IN THE HIGH COURT OF JUDICATURE AT MADRAS
THE HONOURABLE MR.JUSTICE R.MAHADEVAN, THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ
Mr.Farok Sarkari (deceased) Represented by his legal heir and ors. - Appellant
Versus
M/s.New Finn Groups Rep. By its Partners and ors. – Respondents
O.S.A. NO.227 OF 2021 and C.M.P. No.9686 of 2021
Decided On : 09-11-2023
COUNTER-CLAIM - CIVIL PROCEDURE - Order 8 Rule 6A, Clause 13 of Letters Patent, Section 24 of CPC - The court analyzed the interplay between the provisions of Order 8 Rule 6A of the CPC, which restricts counter-claims to the pecuniary limits of the court where the original suit is pending, and the powers under Clause 13 of the Letters Patent and Section 24 of the CPC, which allow for the transfer of cases to the High Court. The court found that the learned judge had erred in dismissing the application for withdrawal of the suit based solely on the counter-claim's excessiveness, without considering the merits of the request for transfer, thus affecting the applicant's rights and the interest of justice.
Fact of the Case:
The appellants, legal heirs of the defendant in a loan recovery suit, challenged the dismissal of their application to transfer the suit from the City Civil Court to the High Court, arguing that the counter-claim exceeded the City Civil Court's jurisdiction but was within the High Court's jurisdiction, necessitating a joint trial to avoid multiplicity of proceedings.
Finding of the Court:
The court found that the learned judge had focused too narrowly on the counter-claim's excessiveness under Order 8 Rule 6A of the CPC, failing to adequately consider the merits of the application for withdrawal under Clause 13 of the Letters Patent, which could promote justice by allowing a joint trial.
Issues: Whether the High Court has the discretion to withdraw a suit from a subordinate court when a counter-claim exceeds the pecuniary limits of that court, and whether the learned judge's dismissal of the application was justified.
Ratio Decidendi: The court emphasized that the exercise of power under Clause 13 of the Letters Patent should be guided by the principles of justice, and that the learned judge's failure to consider the merits of the withdrawal application constituted an error warranting intervention.
Final Decision: The court set aside the learned judge's order and remitted the matter for reconsideration of the withdrawal application, emphasizing the need to evaluate it in light of the objectives of Clause 13 of the Letters Patent.
JUDGMENT :
MOHAMMED SHAFFIQ, J.
Prayer: Original Side Appeal filed under Order XXXVI Rule 1 of Original Side Rules read with Clause 15 of Letters Patent praying to set aside the order dated 29.01.2021 passed by the learned Judge in Application No.1811 of 2020.
The short question that arises for consideration is, whether the filing of a counter claim, the value of which exceeds the pecuniary limit/jurisdiction of the City Civil Court, in which the original suit is pending, but falls within the pecuniary limit of the Original Jurisdiction of the High Court is a circumstance, which warrants exercise of discretion to withdraw/remove the original suit from the file of the City Civil Court and transfer the same to be tried by the High Court by invoking powers under Clause 13 of Letters Patent read with Section 24 of the Civil Procedure Code.
2. The appellants herein are the legal heirs of the applicant in Application No.1811 of 2020. A suit in O.S. No.4820 of 2019 was filed before the III Additional City Civil Court, Chennai, by one M/s. New Finn Groups represented by its partners viz., Mr.A.Balasubramanian and Mr.A.Manthira Moorthy i.e, the respondent herein, for recovery of a loan amount of Rs.10,00,000/-, alleged to be borrowed by the defendant in the suit i.e., the father of the appellants herein (during the pendency of the suit, the father died and the present appellants were impleaded as parties to the same), covered under a registered promissory note and for a permanent injunction restraining the defendant in the suit/applicant from in any way disturbing, interfering and threatening the plaintiff and his family in his place of business / residence under the guise of demanding cancellation of the registered promissory note dated 28.08.2018 bearing Document No. 47 of 2018 on the file of S.R.O. at Surandai. The said suit is admittedly pending before the III Additional City Civil Court, Chennai.
3. During the pendency of the above suit, an application came to be filed by the defendant in the suit, under Order 8 Rule 6A of the Civil Procedure Code (hereinafter referred to as “the CPC”) lodging a counter claim in respect of a sum of Rs.2.70 crores. The said application is pending consideration before the III Additional City Civil Court, Chennai.
4. Whileso, the defendant in the suit / applicant filed a transfer application under Clause 13 of the Letters Patent read with Section 24 of the CPC praying that this Court may withdraw the suit in O.S. No.4820 of 2019 from the file of the III Additional City Civil Court, Chennai and transfer the same to the High Court to be tried in accordance with law. The said transfer application was filed on the premise that the suit in O.S. No. 4820 of 2019 and the counter-claim of Rs. 2.70 crores may have to be tried together, since the underlying transactions in the suit and the counter-claim, the parties to the same, question of law involved, documents and witnesses adduced are all common. Further, the counter-claim made by the applicant exceeds the pecuniary jurisdiction of the III Additional City Civil Court, Chennai. Hence, it would be convenient rather necessary in the interest of justice to try the suit and counter-claim by the High Court, so as to avoid multiplicity of proceedings.
5. The learned Judge was of the view that the counter-claim has been filed in gross disregard to the fact that the same is in excess of the pecuniary limit of jurisdiction of the City Civil Court, where the suit in O.S.No.4820 of 2019 is pending, thereby hit by the embargo contained in Order 8 Rule 6A of the CPC. The learned judge thus found that the application for withdrawal under Clause 13 of Letters Patent read with Section 24 of the CPC was an abuse of process of the Court. Accordingly, the learned Judge dismissed the said application.
6. It is this order of the learned judge, which is under challenge inter alia on the following grounds viz.,
b
The court established that the High Court's power to withdraw cases from subordinate courts under Clause 13 of the Letters Patent must be exercised with regard to the interests of justice, and that p....
A counter claim cannot exceed the pecuniary limits of the court in which the original suit is pending, and must have a separate cause of action.
Point of law: As per sub-Rule(2) to Rule 10 of Order VII of CPC on returning of a counter claim (plaint), the judge shall endorse thereon the date of its presentation and return, the name of the part....
The valuation of the original suit determines the jurisdiction for appeals, irrespective of the counter claim's valuation, as per the provisions of the C.P.C.
A counter-claim must meet the pecuniary jurisdiction requirements of the Court to be maintainable; in this case, it was below the threshold, rendering it invalid.
Counter-claim by defendant – Though normal rule is that subsequent to filing of written statement, counter-claim cannot be filed after issues have been framed, under exceptional circumstances, counte....
A counterclaim must be filed within the limitation period, and failure to address this can lead to a material irregularity in judicial proceedings.
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