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Karnataka State Agro Corn Products Ltd., by its Managing Director v/s M/s. Kerala Agro Seeds, Represented by its Proprietor, Martin Paul

    Regular First Appeal No. 554 of 2012

    Decided On, 02 December 2019

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE H.P. SANDESH

    For the Appellant: K. Nataraj Baba, Advocate. For the Respondent: K.N. Mahabaleshwara Rao, Advocate.



Judgment Text


1. Heard the learned Counsel appearing for the parties.

2. This appeal is filed by the defendant challenging the judgment and decree passed in O.S.No.2959/2005 dated 11.11.2011 by the XL Additional City Civil Judge, Bengaluru City (CCH-41) and to allow the counter claim made by the defendant.

3. The parties are referred to as per their original rankings before the trial Court as plaintiff and defendant in order to avoid confusion and for convenience of the Court.

4. Brief facts of the case are:

The plaintiff has filed the suit for recovery of money. Since there was an agreement between the parties for supply of 500 metric tones of Rice Bran Extraction at Rs.1677/- per metric tonne. The amount has to be paid within 45 days from the date of supply. A sum of Rs.50,000/- was deposited by the plaintiff as security with the defendant. The plaintiff alleged that it has sent six consignments to the defendant. It was further alleged that despite receipt of goods supplied by the plaintiff, the defendant has not paid the amount. Therefore, suit filed for recovery of Rs.1,75,013/- including a sum of Rs.50,000/- which was deposited with the appellant.

It is further contended that the plaintiff at the first instance has filed suit in O.S.No.286/2000 before the Additional Sub Judge Court at North Paravur in Kerala State. In the said suit, the defendant appeared and filed written statement contending that there was an agreement for supply of the D.O. Oiled rice bran extract and plaintiff had deposited a sum of Rs.50,000/- with the defendant. The defendant has further contended that the total goods which was agreed to be supplied by the plaintiff was 500 Metric tonnes at Rs.1677/- per metric tonne. As per the purchase order, the goods would be supplied within a week from the date of rising of the demand. The plaintiff has delayed in supplying the goods and further the plaintiff has not supplied the rice bran extract according to the quality specified in the purchase order. Since the goods supplied was not according to the standard ordered by the defendant, the defendant had to purchase goods in the open market, from the alternative source. In view of the specific clause in the purchase order that the defendant was made to purchase the goods in the open market, hence, the plaintiff is liable to make good the difference amount. It was further contended by the defendant that the Court at Paravur has no territorial jurisdiction to entertain the suit as there was an agreement between the parties that any dispute arises regarding the transaction between the parties, the same would be subject to the jurisdiction of the City Court at Bengaluru. Therefore, the Sub Judge at North Paravur, Kerala has partly decreed the suit of the plaintiff. Against which, the defendant and the plaintiff herein have filed A.S.No.203/2003 and A.S. 66/2004 before the District Court. The learned District Judge heard the appeal filed by both the [parties and by a common judgment dated 10.12.2004 comes to the conclusion that the suit itself is not maintainable for want of territorial jurisdiction, therefore allowed the appeal filed by the defendant and dismissed the suit filed by the plaintiff and held that the plaint should be returned to plaintiff for presentation before the Court at Bangalore.

It is further contended that the plaintiff herein without following the procedure contemplated under Order 7 Rule 10 of CPC has filed a fresh suit before the City Civil Court at Bengaluru. The defendant appeared through his counsel and filed his written statement reiterating the contentions urged earlier and prayed for dismissal of the suit. It is also contended by the defendant that on 19.4.2006 he had made a counter claim contending that the plaintiff has committed breach of contract entered into between the parties in not supplying the required quantity of goods of the quality ordered by the defendant. Therefore, the defendant was forced to purchase remaining quantity of goods in the open market at Bangalore at higher rate, hence, he has sustained loss to the tune of Rs.3,13,271/- which being the difference amount due to buying the goods in the open market. Hence, he is entitled for the same. The counter claim was resisted by the plaintiff by filing rejoinder.

