When plaintiff institutes a suit, it may happen that defendant also has any right or claim in respect of the cause of action as against the plaintiff for which he is legally entitled to bring a separate suit. In that event, he will not be required to bring a separate suit against the plaintiff for his cause of action if he is allowed to set up counter-claim; and in the event of dismissal of the plaintiff’s suit for default, the counter-claim shall alone proceed to the final judgment as an independent suit. For various good reasons, our Code of Civil Procedure, 1908 (Act No.V of 1908) needs to be amended to have express provisions relating to defendant’s right of setting up counter-claim.
Counterclaim and its relevancy to Decree:
A cause of action or claim for relief asserted in opposition to or as a set-off against the plaintiff’s own cause of action or claim for relief and contained in the defendant’s answer to the plaintiff’s complaint. The defendant may plead a set-off or set up by way of counter-claim any right or claim, whether sounding in damages or not, against the claims of the plaintiff. The counter-claim has the same effect as a statement of claim in a cross-action. If counter-claim is entertained, the Court will be able to pronounce a final judgment both on the original claim and on the cross-claim. In this way, all matters in controversy between the said parties respectively may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matter may be avoided.
Decree, as it is defined in section 2(2) of Code of Civil Procedure (thereafter in short Code), means formal expression of an adjudication which conclusively determines the right of the parties. The controversial matter (s) having judicial determination in favour of either the plaintiff or the defendant results in decree. Even in the event of plaintiff’s failure to prove his claim, it would be decree if it conclusively determines the right of the plaintiff and the defendant. Moreover, decree is to be drawn up as per Order XX rule 5A of the Code irrespective of plaintiff’s success or failure. Whether an order passed by a Court is a decree or not, does not depend on the drawing up of a decree by the Court as formal drawing up of a decree is the duty of the Court. If the Court does not draw up a decree, it cannot be said that the order of the Court by which rights of the parties are finally adjudicated upon is not a decree. The words “conclusively determines” as used in section 2(2) of the Code, do not mean only determination of the right of the plaintiff, but also of the defendant. From the aforesaid enunciation of law, it is manifest that when there is a conclusive determination of rights of parties upon adjudication, the said decision in certain circumstances can have the status of a decree.
Usually in most civil suits e.g., title declaration, permanent injunction, recovery of possession etc.; it has only been adjudged whether or not plaintiff’s case has been proved, while the defendant’s evidence is considered only to disprove/shaken the plaintiff’s case. When the suit is dismissed for plaintiff’s failure to prove his case, the defendant’s right receives no determination or recognition by the Court in its final order.
The definition of “decree” conveys that there has to be a formal expression of adjudication and conclusive determination of the rights of the parties concerned. When the counter-claim filed by the defendant is adjudicated and dismissed, finality is attached to it as far as the controversy in respect of the claim put forth by the defendant is concerned. If the defendant does not make counter-claim and after dismissal of the plaintiff’s claim, he (defendant) wants to get remedy on his claim by instituting another suit, the question may come forward as to whether the later suit will be barred by the principle of res judicata as embodied in section 11 of the Code. In this regard, the High Court Division in Shomsher Ali vs. Bangladesh observed that a judgment operates as a bar as regards all findings which are essential to sustain the judgment. When a Court decides a case on two alternative findings, as the High Court Division observed, each one of them operates as res judicata and is a binding authority. The law, therefore, is not that a finding unnecessarily given becomes binding; as such finding may bind not only other Courts but also the parties till the later counter-claim overrides it.
The doctrine of res judicata contains the rule of conclusiveness of the judgment which is based partly on the maxim of Roman jurisprudence “interest reipublicae ut sit finis litium” (concerns the State that there be an end to law suits) and partly on the maxim “nemo debet bis vexari pro uno et eadem causa” (no man should be vexed twice over for the same cause). The essence of that doctrine has also been advocating for allowing the defendant to make counter-claim.
US & UK Provisions for Counterclaim:
Under the United States’ Federal Rules of Civil Procedure, counterclaims can arise on various occasions in federal Courts, including e.g.: an attempt by the defendant to offset or reduce the amount/implications of the plaintiff’s claim; a different claim by the defendant against the plaintiff; a claim by an impleaded third-party defendant against the original defendant acting as a third-party plaintiff; and a claim by any party against another party who has made a cross-claim against him.
Under the Civil Procedure Rules of United Kingdom, a Part 20 claim means any claim other than a claim by a claimant against a defendant. This includes: A counterclaim by a defendant against the claimant or against the claimant and another party; and a claim by a defendant against any person (whether a party or not) for contribution or indemnity.
