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 DLS-011-Mahendra vs MP-Counter-claim after WS

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Mahendra Kumar vs State of MP decided on 04.05.87 by Supreme Court of India, Judges             M. M. Dutt & V. B. Eradi, Case No : 4063 of 1985

Citations - 1987 (3) SCC 265 : 1987 AIR(SC) 1395 : 1987 (2) JT 524 : 1987 (1) Scale 1257 : 1987 (3) SCR 155 : 1987 (2) UJ(SC) 274 

DRT Solutions Citation  DLS-011-Mahendra vs MP-SC-1987

(We have now numbered the Judgments published on this web site as DLS-00.) Accordingly all the judgments published so far have been numbered. The judgment on this page is numbered as DLS-011.

Comments by DRT Solutions

An Important Supreme Court Judgment laying down that Counter-claim can be filed even after filing of WS

(a)   The full text of the judgment is given below with important portion marked in Red.

(b)   Some of our clients enquired whether Counter-claim can be filed even after filing of the WS. We cited this particular judgment to them. Since such queries have increased we have thought appropriate to publish the full text of the judgment as under with important portion marked in Red, which is self explanatory. The said Red portion from Para No 15 is reproduced below:- 

THE next point that remains to be considered is whether Rule 6-A(1) of Order VIII of the Code of Civil Procedure bars the filing of a counter-claim 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 counter-claim by the defendant after he had filed the written statement. What is laid down under Rule 6-A(1) is that a counter-claim 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 counter-claim is in the nature of a claim for damages or not. The High court, in our opinion, has misread and misunderstood the provision of Rule 6-A(1) in holding that as the appellants had filed the counter-claim after the filing of the written statement, the counter-claim was not maintainable. The finding of the High court does not get any support from Rule 6-A( 1) of the Code of Civil Procedure. As the cause of action for the counter-claim had arisen before the filing of the written statement, the counter-claim was, therefore, quite 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 counter-claim, which is treated as a suit under S. 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. The learned District Judge and the High court were wrong in dismissing the counter-claim. 

IN THE SUPREME COURT OF INDIA 

Judges : M.M.Dutt : V.B.Eradi 

Mahendra Kumar

Versus

State of Madhya Pradesh 

Case No. : 4053 of 1985 

Date of Decision : 04-May-1987 

Advocates Appeared: Dhingra Y.P. : Gambhir S.K. : Kapur Madhu : Khanduja S.S. : Lalit U.R. : Sharma T.C. 

JUDGMENT/ORDER:  

M.M. DUTT, J.

(1)         THIS appeal by special leave is directed against the judgment of the Madhya Pradesh High court, whereby the High court affirmed the order of the District Judge, Bhopal, dismissing the counter-claim by the appellants on the ground that it was barred by S. 14 of the Indian Treasure Trove Act, 1878, hereinafter referred to as 'the Act'. The High court also held that the counter-claim was not maintainable under sub-rule (1) of Rule 6-A of Order VIII of the Code of Civil Procedure, as the same was filed by the appellants after the filing of the written statement. 

(2)         THE predecessor-in-interest of the appellants, namely, Babulal, purchased a house in Bhopal in the year 1947 from the sons of one Mannuial. The appellants and the respondents 6 to 8 are the sons of the other three brothers of Mannuial. In the year 1976 the respondents 2 to 5, who were the heirs and legal representatives of the said Babulal, started reconstructing or renovating the house and for that purpose they commenced digging the plinth. It the course of digging, a treasure consisting of gold and silver ornaments and also government currency notes amounting to Rs. 2,900.00 was found. The respondents 2 to 5 intimated the discovery of the treasure to the Collector of the District, who issued a notification under S. 5 of the Act requiring all persons claiming the treasure, or any part thereof, to appear personally or by agent before him on the day and-place mentioned in the notification. Pursuant to the said notification, the respondents 2 to 5, and the appellants and the respondents 6 to 8 filed claims before the Collector. It has been held by the Collector that the respondents 2 to 5, the finders of the treasure, are the owners of the house from where the treasure was found during excavation undertaken by them with a view to starting reconstruction, and he permitted them under S. 8 of the Act to institute a suit in the civil court to establish their right before 22/02/1979. 

(3)         THE .respondents 2 to 5 instituted a suit being Civil Suit No. 1-A of 1979, in the court of the District Judge, Bhopal, for a declaration of their title to the treasure found by them. The respondents 2 to 5 did not, however, make the other claimants before the Collector including the appellants, parties to the suit. The appellants and the respondents 6 to 8 made an application for their addition as parties to the suit under the provision of Order I, Rule 10 of the Code of Civil Procedure. The learned District Judge allowed the said application and, accordingly, they were made defendants in the suit. 

(4)         THEREAFTER, the appellants and the respondents 6 to 8 filed their written statement, inter alia, denying the claim of the respondents 2 to 5 to the treasure. They claimed title to the treasure. 

