The Bombay High Court at Goa has set aside a trial court order excluding a counterclaim filed by defendants in a property dispute, holding that the counterclaim arose from the same transaction forming the basis of the suit and was therefore maintainable.
Justice Dr. Neela Gokhale allowed the writ petition challenging the Civil Judge Senior Division’s order dated 12 July 2023, which had excluded their counterclaim in Special Civil Suit under Order VIII Rule 6C of the Code of Civil Procedure.
The dispute arose from an agreement dated 5 December 2017 between the petitioners and the respondent for the management of property in Candolim, Goa. Under the arrangement, the petitioners were to construct wooden cottage structures on the property to operate a hotel or guest house, while the respondent was to manage the operations.
Due to delays in constructing the cottages, the parties agreed that the respondent would temporarily operate five rooms located in the petitioners’ residential house as a guest house. The respondent subsequently began running the establishment under the name “Hotel Aljana.” Later disputes arose when the petitioners allegedly failed to perform their obligations under an unregistered sale deed, prompting the respondent to file a suit seeking specific performance and related reliefs. In response, the petitioners filed a written statement along with a counterclaim seeking possession of the five rooms and recovery of amounts allegedly due under the arrangement.
The trial court excluded the counterclaim on the ground that it related to property different from the suit property. However, the High Court found that the arrangement regarding the five rooms, the management agreement, and the alleged sale transaction formed part of a single continuous transaction between the parties. Referring to Order VIII Rule 6A of the CPC, the Court noted that the law permits a defendant to raise a counterclaim based on any cause of action against the plaintiff before filing the defence.
Accordingly, the High Court quashed the trial court’s order and directed that the counterclaim filed by the petitioners be taken on record in its present form and the suit proceed to trial.
Appearances
Petitioners: Mr. Abhijeet Kamat, Advocate.
Respondent: Mr. Shivan Desai with Ms. Maria Viegas, Advocates.
