Showing posts with label counter claim. Show all posts
Showing posts with label counter claim. Show all posts

Monday, 25 May 2026

Delhi HC: Drawing the Line: When Does a Procedural Order Become an “Interim Award” in Arbitration?

Introduction

The Delhi High Court’s decision in Eureka Forbes Ltd v Indian Railway Catering and Tourism Corporation Decided On: 12.05.2026 Citation: MANU/DE/3689/2026 throws sharp light on a recurring but under‑discussed problem in arbitral practice: what happens to a counterclaim when a respondent is proceeded ex parte. In setting aside an arbitral order that outright rejected a duly‑filed counterclaim merely because the respondent was proceeded ex parte, the Court has drawn a clear doctrinal line between procedural case‑management and the final extinguishment of substantive rights.

For judges, arbitrators and practitioners, the judgment is important on three axes: it refines the “interim award vs procedural order” distinction, it constrains the use of ex parte powers under Section 25 of the Arbitration and Conciliation Act, 1996 (“A&C Act”), and it re‑anchors arbitral procedure in the guarantee of equal treatment and fair opportunity under Section 18.

Factual matrix in brief

IRCTC invited bids in 2015 for operation and maintenance of Water Vending Machines (WVMs) at railway stations, pursuant to which Eureka Forbes was awarded a licence for Cluster 02 under a licence agreement dated 14 September 2016. Disputes arose regarding alleged non‑payment of licence fees, leading IRCTC to invoke arbitration and, on failure to agree on an arbitrator, to approach the Delhi High Court under Section 11, which appointed a retired District and Sessions Judge as sole arbitrator.

IRCTC filed its statement of claim on 6 May 2024, Eureka Forbes filed its statement of defence on 24 June 2024, and pursuant to liberty granted by the arbitrator on 3 July 2024, Eureka Forbes filed a counterclaim on 10 July 2024. On 31 July 2024, when no one appeared for Eureka Forbes, the DIAC Deputy Counsel informed the arbitrator that previous counsel had withdrawn, and at the same hearing IRCTC sought two weeks’ time to file its reply to the counterclaim and rejoinder, whereupon the matter was adjourned to 21 August 2024 with directions to circulate the order to the parties by email.

On 21 August 2024, noting that emails sent to some Eureka addresses had bounced while those to two official addresses had not, and that no one appeared for Eureka Forbes, the arbitrator proceeded ex parte against Eureka and, in the same breath, rejected the counterclaim. When Eureka later sought recall of this order and restoration of its counterclaim, the arbitrator held that while the defence would remain on record and Eureka could participate in the proceedings, the rejection of the counterclaim amounted to an (interim) award that he lacked jurisdiction to recall.

The Section 34 challenge and core issue

Eureka Forbes approached the Delhi High Court under Section 34 of the A&C Act to assail both the 21 August 2024 order (proceeding ex parte and rejecting the counterclaim) and the 21 October 2024 order (refusing to recall the ex parte order or restore the counterclaim). The petitioner argued that the rejection of its counterclaim amounted to an “interim award” within Sections 2(1)(c) and 31(6), following IFFCO Ltd v Bhadra Products and Delhi High Court precedents such as Cinevistaas Ltd v Prasar Bharti.

The respondent countered that the orders were purely procedural, particularly the ex parte direction, and hence were not amenable to Section 34 scrutiny; it also contended that the petitioner’s own conduct and repeated non‑appearance justified the arbitrator’s course of action. Thus, the central legal issue became whether the arbitrator’s order, to the extent it rejected a duly‑filed counterclaim contemporaneously with proceeding ex parte, was a challengeable interim award or a non‑justiciable procedural direction.

The triple test for an “interim award”

The Court anchored its analysis in its earlier decision in H.S. Nag & Ors v Asian Hotel (North) Ltd, where it had synthesised statutory text and precedent (including IFFCO) into a three‑part test for identifying an “interim award”. An order qualifies as an interim award if:

  1. It finally adjudicates a substantive dispute or claim between the parties.

  2. Such adjudication attains finality and binding effect in respect of that issue.

  3. The arbitral tribunal becomes functus officio qua that issue, retaining no further adjudicatory discretion over it.

  4. The Court emphasised that mere nomenclature is irrelevant; the inquiry must focus on substance and legal effect. Procedural directions that regulate the conduct of proceedings, even if they affect valuable rights, do not cross the threshold unless they conclusively determine a component of the arbitral reference.

Ex parte direction: procedural, not an interim award

Applying this test, the Court first considered the arbitrator’s decision to proceed ex parte against Eureka in respect of IRCTC’s claims. It held that such a direction, by itself, does not adjudicate any substantive issue, nor does it extinguish the defaulting party’s underlying rights; the claims remain to be decided on the merits.

Crucially, the arbitrator remained in seisin of IRCTC’s claims, retained full adjudicatory discretion, and could even revisit procedural aspects, including the ex parte status, in appropriate circumstances. On this reasoning, the ex parte order was characterised as purely procedural and therefore outside the scope of Section 34 review at this stage, with the Court making it clear that any challenge to such procedural steps could ordinarily be raised when assailing the final award or, in exceptional cases, under constitutional jurisdiction.

From an arbitral‑practice perspective, this part of the ruling is conservative and continuity‑based: it preserves tribunal autonomy over day‑to‑day case‑management, resists fragmentation of arbitral review through piecemeal challenges, and aligns with the policy of minimal curial intervention.

Rejection of the counterclaim: a true interim award

The analysis changes starkly when the Court turns to the rejection of the counterclaim. Here, applying the same triple test, the Court concluded that the arbitrator’s decision satisfied all three elements of an interim award.

