Counterclaim seeking direct relief against co-defendants is legally impermissible and not maintainable.

The respondents (plaintiffs) filed a suit for declaration, injunction, and possession regarding ancestral property through their grandfather, Ram Sahay

The appellant (Defendant No. 8) filed a counterclaim asserting sole ownership via a Will executed by Ram Sahay

During the trial, a handwriting expert report found the Will's signatures to be forged; however, the Trial Court discarded the report and allowed the appellant’s counterclaim, effectively unsettling the recorded ownership of co-defendants No. 10 and 11

The co-defendants had previously been denied an application to amend their written statements to contest the counterclaim

On appeal, the First Appellate Court set aside the Trial Court's judgment and remanded the matter for a fresh decision after obtaining a new handwriting expert report comparing thumb impressions from the testator's service book

The appellant challenged this remand order in the present Misc. Appeal

1. Whether a counterclaim filed by a defendant is maintainable when it seeks direct relief or has combative repercussions against the rights, title, and interest of co-defendants.

2. Whether the Trial Court’s decree on the counterclaim violated the principles of natural justice by unsettling the rights of co-defendants without allowing them to amend their pleadings.

The Court primarily applied the principles governing counterclaims under the Code of Civil Procedure (CPC), specifically interpreting the limits of Order VIII Rule 6A.

It relied on the Supreme Court precedents of Sanjay Tiwari v. Yugal Kishore Prasad Sao and others (AIR 2025 SCC 5576) and Rajul Manoj Shah @ Rajeshwari Rasiklal Sheth v. Kiran Bhai Shakra Bhai Patel and another (AIR 2025 SCC 4284), which establish that a counterclaim intended to claim direct relief against co-defendants is not permissible in law

Furthermore, the Court exercised its remedial powers under Order 41 Rule 33 of the CPC (read with Order 43 Rule 2) to pass orders necessary for doing justice between the parties, even regarding issues not explicitly challenged during the trial

The High Court observed that while the appellant’s counterclaim was technically directed at the plaintiffs, its legal effect was to strip the co-defendants (No. 10 and 11) of their recorded ownership

Following the Sanjay Tiwari doctrine, the Court reasoned that a counterclaim cannot survive if it seeks to decide rights and liabilities between co-defendants; the proper remedy for such a claim is an independent civil suit

The Court highlighted a "grim violation" of natural justice, noting that the Trial Court had passed a decree against co-defendants while simultaneously denying them the opportunity to amend their written statements to address the counterclaim

Consequently, the Court found that the Trial Court's failure to address the maintainability of the counterclaim was a fundamental legal error that superseded the merits of the First Appellate Court's specific remand directions regarding the handwriting expert

Without examining the propriety of the First Appellate Court's specific directions for expert evidence, the Court held that the entire trial of the counterclaim required a fresh hearing on the threshold of maintainability

The Court directed the Trial Court to first determine whether the counterclaim filed by the appellant is maintainable against the co-defendants and to decide the matter accordingly

The appeal was disposed of with these directions