The City Corporation And Ors vs M/S Coramandel And Anr

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IN THE HIGH COURT OF KARNATAKA,

KALABURAGI BENCH

DATED THIS THE 20TH DAY OF NOVEMBER, 2023

BEFORE THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR

WRIT PETITION NO. 208364 OF 2017 (GM-CPC)

BETWEEN:

1. THE CITY CORPORATION, GULBARGA. REPRESENTED BY THE COMMISSIONER, KALABURGI-585 101.

2. KARNATAKA URBAN INFRASTRUCTURE, DEVELOPMENT AND FINANCE CORPORATION LIMITED, (KUIDFC), REPRESENTED BY ITS COMPANY SECRETARY, SILVEER JUBILEE BLOCK, 2ND FLOOR, UNITY BUILDING ANNEXE, 3RD CROSS, MISSION ROAD, Digitally signed BENGALURU. by SACHIN Location: HIGH PRESENTLY AT NAGARA ABIRUDDI BHAVAN, COURT OF NO.22, 17TH F CROSS, OLD MADRAS ROAD, KARNATAKA INDIRA NAGAR, 2ND STAGE, BANGALORE-560 038.

3. THE PROJECT MANAGER, EXECUTIVE ENGINEER, NKUSIP KUIDFC, GULBARGA DIVISION, BADEPUR, STAGE-I BLOCK-I, VIRENDRA PATIL LAY OUT, KALABURAGI.

...PETITIONERS -2- NC: 2023:KHC-K:8727 WP No. 208364 of 2017

(BY SRI. D. P. AMBEKAR, ADV. FOR PETITIONER No.1; SRI. VIKRAM VIJAYKUMAR, ADV. FOR PETITIONER NOS.2 AND 3)

AND:

1. M/S CORAMANDEL INFRASTRUCTURE PVT. LIMITED, HYDERABAD HAVING ITS CORPORATE OFFICE AT PLOT NO.319, 320. EAST AVENUE, 2ND FLOOR, NEAR YSR STATUE, MADHAPUR, HYDERABAD 500 081 (T.S), THROUGH ITS MANAGING DIRECTOR, MR.LV SUNIL S/O DR.LV SUBBAREDDY.

2. IDBI BANK LIMITED, MAIN BRANCH D NO.5-9-891, CHEPAL ROAD PB NO.370, HYDERABAD, 500 001 (AP), THROUGH ITS ASSISTANT GENERAL MANAGER.

...RESPONDENTS

(BY SRI. AMEETH KUMAR DESHPANDE, SR. ADV. FOR SRI. GANESH S. KALBURAGI, ADVOCATE FOR R1; NOTICE TO R2 IS SERVED)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE WRIT OF CERTIORARI QUASHING THE ORDER DATED 13.7.2017 PASSED BY THE 2ND ADDL. SENIOR CIVIL JUDGE, AT KALABURAGI ON I.A. FILED UNDER ORDER VI RULE 17 OF CPC IN O.S.NO.88/2013 VIDE ANNEXURE-D.

THIS PETITION, COMING ON FOR HEARING ON I.A., THIS DAY, THE COURT MADE THE FOLLOWING: -3- NC: 2023:KHC-K:8727 WP No. 208364 of 2017

ORDER

This Petition is filed by the petitioners, who are the

defendants before the trial Court to set aside the order dated

13th July 2017 passed by the II Additional Senior Civil Judge,

Kalaburagi in O.S. No.88/2013 on the application filed under

Order VI Rule 17 of the Code of Civil Procedure vide

Annexure-D and consequently allow the application.

2. For easy understanding, parties shall be referred to as

per their status before the trial Court.

3. Plaintiff filed the suit for declaration that the termination

of contract dated 1.2.2012 to be arbitrary, void, capricious and

illegal and also for the relief of mandatory injunction to restore

the Mobilization Advance Bank Guarantee dated 26.4.2011 for

Rs.3,50,72,878/- furnished towards Advance Payment Security

and for the recovery of Rs.9,02,60,917/- towards the

settlement of claims arose in contract agreement dated

21.3.2011 and for other consequential reliefs. The defendants

filed the written statement denying the averments in the plaint

and sought for dismissal of the suit.

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4. During the pendency of the suit, defendant No.1 filed an

application under Order VI Rule 17 of CPC for amendment of

the written statement alongwith the counter-claim against the

plaintiff seeking re-tender costs incurred for engaging a new

agency to perform the contract for rehabilitation of existing

system, extension of sewerage system to the new area at

Kalaburagi. The application, on contest by the

respondent/plaintiff came to be dismissed by the learned trial

Judge, which is questioned before this Court in the present

Petition by the defendants.

