Code of Civil Procedure, 1908 (CPC)
Counterclaim under Order VIII Rules 6A to 6G CPC: Scope, Limits and Comparisons
A counterclaim lets a defendant do more than defend: it lets him sue the plaintiff inside the plaintiff's own suit and obtain a decree against him. Introduced into the Code by the Amendment Act of 1976, Order VIII Rules 6A to 6G of the Code of Civil Procedure, 1908 give the device its shape, and the case law has settled its scope, the cause of action requirement and the situations in which it will be excluded. These notes cover all of it, with the two comparisons examinations invariably ask for: counterclaim against set-off, and counterclaim against a cross-suit.
1. Order VIII Rule 6A: The Provision
§ Order VIII Rule 6A, CPC 1908 (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 counterclaim 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 counterclaim is in the nature of a claim for damages or not: Provided that such counterclaim shall not exceed the pecuniary limits of the jurisdiction of the Court. (2) Such counterclaim 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 counterclaim. (3) The plaintiff shall be at liberty to file a written statement in answer to the counterclaim of the defendant within such period as may be fixed by the Court. (4) The counterclaim shall be treated as a plaint and governed by the rules applicable to plaints. |
Legal set-off, equitable set-off and counterclaim: the defendant's three devices compared
2. Scope of the Counterclaim
i. Any right or claim. The counterclaim is not confined to money. It may be for possession, for a declaration, for an injunction, for specific performance or for damages, since the rule speaks of any right or claim and adds whether such counterclaim is in the nature of a claim for damages or not.
ii. Any transaction. Unlike an equitable set-off, the counterclaim need not arise out of the same transaction as the plaintiff's claim, though in practice it usually does. What matters is that it is a claim by this defendant against this plaintiff.
iii. It may exceed the plaintiff's claim. This is the essential difference from a set-off. The defendant may recover the excess by decree against the plaintiff, subject only to the proviso that the counterclaim must not exceed the pecuniary limits of the court's jurisdiction.
iv. It is treated as a plaint. By Rule 6A(4), the rules applicable to plaints govern it: it must disclose a cause of action, be properly valued, bear the requisite court fee, comply with Orders VI and VII, and it may itself be rejected under Order VII Rule 11.
v. Against whom. The counterclaim lies against the plaintiff. Where relief is also needed against a co-defendant, the position is that a counterclaim may be maintained against the plaintiff along with a co-defendant where the claim against the co-defendant is connected with the relief claimed against the plaintiff; a counterclaim solely against a co-defendant is outside the rule.
3. Cause of Action for a Counterclaim
§ The timing rule in Rule 6A(1) The cause of action for the counterclaim may accrue either before or after the filing of the suit, but it must accrue before the defendant has delivered his defence, or before the time limited for delivering his defence has expired. The rule thus fixes an outer limit by reference to the defence, not to the suit. A cause of action arising after the written statement is filed cannot be brought in by counterclaim; it must be the subject of a separate suit. The practical question that follows is whether a counterclaim may be filed after the written statement has been delivered. The settled position is that the court has a discretion to permit it, by way of amendment, so long as the cause of action accrued before the defence was delivered and the trial has not proceeded so far that permitting it would prejudice the plaintiff or effectively restart the suit. The discretion is exercised sparingly once issues are framed and evidence has begun. |
📖 Rohit Singh v. State of Bihar, (2006) 12 SCC 734 A counterclaim was sought to be filed long after the written statement, at a stage when the trial in the suit had substantially progressed, and by persons who were not defending against the plaintiff's claim in the manner the rule contemplates. The Supreme Court held that a counterclaim under Order VIII Rule 6A cannot be filed after the issues are framed and the suit has proceeded substantially, since the rule contemplates a counterclaim raised along with or in the context of the defence; permitting it at a late stage would convert the suit into a fresh litigation and defeat the object of the provision, which is to avoid multiplicity while trying connected claims together. Rule: a counterclaim belongs with the defence. It may be entertained after the written statement only in the court's discretion, and not once the suit has substantially progressed. |
4. The Procedural Consequences: Rules 6B to 6G
Rule | What it provides |
|---|---|
Rule 6B | Where a defendant sets up a counterclaim, he shall state specifically in his written statement that he does so by way of counterclaim |
Rule 6C | Where a defendant sets up a counterclaim and the plaintiff contends that it ought to be disposed of by an independent suit, the plaintiff may apply, before issues are settled, for an order that the counterclaim be excluded, and the court may make such order as it thinks fit |