5. Based on the pleading of both the parties, the Court below has framed the following issues:

1. Whether the plaintiff proves that defendant is due to it in a sum of Rs.1,75,013/-?

2. Whether the plaintiff is entitled for interest at 18% per annum on the suit claim?

3. Whether suit claim is barred by time?

4. Whether suit is not maintainable for want of cause of action as alleged by the defendant?

5. Whether defendant proves that plaintiff is liable to pay Rs.1,13,271/- to it together with interest at 18% per annum from the date of amount due?

6. What decree or order?

6. The trial Court has also framed the following additional issue for its consideration:

"Whether the counter claim, made by the defendant is barred by time, under the Limitation Act?"

7. The plaintiff in order to substantiate its claim examined one witness as P.W.1 and got marked the documents as Exs.P.1 to P.15. The defendant also examined one witness as D.W.1 and got marked the documents as per Exs.D.1 to D.16.

8. The Court below after hearing both parties, and considering the oral and documentary evidence decreed the suit as claimed by the plaintiff awarding interest at the rate of 10% per annum. The counter claim made by the defendant was rejected. Hence, the present appeal is filed.

9. In the present appeal, the grounds urged by the defendant is that the court below has committed error in awarding interest at the rate of 10% per annum in the absence of any agreement to pay interest, is excessive and unreasonable.

10. The other contention is that Ex.D.7 and Ex.D.12 were not seriously challenged by the plaintiff and hence it is established that the goods supplied by the respondent were sub standard for which the defendant is not liable to make any payment. The other ground urged in the appeal that the court below has committed an error in holding that the counter claim of the defendnat is time barred under Limitation Act. The very approach of the trial court is erroneous. It is contended that under Order 8 rule 6A of CPC "the defendant can make counter claim against the claim of the plaintiff in respect of a cause of action accruing to the defendant against the plaintiff either before or after filing of the suit". In view of this, cause of action accrues not on the date of transaction but after the plaintiff received the suit summons. Therefore, the trial Court has wrongly framed the issue as to whether the counter claim made by the defendant was barred by law of limitation. The counter claim was well within three years from the date of filing of the suit by the plaintiff. The trial Court has failed to notice that in the written statement filed by the appellant in O.S.NO.286/2000, itself the defendant has taken a contention that the plaintiff herein was liable to pay Rs.3,13,271/-. However, it could not make counter claim because the appellant has taken a contention that the Court at North Paravur has no territorial jurisdiction to try the suit. Only after the plaintiff has instituted the O.S.No.2959/2005 before the City Civil Court, Bangalore, the cause of action accrued to the defendant to make a counter claim, and the said fact has been ignored by the Court below. The Court below also failed to notice that if the counter claim made by the defendant on 19.4.2006 is barred by time then the suit filed by the plaintiff in the year 2005 is also barred by time. If the provisions of Section 14 of the Limitation Act is made applicable to the plaintiff, the same should be made applicable to the defendant to make counter claim. The trial Court has failed to appreciate this aspect and has wrongly rejected the counter claim. Hence the defendant prayed this court to set aside the judgment and decree of the trial Court.

11. Learned Counsel appearing for the appellant/defendant in his argument vehemently contended that the Court below has committed error in rejecting the counter claim made by the defendant. But the trial Court has erroneously comes to the conclusion that the counter claim made by the defendant is barred by limitation. The very approach of the trial court is erroneous. Counsel also submits that in the absence of any agreement between the parties to pay interest, the Court below awarded interest at the rate of 10% which is excessive and unreasonable. The trial Court ought not to have granted interest. Hence prayed this court to allow the appeal and grant decree as prayed for in the plaint.

12. Per contra, learned Counsel appearing for the plaintiff/respondent in his arguments, has contended that it is not in dispute that there was an agreement between the parties to supply the material and when the defendant did not pay the amount in respect of the material supplied, the plaintiff stopped the supplying the goods. It is further contended that the appellant though challenged the decree passed in favour of the plaintiff, this appeal has to be restricted only with regard to the refusal of the counter claim and the appellant/defendant with an intent to challenge both the judgment and decree and refusal of the counter claim ought to have filed two separate appeals before this Court, the same has not been done. Hence this appeal is only with regard to the counter claim and not for decree.

