Counterclaims must be filed within the limitation period, and the cause of action must be established to avoid being time-barred.

ORDER :

(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)

[1] Present First Appeal is preferred under Section 96 of the Code of Civil Procedure, 1908 (hereinafter referred as to "the CPC") read with Section 13 of the Commercial Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015 (hereinafter referred as to "the Act") assailing the correctness and validity of judgment and order dated 18.10.2019 passed by Judge, Commercial Court, Rajkot below Exhibit 118 in Commercial Civil Suit No.129 of 2016.

[2] The factual matrix which has led to filing of the present First Appeal is that the appellant is a limited company, inter alia, engaged in the activity of manufacturing of Vanaspati Ghee, which is manufactured/processed from crude palm oil (edible oil). The respondent is engaged in the activity of importing various kinds of edible oil. Respondent was desirous of getting crude palm oil (edible oil) imported after processing at the appellant's plant. Such intention culminated into a contract dated 23.03.2001, being entered by both the parties. The contract contemplated processing of goods into Vanaspati Ghee by the appellant and thereafter, being sold to the respondent or its nominees.

[2.1] Subsequent to the contract, the dispute arose between the appellant and the respondent. It was the case of the respondent that appellant had not performed in terms of contract dated 23.2.2001. This dispute resulted into institution of a Civil Suit by the respondent, being Civil Suit No.49 of 2001 before the Court of Civil Judge (S.D.) at Gandhidham. During the pendency of the Suit, certain proceedings were initiated qua the appellant under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred as to "the SICA"). On 21.04.2007, respondent moved an application for amendment of plaint for recovery of Rs.2,45,52,656/- along with interest 24% p.a. The amendment moved by respondent was dismissed by the learned trial Court on 13.08.2008. Against the order of dismissal, the respondent preferred an appeal before this Court which was allowed. Being aggrieved by the order passed by this Court, the appellant preferred a Special Leave Petition before the Hon'ble Apex Court. The Hon'ble Apex Court dismissed the Special Leave Petition on 08.07.2009. Pursuant to dismissal of Special Leave Petition, the plaint was amended by the respondent on 27.04.2010.

[2.2] After the plaint was amended on 27.04.2010, the appellant filed its written statement in the suit on 02.04.2012. Along with the said written statement, the appellant also preferred a counterclaim. The respondent, therefore, filed an application under Order VII Rule 11 of the CPC for rejection of the counterclaim. The learned court by way of order dated 18.04.2019 allowed the application under Order VII Rule 11 of the CPC filed by the respondent and rejected the counterclaim as being barred by law of limitation. Being aggrieved by the order dated 18.04.2019 rejecting the counterclaim, the present appeal is preferred by the appellant.

[3] We have heard Mr.Uday M. Joshi, learned advocate appearing for the appellant.

[4] Mr. Uday M. Joshi, learned advocate appearing for the appellant has submitted that the learned Commercial Court erred in coming to a conclusion that the counterclaim filed by the appellant was barred by limitation. It was apparent that the plaint filed by the respondent before the learned Commercial Court came to be amended on 27.04.2010. The appellant had filed its written statement and counterclaim on 02.04.2012, which was very much within the period of limitation. It was further submitted by Mr. Joshi, learned advocate that the learned Commercial Court erred in not appreciating the provisions of Order VIII Rule 6A of the CPC, which relates to preferring a counterclaim. As per the provisions of Order VIII Rule 6A, the counterclaim can be filed along with defence statement. In the instant case, the appellant had filed its co