First, the rejection of the counterclaim was a conclusive determination of Eureka’s independent substantive claims, leaving nothing further to be adjudicated on those claims in the arbitration. Second, the determination plainly bore an element of finality and binding effect, as the arbitral record treated the counterclaim as dismissed, not merely deferred or held in abeyance. Third, the arbitrator himself proceeded on the footing that he was functus officio qua the counterclaim, expressly holding that he could not recall what he regarded as an award and that any challenge had to be mounted before a court.

In the Court’s words, the orders “taken in conjunction, insofar as they relate to the Petitioner’s counterclaims, constitute an interim award and would be amenable to challenge under Section 34”. This classification is doctrinally significant: it recognises that while ex parte directions are procedural, the outright extinction of an already‑filed counterclaim is qualitatively different and confronts the parties’ substantive rights in a final manner.

Section 18 and the equal‑treatment imperative

Having brought the matter within Section 34, the Court scrutinised the arbitrator’s rejection of the counterclaim on the touchstone of Section 18, which mandates equal treatment of parties and a full opportunity to present one’s case. The arbitral record showed that:

  • The counterclaim was duly filed on 10 July 2024 pursuant to express liberty granted by the arbitrator.

  • On 31 July 2024, the adjournment was substantially driven by IRCTC’s request for time to file its reply to the counterclaim and rejoinder, not solely by Eureka’s non‑appearance.

  • The proceedings on the counterclaim were still at the pleadings stage; there is no indication that IRCTC’s reply had been filed by 21 August 2024.

Against this backdrop, the Court considered it arbitrary and legally untenable to reject a duly‑filed counterclaim solely because the respondent was proceeded ex parte on a single subsequent date, particularly when the adjournment had previously been sought by the claimant itself. The Court underscored that non‑appearance may justify proceeding ex parte but does not, ipso facto, justify striking off substantive claims that are already on record.

The critical point is conceptual: ex parte status affects how the tribunal proceeds (e.g., taking evidence without participation) but does not erase previously crystallised pleadings. To treat ex parte as a trigger for extinguishing a counterclaim is to convert a procedural consequence into a substantive sanction without statutory warrant, in direct tension with Section 18’s guarantee of equal treatment.

Section 25: default, but not dismissal of claims

The Court then turned to Section 25 of the A&C Act, which deals with “default of a party”. While Section 25(a) allows termination of the proceedings if a claimant fails to communicate its statement of claim at all, and Section 25(b) permits the tribunal to proceed without a respondent’s defence, the Court emphasised two limits:

  • Section 25(a) contemplates termination of the proceedings where no claim (or, by implication, counterclaim) is filed; it does not authorise dismissal of claims that have already been validly filed and are on record.

  • Section 25(c) allows the tribunal to continue proceedings and make an award based on available evidence where a party fails to appear or produce evidence; it does not envisage rejection of a substantive claim purely for non‑appearance.

In Eureka Forbes, the counterclaim had been filed; the case was not one of failure to communicate a claim or counterclaim at all. Thus, Section 25(a) was inapplicable, and the statutory scheme, taken as a whole, pointed towards proceeding on merits on the material before the tribunal rather than striking off claims.

The Court therefore held that the arbitrator’s course—rejecting the counterclaim as a direct consequence of proceeding ex parte—was inconsistent with the legislative design of Section 25 and amounted to visiting the party with an “extreme consequence” not contemplated by the Act.

Public policy, patent illegality and “unable to present the case”

Having found jurisdiction under Section 34, the Court identified multiple grounds for setting aside the interim award rejecting the counterclaim.

First, it treated the rejection as being in “conflict with the public policy of India” under Section 34(2)(b)(ii), because it involved a serious violation of principles of natural justice and Section 18’s equal‑treatment requirement. Denying adjudication on a duly‑filed counterclaim, at a stage when even the claimant’s reply was not on record, was held to constitute a manifest failure of procedural fairness.

Second, the Court invoked Section 34(2A) (patent illegality apparent on the face of the award), pointing out that the arbitrator’s approach showed elements of perversity: it misapplied Section 25, ignored the context of the 31 July 2024 adjournment, and treated ex parte status as equivalent to extinguishment of substantive rights.

Third, the Court held that the situation squarely attracted Section 34(2)(a)(iii) — the party was “otherwise unable to present his case”. By rejecting the counterclaim at the threshold of pleading and without merit‑based adjudication, the arbitrator effectively prevented Eureka from ever placing its counter‑case before the tribunal.

This three‑pronged reasoning sends a strong signal: courts will not countenance procedural shortcuts that result in the permanent foreclosure of substantive claims under the guise of case‑management.

Relief: restoration of counterclaim, ex parte order left untouched

On relief, the Court adopted a calibrated approach. It set aside the 21 August 2024 order “insofar as it proceeds ex parte as against the Petitioner and goes on to hold that as the reason for rejecting the counterclaims of the Petitioner”, and restored the counterclaims to their original position, directing the arbitral tribunal to consider them in accordance with law.

However, the Court declined to interfere with the direction that the petitioner be proceeded ex parte in respect of IRCTC’s claims, reiterating that this part of the order was procedural and did not qualify as an interim award. The same logic applied to the later order of 21 October 2024 so far as it related to ex parte status; the Court expressly disclaimed jurisdiction to rule on its correctness under Section 34, leaving Eureka to pursue any other remedies available in law for challenging such procedural directions.

The outcome is therefore asymmetrical but principled: the counterclaim is revived and must be adjudicated; the ex parte posture towards the main claim remains, unless corrected in some other forum or stage.

Critical appraisal: strengths of the Court’s approach

The judgment’s most compelling strength lies in its insistence on conceptual clarity between procedure and substance. By classifying the rejection of the counterclaim as an interim award while treating the ex parte direction as procedural, the Court preserves arbitral flexibility in managing hearings yet protects parties from the irreversible loss of claims without adjudication.