5. At this stage, it is relevant to refer to certain dates.

The suit came to be filed on 12.4.2013 and the written

statement was filed by the defendants on 29.8.2013. The

application for amendment of the written statement and so also

for counter-claim against the plaintiff came to be filed on

20.4.2017. Prior to the application being filed, the Court

framed the issues on 5.7.2016 and the plaintiff adduced

evidence on 9.11.2016 and 26.11.2016 and the suit posted for

cross-examination. However, the defendants did not commence

cross-examination till 30.1.2017. Thereafter cross-examination

was forfeited and the suit was posted for defendants' evidence. -5-

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This being the state of affairs, the application filed by the 1st

defendant under Order VI Rule 17 of CPC for amendment of the

written statement alongwith counter-claim came to be rejected

by the impugned order dated 13.7.2017. Being aggrieved, the

petitioners approached this Court by filing the present writ

petition.

6. In the mean time, the 1st defendant filed an application

before the trial Court for recalling PW.1, which came to be

allowed and PW.1 was partly cross-examined on 6.1.2018 and

thereafter the matter was adjourned for further cross-

examination. Thereafter in view of the interim order granted

by this Court on 7.6.2018 staying further proceedings in the

suit, the matter has not proceeded further.

7. Heard the arguments of learned counsel - Sri D.P.

Ambekar for petitioner No.1 and learned counsel Sri Vikram

Vijay Kumar for petitioner No.2 and so also learned senior

counsel - Sri Ameeth Kumar Deshpande on behalf of learned

counsel - Sri Ganesh S. Kalaburagi for Respondent No.1.

8. It is the vehement contention of learned counsel

representing the petitioners/defendants that the trial Court has -6- NC: 2023:KHC-K:8727 WP No. 208364 of 2017

committed a serious error in dismissing the application seeking

amendment of the written statement as it is a general rule of

law that while considering an amendment application filed by

the defendants, the Courts are required to generally take a

lenient and pragmatic view and it is always open for the

defendants to take even inconsistent pleas by amending the

written statement. It is also contended by the learned counsel

that there is no much delay in filing the amendment application

and so also counter-claim against the plaintiff as the plaintiff

lead his evidence and defendant has not cross-examined the

plaintiff while the application was filed and therefore no

inconvenience, hardship or grave injustice would be caused to

the plaintiff by considering the said amendment application and

the counter-claim.

9. It is also contended by the learned counsel for the

defendants that the trial Court failed to take into consideration

the very essence of the amendment and the counter-claim for

adjudicating the real controversy between the parties and infact

by allowing the amendment application alongwith the counter-

claim, the plaintiff would be at liberty to counter the same so -7- NC: 2023:KHC-K:8727 WP No. 208364 of 2017

also file statement of objections to the counter claim so raised

by the 1st defendant.

10. Learned counsel further contends that the trial Court

committed a serious miscarriage of justice in dismissing the

application despite the fact that the 1st defendant is not

introducing a new case and come to an erroneous conclusion

that it will deprive the rights of the plaintiff and will cause more

inconvenience to the plaintiff. The amendment to the written

statement should have been accepted and allowed by the trial

Court by taking a pragmatic view as the law permits the

defendant to take even inconsistent and indifferent pleas,

which is not available to the plaintiff. Infact, the law with

regard to the amendment and taking inconsistent pleas is

different to the plaintiff as that of the defendants. According

to him, the trial Court has not taken a holistic view while

considering the application for amendment and the counter-

claim and merely dismissed the application on the ground that

the amendment sought for by the 1st defendant would prejudice

the case and interest of the plaintiff at the stage when the

evidence of the plaintiff was closed and so also the trial Court

committed an error in coming to the conclusion that the -8- NC: 2023:KHC-K:8727 WP No. 208364 of 2017

defendant ought to have filed the counter-claim alongwith the

written statement at the first instance of filing the written

statement.

11. Learned counsel contends that no doubt there is a

delay in filing the amendment application and so also seeking

the counter-claim against the plaintiff. But however the same

could be addressed after the amendment and the counter-claim

is taken on record by raising a fresh defence, if any by the

plaintiff and the Court could also frame additional issue with

regard to the maintainability or limitation of such counter-claim

rather than dismissing the application in toto. He also

contends that at the stage when the application for amendment

was filed, no doubt the issues were framed, but the evidence

of the plaintiff was not concluded and even as of now, the

matter is posted for further cross-examination of PW.1.

