Point of Law: When court had no discretion to disobey mandate of law namely, Section 3(i) r/w 3(2)(b)(ii) of Limitation Act, 1963, and therefore, it could not have granted leave to make a Counterclaim by amending Written Statement, there is an error of great magnitude apparent on file of record and therefore, Writ Court is bound to interfere to set same at naught.

ORDER :

Petitioner being the plaintiff in a money suit in Com.O.S.No.7213/2012 is at the door steps of the Writ Court for assailing the order dated 10.11.2020 a copy whereof is at Annexure-A whereby the learned LXXXII Addl. City Civil Judge, Bengaluru, having allowed respondent-defendant’s application in I.A.No.IV filed u/o VI Rule 17 r/w Sec. 151 of CPC, 1908 has accorded leave to amend the Written Statement for incorporating a Counterclaim therein; the respondent having entered caveat through it’s counsel, opposes the Writ Petition.

2. Material Facts:

Petitioner company filed the subject suit on 5.10.2012 for a money decree in a sum of Rs.270,11,91,123/-; respondent-company resisted the suit by filing the Written Statement on 17.04.2013; long thereafter i.e., on 29.07.2016, it filed the Application in I.A.No. IV u/o VI Rule 17 r/w section 151 of CPC, 1908 seeking leave to introduce the Counterclaim in the Written Statement by way of amendment; the Counterclaim by way of damages is in a sum of Rs.1172.79 crores, with interest at the rate of 18% per annum; apparently, it is founded on the fact matrix which is substantially anterior to the institution of the suit; this was objected to by the petitioner inter alia on the ground of bar of limitation and delay & latches; however, court below sanctioned the amendment, which is now put in challenge, in this petition.

3. Contentions of the parties:

(a) The pith & substance of petitioner’s challenge is that: a Counterclaim cannot be made by way of amendment of Written Statement after the expiry of statutory period of limitation; a counterclaim is nothing but a ‘deemed suit’ for all practical purposes and therefore is bound by the same limitation period which a money suit is; apparently, suit, if were to be filed on the cause of action on which the respondent’s Counterclaim is founded, it would have failed because of the expiry of limitation period; petitioner’s counsel banks upon certain decisions in support of this stand.

(b) Respondent, per contra, contends in justification of the impugned order and the reasons on which it is structured; essentially respondent presses into service three factors viz., (i) ‘doctrine of relation back’ whereby amendments become retrospective in effect from the date of filing of the pleadings concerned; (ii) unassailability of the discretionary order granting leave to amend the Written Statement, & (iii) the foundational facts supporting the Counterclaim being already pleaded in the Written Statement; it’s counsel too relies upon certain decisions for substantiating this stand.

4. Having heard the learned counsel for the parties and having perused the petition papers, this Court is inclined to grant indulgence in the matter for the following reasons:

A. As to filing of counterclaim, stage for:

The question whether a Counterclaim can be filed separately after the filing of the Written Statement or can be introduced by way of amendment to the already filed Written Statement, subject to compliance of requisites and save with all just exceptions, is no longer res integra vide ASHOK KUMAR KALRA –VS-WING CDR. SURENDRA AGNIHOTRI & OTHERS, (2020) 2 SCC 394; what factors enter the decision making process, in re an Application for amendment, have been broadly stated by the Apex Court at paragraph 21 of the said decision, as under :

“21. We sum up our findings, that Order 8 Rule 6-A CPC does not put an embargo on filing the counterclaim after filing the written statement, rather the restriction is only with respect to the accrual of the cause of action. Having said so, this does not give absolute right to the defendant to file the counterclaim with substantive delay, even if the limitation period prescribed has not elapsed. The court has to take into consideration the outer limit for filing the counterclaim, which is pegged till the issues are framed. The court in such case have the discretion to entertain filing of the counterclaim, after taking into consideration and eva