The reliance on H.S. Nag’s triple test is also doctrinally neat: it offers tribunals and courts a workable framework to distinguish challengeable interim awards from unchallengeable interlocutory orders, reducing the risk of ad hoc classifications based on labels or convenience. This clarity is particularly useful in complex arbitrations where multiple orders—on jurisdiction, limitation, bifurcation, or partial claims—are disposed of at different stages.

Further, the judgment correctly reads Section 25 as an enabling, not punitive, provision. It empowers tribunals to continue despite default; it does not authorise them to weaponise default into dismissal of claims that are already alive on the record. That interpretive stance aligns with the pro‑arbitration but fair‑procedure ethos of the A&C Act.

Points of tension and open questions

That said, the judgment raises some interesting questions for arbitral practice. First, while the Court classifies the ex parte order as purely procedural and thus beyond Section 34, the same ex parte posture can, in practice, substantially impair a respondent’s ability to defend, especially at the evidence stage. The Court hints that such grievances may be raised when challenging the final award, but interim prejudice can still be severe.

Second, the judgment assumes that dismissal of a counterclaim for non‑prosecution can never be a legitimate exercise of tribunal discretion where default is repeated and contumacious. While the facts here plainly did not justify such a drastic step, in other cases tribunals may confront respondents who use counterclaims tactically to delay proceedings and then routinely default. The line between robust docket control and extinguishment of rights remains fact‑sensitive and will require careful, record‑based calibration.

Third, by accepting the arbitrator’s own characterisation that he lacked power to recall an “award” on the counterclaim, and instead correcting the position under Section 34, the Court indirectly leaves unresolved the larger question of how far arbitral tribunals can revisit their own interim awards. The judgment does cite Srei Infrastructure v Tuff Drilling (through the arbitral order), but does not itself develop the contours of an arbitral “recall power”, a question that continues to generate debate.

Practical takeaways for arbitrators

For arbitrators, the message is clear and operational.

  • Proceeding ex parte is a procedural step; it should not be mechanically coupled with dismissal of pending claims or counterclaims that are already on file.

  • Even where a respondent defaults on appearance, a filed counterclaim must ordinarily be adjudicated on the basis of available pleadings and evidence, with the tribunal drawing appropriate inferences from non‑participation rather than erasing the claim.

  • When dealing with defaults, orders should clearly identify which consequences flow from Section 25(a), (b) or (c); tribunals should avoid creative “sanctions” not contemplated by the statute.

Tribunals would also be well advised to record, with some care, whether their determinations on specific issues are intended to have finality (and hence the character of awards or interim awards) or are merely procedural directions, to reduce downstream classification disputes.

Practical takeaways for counsel

For counsel, the judgment underscores the importance of both diligence and record‑building.

  • Withdrawal of counsel without formal substitution and without the client being clearly informed of the next dates can expose parties to ex parte consequences; tribunals and institutions will increasingly look at email trails and service records as the Delhi High Court did here.

  • Where a counterclaim (or any independent claim) is struck off during proceedings, counsel should carefully examine whether the order satisfies the H.S. Nag triple test; if it does, a timely Section 34 challenge, even mid‑arbitration, may be necessary to prevent irrevocable loss.

At the same time, parties should not reflexively challenge every adverse procedural order as an “interim award” lest arbitral timelines be derailed and costs escalated.

Conclusion: re‑centring fairness in arbitral default

Eureka Forbes v IRCTC is a useful reminder that ex parte proceedings are a tool for efficiency, not a licence to amputate substantive rights. By restoring a counterclaim that had been rejected merely because counsel failed to appear on a given date, the Delhi High Court has re‑affirmed a simple but vital proposition: in arbitration, as in court, default should not become a backdoor substitute for adjudication.

For the arbitral community, the decision invites greater discipline in distinguishing between case‑management and final dispositions, and in ensuring that even in a regime of party autonomy and minimal court interference, the foundational guarantees of equal treatment and fair hearing remain non‑negotiable.

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Wednesday, 4 February 2026

Digest of Caselaws on Civil and criminal appeal and revision

 

1) Leading SC and other HC Judgments on Civil appeal, criminal appeal, civil revision, criminal revision and remand of case (Part 1)


2) Leading SC and other HC Judgments on Civil appeal, criminal appeal, civil revision, criminal revision and remand of case (Part 2).



3) Notes on Civil appeal

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Sunday, 29 December 2024

Supreme Court: Defendant can not file counter claim solely against the co-defendants

Normally, a counter-claim, though based on a different cause of action than the one put in suit by the plaintiff could be made. But, it appears to us that a counterclaim has necessarily to be directed against the plaintiff in the suit, though incidentally or along with it, it may also claim relief against co-defendants in the suit. But a counter-claim directed solely against the co-defendants cannot be maintained. By filing a counter-claim the litigation cannot be converted into some sort of an inter-pleader suit. Here, defendants 3 to 17 had no claim as against the plaintiff except that they were denying the right put forward by the plaintiff and the validity of the document relied on by the plaintiff and were asserting a right in themselves. They had no case even that the plaintiff was trying to interfere with their claimed possession. Their whole case was directed against defendants 1 and 2 in the suit and they were trying to put forward a claim as against the State and were challenging the claim of the State that the land involved was a notified forest in the possession of the State. Such a counter-claim, in our view, should not have been entertained by the trial court. {Para 17}

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 4517-18 of 2006.

Decided On: 17.10.2006

Rohit Singh and Ors. Vs. State of Bihar and Ors.

Hon'ble Judges/Coram:

S.B. Sinha and P.K. Balasubramanyan, JJ.