13. The other contention of the plaintiff/respondent is that the Court below taken notice of the limitation and in the cross-examination of DW.1 has categorically admitted the claim and counter claim amount which was accrued to him in the year 1998 and counter claim was made in the year 2006. The same is barred by limitation and Court below has given reasons while dismissing the counter claim of the defendant and not committed any error in answering issue that the counter claim is barred by limitation. The counsel would contend that the material supplied was utilized by the defendant and he did not return the material. Hence he contended that the counter claim is barred by time, therefore not entitled to any counter claim. Hence the appeal is liable to be dismissed.

14. In reply to the argument, Counsel for the defendant, would contend that in the written statement before the Kerala Court itself a defence was taken that the plaintiff is liable to pay counter claim amount. But the same was not claimed before the Kerala Court because of the territorial jurisdiction. He also would contend that they have not supplied the entire material which has been agreed in terms of the agreement and there is a recital in the agreement that the payment would be made after 45 days of supply of goods and they have not supplied the entire material as per the agreement. Hence, the Court below has committed an error in appreciating the said fact and ignored the material available on record. Hence, the appeal is liable to be allowed.

15. Having heard the arguments of learned counsel for the appellant and learned counsel for the respondent, the point that arises for consideration of this Court are:

1. Whether the Court below has committed an error in dismissing the counter claim of the defendant/appellant as barred by law and it requires interference of this Court?

2. Whether the Court below has committed an error in decreeing the suit of the plaintiff and it requires interference of this Court?

3. Whether the appellant ought to have filed separate appeals against the decree in favour of the plaintiff and against the refusal of the counter claim and single composite appeal is not maintainable as contended by the learned counsel for the respondent?

4. What order?

Point No.3:

16. Before considering other points, first I would like to take up point No.3 for consideration, since the question of law is involved in the matter whether separate appeals have to be filed against the decree in favour of the plaintiff and against the refusal of the counter claim.

17. Learned counsel for the respondent would contend that it is a formal expression of decree in respect of the suit claim and also in respect of the counter claim and hence, the appellant ought to have filed two separate appeals and single appeal is not maintainable in respect of the decree in favour of the plaintiff and in respect of the rejection of the counter claim. Therefore, the appellant has to restrict his remedy in the appeal either in respect of the decree which he has suffered or the counter claim which has been rejected and there cannot be a challenge to two decrees in a single appeal.

18. Learned counsel for the respondent, in support of his argument relied upon the judgment reported in the case of Premier Tyres Limited -vs- Kerala State Road Transport Corporation, (1993) Supp2 SCC 146. The learned counsel referring paragraph Nos.4 and 6 of the judgment would contend that no appeal is filed against the decree in the connected suit as in this case and the effect of non-filing of appeal against a judgment or decree is that it becomes final. Thus the finality of the finding recorded in the connected suit, due to non-filing of appeal, precluded the Court from proceeding with appeal in the other suit.

19. Learned counsel for the respondent in support of his contention has also relied upon the judgment reported in the case of Harbans Singh and Ors. -vs- Sant Hari Singh and Ors, (2009) AIR SC 1819. The learned counsel referring paragraph No.12 of the judgment would contend that when the appeal is not filed against the judgment and decree and it reaches its finality, the appellant is required to prepare another appeal against the judgment and decree passed in the suit, in the eye of law.

20. Learned counsel for the respondent has also relied upon the judgment reported in the case of Mallanna alias Appaiah -vs- Smt. Muninanjamma alias Nanjamma, (2001) AIR Karnataka 205. The learned counsel referring paragraph Nos.4 and 5 of the judgment would contend that if the judgment and decree of the trial Court in two suits pertain to the same property and between the same parties, the result of the appeal preferred before the lower appellate Court may conflict with the other decree which was not challenged. Therefore, the appellant should have preferred two appeals. Since, that has not been done, by the defendant/respondent the judgment and decree of the lower appellate Court is liable to be set aside.