Indian express provisions for Counter-claim:
Courts in India have been treating counter-claim as a plaint in a cross suit. As already said, India has its Code amended in 1976 by introducing provisions relating to counter-claim (Rules 6A to 6G) in Order VIII. Out of the newly enacted rules, Rule 6A enables a defendant to set up a counter-claim against the plaintiff’s claim. This right or claim in respect of a cause of action may accrue to the defendant either before or after filing of the suit, and irrespective of whether such counter-claim is in the nature of a claim for damages or not. It further states that a counter-claim shall have the same effect as a cross-suit to enable the Court to pronounce a final judgment in the same suit. Sub-rule (3) says that plaintiff will be at liberty to file a written statement in answer to the counter-claim. Rule 6C enables the plaintiff, in certain circumstances, to seek orders of Court so that without tacking on the counter-claim with the plaint, the Court would treat it as a suit. Rule 6-D says that in cases where defendant sets up a counter-claim, even if the plaintiff’s suit is stayed, discontinued, or dismissed, the counter-claim may nevertheless be proceeded with. Rule 6-E as like Rule 10 says that if the plaintiff fails to file a reply to the counter-claim, the Court may pronounce judgment solely on counter-claim. Rule 6-G says that in respect of the statement to be filed by plaintiff, provisions of Order 8 of the Code will apply.
Accordingly, in rule 19 of Order XX of the First Schedule to the Code, in sub-rules (1) and (2), after the word “set-off” wherever it occurs, the words “or counter-claim” have been inserted. This is relating to drawing up decree when counter-claim is allowed. This amendment in rule 19 of Order XX is consequential to the amendment made in Order VIII.
Looking to the scheme of Order VIII as amended by Act No. 104 of 1976, Supreme Court of India in the case of Ramesh Chand Ardawatiya vs Anil Panjwani held, “we are of the opinion, that there are three modes of pleading or setting up a counter-claim in a civil suit. Firstly, the written statement filed under Rule 1 may itself contain a counter-claim which in the light of Rule 1 read with Rule 6-A would be a counter-claim against the claim of the plaintiff preferred in exercise of legal right conferred by Rule 6-A. Secondly, a counter-claim may be preferred by way of amendment incorporated subject to the leave of the Court in a written statement already filed. Thirdly, a counter-claim may be filed by way of a subsequent pleading under Rule 9. In the latter two cases the counter-claim though referable to Rule 6-A cannot be brought on record as of right but shall be governed by the discretion vesting in the Court, either under Order VI Rule 17 of the CPC if sought to be introduced by way of amendment, or, subject to exercise of discretion conferred on the Court under Order VIII Rule 9 of the CPC if sought to be placed on record by way of subsequent pleading.”
Scope of Counter-claim & Necessity of its express provisions:
Order VIII rule 6 of Code of Civil Procedure provides for counter-claim in suits for recovery of money only where the defendant can claim set-off against the plaintiff’s demands. By introducing provisions relating to counter-claim (Rules 6A to 6G) in Order VIII, India has its Code amended in 1976. This amendment came following the suggestion given by the Law Commission of India in that regard. In its suggestion to incorporate new rules i.e., 6A to 6G relating to counter-claim in Order VIII, the Law Commission of India described the necessity for such new rules in the following words:-
“There is at present no express provision for filing of a counter-claim except the rule-making power in section 128(2)(c). The present position has been summed up by Mulla thus: “Though the Code does not provide for counter-claims, there is nothing to prevent a Court from treating the counter-claim as a plaint in a cross-suit and hearing the two suits together, provided the requisite Court-fee on the counter-claim has been paid.” High Courts which exercise original jurisdictions have made rules which provide for counter-claims (e.g. Bombay High Court Original Side Rules, 1957, Rules 137 et seq.). We are of the opinion that in order to avoid multiplicity of proceedings and to dispel doubts that counter claims cannot be entertained, an express provision should be inserted in the Code for this purpose.”
“The rules have been drafted mainly on the lines of rules 137 to 146 of the Rules of the Bombay High Court (Original Side), 1957, pages 38-39. Those rules embody many points which have been clarified by case-law on the corresponding rules in the R.S.C. See also Order VIII, rules 13 to 22 inserted for Bombay City Civil Court.”, expressed the Law Commission of India in support of its drafted rules i.e., 6A to 6G relating to counter-claim.
Before the insertion of the express provisions relating to counter-claim i.e., Rules 6A to 6G in Order VIII in Indian Code of Civil Procedure by Act No.104 of 1976, the issue was represented in the various case-laws.