Author: P.K. Balasubramanyan, J.

 Citation: 2006 INSC 706, MANU/SC/4619/2006,(2006) 12 SCC 734.

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Sunday, 22 September 2024

Delhi HC: 𝗖𝗼𝘂𝗻𝘁𝗲𝗿 𝗖𝗹𝗮𝗶𝗺𝘀 𝗶𝗻 𝗮 𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗶𝗮𝗹 𝘀𝘂𝗶𝘁 𝗰𝗮𝗻 𝗯𝗲 𝗿𝗲𝗷𝗲𝗰𝘁𝗲𝗱 𝗳𝗼𝗿 𝗻𝗼𝗻-𝗰𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝗼𝗳 𝗽𝗿𝗲-𝗹𝗶𝘁𝗶𝗴𝗮𝘁𝗶𝗼𝗻 𝗺𝗲𝗱𝗶𝗮𝘁𝗶𝗼𝗻 𝗽𝗿𝗼𝗰𝗲𝗲𝗱𝗶𝗻𝗴𝘀

 In view of above said discussion, it clearly emerges out that process of pre-institution mediation is mandatory for every suit involving a commercial suit and no distinction can be drawn when it comes to a counter-claim involving a commercial dispute and not contemplating any urgent relief. As per the mandate of Patil Automation Private Ltd. (supra), any such suit, which has been filed without taking recourse of Section 12-A of Commercial Courts Act, needs to be rejected under Order VII Rule 11 CPC. {Para 57}

In the High Court of Delhi at New Delhi

(Before Manoj Jain, J.)

Aditya Birla Fashion and Retail Limited  Vs Saroj Tandon

CM(M) 459/2023 and CM APPL. 13679/2023

Decided on September 2, 2024,

Citation: 2024 SCC OnLine Del 6099,2024:DHC:6693,

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Saturday, 3 August 2024

Kerala HC: The Appellate court can not consider appeal against rejection of counter claim if no court fees is paid on said appeal

In the light of these decisions let us consider as to whether non payment of Court-fee on the plea of counter claim in the appeal will work as res judicata. By non-payment of Court-fee on the counter claim in appeal, the appellate Court is not in a position to consider the question of counter claim. Thus it has to be held that the counter claim as rejected by the lower Court has become final. That portion of the discharge of the suit amount as raising the counter claim cannot be considered by the appellate Court on the principle of res judicata. But at the same time the question of discharge of the decree amount can be considered by the appellate Court. {Para 6}

 IN THE HIGH COURT OF KERALA

A.S. No. 291 of 1993

Decided On: 31.03.1997

Nherapoyil N.P. Moideen Vs. K. Narayanan Nair

Hon'ble Judges/Coram:

T. Ramachandran, J.

Citation:  MANU/KE/0068/1997,AIR 1997 Ker 318.

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Friday, 2 August 2024

Whether limitation for filing suit for damages for malicious prosecution will be suspended if order of termination of proceeding is challenged before higher court?

Thus, the aforesaid judgments of this Court have consistently held that once the plaintiff is acquitted or the prosecution is otherwise terminated, the period of limitation is triggered and that when time begins to run, it cannot be held in abeyance or suspended, only because an order of acquittal or otherwise terminating the prosecution has been made subject matter of challenge before the Higher Court. It is clear from the said position of law that if the contentions raised on behalf of the appellant in the present case are accepted, it would amount to reading something more in Article 74 of the Act of 1963, than what is plainly stated therein, which is not acceptable. If the contentions are accepted, it would amount to reading the words "finally terminated" or "finally acquitted" in the said provision, which is wholly impermissible. {Para 22}


23. If there is a challenge to an order that terminates the prosecution, it would not amount to a suspension of time of the period of limitation that starts to run on an order being passed terminating the prosecution. Even if there is interim order passed in the proceeding challenging the order terminating the prosecution, it would only amount to stay of the suit or suspension of the proceedings in the suit for malicious prosecution preferred by the plaintiff. If the appeal/revision proceedings challenging an order terminating the prosecution wherein an interim order is operating, is dismissed, the proceedings in the suit for malicious proceedings could commence again. Conversely, if the appeal/revision proceeding challenging the order terminating prosecution is allowed, the suit will not survive. But, it does not mean that merely because a proceeding has been instituted challenging an order terminating the prosecution, a suit for malicious prosecution would not be maintainable. The period of limitation would start to run from the date of the order terminating the prosecution which in the present case was the order dated 05-11-2003 passed by this Court quashing the FIR and charge sheet. Any other interpretation would do violence to Article 74 of the Act of 1963, because it would amount to reading something more into the said provision than what it provides. The aforesaid judgments of this Court are binding and therefore, the first substantial question of law pertaining to limitation on which this appeal was admitted, is answered in favour of the respondent and against the appellant herein. Consequently, it is held that the appellate Court was justified in allowing the appeal of the respondent and dismissing the suit filed by the appellant for damages for malicious prosecution.

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Second Appeal No. 464 of 2016

Decided On: 03.05.2018

Nilkanth Baliram Sawarkar Vs. Vidyanand Balkrishna Ogale

Hon'ble Judges/Coram:

Manish Pitale, J.

Citation:  MANU/MH/0857/2018,2019 MHLJ(2) 265.

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Whether plaintiff should value his appeal on the basis of combined valuation of the plaint and counterclaim where both suit and counter-claim are dismissed?

 Where both suit and counter-claim are dismissed, the subject-matter of the appeal would be the plaint. Hence valuation would be as per the valuation of the plaint and Court fee as payable on the plaint; would be as due and payable thereon. The plaintiff cannot be made to value his appeal on the basis of the combined valuation of the plaint and counterclaim, in respect of which he makes no claim. {Para 48}.