21. Learned counsel also relied upon the judgment of the Madras High Court in the case of S.Rajeswari Vs. Perumal and another decided on 13.07.2018, brought to my notice para No.15(b) of the judgment. Referring to the said para, the Madras High Court held that when two separate decrees were drafted for decreeing the suit and dismissing the counter claim, the respondents filed only one appeal challenging the decree passed in favour of the appellant i.e., decreeing the suit and no appeal was filed challenging the dismissal of the counter claim. It is settled law that counter claim itself is in the nature of suit and that counter claim has to be considered as separate suit and Courts have to pass a judgment and decree in respect of counter claim. Even if the suit itself is dismissed for any reason, whatsoever, the counter claim can be allowed on merits and a separate decree is to be drafted. When common judgment is delivered in respect of two or more suits, appeals are to be filed in respect of all the suits which are decided against him. If a party fails to file appeal in respect of one of the suits, the said judgment will be res judicata in respect of the judgment appealed. In the present case, the suit filed by the appellant was decreed and counter claim filed by the respondents was dismissed. The learned Trial Judge, considering the averments in the counter claim, the evidence let in and arguments of the respondents, dismissed the counter claim of the respondents by giving cogent and valid reasons. Respondents did not file any appeal challenging the dismissal of the counter claim. The First Appellate Judge, failed to consider the failure on the part of the respondents to challenge the dismissal of the counter claim, erroneously set aside the dismissal of the counter claim and allowed the counter claim. It is further held that the appeal filed against decreeing the suit is hit by principles of res judicata and is not maintainable.

22. Learned counsel also relied upon the judgment of Madras High Court in the case of M.Anandan Vs. A.Dakshinamoorthy,2008 1 LAWS(MAD) 365 decided on 08.01.2008 in the Appeal Suit No.1116 of 1995 and brought to my notice that the Trial Court, on a consideration of oral and documentary evidence, held that the plaintiff is entitled to a sum of Rs.23,350/- towards rental arrears, a sum of Rs.5,000/- towards the value of missing materials and a sum of Rs.3,500/- towards the value of gunny bags in total a sum of Rs.31,850/- from the defendants and granted decree for that sum with subsequent interest and it further held that the defendants are not entitled to the counter claim and dismissed the counter claim. Aggrieved by the decree granted to the plaintiff for recovery of Rs.31,850/- with subsequent interest, the defendants have preferred present Appeal and no Appeal is preferred by them against the dismissal of their counter claim. The Court further held that this finality can be taken away only in accordance with law. When a judgment or decree in a connected cross-suit is not appealed from, the principle of res judicata has to be applied.

23. Learned counsel also relied upon the judgment reported in the case of Darayas Bamanshah Medhora Vs. Nariman Bamansha Medhora, (2002) AIR Gujarat 166. Referring to this judgment, he contended that when there are two decrees arising from common judgment and if only one appeal is filed, then non filing of the appeal in respect of other decree amounts to res judicata.

24. Learned counsel appearing for the respondent would contend that in the case on hand, composite single appeal is filed against the judgment and decree passed in favour of the plaintiff and also in respect of the counter claim rejected in the very same judgment. The defendant has questioned the decree as well as the rejection of the counter claim. Hence, the single appeal is not maintainable. As the single appeal is not maintainable, the appellant has to either restrict its claim against the judgment and decree which it has suffered or restrict its appeal with regard to the rejection of the counter claim.

25. Learned counsel appearing for the appellant in his arguments contended that the composite decree was drawn and no separate decree was drawn decreeing the suit and rejecting the counter claim. Hence, single appeal is maintainable. In support of his contention, he relied upon the judgment of Rajasthan High Court in the case of Mr.Sajjan Singh and another Vs. Mr.H.R.Soni, delivered on 12th September 2018. Referring to this judgment, he would contend that the Rajasthan High Court while dealing with the same issues held that wherein it has expressly provided that in an appeal from decree passed in suit where a counter claim has been claimed, the appeal would be filed as if no counter claim has been claimed, which necessarily means that the appeal would be against the decree passed in the main suit and the appellant would be entitled to question the passing of the decree on counter claim in the same appeal and therefore, there is absolutely no necessity of filing separate appeal in case where the counter claim preferred in a suit has been decreed by the Trial Court.

