Research › Search › Judgment

Gujarat High Court · body

2024 DIGILAW 1610 (GUJ)

Raj Solvex Limited v. Oxygen And Carbide Gas Pvt. Ltd.

2024-07-24

PRANAV TRIVEDI, SUNITA AGARWAL

body2024
ORDER : (PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI) [1] Present First Appeal is preferred under Section 96 of the Code of Civil Procedure, 1908 (hereinafter referred as to "the CPC") read with Section 13 of the Commercial Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015 (hereinafter referred as to "the Act") assailing the correctness and validity of judgment and order dated 18.10.2019 passed by Judge, Commercial Court, Rajkot below Exhibit 118 in Commercial Civil Suit No.129 of 2016. [2] The factual matrix which has led to filing of the present First Appeal is that the appellant is a limited company, inter alia, engaged in the activity of manufacturing of Vanaspati Ghee, which is manufactured/processed from crude palm oil (edible oil). The respondent is engaged in the activity of importing various kinds of edible oil. Respondent was desirous of getting crude palm oil (edible oil) imported after processing at the appellant's plant. Such intention culminated into a contract dated 23.03.2001, being entered by both the parties. The contract contemplated processing of goods into Vanaspati Ghee by the appellant and thereafter, being sold to the respondent or its nominees. [2.1] Subsequent to the contract, the dispute arose between the appellant and the respondent. It was the case of the respondent that appellant had not performed in terms of contract dated 23.2.2001. This dispute resulted into institution of a Civil Suit by the respondent, being Civil Suit No.49 of 2001 before the Court of Civil Judge (S.D.) at Gandhidham. During the pendency of the Suit, certain proceedings were initiated qua the appellant under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred as to "the SICA"). On 21.04.2007, respondent moved an application for amendment of plaint for recovery of Rs.2,45,52,656/- along with interest 24% p.a. The amendment moved by respondent was dismissed by the learned trial Court on 13.08.2008. Against the order of dismissal, the respondent preferred an appeal before this Court which was allowed. Being aggrieved by the order passed by this Court, the appellant preferred a Special Leave Petition before the Hon'ble Apex Court. The Hon'ble Apex Court dismissed the Special Leave Petition on 08.07.2009. Pursuant to dismissal of Special Leave Petition, the plaint was amended by the respondent on 27.04.2010. [2.2] After the plaint was amended on 27.04.2010, the appellant filed its written statement in the suit on 02.04.2012. The Hon'ble Apex Court dismissed the Special Leave Petition on 08.07.2009. Pursuant to dismissal of Special Leave Petition, the plaint was amended by the respondent on 27.04.2010. [2.2] After the plaint was amended on 27.04.2010, the appellant filed its written statement in the suit on 02.04.2012. Along with the said written statement, the appellant also preferred a counterclaim. The respondent, therefore, filed an application under Order VII Rule 11 of the CPC for rejection of the counterclaim. The learned court by way of order dated 18.04.2019 allowed the application under Order VII Rule 11 of the CPC filed by the respondent and rejected the counterclaim as being barred by law of limitation. Being aggrieved by the order dated 18.04.2019 rejecting the counterclaim, the present appeal is preferred by the appellant. [3] We have heard Mr.Uday M. Joshi, learned advocate appearing for the appellant. [4] Mr. Uday M. Joshi, learned advocate appearing for the appellant has submitted that the learned Commercial Court erred in coming to a conclusion that the counterclaim filed by the appellant was barred by limitation. It was apparent that the plaint filed by the respondent before the learned Commercial Court came to be amended on 27.04.2010. The appellant had filed its written statement and counterclaim on 02.04.2012, which was very much within the period of limitation. It was further submitted by Mr. Joshi, learned advocate that the learned Commercial Court erred in not appreciating the provisions of Order VIII Rule 6A of the CPC, which relates to preferring a counterclaim. As per the provisions of Order VIII Rule 6A, the counterclaim can be filed along with defence statement. In the instant case, the appellant had filed its counterclaim along with its written statement, which was within limitation. The learned Commercial Court, thus, has erred in dismissing the counterclaim on the ground of being beyond limitation. In the wake of such submission, Mr. Joshi, learned advocate for the appellant has prayed to allow the present First Appeal. This was the only argument which was canvassed by Mr. Joshi, learned advocate. [5] Having heard the learned advocate appearing for the appellant and having gone through the material on record, only point of determination is whether the counterclaim filed by the appellant on 02.04.2012 was within the period of limitation. If the facts are perused, the suit was initially instituted on 23.02.2001. Joshi, learned advocate. [5] Having heard the learned advocate appearing for the appellant and having gone through the material on record, only point of determination is whether the counterclaim filed by the appellant on 02.04.2012 was within the period of limitation. If the facts are perused, the suit was initially instituted on 23.02.2001. The cause of action, even for filing a counterclaim due to non supply of crude palm oil, thus, had arisen in the year 2001 itself. The only justification brought forward by the appellant is that due to the amendment of claim by the plaintiff, the written statement came to be filed in the year 2012. It is contended that as per the provisions of Order VIII Rule 6A of the CPC, which provides that counterclaim needs to be filed before/along with the defense of the respondent, they have filed a counterclaim along with the written statement and as such there is no delay. the said argument does not appeal to us, inasmuch as, the right to file a counterclaim in a suit is explicitly limited by the embargo provided for the accrual of the cause of action. This situation can be understood by sub-clause (2) of Rule 6 A, which reads as under:- "6A. 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 time limited for delivering his defence has expired, whether such counterclaim 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. (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] As counterclaim is treated to be a plaint, filing of it needs to comply with the limitation provided under the Limitation Act, 1963, as the time barred suits cannot be entertained under the guise of the counterclaim. The cause of action has arisen much prior to the appearance of the defendant in the suit on receipt of summons. It is true that as per provision of Order VIII Rule 6A counterclaim can be filed along with the written statement but that by itself would not mean that the counterclaim can be filed at any time. As the cause of action for the counterclaim had arisen before filing of the written statement, the counterclaim was, therefore, ought to have been filed on the appearance of the defendant. If we look to the provisions of the Limitation Act, under Article 113 of the Limitation Act, 1963, the period of limitation of three years is prescribed from the date the right to sue accrues, for any suit wherein no period of limitation is provided. 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 appellant for the cause of action which had arisen in the year 2001. Therefore, the counterclaim which is treated as a suit was filed way beyond the period of limitation. The reasoning given by the learned District Judge for rejection of the counterclaim, therefore, cannot be faulted with. [7] In the instant case, when the cause of action arose in the year 2001, the filing of counterclaim was clearly barred by limitation. The counterclaim was filed in the year 2012, i.e., after merely 11 years from the date of accrual of cause of action. Therefore, the learned Commercial Court was totally justified in allowing the application under Order VII Rule 11(d) of the CPC and rejecting the counterclaim as barred by law of limitation. [8] With the reasons mentioned hereinabove, the First Appeal is meritless and is hereby dismissed with no order as to costs. Therefore, the learned Commercial Court was totally justified in allowing the application under Order VII Rule 11(d) of the CPC and rejecting the counterclaim as barred by law of limitation. [8] With the reasons mentioned hereinabove, the First Appeal is meritless and is hereby dismissed with no order as to costs. [9] In view of the order passed in the main matter, connected Civil Application stands disposed of.