IN THE HIGH COURT OF BOMBAY AT GOA

Writ Petition No. 283 of 2006

Decided On: 05.03.2007

Teofilo Barreto Vs. Sadashiva G. Nasnodkar and Ors.

Hon'ble Judges/Coram: V.C. Daga, J.

Citations: 2007 (4) BomCR 830, 2007 (6) MhLj 1, MANU/MH/0637/2007.

Read full Judgment here: Click here.

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Whether the District Court (Appellate Court) lacks jurisdiction to entertain appeal when valuation of cross-objection exceeds pecuniary jurisdiction of the District Court?

 Having noticed the change in old Code and new unamended Code of Civil Procedure, let me now turn to the further legislative change brought about in new Code by virtue of amendment of the year 1976; whereby provisions with respect to counter-claim under Order 8, Rule 6-A to 6-G came to be inserted. Consequent to this insertion provisions of Order 20, Rule 19(1), (2) also came to be amended and the words "counter-claim" were inserted immediately after the words "set off". Thus, by virtue of this amendment, set off and counter-claim are treated at par; and both were brought on the same platform with equal status. Therefore, while interpreting clause, Order 20, Rule 19(2), the same treatment which is given to a decree of set off, will have to be given to a decree in suit in which counter-claim was claimed. The legislative object which led to deletion of Section 216 and enactment of Order 20, Rule 19 in respect of decree of set off shall also hold good in respect of decree from counterclaim. As such decree passed in a suit where counter-claim was preferred has to be treated subject to the same provisions in respect of appeal to which it would have been subject, if no counter-claim had been preferred. If the legislative view is that the decree wherein the set off is claimed should go before the same Appellate Forum to which it would have been subject in normal course in absence of claim for set-off; then so far as the counter-claim is concerned; the same treatment will have to be accorded to a decree passed in a suit where counter-claim was preferred. As an extension of the same principle, the cross objection arising from the decree of set-off and/or counter-claim will have to be given similar treatment in the matter of determination of Appellate Forum. {Para 56}

 IN THE HIGH COURT OF BOMBAY AT GOA

Writ Petition No. 283 of 2006

Decided On: 05.03.2007

Teofilo Barreto Vs. Sadashiva G. Nasnodkar and Ors.

Hon'ble Judges/Coram: V.C. Daga, J.

Citations: 2007 (4) BomCR 830, 2007 (6) MhLj 1, MANU/MH/0637/2007.

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Bombay HC: There is no embargo to raise counter-claim in suit and or proceedings, application filed under Indian Succession Act

After reading the clear provisions of counter-claim, I am also of the view that there is no embargo of whatsoever created to raise counter-claim in the suit and or proceedings/ application filed under the Indian Succession Act, 1925 (for short," the Indian Succession Act"). There is nothing to show that the counter-claim as provided under Order 8, Rule 6A is limited to the case involved in the money claims only. The Rules 6A to 6G if read together, no restriction whatsoever, is created to file counter-claim in any suit and or proceedings of any nature. {Para 16}

 IN THE HIGH COURT OF BOMBAY

First Appeal No. 537 of 1995

Decided On: 17.12.2007

Namdeo Mali Vs. Jayram Barde and Ors.

Hon'ble Judges/Coram:

Anoop V. Mohta, J.

Citation:  MANU/MH/1351/2007.

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Tuesday, 28 November 2023

What is the difference between set-off and counter-claim?

 The difference between set-off and counter-claim lies in their nature and purpose in legal proceedings:

O 8 R 6 of CPC provides for set off:

  1. Set-off: Set-off refers to the adjustment or cancellation of mutual debts or claims between parties involved in a legal dispute. It allows a defendant to reduce or eliminate their liability by setting off a claim they have against the plaintiff. In other words, it is a defense mechanism used by the defendant to counterbalance the plaintiff's claim by asserting their own claim against the plaintiff. The purpose of set-off is to achieve a fair and equitable resolution of the dispute by considering the mutual claims between the parties.

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Saturday, 28 October 2023

Whether the court can infer that there was contract on the basis of exchange of Emails?

 I agree with the Plaintiff's Counsel submission relying on the case of Jyotsna Valia (supra) that a written contract need not always be a contract signed by both parties and may consist of correspondence exchanged between the parties without signature. In the present case the authenticity or veracity or truth of its contents of the emails exchanged between the parties are not in dispute. Thus the contentions of the Defendant with regard to no agreement between the parties to extend time upto 31st March 2020 is repelled as misconceived.{Para 30}

 IN THE HIGH COURT OF BOMBAY

Interim Application No. 655 of 2023 in Commercial Summary Suit No. 75 of 2021 and Summons for Judgment No. 65 of 2021 in Commercial Summary Suit No. 75 of 2021

Decided On: 20.09.2023

Play Games 24X7 Pvt. Ltd. Vs. Loran Leasing And Infotech Pvt. Ltd.

Hon'ble Judges/Coram:

Kamal Khata, J.

Citation: MANU/MH/3838/2023.

Read full Judgment here: Click here.


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Whether the court should grant unconditional leave to defend in Summary suit on the ground that defendant has raised a counter claim?