(5)         AFTER the filing of the written statement, the appellants filed a counter-claim claiming title to the treasure. It is not necessary for us to state the basis of the claims of the parties to the treasure. The respondents 2 to 5 filed an application praying that the counter-claim should be dismissed contending that it was barred by limitation as prescribed under S. 14 of the Act and that it was also not main-tainable under Order VIII, Rule 6-A(1) of the Code of Civil Procedure. The learned District Judge came to the finding that the counter-claim was barred by S. 14 of the Act and, in that view of the matter, dismissed the counter-claim. Being aggrieved by the said order of the learned District Judge, the appellants and the said respondents 6 to 8 moved the High court in revision against the same. The High court upheld the order of the learned District Judge that the counter-claim was barred by limitation as prescribed by S. 14 of the Act. The High court further held that the counter-claim having been filed after the filing of the written statement, it was not main tamable under Order VIII, Rule 6-A( 1) of the Code of Civil Procedure. Hence this appeal by special leave. 

(6)         AT this stage, it is necessary to refer to some of the provisions of the Act. S. 4 of the Act provides, inter alia, for the giving of notice by the finder of treasure to the Collector containing the details of the treasure. The treasure may be deposited in the nearest government Treasury or the finder may give the Collector such security as the Collector thinks fit to produce the treasure at such time and place, as he may, from time to time, require. Under S. 5, the Collector shall, after making such enquiry, if any, as he thinks fit, issue a notification requiring the claimants to the treasure to appear before him on a day and at a place mentioned in the notification, such day not being earlier than four days or later than six months, after the date of the publication of such notification. S. 6 provides that any person having claimed any right to such treasure or any part thereof, as owner of the place in which it was found or otherwise, and not appearing as required by the notification issued under S. 5, shall forfeit such right. S. 7, 8,9, 13 and 14 which are relevant for our purpose are extracted below:  

7 On the day notified under S. 5, the Collector shall cause the treasure to be produced before him, and shall enquire as to and determine- 

     (A) the person by whom, the place in which, and the circumstances under which, such treasure was found; and 

     (B) as far as is possible, the person by whom, and the circumstances under which, such treasure was hidden 

     8 If, upon an enquiry made under S. 7, the Collector sees reason to believe that the treasure was hidden within one hundred years before the date of the finding, by a person appearing as required by the said notification and claiming such treasure, or by some other person under whom such person claims, the Collector shall make an order adjourning the hearing of the case for such period as he deems sufficient, to allow of a suit being instituted in the civil court by the claimant, to establish his right. 

     9 If upon such enquiry the Collector sees no reason to believe that the treasure was so hidden; or 

     IF, where a period is fixed under S. 8, no suit is instituted as aforesaid within such period to the knowledge of the Collector; or 

     IF such suit is instituted within such period, and the plaintiff's claim is finally rejected; 

     THE Collector may declare the treasure to be ownerless.  

Appeal against such declaration

     ANY person aggrieved by a declaration made under this S. may appeal against the same within two months from the date thereof to the Chief Controlling Revenue Authority. 

     SUBJECT to such appeal, every such declaration shall be final and conclusive. 

13. When a declaration has been made as aforesaid in respect of any treasure, and two or more persons have appeared as aforesaid and each of them claimed as owner of the place where such treasure was found, or the right of any person who has so appeared and claimed is disputed by the finder of such treasure, the Collector shall retain such treasure and shall make an order staying his proceedings with a view to the matter being enquired into and determined by a civil court. 

     14. Any person who has so appeared and claimed may, within one month from the date of such order, institute a suit in the civil court to obtain a decree declaring his right; and in every such suit the finder of the treasure and all persons disputing such claim before the Collector shall be made defendants. 

(7)         UNDER the scheme of the Act, two kinds of suits can be filed at two stages, namely, one under S. 8 and the other under S. 14 of the Act. S. 8 provides that if the Collector has reason to believe that the treasure was hidden by any person appearing before the Collector within one hundred years or by some other person under whom such person claims, the Collector shall adjourn the hearing for such period as he deems sufficient to allow the claimant to institute a suit to establish his right to the treasure. So under S. 8, the suit has to be filed by the claimant within the period for which the hearing of the case is adjourned for the establishment of his right to the treasure. 

(8)         ON the other hand, the question of filing a suit under S. 14 will not arise unless the Collector makes a declaration under S. 9 that the treasure is ownerless. Such a declaration under S. 9 will be made by the Collector if he sees no reason to believe that the treasure was not hidden within one hundred years or if no suit is instituted under S. 8 within the period for which the hearing is adjourned by the Collector or if the plaintiff's claim is rejected. An appeal lies against a declaration by the Collector to the Chief Controlling Revenue Authority and subject to the appeal, such declaration shall be final and conclusive. If, however, no such con tingencies as mentioned in S. 9 take place, the Collector will have no jurisdiction to make a declaration that the treasure is ownerless. 

