Case Note & Summary
The case arises from a Summary Suit instituted in 1997 by Tube Investment of India Limited (Plaintiff) against Gulf Oil India Limited (Defendant) on the Original Side of the Bombay High Court. No Summons for Judgment was taken out by the Plaintiff initially. In 2009, the Plaintiff took out a Notice of Motion for condonation of delay in taking out the Summons for Judgment, which was dismissed, and the suit was directed to be tried as a regular suit. The court directed the Defendant to file a written statement within twelve weeks, but the Defendant failed to do so. Subsequently, the Defendant took out a Notice of Motion for condonation of delay in filing the written statement and for taking a counter claim on record. The learned Single Judge allowed the condonation of delay subject to payment of costs of Rs.50,000/- but rejected the prayer to set up a counter claim or equitable set off on the ground of limitation, holding that the cause of action for the counter claim (damages for alleged delay in completing the project) arose in 1995-96 and was barred after nearly sixteen years. The Defendant appealed against the rejection of the counter claim. The Division Bench found force in the Appellant's contention that the learned Single Judge was not justified in rejecting the counter claim on limitation at that stage. The court observed that if the Defendant were to file a separate suit, the registry would not decline to register it on limitation grounds. Limitation is a mixed question of law and fact to be determined upon framing an issue under Order XIV Rules 1 and 2 of the Code of Civil Procedure, 1908, and cannot be decided on an a priori basis on affidavits. The court relied on the Supreme Court decision in South Konkan Distilleries and Another Vs. Prabhakar Gajanan Naik and others, where the issue was whether rejection of an amendment application for counter claim was proper. The Division Bench held that the counter claim should be allowed to be taken on record, leaving the question of limitation to be decided at the trial. The appeal was allowed, and the impugned order was set aside to the extent it rejected the counter claim. The Defendant was permitted to take the counter claim on record, and the trial court was directed to frame an issue on limitation and decide it in accordance with law.
Headnote
A) Civil Procedure - Counter Claim - Limitation - Order XIV Rules 1 and 2, Code of Civil Procedure, 1908 - The court held that limitation is a mixed question of law and fact and ought not to be decided on an a priori basis purely on affidavits. The learned Single Judge was not justified in rejecting the counter claim on the ground that it was barred by limitation at the stage of condonation of delay in filing the written statement. (Paras 4-5) B) Civil Procedure - Written Statement - Condonation of Delay - The learned Single Judge allowed the Notice of Motion for condonation of delay in filing the written statement subject to payment of costs quantified at Rs.50,000/-. The Appeal challenged the rejection of the counter claim, not the condonation order. (Paras 2-3)
Issue of Consideration
Whether a counter claim can be rejected at the stage of condonation of delay in filing written statement on the ground that it is ex-facie barred by limitation
Final Decision
Appeal allowed. Impugned order set aside to the extent it rejected the counter claim. Defendant permitted to take counter claim on record. Trial court to frame an issue on limitation and decide it in accordance with law.
Law Points
- Limitation is a mixed question of law and fact
- cannot be decided on a priori basis on affidavits
- counter claim cannot be rejected at threshold on limitation ground
- Order XIV Rules 1 and 2 CPC