 I am in respectful agreement with the judgement of this Court in the case of First Rand Services Pvt. Ltd vs. Pantheon Infrastructure Ltd.2 which held that


"I find substance in the submission of Mr. Engineer. If the contention on behalf of the defendant that the defendant is entitled to an unconditional leave to defend the suit since the defendant has raised a counterclaim is accepted, the very object of providing summary procedure under Order XXXVII of the Code would be rendered otiose. It is one thing to contend that while seeking leave to defend the suit, the Defendant has raised a counterclaim which raises a substantive defence or at any rate triable issues. It is a completely different thing to assert that since the Defendant has raised a counter claim, irrespective of the nature and quality of the defence and/or counterclaim the Defendant is entitled to an unconditional leave to defend the suit. It all turns upon the quality of defence raised by the Defendant. The tests enunciated by a catena of decisions and reformulated in the case of Hubtown (supra) are required to be applied even in a case where the Defendant raises a counterclaim. An unconditional leave cannot be granted on the sole premise that the Defendant has raised a counterclaim."{Para 36}

 IN THE HIGH COURT OF BOMBAY

Interim Application No. 655 of 2023 in Commercial Summary Suit No. 75 of 2021 and Summons for Judgment No. 65 of 2021 in Commercial Summary Suit No. 75 of 2021

Decided On: 20.09.2023

Play Games 24X7 Pvt. Ltd. Vs. Loran Leasing And Infotech Pvt. Ltd.

Hon'ble Judges/Coram:

Kamal Khata, J.

Citation: MANU/MH/3838/2023.

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Saturday, 10 June 2023

Whether the transfer of Agricultural land is totally prohibited as Maharashtra Prevention of Fragmentation and Consolidation of Holdings Act?

  At the outset, we may say that there is dichotomy between the contention of the first Respondent/ the second Defendant founded on the Fragmentation Act as mentioned above and also his contention of absolute absence of a transaction partaking the real nature of sale. This is because Section 9(1) of the Fragmentation Act makes void only the transfer or partition of any land contrary to the provisions of the said Act. The word 'transfer' is not defined under the Fragmentation Act though the expression 'land' has been defined thereunder. As per Section 2(5) of the Fragmentation Act, the term 'land' means, 'agricultural land whether alienated or unalienated'. {Para 15}

It will not be inappropriate to look into the object of the Fragmentation Act, in the context of the contentions. It runs as under:


Whereas it is expedient to prevent the fragmentation of agricultural holdings and to provide for the consolidation of agricultural holdings for the purpose of the better cultivation thereof;


18. Thus, obviously, it is not the object or purpose of the Fragmentation Act to totally prohibit or prevent transfer of land within any notified 'local area', but it is only aimed at preventing the fragmentation of agricultural holdings and to provide for the consolidation of agricultural holdings for the purpose of the better cultivation thereof.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 930 of 2023 

Decided On: 04.05.2023

 Damodhar Narayan Sawale (D) through L.Rs.  Vs. Tejrao Bajirao Mhaske and Ors.

Hon'ble Judges/Coram:

M.R. Shah and C.T. Ravikumar, JJ.

Author: C.T. Ravikumar, J.

Citation: MANU/SC/0535/2023.

Read full Judgment here: Click here


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Whether Fragmentation Act is applicable if sale transaction was not intended to be acted upon?

As a matter of fact, the very applicability of the Fragmentation Act itself on sale transactions would depend upon the question whether the area in question falls under a Municipal Council or not and if it does not, then on the further question as to whether it falls within a 'local area' notified under the Fragmentation Act. Above all, the case attempted to be projected and proved by the second Respondent is that in regard to sale deed dated 04.07.1978 and the sale deed dated 21.04.1979 (Ext.128) they were never intended to be acted upon and in fact, they were never been acted upon. If that is accepted, then, there is absolutely no question of applicability of the provisions of 'the Fragmentation Act' as they would apply only in the eventuality of an actual transfer of land or partition of land subject to the satisfaction of other conditions. {Para 22}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 930 of 2023 

Decided On: 04.05.2023

 Damodhar Narayan Sawale (D) through L.Rs.  Vs. Tejrao Bajirao Mhaske and Ors.

Hon'ble Judges/Coram:

M.R. Shah and C.T. Ravikumar, JJ.

Author: C.T. Ravikumar, J.

Citation: MANU/SC/0535/2023.

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Sunday, 18 September 2022

Important Provisions of CPC(Part 4 ) ( O 6 to O 8 of CPC)

 ORDER VI

Pleadings Generally

1. Pleading.—“Pleading” shall mean plaint or written statement.

344[2. Pleading to state material facts and not evidence

4. Particulars to be given where necessary.—In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary , particulars (with dates and items if necessary) shall be stated in the pleading.

6. Condition precedent.—Any condition precedent, the performance or occurrence of which is intended to be contested, shall be distinctly specified in his pleading by the plaintiff or defendant, 

7. Departure.—No pleading shall, except by way of amendment raise any new ground of claim or contain any allegation of fact inconsistent with the previous pleadings of the party pleading the same.

8. Denial of contract.—Where a contract is alleged in any pleading, a bare denial of the same by the opposite party shall be construed only as a denial in fact of the express contract alleged or of the matters of fact from which the same may be implied, and not as a denial of the legality or sufficiency in law of such contract.

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Friday, 26 August 2022

Whether the court can entertain an independent counterclaim having nothing to do with the plaintiffs?

  From the pleadings of the plaintiffs, it is clear that they had never raised any claim on Killa No. 6//18 or Killa No. 23. The defendants in their written statement while denying the rights of the plaintiffs on the land of which particulars had been given by the plaintiffs, quite ingeniously inserted the two Killa Nos. 6//18 and 23, setting a counter-claim on these plots. The Trial Court and the First Appellate Court while dismissing the plaintiffs' suit had allowed this claim for without assigning any reasons. In fact, this counter claim which was raised by the defendant is barred under Order VIII, Rule 6A of the CPC. Order VIII, Rule 6A reads as under:—

[6A. Counter-claim by defendant.—(1) A defendant in a suit may, in addition to his right of pleading a set-off under rule 6, set up, by way of counter-claim against the claim of the plaintiff, any right or claim in respect of a cause of action accruing to the defendant against the plaintiff either before or after the filing of the suit but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not:

Provided that such counter-claim shall not exceed the pecuniary limits of the jurisdiction of the court.