Therefore the evidence of PW.1 is not yet concluded. On these

grounds, he seeks to allow the writ petition and consequently

set aside the order passed by the trial Court dismissing the

application for amendment and the counter-claim. -9-

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12. In support of his contentions, learned counsel for the

petitioners relies on the following Judgments:

i) Life Insurance Corporation of India -vs- Sanjeev Builders Private Limited (AIR 2022 SC 4256)

ii) Andhra Bank -vs- ABN Amro Bank N.V. and Ors. (AIR 2007 SC 2511)

iii) Ashok Kumar Kalra -vs- Wing CDR.Surendra Agnihotri {AIRONLINE 2019 SC 1525 : (2019)16 SCALE 544}

13. Per contra, learned senior counsel - Sri Ameet

Kumar Deshpande on behalf of learned counsel - Sri Ganesh S.

Kalaburagi vehemently contends that the order passed by the

trial Court does not suffer from any infirmity, illegality or

perversity to call for interference at the hands of this Court. He

contends that the application filed by the 1st defendant seeking

amendment of the written statement alongwith the counter-

claim, is belated and liable to be dismissed on the ground of

delay and laches so also the counter-claim cannot be accepted

at this stage of the proceedings and the defendants ought to

have filed counter-claim at the first instance of filing the

statement before the trial Court either alongwith the written

statement or prior to filing of the written statement.

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14. It is also contended that when the counter-claim is

barred by the law of limitation, generally it should not be

allowed and the trial Court having considered the same rightly

rejected the application of the 1st defendant. He further

contends that the issues were framed on 5.7.2016 after the

written statement was filed by the 1st defendant and the case

was posted for recording of evidence of PW.1 on 9.11.2016 and

subsequently it was posted for cross-examination of PW.1 on

several dates, but the 1st defendant did not bother to cross-

examine PW.1 and therefore his cross-examination came to be

forfeited. Thereafter, the matter was adjourned on several

dates of hearing.

15. This being the state of affairs, on 20.4.2017 an

application came to be filed by the 1st defendant for

amendment of the written statement alongwith the counter-

claim only with an intent to prolong and protract the

proceedings. This application came to be heard and rejected by

the impugned order dated 13.7.2017 and thereafter

immediately the defendants approached this Court by filing the

present writ petition to set aside the said order. Since no

interim relief was granted by this Court instantaneously, the 1st

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defendant filed an application for recalling PW.1, which came to

be allowed and thereafter PW.1 was partly cross-examined on

6.1.2018 and presently it is posted for further cross-

examination of PW.1. However, in view of an interim order

granted by this Court on 7.6.2018 staying further proceedings

in the suit, the matter has not proceeded further.

16. Learned senior counsel - Sri Ameet Kumar Deshpande

brought to the notice of the Court the proviso to Order VI Rule

17 of CPC which prescribes that no application for amendment

shall be allowed after the trial has commenced, unless the

Court comes to the conclusion that inspite of due diligence

exercised by the defendant, he could not have raised the

matter before commencement of trial. He also contends that

the counter-claim under Order VIII Rule 6A is required to be

filed by the defendant before he delivers his defence or before

the time limited for delivering his defence has expired and that

the counter-claim shall be treated in the same manner as that

of the plaint for all purposes. In the present case, the 1st

defendant kept quite after filing the written statement on

29.8.2013 and files an application for amendment of the

written statement alongwith counter-claim only on 20.4.2017

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by taking a totally different and inconsistent plea and claiming

re-tender costs from the plaintiff by showing the cause of

action for the said counter-claim to have arisen on 24.5.2013

which is subsequent to the filing of the suit and on 1.8.2015

which is subsequent to the filing of the first written statement.

Learned counsel further contends that the application for

amendment of the written statement alongwith counter-claim,

is hit by delay and laches and barred by law of limitation.

Under these circumstances, learned senior counsel contends

that the trial Court having considered all these aspects rightly

dismissed the application filed by the 1st defendant.

17. In support of his contentions, learned senior counsel

relies on the following judgments:

i) Ashok Kumar Kalra -vs- Wing CDR.Surendra Agnihotri {AIRONLINE 2019 SC 1525 : (2019)16 SCALE 544}

ii) M/s JSW Steel Limited -vs- Mysore Minerals Limited (Unreported judgment of this Court in W.P. No.15190/2020 decided on 13th January, 202)

18. I have given my thoughtful consideration to the

arguments advanced by learned counsel for the parties.