26. Having considered the rival contentions of the respondent's counsel and also appellant's counsel, this Court has to examine the issues involved between the parties so as to whether single appeal is maintainable or two separate appeals have to be filed, before deciding the question involved in the matter.

27. First, I would like to refer to the factual matrix of the case. The plaintiff has filed the suit for recovery of money against the defendant and in the said suit, the defendant filed the counter claim against the plaintiff. The Court below, considering both oral and documentary evidence, decreed the suit of the plaintiff and rejected the counter claim of the defendant. Hence, the single appeal is filed before this Court.

28. The main contention of the respondent is that the appellant ought to have filed two separate appeals questioning the decree, and the rejection of the counter claim. It is to be noted that when the counter claim is made, it is a cross-suit and when the Court below has considered both the claim of the plaintiff and also counter claim, the same have been adjudicated and when once the same is adjudicated, it amounts to a decree in respect of both. There is no dispute with regard to the fact that when the matter has been considered on merits and decree has been passed and the same has attained its finality, the decree has to be drawn for the respective claims. On perusal of the judgment and decree of the Trial Court, no doubt the Trial Court has drawn the composite decree in respect of the suit claim and also in respect of the counter claim but the Court below has not drawn separate decrees in respect of recovery of money and the counter claim of the defendant. Before considering this aspect, I would like to refer to proviso of Section 2(2) of Civil Procedure Code, which defines "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 Section 47 or 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.

29. In the case on hand, I have already pointed out that the rights of the parties have been adjudicated with regard to recovery of money as well as counter claim. When such being the case, there lays adjudication and also the formal expression of adjudication.

30. Learned counsel appearing for the respondent referred to the judgment of the Apex Court in the case of Premier Tyres Limited Vs. Kerala State Road Transport Corporation, (1993) Supp2 SCC 146 wherein it is observed that in the said appeal, there were two connected suits tried together and finding was recorded in one suit which become final in the absence of appeal and the appeal preferred against the finding recorded in the other suit would be barred by res judicata.

31. In the case of Harbans Singh and Ors. Vs. Sant Hari Singh and Ors., (2009) AIR SC 1819, it is held that when two suits are filed and the same has been adjudicated and no appeal is filed in respect of the decree of the other claim and attained finality, the appeal against other decree would be barred by res judicata.

32. In the case of Mallanna alias Appaiah Vs. Smt.Muninanjamma alias Nanjamma, (2001) AIR Karnataka 205, this Court has held that when the suits filed for eviction and for specific performance by the parties against each other in respect of same property and the same was decided by common judgment and separate decrees have been passed, then the Single appeal against common order and decree in one of the suits would not be tenable. This judgment is aptly applicable in so far as to the contention of the respondent's counsel since in this appeal also only one appeal is filed challenging the decree as well as the rejection of the counter claim.

33. The Madras High Court in para No.15(b) of the judgment in Rajeswari's case stated supra held that First Appellate Judge failed to take note that the dismissal of counter claim and the same not being challenged, the appeal filed by the respondent is hit by principles of res judicata. In M.Anandan's case referred supra, it is observed that no appeal was filed against the rejection of counter claim and challenged the decree only for recovery of Rs.31,850/- and hence, principles of res judicata applies when no appeal is filed. The Gujarat High Court in the Darayas's case stated supra, held that when two decrees have been passed and appeal has been filed against only one decree, and the appellant is estopped by non filing of the appeal, it amounts to res judicata. In the case on hand both the decrees i.e., allowing of the claim of plaintiff and rejection of counter claim is challenged in the composite appeal and the principles referred above are in respect of not filing of the appeal in respect of rejection of counter claim.

34. Having considered the facts and circumstances of the case, which are relied upon by the counsel appearing for the respondent, there were two decrees and no appeal was filed in respect of one decree, under such circumstances, the judgments are delivered. Hence, it is held that it amounts to res judicata.

35. The Rajasthan High Court in Sajjan Singh's case stated supra, held that there is absolutely no necessity of filing a separate appeal in case, where the counter claim preferred in a suit has been decreed by the Trial Court. The factual aspects of the case is that the suit was dismissed and counter claim was decreed.

