Counter-Claim May Be Filed Post-Written Statement Until Issues Are Framed to Avoid Multiplicity of Proceedings Key Legal Takeaways: * Procedural Timeline: Order VIII Rule 6A does not impose an absolute embargo on filing a counter-claim after the written statement, provided it is filed before the settlement of issues and the cause of action accrued before the defense was delivered. * Judicial Discretion: Courts must exercise discretion to permit belated counter-claims by evaluating factors such as the period of delay, similarity of causes of action, and the promotion of substantive justice. * Limitation vs. Maintainability: Even if a counter-claim appears delayed, if the question of limitation is a mixed question of fact and law, it should be adjudicated at trial rather than serving as a ground for summary rejection of the application to file. * Objective: The primary goal of permitting a counter-claim is to resolve all disputes between the same parties in a single proceeding, thereby avoiding multiplicity of suits and conflicting decrees.

The Respondent-Society allotted plots to Petitioner No. 1, who later sought to assign leasehold rights to Petitioner No. 2.

The Society refused NOC for the transfer, citing unpaid dues and procedural illegalities in the original allotment.

After a series of litigations before the Registrar and the State Government, the Society filed suits (RCS/2248/2019 and RCS/2249/2019) to declare the assignment agreements void.

Following a High Court order in 2025 granting liberty to parties to pursue appropriate remedies, the Petitioners sought to file a counter-claim for specific performance to compel the Society to execute the lease deeds.

The Trial Court rejected the applications, citing unexplained delay, lack of privity, and the claims being barred by limitation.

1. Whether a counter-claim can be filed after the written statement but before the settlement of issues under Order VIII Rule 6A of the CPC.

2. Whether the Trial Court properly exercised its discretion in rejecting the counter-claim on grounds of delay and limitation.

Order VIII Rule 6A of the Code of Civil Procedure, 1908, which allows a defendant to set up a counter-claim for a cause of action accruing before or after the suit, provided it is filed before the defense is delivered or the time expires.

Ashok Kumar Kalra v. Wing Commander Surendra Agnihotri (2020), which established that while there is no absolute embargo on filing a counter-claim after the written statement, the outer limit is generally the framing of issues.

Ramesh Chand Ardawatiya v. Anil Panjwani regarding the judicial discretion to permit counter-claims to avoid multiplicity of proceedings.

The High Court found that since issues had not yet been settled, the Petitioners were within the permissible "outer limit" for filing a counter-claim as per the Ashok Kumar Kalra precedent.

The Court observed that the Trial Court's finding was contradictory—labeling the claim both "barred by limitation" and "premature".

The High Court reasoned that the necessity to file the counter-claim arose specifically after the State Government set aside the Registrar's orders, and the liberty granted by the High Court in previous writ petitions justified the timing.

The court held that the counter-claim shared a similarity of cause of action with the main suit and that resolving all disputes in one proceeding would advance substantive justice and prevent multiplicity of suits.

The question of limitation was deemed a mixed question of fact and law to be decided at trial.

The High Court allowed the petitions and quashed the Trial Court’s orders, directing Petitioner No. 1 to file the counter-claim within one week and the Respondent to file a written statement within 30 days, while keeping the specific issue of limitation open for adjudication during the trial.