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19. I have perused the impugned order passed by the

trial Court meticulously. The learned trial Judge rejected the

application mainly on four grounds. Firstly, that the application

for amendment of the written statement alongwith the counter-

claim, is filed at a belated stage when the trial has already

commenced and infact the plaintiff having closed his side of

evidence, the matter posted for recording of defendants'

evidence. Secondly if the amendment to the written statement

is allowed, it would cause prejudice to the interest of the

plaintiff as already his evidence is closed. Thirdly, the 1st

defendant is trying to introduce fresh calculation/facts in place

of the earlier pleadings made in the written statement, which

would certainly cause inconvenience to the plaintiff. Lastly, the

1st defendant has not made out sufficient grounds to show that

inspite of due diligence, he could not have pleaded in the

written statement about the pleadings in the proposed

amendment. Therefore, the trial Court having not found favour

with the application filed by the 1st defendant has rejected the

same.

20. At this stage, it is relevant to refer to certain

provisions of the Code of Civil Procedure.

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21. Order VI Rule 17 of the Code of Civil Procedure reads

as under:

"Amendment of pleadings;-- The Court may at any stage of the proceedings allow either party to alter or amend his pleading in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties:

Provided that no application for amendment shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial."

22. Order VIII Rule 6-A and Order VIII Rule 6-B of the

Code of Civil Procedure read as under:

"6-A. Counter-claim by defendant.-- (1) A defendant in a suit may, in addition to his right of pleading a set-off under Rule 6, set up, by way of counter-claim against the claim of the plaintiff, any right or claim in respect of a cause of action accruing to the defendant against the plaintiff either before or after the filing of the suit but before the defendant has delivered his defence or before the

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time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not:

Provided that such counter-claim shall not exceed the pecuniary limits of the jurisdiction of the Court.

(2) Such counter-claim shall have the same effect as a cross-suit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the counter-claim.

(3) The plaintiff shall be at liberty to file a written statement in answer to the counter-claim of the defendant within such period as may be fixed by the Court.

(4) The counter-claim shall be treated as a plaint and governed by the rules applicable to plaints.

6-B. Counter-claim to be stated.--Where any defendant seeks to rely upon any ground as supporting a right of counter-claim, he shall, in his written statement, state specifically that he does so by way of counter-claim."

23. On careful perusal of the proviso to Order VI Rule 17

of CPC, it is clear that no application for amendment shall be

allowed after the trial has commenced, unless the Court comes

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to the conclusion that inspite of due diligence, the party could

not raise the matter before the commencement of trial. It is

also well settled in several catena of judgments that

amendment of the pleadings generally should be allowed at any

stage of the proceedings as may be necessary for the purpose

of determining the real question in controversy between the

parties provided that it does not cause injustice to the other

side, in order to avoid multiplicity of proceedings. This Court

is of the opinion that the amendment in civil proceedings

should generally be allowed in order to thrash out the real issue

in controversy between the parties by taking a pragmatic and

holistic view of the entire case rather than taking a technical

and hyper-technical approach to reject such amendment,

unless the amendment would cause very serious or irreparable

injury to the other side.

24. This view is fortified by the judgment of the Hon'ble

Supreme Court in the case of Life Insurance Corporation of

India -vs- Sanjeev Builders Private Limited reported in

AIR 2022 SC 4256, wherein it is held at paragraphs 70 and 71

as under:

"70. Our final conclusions may be summed up thus:

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(i) Order II Rule 2 CPC operates as a bar against a subsequent suit if the requisite conditions for application thereof are satisfied and the field of amendment of pleadings falls far beyond its purview.

The plea of amendment being barred under Order II Rule 2 CPC is, thus, misconceived and hence negatived.

(ii) All amendments are to be allowed which are necessary for determining the real question in controversy provided it does not cause injustice or prejudice to the other side. This is mandatory, as is apparent from the use of the word "shall", in the latter part of Order VI Rule 17 of the CPC.

(iii) The prayer for amendment is to be allowed.

(i) if the amendment is required for effective and proper adjudication of the controversy between the parties, and

(ii) to avoid multiplicity of proceedings, provided

(a) the amendment does not result in injustice to the other side,

(b) by the amendment, the parties seeking amendment does not seek to withdraw any clear admission made by the party which confers a right on the other side and

(c) the amendment does not raise a time barred claim, resulting in divesting of the other side of a valuable accrued right (in certain situations).

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(iv) A prayer for amendment is generally required to be allowed unless

(i) by the amendment, a time barred claim is sought to be introduced, in which case the fact that the claim would be time barred becomes a relevant factor for consideration,

(ii) the amendment changes the nature of the suit,

(iii) the prayer for amendment is malafide, or

(iv) by the amendment, the other side loses a valid defence.

(v) In dealing with a prayer for amendment of pleadings, the court should avoid a hypertechnical approach, and is ordinarily required to be liberal especially where the opposite party can be compensated by costs.