Rule 6D | If in any case in which the defendant sets up a counterclaim the suit of the plaintiff is stayed, discontinued or dismissed, the counterclaim may nevertheless be proceeded with |
Rule 6E | If the plaintiff makes default in putting in a reply to the counterclaim, the court may pronounce judgment against him in relation to the counterclaim, or make such order as it thinks fit |
Rule 6F | Where in a suit a set-off or counterclaim is established as a defence against the plaintiff's claim, and any balance is found due to the defendant, the court may give judgment to the party entitled to such balance |
Rule 6G | The rules relating to a written statement by a defendant shall apply to a written statement filed in answer to a counterclaim |
Rule 6D is the provision that proves the counterclaim's independence and is the most examined of the group: because the counterclaim is in substance a cross-action, the withdrawal, dismissal or stay of the plaintiff's suit does not carry it away, and the court proceeds to judgment on it. A set-off cannot survive in the same way, since it exists only as an answer to a demand that has ceased to exist.
5. Exclusion of a Counterclaim: Rule 6C
The counterclaim is not an unqualified right. By Rule 6C, where the plaintiff contends that the counterclaim ought to be disposed of by an independent suit, he may apply, before issues are settled, for an order excluding it, and the court may make such order as it thinks fit. The grounds on which exclusion is ordered follow from the object of the rule, which is to try connected claims together without embarrassing the trial.
§ When a counterclaim will be excluded or refused The recurring grounds: • The counterclaim is wholly unconnected with the plaintiff's claim and would enlarge the suit into two unrelated trials. • It would embarrass or delay the trial of the plaintiff's claim, or require evidence of an entirely different character. • The cause of action accrued after the defence was delivered, and so falls outside Rule 6A(1) altogether. • It is filed at a late stage, after issues are framed and the suit has substantially progressed: Rohit Singh. • It exceeds the pecuniary jurisdiction of the court, contrary to the proviso to Rule 6A(1). • It does not comply with the rules applicable to plaints, for instance by failing to disclose a cause of action or to bear the requisite court fee, in which case it is liable to be rejected under Order VII Rule 11. |
6. Counterclaim Compared with Set-Off
Basis | Set-off | Counterclaim |
|---|---|---|
Nature | A defence that answers and reduces the plaintiff's claim: a shield | A cross-action asserted within the same suit: a sword |
Kind of suit | Only in a suit for the recovery of money | In any suit, and the claim need not be for money |
Amount | Cannot exceed the plaintiff's claim; nothing is recovered beyond extinguishing it | May exceed the plaintiff's claim, and the defendant may take a decree for the excess |
Cause of action | The sum must be legally recoverable when the suit is filed | The cause of action must accrue before the defence is delivered, whether before or after the suit was filed |
Connection required | Legal set-off requires none; equitable set-off requires the same transaction | None required; the claim may arise from a wholly different transaction |
If the suit is dismissed or withdrawn | Falls with the suit | Proceeds to judgment nevertheless: Rule 6D |
Court fee and treatment | Fee on the amount set off; the written statement has the effect of a plaint in a cross-suit | Fee as on a plaint; the counterclaim is treated as a plaint under Rule 6A(4) |
7. Counterclaim Compared with a Cross-Suit
Basis | Counterclaim | Cross-suit (an independent suit) |
|---|---|---|
How it is brought | Pleaded in the written statement in the plaintiff's suit, under Order VIII Rule 6A | Instituted by a separate plaint under Section 26 and Order IV |
Cause of action | Must accrue before the defence is delivered | May accrue at any time, subject only to limitation |
Pecuniary limit | Must not exceed the pecuniary jurisdiction of the court trying the suit | Filed in whichever court has jurisdiction over its own value |
Trial | Tried together with the plaintiff's claim, and one judgment is pronounced on both | Tried separately, unless consolidated under the court's inherent power |
Object | To avoid multiplicity by trying connected claims in one proceeding | An ordinary, independent action |
Effect on the other proceeding | Survives the dismissal or withdrawal of the plaintiff's suit under Rule 6D | Independent throughout; the fate of the other suit does not touch it |
The relationship between the two is best stated functionally: a counterclaim is a cross-suit brought inside the plaintiff's suit. Rule 6A(2) says as much, giving it the same effect as a cross-suit, and Rule 6A(4) completes the identity by treating it as a plaint. The differences are therefore all procedural, arising from the fact that it is housed within another proceeding: the timing limit tied to the defence, the pecuniary ceiling of the trying court, and the plaintiff's right under Rule 6C to ask that it be sent out to an independent suit.