(2) Such counter-claim shall have the same effect as a cross-suit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the counter-claim.

(3) The plaintiff shall be at liberty to file a written statement in answer to the counter-claim of the defendant within such period as may be fixed by the court.

(4) The counter-claim shall be treated as a plaint and governed by the rules applicable to plaints

19. A counter claim can be set up only “against the claim of the plaintiffs”. Since there was no claim of the plaintiffs regarding Killa No. 6//8 and 23, the defendants were barred to raise any counter claim on these Killa numbers in view of Order VIII, Rule 6A of the CPC as it has nothing to do with the plaintiffs. It is true that a counter claim can be made by the defendant, even on a separate or independent cause of action (Jag Mohan Chawla v. Dera Radha Swami Satsang6).

20. The Legislature permits the institution of a counter claim, in order to avoid multiplicity of litigation. But then it has certain limitations such as that the counter claim cannot exceed the pecuniary limits of the jurisdiction of the court, and that such counter claim must be instituted before the defendant has delivered his defence or before the time limit for delivering his defence has expired. More importantly, such a counter claim must be against the plaintiff! Evidently, in the present case the counter claim was not against the plaintiffs. Moreover, as the plaintiffs had not claimed any right over the property and the Killa Nos. 6//8 and 23 are not even a part of the suit property described in the plaint by the plaintiffs. Despite the same, such a claim has been allowed against the plaintiffs. In fact, we do not find on record any reply submitted by the plaintiffs against the counter claim. To be fair, such a counter claim should have been excluded in terms of Order VIII, Rule 6C of the CPC. Suffice it to state here that the counter claim set up by the defendants has been rightly rejected by the High Court.

In the Supreme Court of India

(Before Uday U. Lalit, S. Ravindra Bhat and Sudhanshu Dhulia, JJ.)

Satyender and Others Vs Saroj and Others.

Civil Appeal No. 4833 of 2022 

Decided on August 17, 2022

Citation: 2022 SCC OnLine SC 1026

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Sunday, 24 April 2022

Whether the order of the arbitrator refusing to entertain a counterclaim is the interim award?

 Section 34 of the 1996 Act allows recourse to a Court against any "arbitral award". "Arbitral award" is defined in Section 2(1)(c) as including an interim award. {Para 9}

10. "Interim award" is, however, not defined in the 1996 Act. Section 31(6) of the 1996 Act, however, empowers an Arbitral Tribunal to make an interim award on any matter with respect to which it may make a final arbitral award. Section 31(6) of the 1996 Act reads thus:

"The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award."

11. Inasmuch as an interim award is also an "arbitral award" as defined in Section 2(c), an interim award would be susceptible to challenge under Section 34 of the 1996 Act. This fact was noticed by the Supreme Court in Indian Farmers Fertilizer Cooperative Ltd. v. Bhadra Products MANU/SC/0026/2018 : (2018) 2 SCC 534 (IFFCO, hereinafter). The issue before the Supreme Court, in that case, was whether an order rejecting a claim on the ground of limitation, could be treated as "interim award", so as to make the order amenable to challenge under Section 34 of the 1996 Act. The Supreme Court, in IFCO MANU/SC/0026/2018 : (2018) 2 SCC 534, while noticing that the 1996 Act does not define "interim award", proceeded to opine as under:

"7. As can be seen from Section 2(c) and Section 31(6), except for stating that an arbitral award includes an interim award, the Act is silent and does not define what an interim award is. We are, therefore, left with Section 31(6) which delineates the scope of interim arbitral awards and states that the arbitral tribunal may make an interim arbitral award on any matter with respect to which it may make a final arbitral award."

8. The language of Section 31(6) is advisedly wide in nature. A reading of the said sub-section makes it clear that the jurisdiction to make an interim arbitral award is left to the good sense of the Arbitral Tribunal, and that it extends to "any matter" with respect to which it may make a final arbitral award. The expression "matter" is wide in nature, and subsumes issues at which the parties are in dispute. It is clear, therefore, that any point of dispute between the parties which has to be answered by the arbitral tribunal can be the subject matter of an interim arbitral award. However, it is important to add a note of caution. In an appropriate case, the issue of more than one award may be necessitated on the facts of that case. However, by dealing with the matter in a piecemeal fashion, what must be borne in mind is that the resolution of the dispute as a whole will be delayed and parties will be put to additional expense. The arbitral tribunal should, therefore, consider whether there is any real advantage in delivering interim awards or in proceeding with the matter as a whole and delivering one final award, bearing in mind the avoidance of delay and additional expense. Ultimately, a fair means for resolution of all disputes should be uppermost in the mind of the arbitral tribunal.

12. In my view, the import of the afore-extracted passages from the judgment of the Supreme Court in IFFCO MANU/SC/0026/2018 : (2018) 2 SCC 534 is clear and categorical. Any matter, on which an Arbitral Tribunal may make a final award, can also be subject of an interim award made by it. If, therefore, the decision of the Arbitral Tribunal brings a quietus to an issue before the Arbitral Tribunal, and is an order which the Arbitral Tribunal is empowered to pass at the final stage, it would constitute an "interim award" within the meaning of Section 31(6) and, consequently, within the meaning of Section 34 of the 1996 Act.