(vi) Where the amendment would enable the court to pin-pointedly consider the dispute and would aid in rendering a more satisfactory decision, the prayer for amendment should be allowed.

(vii) Where the amendment merely sought to introduce an additional or a new approach without introducing a time barred cause of action, the amendment is liable to be allowed even after expiry of limitation.

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(viii) Amendment may be justifiably allowed where it is intended to rectify the absence of material particulars in the plaint.

(ix) Delay in applying for amendment alone is not a ground to disallow the prayer. Where the aspect of delay is arguable, the prayer for amendment could be allowed and the issue of limitation framed separately for decision.

(x) Where the amendment changes the nature of the suit or the cause of action, so as to set up an entirely new case, foreign to the case set up in the plaint, the amendment must be disallowed. Where, however, the amendment sought is only with respect to the relief in the plaint, and is predicated on facts which are already pleaded in the plaint, ordinarily the amendment is required to be allowed.

(xi) Where the amendment is sought before commencement of trial, the court is required to be liberal in its approach. The court is required to bear in mind the fact that the opposite party would have a chance to meet the case set up in amendment. As such, where the amendment does not result in irreparable prejudice to the opposite party, or divest the opposite party of an advantage which it had secured as a result of an admission by the party seeking amendment, the amendment is required to be allowed. Equally, where the amendment is necessary for the court to effectively adjudicate on the main issues in controversy between the parties, the amendment should be allowed.(See Vijay

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Gupta v. Gagninder Kr. Gandhi, 2022 SCC OnLine Del 1897) : (AIR OnLine 2022 Del 1797).

71. In the overall view of the matter, we are convinced that we should not disturb the impugned order passed by the Division Bench of the High Court, affirming the order passed by the Learned Single Judge, allowing the amendment application filed at the instance of the plaintiffs."

25. In the case of Andhra Bank -vs- ABN Amro Bank

N.V and others reported in AIR 2007 SC 2511, it is held at

paragraphs 5 and 7 as under:

"5. We have heard Mr Rohit Kapadia, learned Senior Counsel appearing for the appellant and Mr S. Ganesh, learned Senior Counsel for the respondent. We have perused the original written statement as well as the application for amendment of the written statement. After going through the written statement and the application for amendment of the written statement, we are of the view that the amendment sought to be introduced by the appellant must be allowed. From a perusal of the impugned order of the Special Court we find basically that two grounds have been taken by the Special Court for rejecting the prayer for amendment of the written statement. The first ground is that considerable delay has been caused by the appellant in filing the application for amendment of the written statement. It is well settled that delay is no ground for refusal of prayer for amendment. Mr Ganesh, appearing

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for abn amro Bank submits before us that by filing of such an application for amendment of the written statement which has been filed with long delay, the appellant sought to stall the hearing of the suit which has been fixed on 13-7-2007. In response to this Mr Kapadia, learned counsel for the appellant, submits that in the event the prayer for amendment is allowed by us his client undertakes to file the amended written statement by day after tomorrow i.e. 12-7-2007 before the Special Court. Since, we are of the view that delay is no ground for not allowing the prayer for amendment of the written statement and in view of the submissions made by Mr Kapadia, we do not think that delay in filing the application for amendment of the written statement can stand in the way of allowing the prayer for amendment of the written statement. So far as the second ground is concerned, we are also of the view that while allowing an application for amendment of the pleadings, the Court cannot go into the question of merit of such amendment. The only question at the time of considering the amendment of the pleadings would be whether such amendment would be necessary for decision of the real controversy between the parties in the suit. From a perusal of the amendment application we find that the appellant in its prayer for amendment has only taken an additional defence that in view of Section 230 of the Contract Act, the suit itself is not maintainable. It is well settled, as noted herein earlier, that at the time of considering the prayer for amendment of the written statement it would not be open to the Court to go into

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the fact whether in fact the suit in view of Section 230 of the Contract Act was or is not maintainable.

7. In view of the reasons stated hereinabove we are of the view that the order of the Special Court rejecting the application for amendment of the written statement filed by the appellant is liable to be set aside and the prayer for amendment of the written statement must be allowed. Accordingly, the application for amendment of the written statement is allowed and the impugned order is set aside. We are informed by the learned counsel for the parties appearing before us, as noted herein earlier, that the suit has been fixed for hearing on 13-7-2007 and the parties will not seek any adjournment on that date. In that view of the matter we direct the appellant to file the amended written statement by 12-7-2007 positively and thereafter the Special Court shall proceed with the hearing of the suit. The appeal is allowed to the extent indicated above. There will be no order as to costs."