8. Landmark Judgments on Counterclaim
- Rohit Singh v. State of Bihar, (2006) 12 SCC 734. A counterclaim cannot be filed after issues are framed and the suit has substantially progressed; it belongs with the defence.
- Jag Mohan Chawla v. Dera Radha Swami Satsang, (1996) 4 SCC 699. A counterclaim is not confined to money claims and may be set up in respect of any cause of action, the object of Rules 6A to 6G being to avoid multiplicity by trying connected claims together.
- Ashok Kumar Kalra v. Wing Cdr. Surendra Agnihotri, (2020) 2 SCC 394. A counterclaim may be filed after the written statement, in the court's discretion, so long as the cause of action accrued before the defence was delivered; the court weighs the stage of the proceedings, delay and prejudice, and the discretion is not available once issues are framed and the trial has advanced.
- Order VIII Rules 6C and 6D. The plaintiff may apply before settlement of issues for exclusion of the counterclaim; and the counterclaim proceeds notwithstanding the stay, discontinuance or dismissal of the suit.
9. Frequently Asked Questions on Counterclaim
What is a counterclaim under the CPC?
A claim set up by a defendant against the plaintiff in the plaintiff's own suit, under Order VIII Rule 6A. It has the effect of a cross-suit, is treated as a plaint, and enables the court to pronounce a final judgment both on the plaintiff's claim and on the counterclaim.
What is the scope of a counterclaim?
It may be for any right or claim, whether or not for money and whether or not in the nature of damages, and it need not arise out of the same transaction as the plaintiff's claim. It may exceed the plaintiff's claim, subject to the pecuniary limits of the court's jurisdiction.
When must the cause of action for a counterclaim accrue?
Either before or after the filing of the suit, but before the defendant has delivered his defence or before the time limited for delivering it has expired. A cause of action arising after the defence must be pursued by a separate suit.
Can a counterclaim be filed after the written statement?
Only in the court's discretion. Ashok Kumar Kalra holds that a counterclaim may be entertained after the written statement where the cause of action accrued before the defence was delivered, but the discretion is not exercised once issues are framed and the trial has advanced, as Rohit Singh illustrates.
What happens to a counterclaim if the plaintiff's suit is dismissed?
It proceeds to judgment. Order VIII Rule 6D provides that where the suit of the plaintiff is stayed, discontinued or dismissed, the counterclaim may nevertheless be proceeded with, which distinguishes it from a set-off.
Can a counterclaim be excluded from the suit?
Yes. Under Order VIII Rule 6C, where the plaintiff contends that the counterclaim ought to be disposed of by an independent suit, he may apply before issues are settled for an order excluding it, and the court may make such order as it thinks fit.
What is the difference between a counterclaim and a cross-suit?
A counterclaim is a cross-suit brought inside the plaintiff's suit: it is pleaded in the written statement, must be within the trying court's pecuniary jurisdiction, and its cause of action must accrue before the defence is delivered. A cross-suit is an independent action filed by a separate plaint in whichever court has jurisdiction.
10. Related Topics in This CPC Series
- Set-Off under Order VIII Rule 6: Legal and Equitable
- Order VIII: Written Statement, Set-Off and Counterclaim
- Order VII: The Plaint, Return and Rejection
- Order II: Frame of Suit and the Bar under Order II Rule 2