36. I would like to refer to the judgment of Himachal Pradesh High Court reported in the case of Piar Chand & Others Vs. Ranjeet Singh & Others,2016 SCCOnLineHP 3493 wherein the substantial question raised before the Second Appellate Court was that whether the First Appellate Court has committed illegality in allowing the appeal and decreeing the counter claim of the respondents-defendants, whereas separate appeal against the dismissal of the counter claim has not been filed by the respondents? The Himachal Pradesh High Court, dealing with the issue involved between the parties, at para No.11 of the judgment has framed a substantial question of law as under:-

"2. Whether the Ld. Addl. District Judge has committed illegality in allowing the appeal and decreeing the counter claim of the respondents-defendants whereas separate appeal against the dismissal of the counter claim has not been filed by the respondents-defendants?"

37. Further, the Court has referred to the appeal filed by the defendant under Section 96 of CPC read with Section 21 of the Himachal Pradesh Courts' Act against the judgment and decree also discussed with regard to the provision of Order 8 Rule 6A of Civil Procedure Code which mainly relates to the counter claim by defendant. Further the reliance has been placed on the judgment of the Hon'ble Apex Court in Rajni Rani Vs. Khairati Lal, (2015) 2 SCC 682 at para No.41 and also in the case of R.Rathinavel Chettiar Vs. V.Sivaraman, (1999) 4 SCC 89. Similar facts and circumstances have also been involved in the present case before this Court.

38. The Hon'ble Apex Court at Para No.16 of the said judgment held that there may be situations where an order can get the status of a decree. A 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 on 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 counterclaim. 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. The order passed by the High Court is indefensible.

39. The High Court of Himachal Pradesh referring to the decision of Hon'ble Apex Court held that this Court need not to elaborate further on the issue at hand because Hon'ble Apex Court has categorically held that if by virtue of order of the Court rights have finally been adjudicated, it would assume the status of a decree. Hon'ble Apex Court has also stated that the Court may or may not draw a formal decree, but if rights are finally adjudicated, it would assume the status of a decree. Apex Court has further held that in such like situation order passed by the Trial Judge has the status of decree and challenge to the same has to be made before the appropriate forum where appeal could lay by paying the requisite fee.

40. Accordingly, in view of the detailed discussion made hereinabove as well as law laid down by Hon'ble Apex Court, this Court sees no force in the contention put forth on behalf of the counsel representing the defendants that in the absence of specific decree drawn by learned Trial Court at the time of dismissal of their counter claim, defendants could not file separate appeal.

41. It is further observed that the learned First Appellate Court has erred in entertaining the composite appeal filed on behalf of the defendants specifically laying challenge to the Judgment passed by the learned Trial Court, wherein suit of the plaintiffs was partly decreed and the counter claim filed by the defendants was dismissed, there is no need to look into the other substantial question of law as the same have become redundant in view of the findings.

42. Having considered the principles laid down in the judgment of the Himachal Pradesh High Court and also the judgment of the Apex Court in Rajni Rani vs. Khairati Lal and the contentions taken by the appellant's counsel so also the respondent's counsel, it is made clear that once the Court has adjudicated the issue involved between the parties i.e., the suit claim for recovery and also the counter claim of the defendant and the same has been considered on merits and the rights of the parties have been adjudicated, it amounts to a decree.

43. The contention of the appellant's counsel is that since the Kerala Court is not having jurisdiction to deal with the suit, no counter claim was made before the Kerala Court. Hence, the Trial Court ought not to have dismissed the suit on the ground that the suit is time barred.

44. Learned counsel appearing for the respondent would contend that when the suit was filed before the Kerala Court, the defendant has filed the written statement. However, he did not make any claim or counter claim in respect of the amount of Rs.3,13,271/-, but the defendant has made the counter claim in O.S.No.2959/2005 and the same was barred by law of limitation, since the transaction had taken place in the year 1998 as per the purchase order marked at Ex.P.1 dated 12.8.1998, wherein the terms and conditions were also imposed. The defendant had not made any counter claim within a period of three years and hence, the suit is barred by law of limitation and thus, the Trial Court has rightly appreciated both oral and documentary evidence.