26. In the case of Ashok Kumar Kalra -vs- Wing

CDR.Surendra Agnihotri reported in AIRONLINE 2019 SC

1525: (2019)16 SCALE 544, it is held at paragraphs 20, 21, 30

and 31 as under:

"20. We sum up our findings, that Order 8 Rule 6-A CPC does not put an embargo on filing the counterclaim after filing the written statement, rather the restriction is only with respect to the accrual of the cause of action. Having

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said so, this does not give absolute right to the defendant to file the counterclaim with substantive delay, even if the limitation period prescribed has not elapsed. The court has to take into consideration the outer limit for filing the counterclaim, which is pegged till the issues are framed. The court in such cases have the discretion to entertain filing of the counterclaim, after taking into consideration and evaluating inclusive factors provided below which are only illustrative, though not exhaustive:

(i) Period of delay. (ii) Prescribed limitation period for the cause of action pleaded (iii) Reason for the delay. (iv) Defendant's assertion of his right. (v) Similarity of cause of action between the main suit and the counterclaim. (vi) Cost of fresh litigation. (vii) Injustice and abuse of process.

(viii) Prejudice to the opposite party.

(ix) And facts and circumstances of each case.

(x) In any case, not after framing of the issues.

21. I have perused the opinion given in this reference by my learned Brothers. I agree with their conclusion that a Court may exercise its discretion and permit the filing of a counterclaim after the written statement, till the stage of framing of the issues of the trial. However, in addition to this, I find that in exceptional circumstances, the subsequent filing of a counterclaim may be permitted till the stage of commencement of recording of the evidence on behalf of the plaintiff. I deem it fit to state the reasons for arriving at this conclusion through this opinion.

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30. It can also be gleaned from Order 8 Rule 10 that it is permissible to file a belated counterclaim under the scheme of Order 8 CPC:

"10. Procedure when party fails to present written statement called for by court.-- Where any party from whom a written statement is required under Rule 1 or Rule 9 fails to present the same within the time permitted or fixed by the court, as the case may be, the court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit and on the pronouncement of such judgment a decree shall be drawn up."

(emphasis supplied)

Under this Rule, the court is afforded with the discretion to pass any order that it deems fit in the event that a written statement is not filed within the prescribed statutory limit. To determine whether this discretion extends to allowing the filing of a belated counterclaim as well, it would be useful to appreciate the scope of the discretion accorded under this provision. In Salem Advocate Bar Assn. (2) v. Union of India [Salem Advocate Bar Assn. (2) v. Union of India, (2005) 6 SCC 344 : AIR 2005 SC 3353] , this Court, while construing the nature of Order 8 Rule 1, relied on the broad discretionary power

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under Order 8 Rule 10, and observed as follows:

"21. In construing this provision, support can also be had from Order 8 Rule 10 which provides that where any party from whom a written statement is required under Rule 1 or Rule 9, fails to present the same within the time permitted or fixed by the court, the court shall pronounce judgment against him, or make such other order in relation to the suit as it thinks fit. ...

In construing the provision of Order 8 Rule 1 and Rule 10, the doctrine of harmonious construction is required to be applied. The effect would be that under Rule 10 Order 8, the court in its discretion would have the power to allow the defendant to file written statement even after expiry of the period of 90 days provided in Order 8 Rule 1. There is no restriction in Order 8 Rule 10 that after expiry of ninety days, further time cannot be granted. The court has wide power to 'make such order in relation to the suit as it thinks fit'.

Clearly, therefore, the provision of Order 8 Rule 1 providing for the upper limit of 90 days to file written statement is directory."

(emphasis supplied) Thus, under Order 8 Rule 10, the court has the power to condone the delay in filing of

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a written statement, if it deems it fit in the facts and circumstances of the case. If it is so, there is no reason as to why the delay in filing a counterclaim cannot be condoned by the court as well.

31. A conjoint and harmonious reading of Rules 6-A, 9 and 10 of Order 8 as well as Order 6 Rule 17 CPC thus reveals that the court is vested with the discretion to allow the filing of a counterclaim even after the filing of the written statement, as long as the same is within the limitation prescribed under the Limitation Act, 1963. In this regard, I agree with the propositions laid down in the decisions discussed below.

