Question : What is Counter Claim?

Answer. A counter claim is a claim made by a defendant in a suit against a plaintiff. It is a claim independent of and separable from the plaintiff’s claim, enforceable by cross action. A counter claim is treated as a cross-suit which must contain all the features of a regular suit, and must be filed within the limitation period.

The provisions for counter claim were added in 1976. The relief under Order VIII, Rule 6A of the Code is discretionary remedy but discretion is to be exercised in judicious manner.

The object was to ensure trial of all issues between the parties at one time as far as possible. It makes a complete departure from provision for set-off and makes it easier for the defendant to make a counter claim.

The restrictions attached to set-off are not applicable to the counter claim. The right to make a counter claim is in addition to the right to claim set-off and both are not inconsistent or mutually exclusive. In fact, when the claim against the plaintiff exceeds the claim against the defendant, it is a combination of both, set-off, to the extent of plaintiff’s claim, and counter claim for the excess over and above such claim.

The Counter claim is required to be treated as an independent suit in view of provisions of Order VIII, Rule 6A of the Code.

The defendant can set up any right or claim arising out of a cause of action accruing against the plaintiff. However, there is one important condition. Such cause of action must have arisen before the written statement is submitted or before the time to submit written statement has expired.

It is immaterial whether it has accrued before or after the institution of the suit, but no counter claim can be made to set up any right or claim arising out of cause of action which has accrued after the time for filing the written statement or delivering the defence has expired.

Once the right to file the written statement has been lost or the time limited for delivery of defence has expired, then neither the written statement can be filed as a right, nor can counter claim be allowed to be raised. (Ramesh Chand v. Anil Panjwani, 2003, SC)

It is not necessary that counter claim must be submitted along with the written statement. It can be submitted later on, provided cause of action has already accrued earlier as aforesaid. (Mahendra Kumar v. State of Uttar Pradesh, SC, 1985)

The counter claim must not exceed the pecuniary limits of the jurisdiction of the court. Even if the suit is withdrawn, dismissed or stayed, counter claim will stand independently and continue. It is just as if the defendant has become plaintiff and the plaintiff has become defendant.