P&H HC Lets Doctor’s Alleged ₹65-Lakh House-Deal Counterclaim Proceed, As the 7-Year Term and Refusal Date Need Evidence

Suresh Jain filed a suit for permanent injunction concerning property he claimed to own and possess.

Dr. Tarun Jhamb filed a counter-claim alleging an oral agreement dated 28 February 2018 to purchase the property for ₹65,00,000, of which ₹31,18,000 had been paid, and sought specific performance and related injunctive relief

Jain applied under Order VII Rule 11 CPC to reject the counter-claim, arguing, among other things, that it was time-barred and unrelated to the main suit.

The trial court dismissed the application, and Jain challenged that order under Article 227 of the Constitution

A counter-claim is in the nature of a plaint and is treated as an independent suit; accordingly, Order VII Rule 11 CPC applies to it

In deciding an application under that provision, the court considers the averments in the plaint (or counter-claim) and the documents relied on, assumes those averments to be true, and does not determine disputed factual matters or conduct a mini-trial

Article 54 of the Limitation Act, 1963 prescribes three years for a suit for specific performance, running from the date fixed for performance or, if no date is fixed, from when the plaintiff has notice that performance is refused

The Court held that the trial court was correct that Order VII Rule 11 CPC could be applied to the counter-claim.

However, limitation could not be conclusively determined merely from the dates pleaded: the alleged agreement’s terms, whether a performance date was fixed, and when performance was refused required consideration.

The counter-claimant’s plea that the agreement had a seven-year validity period meant that the limitation issue could not be resolved at the threshold on the pleadings as presented

The allegations that the counter-claim was a belated counterblast, and the disputes over payment, the agreement’s existence and terms, and readiness and willingness, likewise concerned matters requiring adjudication rather than rejection under Order VII Rule 11 CPC

It dismissed the civil revision petition and directed that the counter-claim be decided independently, without being influenced by the observations in the revision order