What is a Counter Claim?
A counter claim is a claim made by the defendant against the plaintiff in response to the original claim. It is filed along with the written statement and is treated like a cross-suit. The court hears and adjudicates both claims together.
Under Order VIII Rule 6A of the Code of Civil Procedure, 1908 (CPC), the defendant may, in addition to their defence, set up a counter claim against the plaintiff for any right or cause of action that arose before or after the filing of the suit, but before the delivery of the defence.
Purpose of a Counter Claim
- To avoid multiple proceedings: A counter claim reduces the need for filing a separate suit.
- To save time and cost: It allows both parties to resolve disputes in one legal proceeding.
- To ensure a complete and final settlement: The court can decide all related issues together.
Legal Provisions for Counter Claim (CPC)
Order VIII Rule 6A – 6G of CPC:
- Rule 6A: Allows a counter claim against the plaintiff’s claim.
- Rule 6B: Requires the defendant to state the grounds of the counter claim.
- Rule 6C: Allows the plaintiff to apply for the counter claim to be excluded if it cannot be conveniently tried with the main suit.
- Rule 6D: States that the counter claim shall be treated as a plaint and the plaintiff’s reply as a written statement.
- Rule 6E & 6F: Prescribe how the counter claim is tried and how the judgment is passed.
- Rule 6G: Ensures that the counter claim has the same effect as a cross suit.
Key Conditions for a Valid Counter Claim
- Filing within time: The counter claim must be filed before the defendant’s defence is concluded.
- Cause of action must arise before defence filing: The right to counter claim should exist before or at the time of filing the written statement.
- Jurisdiction matters: The court must have the power to try both the original claim and the counter claim.
- Legal formality: It must be in writing and follow the same structure as a plaint.
Differences Between Set-off and Counter Claim
| Basis | Set-off | Counter Claim |
|---|---|---|
| Nature | Defensive | Offensive and defensive |
| Scope | Limited to money claims | Broader (includes damages, declarations, etc.) |
| Jurisdiction | Amount must fall within court’s pecuniary jurisdiction | Same as original suit |
| Requirement | Must be for an ascertained amount | Can be unliquidated or for other reliefs |
Illustration
Suppose A files a suit against B to recover ₹1,00,000. B, in his written statement, claims that A failed to supply goods worth ₹70,000 as per their contract. Instead of filing a separate suit, B can file a counter claim within the same proceeding, seeking compensation for breach of contract.
Importance of Counter Claim in Legal Practice
- Simplifies the process by resolving all disputes in one proceeding.
- Reduces the burden on courts by eliminating the need for parallel suits.
- Protects the rights of the defendant who might otherwise be forced into separate, costly litigation.
- Ensures quicker justice and promotes judicial economy.