In the case of Lassoo & Sons v. Krishna Wadia J., sitting as a single Judge of Bombay High Court, distinguished a set-off from a counter-claim in respect of basis of claiming those in the following terms: ‘A set-off and a counter-claim, therefore, are essentially different, and in India we are governed by Order VIII, Rule 6, of the Civil Procedure Code, and the High Court Rules as regards set-off, and by the High Court Rules only as regards counter-claim.’
Even before insertion of Order VIII Rule 6A, in Laxmidas v. Nanabhai, wherein, in a suit by one partner against the heirs of a deceased partner for specific performance of an agreement by which the co-partner had agreed to convey his interest to the former, a counter-claim was made by the defendants for account of the dissolved firm and an objection was raised that the counter-claim was not maintainable. the Supreme Court of India observed that the right to make a counter-claim is statutory, but, since the Civil Procedure Code does not contain any provision for a counter-claim, the Supreme Court stated that the said case was, admittedly, not within Order VIII, Rule 6 of the Code of Civil Procedure. The Apex Court of India, while dealing the law on the point held as follows:
“The question has therefore to be considered on principle as to whether there is anything in law — statutory or otherwise — which precludes a Court from treating a counter-claim as a plaint in a cross suit. We are unable to see any. No doubt, the Civil Procedure Code prescribes the contents of a plaint and it might very well be that a counter-claim which is to be treated as a cross suit might not conform to all these requirements, but this by itself is not sufficient to deny to the Court the power and the jurisdiction to read and construe the pleadings in a reasonable manner. If, for instance, what is really a plaint in a cross-suit is made part of a written statement either by being made annexure to it or as part and parcel thereof, though described as a counter-claim, there can be no legal objection to the Court treating the same as a plaint and granting such relief to the defendant as would have been open if the pleading had taken the form of the plaint. In such a case the Court is not prevented from separating the Written Statement proper from what was described as a counter-claim and treating the latter as a cross suit, and if the counter-claim contains all the necessary requisites sufficient to be treated as a plaint making a claim for the relief sought, it would be open to a Court to convert or treat the counter-claim as a plaint in a cross suit.”
On construction of the plain terms of Rules 137,143,144,146 and 710 of the Original Side Rules of Bombay High Court relating to the procedure by way of counter-claim, Vimadalal, J in Aminchand Pyarelal vs Union Of India, came to the conclusion that ‘a counter-claim is a part of the original suit itself and is a defence to the extent of the plaintiff’s claim, though to the extent to which it exceeds that claim, it has “the same effect as a cross-suit”.’ It has been observed that ‘Since a counter-claim is not wholly defensive in nature, it has rightly been said to be a weapon of offence, but, even so, a counter-claim is undoubtedly a part of the suit itself, and it is precisely for that reason that it became necessary to frame Rule 144 expressly empowering the Court to proceed with the counter-claim, even though the plaintiff’s suit may be stayed, discontinued or dismissed.’
On the argument that counter-claim can be made only in a suit for money, in Pathrose Samual and Anr. vs Karumban Parameswaran the Kerala High Court (India) felt it very difficult to accept such view, and thereby observed, ‘even before inserting the Rules 6A to 6G in the Code by the amendment of 1976, there were instances of counter-claims being allowed even in suits other than money suits and there was nothing in the earlier Code prohibiting the same.’
In Loyal Shipping vs. Castrol UK Ltd, the Supreme Court of Bangladesh had occasion to consider whether counter claim of the defendant is entertainable. The apex Court observed it in affirmative, and endorsed its earlier views made in United Shipping case where in response to Indian express provisions for counter-claim it was observed as follows:
“It seems that what is latent in, but covered by provisions of Order VIII, rule 6, CPC are made express by the aforesaid amendment, but for this reason it cannot be said that counter-claim of the nature made by the defendant-respondents in the present suit is not entertainable, particularly when they have paid the full Court fees on the amount of counter-claim.”
Rule making power of Bangladesh Supreme Court:
The history of civil procedure begins with the year of 1859, when first uniform Code of Civil Procedure was enacted. Thereafter, it followed changes and successively it were the Codes of 1877, 1882, and lastly of 1908 in British India.
In the proposed revised Code which was enacted as the Code of Civil Procedure, 1908, the provisions pertaining to details of procedure and other matters of minor character were relegated to rules contained in a Schedule. The object of the re-arrangement was to separate the fundamental and basic provisions, which could not be amended except by the legislative process, from the comparatively minor and detailed provisions in respect of which it was desirable to provide a more elastic and speedy machinery for modification than the tardy process of legislation. It was accordingly proposed that the new Code should empower the High Courts to make rules for regulating their own procedure and the procedure of subordinate Courts and to modify the rules contained in the first Schedule to the Code. Provision was also made for a Rules Committee to report to the High Court on all proposals for making new rules or modifying the existing rules.