45. Having considered the contentions of the defendant's counsel and also plaintiff's counsel, there is no dispute with regard to the fact that the plaintiff has filed the suit in O.S.No.286/2000 at the first instance before the Additional Sub Judge Court at North Paravur in Kerala. There is also no dispute with regard to the fact that the defendant appeared through the counsel and filed written statement. At the first instance, when the written statement was filed, no counter claim was made in the written statement but reference was made that the defendant incurred loss of Rs.3,13,271/-.

46. Learned counsel appearing for the appellant/defendant also would contend that a clear reference was made at the first instance with regard to the loss suffered by the defendant and also tried to convince the Court that the Kerala Court has no jurisdiction to decide the suit. On the ground of no territorial jurisdiction, the suit was transferred to City Civil Court at Bengaluru on account of the order passed in A.S.Nos.203/2003 and 66/2004. It is to be noted that the suit was filed in the year 2005 and the defendant in O.S.No.2959/2005 for the first time made the counter claim before the City Civil Court, Bengaluru. It is also an undisputed fact that transaction was taken place in the year 1998 and the plaintiff filed the suit in the year 2000 itself making the claim against the defendant and composite decree has been passed. Hence, the composite appeal is filed cannot be accepted. When the counter claim amounts to the cross-suit and the rights of the parties have been adjudicated and the suit has been decreed for the reasons mentioned in the

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suit and counter claim was rejected hence, the appellant/defendant ought to have filed separate appeal. The same cannot be challenged in a single composite appeal as held by the Himachal Pradesh High Court referring the Supreme Court judgment. The facts in the said case and also in the present case are similar. 47. Having considered the facts of the case and that the Trial Court adjudicated the issue involved between the parties with regard to claim of the plaintiff and also with regard to counter claim made by the defendant and when the formal expression was made in respect of those independent claims by the parties, the appellant ought to have filed a separate appeal against the decree, which it has suffered and also for the rejection of the counter claim made by the Court below since both are independent claims and the same has been adjudicated. Hence, I answer point No.3 in the affirmative that the single appeal is not maintainable. 48. No doubt, in the composite appeal, they have challenged the decree as well as the rejection of the counter claim decree. However, learned counsel restricted his arguments in respect of the issue of the counter claim. In view of answering Point No.3 in the affirmative, the grounds urged in the appeal memo with regard to decree is concerned would be redundant. Hence this Court has to consider point No.1. Accordingly, the point No.2 does not survive for consideration. 49. Point No.1:- It is the contention of the defendant in this appeal that the Court below has committed an error in rejecting the counter claim on the ground that same is time barred. The defendant did not seek the counter claim when the earlier suit was filed before the Kerala Court contending that since the issue with regard to jurisdiction was raised, he kept quiet. Whether the Kerala Court has got jurisdiction or not does not matter to make the counter claim. However, the counter claim has to be filed within three years. No doubt, it is settled law that the counter claim may be filed even after filing of the written statement, but in the earlier suit, the defendant did not make any counter claim and the same was disposed of on merits and subsequently the matter was transferred to City Civil Court, Bengaluru, based on the order passed by the District Court in AS 203/2003 and as 66/04. The Court below, considering the fact that the transaction had taken place in the year 1998 and also suit was filed in the year 2000 so also taking into account, the counter claim was made in the year 2006, comes to the conclusion that claim of the defendant i.e., counter claim is barred by limitation. Hence, I do not find any error committed by the Court below in rejecting the counter claim as the defendant had not made any claim within three years from the date of receipt of the suit summons and claimed the counter claim on 19.4.2006. Having considered the limitation and also transaction being taken place in the year 1998 and subsequent claim in 2006, no error has been committed by the Trial Court. Apart from the merits, it is also the contention of the defendant before the Trial Court that substandard materials were supplied by the plaintiff. It is also not in dispute that defendant has made use of the material supplied by the plaintiff and did not return the goods alleged to be the substandard materials. When such being the case and also not returned the goods of alleged substandard materials, the defendant is not entitled for the counter claim on merits also. Hence, I do not find any merit in the Appeal. 50. In view of the discussions made above, I pass the following:- ORDER The appeal is dismissed.
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