A counterclaim may arise independently and concern different property, provided it is against the plaintiff.

Respondent No. 1 sued for a perpetual injunction concerning land it claimed to own and possess.

The defendants filed a counter-claim seeking a declaration of ownership and consequential injunction in respect of other, adjoining properties, alleging that the plaintiff’s development activity encroached upon those lands.

The trial court excluded the counter-claim under Order VIII Rule 6-C CPC, reasoning that the suit and counter-claim properties were distinct and had no nexus.

The defendants challenged that order in revision.

1. Whether a counter-claim may be excluded merely because it concerns property different from the suit property or arises from an independent cause of action.

2. Whether the trial court exercised its discretion under Order VIII Rule 6-C CPC judiciously in excluding the counter-claim.

Order VIII Rule 6-A CPC permits a defendant to bring a counter-claim based on any cause of action accruing against the plaintiff within the prescribed time; the counter-claim need not arise from, or be connected with, the plaintiff’s cause of action, and need not concern the same property.

A counter-claim is treated as a cross-suit, furthering the objective of avoiding multiplicity of proceedings.

Under Order VIII Rule 6-C CPC, a plaintiff may seek exclusion of a counter-claim, but the court retains discretion to decide whether exclusion is appropriate; that discretion must be exercised judicially, having regard to relevant circumstances.

In Jag Mohan Chawla v. Dera Radha Swami Satsang, (1996) 4 SCC 699, the Supreme Court held that a counter-claim may rest on an independent cause of action and concern different property.

Satyender v. Saroj, (2022) 17 SCC 154, does not displace that rule: exclusion was warranted there because the counter-claim was not against the plaintiffs and concerned property over which they had made no claim.

The trial court applied an incorrect legal test by treating the difference between the properties, and the absence of identity between them, as sufficient grounds for exclusion.

In any event, the pleadings showed a factual connection: the plaintiff identified the defendants’ lands as lying along the northern boundary of its property and alleged obstruction by defendants claiming adjoining land.

Trying the suit and counter-claim together would permit complete adjudication of the parties’ dispute and reduce the risk of multiple proceedings and conflicting decisions.

The trial court therefore failed to exercise its Rule 6-C discretion judicially.

The trial court was requested to decide the suit and counter-claim expeditiously in accordance with law; the Court made clear that it had expressed no opinion on the merits.