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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. Sounthar, J.
P. Sreenivasulu Reddy and ors. – Petitioners
Versus
U. Vishwanatha Reddy and ors. – Respondents
C.R.P.Nos.483 and 817 of 2022 and C.M.P.Nos.2536 and 4108 of 2022
Decided On : 28-11-2022
Counter Claim - Partnership Dispute - Order VIII Rule 6A (1) of the Civil Procedure Code - [Ashok Kumar Kalra vs. Wing CDR.Surendra Agnihotri (2020) 2 SCC 394] - The court held that the outer limit for filing a counter claim is the date of framing of issues. The counter claim cannot be permitted to be filed in respect of a cause of action that arose subsequent to the filing of the written statement. The court also emphasized that the defendant cannot be permitted to file a counter claim after the issues have been framed and the suit has been proceeded substantially. The order of the Court below refusing leave to file a counter claim and allowing the withdrawal of the suit by the plaintiff was justified and in accordance with the law.
Fact of the Case:
The 1st respondent filed a suit for permanent injunction restraining the 2nd respondent/1st defendant from alienating the suit properties, claiming that they were purchased through a partnership firm. The defendants filed a written statement and sought leave of the Court to file a counter claim. The Court dismissed the petition for raising a counter claim and allowed the petition filed by the 1st respondent seeking leave to withdraw the suit.
Finding of the Court:
The Court found that the counter claim filed by the defendants subsequent to the settlement of issues was not maintainable as per the law laid down by the Apex Court. The Court also justified the grant of leave to withdraw the suit by the plaintiff, as it did not cause prejudice to the defendants.
Issues: The main legal question was whether the counter claim filed by the defendants subsequent to the settlement of issues was maintainable or not.
Ratio Decidendi: The Court held that the outer limit for filing a counter claim is the date of framing of issues, and a counter claim cannot be filed in respect of a cause of action that arose subsequent to the filing of the written statement. The Court also emphasized that the defendant cannot be permitted to file a counter claim after the issues have been framed and the suit has been proceeded substantially.
Final Decision: The Civil Revision Petitions were dismissed, and there was no order as to costs. The Court found no illegality or irregularity in the order passed by the Court below warranting interference by the Court.
ORDER :
Prayer: Civil Revision Petition is filed under Section 227 of the Constitution of India, praying to set aside the fair order and decreetal order in I.A.No.3 of 2020 in O.S.No.220 of 2014 on the file of the Additional Sub-Judge, Hosur, dated 15.12.2021.
Prayer: Civil Revision Petition is filed under Section 227 of the Constitution of India, praying to set aside the fair order and decreetal order in I.A.No.1 of 2019 in O.S.No.220 of 2014 on the file of the Additional Sub-Judge, Hosur, dated 15.12.2021.
The Civil Revision Petition in C.R.P.No.817 of 2022 is filed by the revision petitioners/2nd and 3rd defendants, challenging the order dated 15.12.2021 passed by the Court below dismissing the petition in I.A.No.1 of 2019 filed by the revision petitioners seeking leave of the Court to file counter claim in the suit for injunction filed by the 1st respondent.
2. The Civil Revision Petition in C.R.No.483 of 2022 is filed by the revision petitioner challenging the order dated 15.12.2021 passed by the Court below allowing the application in I.A.No.3 of 2020 filed by the 1st respondent seeking leave of the Court to withdraw the suit for injunction filed by him.
3. The 1st respondent herein filed a suit for permanent injunction restraining the 2nd respondent herein/1st defendant from alienating the suit properties. According to the 1st respondent, he, revision petitioners and the other respondents entered into a partnership in the name and style of ‘M/s.CITI FARMS AND RESORTS’ for doing real estate development business. The 1st respondent further averred that each of the partners invested certain percentage of partnership capital and the suit properties were purchased through the above said partnership firm. It was submitted that the 2nd respondent/1st defendant was permitted to act as Managing Partner of the firm and he tried to alienate the properties of the firm to obtain wrongful gain and consequently, the 1st respondent was constrained to file above said suit seeking permanent injunction against the 2nd respondent herein from alienating the suit properties. Since the petitioners and other respondents also having interest in the partnership, they were also arrayed as parties/defendants in the suit.
4. The petitioners filed a written statement and resisted the suit by raising a plea that no partner can alienate the property of the partnership firm as if it belonged to him individually. The exclusive title and possession of the 1st respondent was denied in the written statement. It was also stated that since the dispute revolves around the properties of the firm, the rights of the parties has to be determined under the partnership deed and not by general law. The petitioners specifically raised a point that partnership deed provided for settlement of the dispute among partners by arbitration and on that ground, the plaint was liable to be rejected. It was also submitted that the 1st respondent himself executed various sale deeds in respect of the properties of the firm in his individual capacity by undervaluing the property.
5. The written statement of the revision petitioners were filed on 16.12.2015 and issues in the suits were settled on 08.11.2018. Thereafter, the revision petitioners have come up with a petition seeking leave of the Court to file counter claim in I.A.No.1 of 2019. The said petition was filed on 13.08.2019. By way of counter claim the revision petitioners sought for nearly 8 reliefs. The 1st relief sought for by the revision petitioners was a declaration that they were entitled to 1/5th share in the suit properties being the trading asset of the partnership firm. The 2nd prayer was for rendition of accounts by respondents herein with regard to the partnership business. By prayers 3 to 8 in the counter claim the revision petitioners sought for a declaration that various sale deeds executed by the respondents 1, 2 and 6 herein in favour of the respondents 1, 6, 5 and 7 on various dates from 01.10.2018 to 26.10.2018
The outer limit for filing a counter claim is the date of framing of issues, and a counter claim cannot be filed in respect of a cause of action that arose subsequent to the filing of the written sta....
The court affirmed that counter claims can be filed to prevent multiplicity of proceedings, even after the written statement, as long as they comply with legal principles.
The court has the discretion to entertain filing of the counter claim after the written statement, but such filing should not be done at a highly belated stage. The court should consider various fact....
Point of Law : Court has to take into consideration outer limit for filing the counterclaim, which is pegged till the issues are framed.
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