In Mahendra Kumar v. State of M.P. [Mahendra Kumv. State of M.P., (1987) 3 SCC 265] , it was held that:

"15. The next point that remains to be considered is whether Rule 6-A(1) of Order 8 of the Code of Civil Procedure bars the filing of a counterclaim after the filing of a written statement. This point need not detain us long, for Rule 6-A(1) does not, on the face of it, bar the filing of a counterclaim by the defendant after he had filed the written statement. What is laid down under Rule 6- A(1) is that a counterclaim can be filed, provided the cause of action had accrued to the defendant before the defendant had delivered his defence or before the time limited for delivering his defence has expired, whether such counterclaim is in the nature of a claim for damages or not. The High Court, in our opinion, has misread and

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misunderstood the provision of Rule 6-A(1) in holding that as the appellants had filed the counterclaim after the filing of the written statement, the counterclaim was not maintainable. ...

Under Article 113 of the Limitation Act, 1963, the period of limitation of three years from the date the right to sue accrues, has been provided for any suit for which no period of limitation is provided elsewhere in the Schedule. It is not disputed that a counterclaim, which is treated as a suit under Section 3(2)(b) of the Limitation Act has been filed by the appellants within three years from the date of accrual to them of the right to sue."

(emphasis supplied)

In Shanti Rani Das Dewanjee v. Dinesh Chandra Day [Shanti Rani Das Dewanjee v. Dinesh Chandra Day, (1997) 8 SCC 174] , it was held that the right to file a counterclaim is referable to the date of accrual of the cause of action:

"2. In our view, the impugned decision does not warrant interference. Such question was specifically raised before this Court in Mahendra Kumar v. State of M.P. [Mahendra Kumar v. State of M.P., (1987) 3 SCC 265] It has been held by this Court that right to file a counterclaim under Order 8 Rule 6-A of the Code of Civil Procedure is referable to the date of accrual of the cause of action. If the cause of action had arisen before or after the filing of the suit, and such cause of action continued up to the date of filing written statement or extended date of filing written statement, such counterclaim can be filed even after filing the written statement. The said Civil Case No.

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248 of 1982, in which the application under Order 8 Rule 6-A has been filed by the defendant-respondents was instituted on 15-7-1982 and the application under Order 8 Rule 6-A was presented on 22-6-1985. It cannot be held that the cause of action for the suit or counterclaim was ex facie barred by limitation under the Limitation Act."

(emphasis supplied)

I am unable to persuade myself to arrive at a different conclusion than the one found in the aforementioned judgments."

27. Admittedly in the present case, the suit was posted for

recording of evidence of PW.1 on 9.11.2016 and 26.11.2016

and subsequently suit was posted for cross-examination of

PW.1 on several dates, but the 1st defendant did not cross-

examine PW.1 and therefore his cross-examination came to be

forfeited. Thereafter, the matter was adjourned on several

dates of hearing. This being the state of affairs, on 20.4.2017

an application came to be filed by the 1st defendant for

amendment of the written statement alongwith the counter-

claim much after the filing of the written statement during 2013

and after framing of issues.

28. In the affidavit filed in support of the application, it is

contended that as already stated in the written statement the

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contract value which was entered into by the plaintiff was for

Rs.35.07 crores and the plaintiff has done only a work to a

value of Rs.0.527 crores and failed to complete the contract

and accordingly, the contract was terminated and the actual

value of the balance work was Rs.34.543 crores. At the time of

termination of the contract, defendant levied liquidated

damages to a tune of Rs.1.077 cores and a sum of Rs.0.476

was recovered and the balance of liquidated damages is to tune

of Rs.0.601 crores is outstanding. It is further stated that the

plaintiff could not perform the contract entered into by it and

there was a clear breach of the contract due to non-

performance on the part of the plaintiff to complete the

contract within the time frame and therefore, contract was

terminated. Therefore, the defendants were compelled to

engage two new agencies for the said work for which incurred

the additional costs which runs into Rs.4.28 crores and this has

to be recovered as a risk and cost. In all, the defendant has to

recover Rs.9.62 crores. After deduction of the performance

security and additional performance security, a sum of Rs.2.49

crores is the actual amount which the plaintiff is entitled to pay

to the defendant. The defendant has already submitted all

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these things in the written statement, but the same do not give

clarity about the actual amount to be recovered from the

plaintiff. Therefore, the defendant sought to allow the proposed

amendment by allowing the application.

29. On careful perusal of the affidavit filed in support of

the application, it appears that after verifying the financial

records of the Corporation, the 1st defendant filed the

application for amendment and counter-claim. In matters of

financial statistics, unless there is an expert to assist the

Lawyer, it would not be easy for the Lawyer to file statement

and in the present case, the 1st defendant after realizing some

of the errors and flaws in the written statement, filed the

application for amendment of the written statement alongwith

the counter-claim. No doubt in the normal circumstances and

ideal situation, all applications for amendment are required to

be filed before the issues are framed and before the

commencement of the evidence of plaintiff. But, the

amendments can be allowed at any stage of the proceedings in

order to decide the real issue in controversy between the

parties and in order to avoid multiplicity of proceedings.