A decision that the counter-claim is not maintainable and is, therefore, liable to be rejected, is a decision which an Arbitral Tribunal can certainly take at the final stage of the proceedings, especially in view of the power conferred on the Arbitral Tribunal, by Section 16 of the 1996 Act, to rule on its own jurisdiction especially in view of the power conferred on the Arbitral Tribunal by Section 16 of the 1996 Act, to rule on its own jurisdiction. Being, therefore, in the nature of a decision which could be taken at the final stage of the proceedings, i.e. in the final award which the Arbitral Tribunal would pass, such a decision, when taken at an interlocutory stage, would, in my view, certainly constitute an "interim award" within the meaning of the 1996 Act, in view of the law laid down in IFFCO MANU/SC/0026/2018 : (2018) 2 SCC 534.

IN THE HIGH COURT OF DELHI

O.M.P. (COMM) 224/2021 and I.A. 9860/2021

 National Highways Authority of India Vs.  Abhijeet Angul Sambalpur Toll Road Limited

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Can the arbitrator refuse to entertain a counterclaim if it is not as per his liberty?

 The right of the petitioner to file counter-claims exists independent of any liberty granted by the learned Arbitral Tribunal. It is always open to the learned Arbitral Tribunal to reject the counterclaims either on merits or on limitation or even on the ground that they are not arbitrable within the scope of the reference made to learned Arbitral Tribunal, in exercise of the powers conferred by it by Section 16 of the 1996 Act1, which empowers an Arbitral Tribunal to rule on its own jurisdiction. The learned Arbitral Tribunal could not, however, take a view that it would not entertain any such counter-claim, if preferred before it.

IN THE HIGH COURT OF DELHI

O.M.P. (COMM) 224/2021 and I.A. 9860/2021

 National Highways Authority of India Vs.  Abhijeet Angul Sambalpur Toll Road Limited

Hon'ble Judges/Coram:

C. Hari Shankar, J.

Decided On: 28.02.2022

Citation: MANU/DE/0735/2022

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Sunday, 10 October 2021

Can the wife file the counter claim as per S 23A of Hindu Marriage seeking a declaration to declare marriage of his husband with the third-person void?

 As per para 37, the appellant-original defendant has proposed the relief to declare that the marriage between the respondent-original plaintiff with Hinaben Manubhai Panchal on 14.12.2006 is illegal, void and voidable and further to declare that Hinaben Manubhai Panchal is not a legal wife of the respondent – original plaintiff and also to declare that the original plaintiff – respondent herein is living with Hinaben Manubhai Panchal in adultery. It is also further prayed to declare that the son ‘Dev’ born through the respondent and Hinaben Manubhai Panchal is not a legitimate child of the respondent-original plaintiff. On a fair reading of Section 23A of the Hindu Marriage Act, we are afraid that the relief sought by way of counter claim in the Hindu Marriage Petition filed by the respondent can be claimed. Section 23A of the Hindu Marriage Act reads as under:

“23A. Relief for respondent in divorce and other proceedings – In any proceeding for divorce or judicial separation or restitution of conjugal rights, the respondent may not only oppose the relief sought on the ground of petitioner’s adultery, cruelty or desertion, but also make a counter-claim for any relief under this Act on that ground; and if the petitioner’s adultery, cruelty or desertion is proved, the court may give to the respondent any relief under this Act to which he or she would have been entitled if he or she had presented a petition seeking such relief on that ground.”

On a fair reading of Section 23A of the Hindu Marriage Act, the

respondent in any proceedings for divorce or judicial separation or

restitution of conjugal rights, may not only oppose the relief sought on the ground of adultery, cruelty or desertion, but also make a counterclaim for any relief under Hindu Marriage Act, i.e, on the ground of petitioner’s adultery, cruelty or desertion and if the petitioner’s adultery, cruelty or desertion is proved, the court may give to the respondent any relief under Hindu Marriage Act to which he or she would have been entitled if he or she had presented a petition seeking such relief on that ground, i.e., seeking a divorce or judicial separation on the ground of petitioner’s adultery or cruelty. Therefore, by way of counter claim, the respondent in any proceedings for divorce or judicial separation or restitution of conjugal rights can pray for the relief by way of counter claim only those reliefs which can be prayed and/or granted under the Hindu Marriage Act, namely, the relief under Section 9 (Restitution of

conjugal rights); Section 10(judicial separation); Sections 11 &

12(declaration of marriage between the petitioner and the respondent

void) and Section 13 (divorce). Therefore, the respondent to the

aforesaid proceedings can pray for the aforesaid reliefs only by way of counter claim and that too between the petitioner and the respondent. No relief can be prayed qua the third party. Under the provisions of the Hindu Marriage Act, the relief of divorce, judicial separation etc. can be between the husband and the wife only and cannot extend to the third party. Therefore, by virtue of Section 23A of the Hindu Marriage Act, it is not open for the appellant herein – original defendant to seek declaration to the effect that the marriage between the respondent – original plaintiff and the third party – Hinaben Manubhai Panchal is void. No relief can be prayed by way of counter claim even against ‘Dev’, the son born out of the alleged wedlock between the respondent – original plaintiff and the third party – Hinaben Manubhai Panchal. In such a situation, the only remedy available to the appellant would be to file a substantive suit and/or initiate independent proceedings claiming such reliefs. But such reliefs cannot be claimed by way of counter claim under Section 23A of the Hindu Marriage Act in the petition for divorce filed by the respondent herein against the appellant. At the most, the appellant herein – original defendant by way of counter claim could have claimed the relief and prayed for divorce and/or judicial separation on the ground of husband’s adultery. Beyond that, no relief which cannot be granted under the provisions of the Hindu Marriage Act can be claimed by way of counter claim.

{Para 9}

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 5901-5902 OF 2021

Nitaben Dinesh Patel  Vs  Dinesh Dahyabhai Patel 

Author: M.R. SHAH, J.

Dated: October 07, 2021.

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