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2023 Supreme(Online)(Bom) 2406
HIGH COURT OF BOMBAY
BHARAT P. DESHPANDE, J
M/s Green Associates, Through its Partner, Mr Wilfred Joao – Appellant
Versus
Mr. Avito A. Fernandes – Respondent
CIVIL REVISION APPLICATION NO.10 OF 2021
For the Appellants/Petitioners: Ms Asha Desai
For the Respondents: Mr Clayton Fonseca
A counterclaim must demonstrate a valid cause of action, not based solely on frivolous claims or receipt of summons.
Headnote:(A) Code of Civil Procedure, 1908 - Order 7 Rule 11 (a) - Order 8 Rule 6 (A) - Counterclaim - The Applicant challenged the order rejecting dismissal of the Respondent's counterclaim which claimed compensation for vexatious litigation. The court found that no proper cause of action existed for the counterclaim based solely on receipt of legal notice or summons. The impugned order was quashed allowing for the rejection of the counterclaim under Order 7 Rule 11 (a). (Paras 6, 26)
(B) Counterclaims - The necessity of a valid cause of action must be demonstrated for a counterclaim to be considered, which should stem from actions before the filing of the initial suit or during its process. (Paras 20, 24)
Facts of the case:
The Applicant filed for recovery against the Respondent based on a construction agreement, which lead to a counterclaim alleging the original suit was vexatious. The Trial Court initially upheld the counterclaim as having cause of action.
Findings of Court:
The counterclaim lacked an actual cause of action required for it to stand and therefore was dismissed. The Trial Court had erred in its interpretation of the applicable procedural rules.
Issues: The primary issue was whether the Respondent had established a valid cause of action for his counterclaim based on the assertion of vexatious litigation.
Ratio Decidendi: The ruling established that a counterclaim requires a substantive cause of action beyond mere receipt of court summons to be justified. The lack of a significant claim meant the counterclaim was unfounded.
Result: Revision allowed; counterclaim rejected.
| Table of Content |
|---|
| 1. preliminary procedural steps for court admission. (Para 1 , 2 , 3) |
| 2. basis of applicant's recovery claim from respondent. (Para 5 , 10 , 11) |
| 3. arguments over counterclaim validity. (Para 12 , 14 , 19) |
| 4. court's observations on cause of action criteria. (Para 13 , 17 , 24) |
| 5. final ruling on counterclaim rejection. (Para 26 , 27) |
JUDGMENT:
1. Admit.
2. Heard Ms Asha Desai for the Applicant and Mr Clayton Fonseca for the Respondent.
3. With consent of both the learned Counsel, the matter is taken up for final disposal at the admission stage itself.
4. The Applicant is challenging the impugned order dated 15.06.2021 passed below Exhibit 15 in Special Civil Suit No.50/2018 whereby an application filed under Order 7 Rule 11 (a) of CPC for dismissal of the counterclaim filed by the Respondent, was rejected by the Trial Court.
5. Ms Desai appearing for the Applicant/Plaintiff would submit that suit for recovery was filed against the Defendant on the basis of agreement executed between the parties for construction of bungalow. On receipt of suit summons, Defendant/Respondent appeared and filed written statement as well as counterclaim. The Respondent/Defendant in the said counterclaim raised the plea that the suit is vexatious and that by the filing of the said suit, the Defendant/Respondent suffered mental agony and thus, is entitled for compensation of ₹10,00,000/-.
6. Ms Desai would then submit that no cause of action accrued in favour of Defendant/Respondent to file such counterclaim only on the basis of receipt of legal notice or the suit summons. She would submit that the aspect as to whether the suit is vexatious will have to be decided by the Trial Court and only then the Defendant/Respondent herein would be entitled to claim compensation. She then submitted that the provisions of Section 35 (A) of CPC deals on different proposition and that could be one of the defences in the written statement for claiming compensation. If the defence is not satisfied with the compensation awarded under Section 35(A) of CPC, he is entitled to file separate suit but not along with the counterclaim.
7. Ms Desai would submit that the reasons disclosed in the impugned order are perverse and that the same needs to be interfered with.
8. Per contra, Mr Fonseca appearing for the Respondent would submit that in order to avoid multiplicity of proceedings, he raised the counterclaim as according to him, suit itself is vexatious and filed with intention to harass the Defendant. He claimed that the cause of action for filing of the counterclaim rose on receipt of legal notice as well as the suit summons.
9. The rival contentions fall for determination as under.
10. Applicant/Plaintiff filed the suit for recovery of money wherein it has been claimed that an agreement was executed between Plaintiff and Defendant with regard to construction of bungalow. However, since the Defendant failed to comply with such terms and conditions, Plaintiff is entitled to recover amount of ₹21,90,125/- together with interest.
11. On receipt of the suit summons, Defendant filed his written statement along with counterclaim. It is specific defence of the Defendant that the suit is vexatious and filed with an intention to harass the Defendant. Apart from raising the available defence, the counterclaim is raised against the Plaintiff wherein it is stated that the Plaintiff by bringing out present litigation is trying to settle the score with the Defendant’s brother thereby causing severe inconvenience, hardships and mental stress to the Defendant. In para 25 of the counterclaim, it is claimed that cause of action arose on 26.12.2018 when the Defendant received notice/summons from the Court.
12. Plaintiff filed an application under Order 7 Rule 11 (a) and (b) of CPC wherein it is claimed that counterclaim is not maintainable for want of any cause of action. Defendant filed reply to such application.
13. Learned Trial Court after hearing both the parties observed that counterc
