Counterclaim Over Alleged ₹16.76-Lakh Loans Can Proceed Without Ad-Valorem Fee Until Accounts Are Settled: P&H HC

Rakesh Kumar filed a recovery suit for ₹21,64,301 with interest, alleging that the defendant had borrowed money and failed to repay it.

Defendant No. 1 filed a counter-claim alleging that he had advanced ₹16,76,000 to the plaintiff and his family, and sought settlement of accounts and payment of any amount found due, with interest.

The plaintiff applied under Order VII Rule 11 CPC to have the counter-claim rejected, contending that it was time-barred and that ad valorem court fee was payable because it effectively sought recovery of money.

The trial Court dismissed the application.

The plaintiff challenged that order under Article 227 of the Constitution.

Order VII Rule 11 CPC permits rejection of a pleading where a legal bar is apparent from its statements; a limitation objection that depends on disputed facts or mixed questions of fact and law ordinarily cannot be conclusively decided under that rule unless the bar appears from the pleading itself.

In a claim for rendition of accounts, the claimant may tentatively value the relief, with appropriate court fee payable when the amount due is determined; where no specific or ascertained sum is claimed, ad valorem court fee on an unascertained amount need not be insisted upon at the threshold.

The Court also considered its supervisory jurisdiction under Article 227 and the application of Order VII Rule 11 CPC.

The counter-claim sought settlement of accounts and payment of whatever amount might be found due, rather than recovery of a specified sum.

The Court therefore upheld the counter-claimant’s tentative valuation and held that any additional court fee would arise upon determination of the amount due.

The alleged limitation bar was not apparent from the counter-claim alone and depended on matters including the nature of the transaction and accrual of the cause of action; it therefore required evidence and could not justify rejection at that stage.

The counter-claimant’s subsequent separate suit concerning cancellation of the sale deed did not, by itself, establish or extinguish the cause of action pleaded in the counter-claim.

The revision petition was dismissed and the impugned order upheld; the limitation issue was left open for determination by the trial Court in accordance with law.