(9)         IF, however, any of such contingencies happens and the Collector makes a declaration under S. 9 and two or more persons have appeared before the Collector each claiming the ownership of the place where such treasure was found or the finder of the treasure disputes the right of any person who has so appeared and claimed, the Collector shall make an order under S. 13 staying the proceedings with a view to the matter being enquired into by a civil court. It may be noticed here that the claim made under S. 13 by the rival claimants relate to the ownership of the place and not to the ownership of the treasure for, it has been already noticed that the declaration by the Collector under S. 9 that the treasure is ownerless shall, subject to the appeal to the Chief Controlling Revenue Authority, be final and conclusive. The object of an enquiry as to the ownership of the place by the civil court is necessary inasmuch as S. 10 of the Act provides inter alia that when a declaration has been made in respect of any treasure under S. 9, such treasure shall either be delivered to the finder or be divided between him and the owner of the place in which it has been found.

(10)         THUS it is manifestly clear that if no declaration is made under S. 9, there is no question of filing a suit under S. 14 of the Act. While a suit under S. 8 relates to the establishment of the right of the claimant to the treasure, a suit under Section 14 relates to the establishment of the ownership of the place where the treasure was found for the purpose of division of the treasure between the finder and the owner of the place. 

(11)         S. 14 lays down that such a suit has to be filed within one month from the date of such order to obtain a decree declaring his right. 

(12)         IT is manifestly clear from S. 14 that the suit referred to therein is a suit to be filed by a person for the establishment of his right after the Collector had declared the treasure to be ownerless under S. 9 after making a claim before the Collector under S. 13. The words "such order" in S. 14, in our view, refer to the order passed by the Collector under S. 13. Further, the placement of S. 14 after S. 13 of the Act points only to the filing of the suit by a person after the Collector had made an order staying the proceedings under S. 13. The suit contemplated by S. 8 of the Act has to be filed by the claimant within the period for which the hearing of the case is adjourned. Such period for which the hearing under S. 8 is adjourned by the Collector, may be more than a month. It is absurd to think that although S. 8 provides that the suit has to be filed within the period for which the hearing is adjourned, yet it has to be filed within one month under S. 14. S. 8 and S. 13 and 14 contemplate two different situations. While under S. 8 the suit has to be filed within the period during which the hearing stands adjourned, the suit under S. 14 has to be filed within one month of the order of the Collector under S. 13 of the Act. To hold that suits under S. 8 and S. 13, are both governed by the limitation prescribed by S. 14, will be to do violence to the provisions of the Act and the clear intention of the legislature as indicated in the provisions. 

(13)         ANOTHER aspect in this regard may be considered. It may be argued that as the Collector had not allowed the appellants and the respondents 6 to 8 to file a counter-claim or a suit, the suit was not maintainable. In our opinion, the question of filing a counter-claim arises after a suit is filed by the claimant under S. 8. It may be that there is no substantial difference between a counter-claim and a suit, but nonetheless a defendant cannot be prevented from filing a counter-claim under the Code of Civil Procedure. 

(14)         IN the instant case, as the respondents 2 to 5 have instituted the suit within the period during which the hearing before the Collector stands adjourned under S. 8, the question of making a declaration by the Collector under S. 9 of the Act does not arise and, consequently, there is no scope for filing any suit under S. 14 of the Act for the establishment of the right to ownership of the place where the treasure was found by respondents 2 to" 5. Thus Section 14 has no manner of application to a suit filed under S. 8 of the Act. 

(15)         THE next point that remains to be considered is whether Rule 6-A(1) of Order VIII of the Code of Civil Procedure bars the filing of a counter-claim 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 counter-claim by the defendant after he had filed the written statement. What is laid down under Rule 6-A(1) is that a counter-claim 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 counter-claim is in the nature of a claim for damages or not. The High court, in our opinion, has misread and misunderstood the provision of Rule 6-A(1) in holding that as the appellants had filed the counter-claim after the filing of the written statement, the counter-claim was not maintainable. The finding of the High court does not get any support from Rule 6-A( 1) of the Code of Civil Procedure. As the cause of action for the counter-claim had arisen before the filing of the written statement, the counter-claim was, therefore, quite 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 counter-claim, which is treated as a suit under S. 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. The learned District Judge and the High court were wrong in dismissing the counter-claim. 

(16)         FOR the reasons aforesaid, the appeal is allowed. The order of the learned District Judge and the judgment of the High court are set aside. The learned District Judge is directed to proceed with the hearing of the suit and the counter-claim in accordance with law. The appellants shall pay court fee on the counter-claim, if not already paid. within such time as may be fixed by the learned District Judge.

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