Or.2, Rule 2 and Or.8, Rule 6 A of C.P.C - Dismissal of COUNTER CLAIM - is a decree and appeal is the only remedy -2015 S.C.(2014) MSK Law Reports 4.

 whether an order of dismissal of the counter-claim being barred  by
principles of Order 2, Rule 2 of the Code of Civil  Procedure  (C.P.C.)  can
be set aside in exercise of revisional jurisdiction  under  Section  115  of
the C.P.C. or in exercise of power of superintendence under Article  227  of
the Constitution of India or is it required to be assailed by preferring  an
appeal.


Apex court held
Order 8, Rule 6A deals with counter-claim  by  the  defendant.   Rule  6A(2)
stipulates thus:-
“(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.”

Rule 6A(3) enables the plaintiff to file  a  written  statement.   The
said provision reads as follows:-
“(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.”

Rule 6A(4) of the said Rule postulates that  the  counter-claim  shall
be treated as a plaint and governed by rules applicable to a  plaint.   Rule
6B provides how the counter-claim is to be stated and  Rule  6C  deals  with
exclusion of counter-claim.  Rules 6D deals  with  the  situation  when  the
suit is discontinued.  It is as follows:-
“R. 6D. Effect of discontinuance of suit. – If in  any  case  in  which  the
defendant sets up a counter-claim, the suit  of  the  plaintiff  is  stayed,
discontinued or dismissed, the counter-claim may nevertheless  be  proceeded
with.”

On a plain reading of the aforesaid  provisions  it  is  quite  limpid
that a counter-claim preferred by the defendant in a suit is in  the  nature
of a cross-suit and by a statutory command even if the  suit  is  dismissed,
counter-claim shall remain alive for adjudication.
The  purpose  of  the  scheme  relating  to  counter-claim   is   to   avoid
multiplicity of the proceedings.   When  a  counter-claim  is  dismissed  on
being adjudicated on merits it forecloses the rights of the  defendant.   As
per Rule 6A(2) the court is required to pronounce a final  judgment  in  the
same suit both on the original claim and also  on  the  counter-claim.   The
seminal purpose is to avoid piece-meal  adjudication.    The  plaintiff  can
file an application for exclusion of a counter-claim and can do  so  at  any
time before issues are settled in relation to  the  counter-claim.   We  are
not concerned with such a situation.
In the instant case, the counter-claim has been dismissed  finally  by
expressing an opinion that it is barred by principles of Order 2, Rule 2  of
the CPC. 
The question is what status is to be given to such  an  expression
of opinion. In this context we may refer with profit the definition  of  the
term decree as contained in section 2(2) of CPC:-
“(2) “decree” means the formal expression of an adjudication which,  so  far
as regards the Court expressing it, conclusively determines  the  rights  of
the parties with regard to all or any of the matters in controversy  in  the
suit and may be either preliminary or final.  It shall be deemed to  include
the rejection of a plaint and the determination of any question within  [1][
* * *] Section 144, but shall not include –
any adjudication from which an appeal lies as an appeal from an order, or
any order of dismissal for default.

Explanation- A decree is preliminary when further  proceedings  have  to  be
taken before the suit can be completely disposed of.  It is final when  such
adjudication completely disposes of the suit.  It may be partly  preliminary
and partly final;”

Court may draw up a formal decree or may not, but if by virtue of the  order
of the Court, the rights  have  finally  been  adjudicated,  irrefutably  it
would assume the status of a decree.  
As is evincible, in the case at  hand,
the  counter-claim  which  is  in  the  nature  of  a  cross-suit  has  been
dismissed.  Nothing else survives for  the  defendants  who  had  filed  the
counter-claim.  
Therefore, we have no hesitation in holding that  the  order
passed by the learned trial Judge  has  the  status  of  a  decree  and  the
challenge to the same has to be made  before  the  appropriate  forum  where
appeal could lay by paying the  requisite  fee.   It  could  not  have  been
unsettled by the High Court in exercise of the power under  Article  227  of
the Constitution of India.  Ergo, the order passed  by  the  High  Court  is
indefensible.
Consequently, the appeal is allowed and the order passed by  the  High
Court is set aside.  However, as we are annulling the order  on  the  ground
that revision was not maintainable, liberty is granted  to  the  respondents
to prefer an appeal before the appropriate forum as required under law.-2015 S.C.(2014) MSK Law Reports 4.

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