filed by the present appellants along with others against the defendants and a decree was finally passed after appeal in their favour whereby it was held that the present appellants and some of the respondents were entitled to 1/9th share.
After disposal of the appeal, one of the sisters filed a declaratory suit to the effect that she is the owner in possession of land in respect of 1/9th share in the suit land.
In the said suit a counter-claim was filed by defendant Nos. 12 to 14 stating that they had become owners in possession of the suit property on the basis of a properly registered Will executed by Jeth Ram.
It was urged that the plea having not been raised in the earlier suit, it could not have been raised by way of a counter-claim in the second suit being barred by the principles of Order 2, Rule 2 of C.P.C.
The trial Judge allowed the application filed by the defendant Nos. 1 and 2 and resultantly dismissed the counter-claim filed by the defendant Nos. 12 to 14.
The legal substantiality of the aforesaid order was called in question in Civil Revision preferred under Article 227 of the Constitution of India.
The High Court set aside the order passed by the learned trial Judge. However, the Single Judge observed that it would be open to the plaintiff to raise all pleas against the counter-claim.
Finding of the Court:
The order dismissing the counter claim was final adjudication and attained status of a decree. It could be assailed only by way of appeal and not under Article 227 of the Constitution.
Result: Appeal allowed.
Key Points:
An order dismissing a counter-claim becomes a final adjudication and attains the status of a decree, which conclusively determines the rights of the parties involved (!) (!) .
Such a decree can only be challenged through an appeal; it cannot be challenged under the constitutional jurisdiction of Article 227 of the Constitution of India (!) .
A counter-claim filed by a defendant in a suit is in the nature of a cross-suit, and even if the main suit is dismissed, the counter-claim remains alive for adjudication as an independent claim (!) .
The scheme of the Civil Procedure Code (CPC) mandates that a counter-claim shall have the same effect as a cross-suit and must be finally adjudicated within the same suit, with the court required to pronounce a final judgment on both the original claim and the counter-claim (!) .
When a counter-claim is adjudicated and dismissed on merits, the order has the effect of a decree, and the rights of the parties with respect to that claim are conclusively settled (!) (!) .
An order that finally determines the rights of the parties in respect of a counter-claim, especially one that is barred by procedural principles such as Order 2, Rule 2 of CPC, is a substantive adjudication and thus has the status of a decree (!) (!) .
Such a decree can be challenged only through an appeal, and not through supervisory or revisional jurisdiction under Article 227 or Section 115 of CPC (!) (!) .
The challenge to an order that has the status of a decree must be made before the proper appellate forum, and failure to do so renders the order unassailable under constitutional or revisional jurisdiction (!) .
The order dismissing the counter-claim, after adjudication on merits, is final and conclusive, and the rights of the parties are settled accordingly (!) (!) .
The exercise of revisional or supervisory jurisdiction to unsettle such an order is not permissible; instead, the appropriate remedy is to prefer an appeal (!) (!) .
The order passed by the trial court, which has the status of a decree, cannot be invalidated or set aside under Article 227 of the Constitution, as that jurisdiction is not meant for re-evaluating substantive rights but for correcting procedural errors (!) .
The appellate process is the proper and exclusive remedy for challenging final orders that have the effect of a decree, ensuring the finality and conclusiveness of such judgments (!) .
These points collectively emphasize that orders finalizing and adjudicating counter-claims on merits are considered decrees, which must be challenged through appeals, not supervisory or revisional jurisdiction.
Judgment :-
Dipak Misra, J.
The centrirorial issue that has stemmed in this appeal by grant of special leave is whether an order of dismissal of the counter-claim being barred by principles of Order 2, Rule 2 of the Code of Civil Procedure (C.P.C.) can be set aside in exercise of revisional jurisdiction under Section 115 of the C.P.C. or in exercise of power of superintendence under Article 227 of the Constitution of India or is it required to be assailed by preferring an appeal.
2. The factual score need not be exposited in detail. Suffice it to state that one Phoolan Rani, wife of Om Prakash, and another instituted Civil Suit No. 107B of 2003 seeking a declaration that they are the owners in possession of the land admeasuring 1/9th share in the suit land and further praying for permanent injunction against the defendants. After issue of notice, the defendants entered contest and the defendant Nos.12 to 14 filed a counter-claim putting forth that they had the right, title and interest as the original owner, Jeth Ram, had executed a Will dated 18.5.1995 in their favour.
3. After the counter-claim was filed, defendant Nos. 1 and 2 filed an application for dismissal of the counter-claim on the foundation that the same did not merit consideration as it was barred by Order 2, Rule 2 of C.P.C. It was set forth in the application that a suit for declaration was earlier filed by the present appellants along with others against the defendants and a decree was passed in their favour on 21.9.2002 whereby it was held that the present appellants and some of the respondents were entitled to 1/4th share each. The judgment and decree passed in the said suit was assailed in appeal and the appellate court modified the judgment and decree dated 21.9.2002 vide judgment dated 15.2.2003 holding that each one of them was entitled to 1/9th share and the said modification was done on the ground that the property was ancestral in nature and the sisters had their shares. After disposal of the appeal, one of the sisters filed a declaratory suit to the effect that she is the owner in possession of land in respect of 1/9th share in the suit land and in the said suit a counter-claim was filed by defendant Nos. 12 to 14 stating that they had become owners in possession of the suit property on the basis of a properly registered Will dated 18.5.1995 executed by Jeth Ram. In the application it was set forth that the counter-claim had been filed in collusion with the plaintiff as the plea of claiming any status under the Will dated 18.5.1995 was never raised in the earlier suit. It was urged that the plea having not been raised in the earlier suit, it could not have been raised by way of a counter-claim in the second suit being barred by the principles of Order 2, Rule 2 of C.P.C.
4. The learned trial Judge adverted to the lis in the first suit, the factum of not raising the plea with regard to Will in the earlier suit and came to hold that the counter-claim could not be advanced solely on the ground that the existence of the Will had come to the knowledge of the defendants only in the year 2003. Being of this view, the learned trial Judge allowed the application filed by the defendant Nos. 1 and 2 and resultantly dismissed the counter-claim filed by the defendant Nos. 12 to 14 vide order dated 13.10.2010.
5. The legal substantiality of the aforesaid order was called in question in Civil Revision No. 900 of 2011 preferred under Article 227 of the Constitution of India wherein the High Court taking note of the previous factual background came to hold that the learned trial Judge had failed to appreciate that the Will dated 18.5.1995 executed by Jeth Ram, the father of defendant Nos. 12 to 14, was alive at the time of adjudication of the earlier suit and hence, the said Will could not have taken aid of during his lifetime. The aforesaid analysis persuaded the learned Single Judge to set aside the order passed by the learned trial Judge. However, the Single Judge observ
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