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30. It has to be stated that though Order VIII Rule 6A of

CPC prescribes that the counter-claim is to be filed before the

defendant has delivered his defence or before the time limited

for delivering his defence has expired, however it does not put

an embargo on filing the counter-claim after the written

statement, rather the restriction is only with respect to accrual

of the cause of action and the law of limitation. Generally, the

counter-claim to be filed before the issues are framed and

evidence is closed. In the present case, the application for

amendment of the written statement alongwith the counter-

claim made by the 1st defendant after the issues are framed

and the evidence of the plaintiff is commenced. But, it is stated

that the cause of action to seek the counter-claim arose on

24.5.2013 and 1.8.2015 and the counter-claim filed on

20.4.2017. If later date of cause of action mentioned in the

counter-claim i.e, 1.8.2015 is taken, it would be less than three

years and for the purpose of recovery of money, three years

would be the time period for the law of limitation to come into

force. This Court does not express its opinion at this point of

time with regard to the limitation aspect of the counter-claim

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made by the 1st defendant, which shall be dealt with by the trial

Court independently.

31. The fundamental rule of law in a civil litigation is to

see that amendment and counter-claim are allowed at relevant

stages to avoid multiplicity of proceedings and to prevent a

situation of re-trial between the same parties once again in the

another round of litigation. In the present case, on dismissal

of the application, the 1st defendant approached this Court in

the present Petition and he has not filed fresh suit against the

plaintiff for recovery of the amount mentioned in the counter

claim. In the event of filing fresh suit, that suit between the

same parties eventually would have to be clubbed with the

present suit initiated by the plaintiff, fresh issues would have to

be framed and re-trial would have to begin. In order to avoid

these unnecessary procedural rigours of litigation and to avoid

multiplicity of proceedings, having regard to the exceptional

and extraordinary circumstances of the case, in the interest of

both the parties to thrash out the real controversy between

them, it becomes imminent and necessary for the Court to

exercise its extraordinary jurisdiction to allow amendment

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application in the larger interest of both the parties and to

prevent the precious time of the Court being wasted.

32. In the present case, the impugned order is passed by

the trial Court on 13.7.2017 and now, we are in the year

November-2023 and more than six years have elapsed. This

Court by the order dated 7.6.2018 stayed further proceedings

in the suit and the said interim order continued till date.

Therefore, the case is not proceeded further and neither of the

party is benefitted by the litigation before this Court against the

impugned order. In my opinion, though the issues are framed

and the cross-examination of PW.1 is partly conducted, the

evidence of PW.1 is not closed, the defendant has not stepped

into the witness box. Had the trial Court decided the

application in favour of the defendant, probably the additional

issues would have been framed and there would have been

progress in the case. At this stage, if the application for

amendment and the counter-claim is allowed, the trial Court

would have to permit the plaintiff to file his objections to the

counter-claim so made and the trial Court may have to frame

additional issues based on the amendment and the counter-

claim and thereafter the parties would have to lead additional

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evidence in support of their case. This process can still be

performed at this stage as the evidence of PW.1 is not closed

and the defendants yet to enter the witness box to adduce their

evidence. If the application for amendment and counter-claim

is allowed, no irreparable injustice or loss would be caused

either to the plaintiff or the defendants and infact it would

avoid multiplicity of proceedings and the defendants would be

prevented from pursuing fresh suit as against the plaintiff.

Most importantly the substantial justice and equity would be

achieved by the application being allowed.

33. In view of the above discussion, I pass the following:

ORDER

i) The impugned order dated 13th July 2017 passed by the II Addl. Senior Civil Judge, Kalaburagi on the application filed under Order VI Rule 17 of the CPC, is hereby set aside.

ii) The application filed by the defendant No.1 under

Order VI Rule 17 of CPC is hereby allowed.

iii) The defendant No.1 is permitted to carry out the

amendment to the written statement by including

the counter-claim made.

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iv) The trial Court shall provide opportunity to the

plaintiff to file objections, if any to the said

counter-claim and thereafter frame additional

issues, if required and proceed further in the

matter.

v) It is made clear that this Court has not expressed

any opinion with regard to the bar of limitation in

respect of counter-claim made by the defendant

No.1 so also with regard to the cause of action

raised by the defendant No.1, which shall be

independently examined and adjudicated by the

trial Court.

Sd/-

JUDGE

GSS List No.: 1 Sl No.: 18