Following the historical adoption of the Constitution on 4th November 1972 A.D., like other laws this Code of 1908 has been deemed to have taken effect on the 26th day of March, 1971. In independent Bangladesh, the Code of 1908 has been amended in 1973, 1974, 1978, 1983, 1989, 2003, 2006 and lastly in 2012. In our Code, there is at present no express provision for filing of a counter-claim except the rule-making power of the Supreme Court in section 128(2)(c) to make rules for procedure in suits by way of counter-claim. Section 122 empowers the Supreme Court to make rules regulating its own procedure and the procedure of subordinate Civil Courts. And for that purpose, the Rule Committee is to make report to the Supreme Court on any proposal to annul, alter, or add to the rules or to make new rules in the First Schedule to the Code.
In partition suits, defendants are allowed to file Chhaham Petition with required court fee where defendants’ claims are treated as cross-suit, and thereby both plaintiff and defendant are equated in the same position. Court can pass a decree for partition among the defendants even dismissing the plaintiff’s claim. Though termed as “Chhaham Petition”, it is nothing but a Counter-claim.
In a suit, for example, the plaintiff challenges a transfer-deed of which the defendant is the transferee, claiming it to be false, collusive, and void but fails to prove so; while the defendant succeeds to prove the alleged deed to be genuine and acted upon one. In this event, the Court’s mere adjudication of the plaintiff’s case dismissed, does not redress the defendant. In doing so, the order portion of most suits where plaintiff fails to prove his case, usually runs as follows:- “The suit be dismissed on contest against the defendant Nos. … and ex parte against the defendant Nos. …”. Thus, the defendant’s claim having proved by legal evidence gets no finality at the end. If the defendant is allowed to make counter-claim against the plaintiff’s claim, then the operative portion of the judgment would not only be limited to the saying “… the suit for … be dismissed …”, but may also be like as, “… the plaintiff’s case be dismissed and the defendant’s case be decreed …”
The purpose of the provision enabling filing of a counter-claim is to avoid multiplicity of judicial proceedings and save upon the Court’s time as also to exclude the inconvenience to the parties by enabling claims and counter-claims, that is, all disputes between the same parties being decided in the course of the same proceedings. The goal of counter-claim is to turn the tables on the plaintiff with more issues in the case and demanding defendant’s redress. As discussed already, it has to be treated as a plaint and is governed by the rules applicable to it. If the counter-claim is treated as a suit, and the same is disposed of by a common judgment, and if one of the judgments is not appealed against, the principle of res judicata has to be applied. To dispel the doubt that counter-claims cannot be entertained, we need express statutory provisions for Counter-claim in our Code.
 Webster’s New World Law Dictionary; Wiley Publishing, Inc., Hoboken, New Jersey. Read more at http://www.yourdictionary.com/counterclaim#RQ7ZgoiukrXBkEDh.99
 Code of Civil Procedure, 1908 (Act No.V of 1908).
 Inserted by Ordinance No.XLVIII of 1983.
 45 DLR 405
 Rule 13 of Title-III of Federal Rules of Civil Procedure
 Inserted by Act No. 104 (n 5)
 AIR 2003 SC 2508
 Ins. by Act No. 104 of 1976 (w.e.f. 1.2.1977).
 Law Commission of India, Code of Civil Procedure,1908 (Law Com Report No.27, 1964) para 64
 ibid Appendix II at page 150
 (1932) 34 Bom. L.R. 1401,
 Laxmidas v. Nanabhai; AIR 1964 SC 11
 Laxmidas (n 10)
 Aminchand Pyarelal vs Union Of India; (1977) 79 BOMLR 1.
 Aminchand (n 12)
 AIR 1988 Ker 163
 60 DLR (AD) 44
 United Shipping vs. WH Bennett and others; 36 DLR(AD)175
 Law Commission of India (n 6) p 3.
 Bangladesh Laws (Revision And Declaration) Act, 1973. (ACT NO. VIII OF 1973).
 Substituted for original section by Act VIII of 1973. Earlier it were the High Courts to make rules regulating their own procedure and the procedure of Civil Courts subject to their superintendence.
 Rule Committee constituted under Code (n 2) s 123.
 Code (n 2) s 124.
 In partition suits, defendant’s written statement with counterclaim therein to get his share from the suit property is known as Chhaham Petition.
 Abdul Quddus Sarkar vs. Nabiruddin 1 BLC (1996) 408.
 Ramesh Chand Ardawatiya vs Anil Panjwani; AIR 2003 SC 2508