Supreme Court says that a counter claim not on record cannot be pursued after the trial has concluded.

The Supreme Court has held that while courts have the authority under Section 149 of the Civil Procedure Code (CPC) to grant time for payment of court fees at any stage of a suit, this discretion cannot be used to allow a counter claim to be introduced or pursued when it was not effectively on record and the trial has already concluded without the opposite party getting an opportunity to contest it.

A Bench of Justices J B Pardiwala and K Vinod Chandran set aside an order allowing the respondent to pay court fees for a counter claim after the trial had already concluded.

Section 149 of the Civil Procedure Code (CPC) allows a court to let a party pay a missing or short court fee at any stage of a case.

In the present case, the respondent, M/s Lakshmi Sai Constructions Company, had relied on Section 149 of the CPC and the Supreme Court's judgment in A Nawab John & Ors Vs V N Subramaniyam (2012).

The Bench noted that the Court had, in that judgment, specifically dealt with Section 149 and held that when a plaint is presented without payment of the appropriate court fees, the court has the authority to direct the plaintiff to pay the required fees within a stipulated time. Such authority can be exercised at any stage of the suit.

"No doubt, the defendant could have deposited the court fees, with leave of the court at any stage, if the counter claim was available on record," the Bench said.

Why did the Supreme Court reject the counter claim in this case?

Court noted that when the defendant resubmitted the written statement, it sought only to have the written statement taken on record, stating that it did not have the financial capacity to pay the court fees.

This was specifically recorded in the order passed by the Court. Therefore, there was no counter claim on record, even though one may have been mentioned in the written statement.

The bench said that ideally, the defendant should have filed an application either to raise a counter claim or to have the counter claim already mentioned in the written statement accepted and then sought permission to pay the court fees.

However, even this course could not have been adopted in the present case because the trial had virtually concluded.

The appellant, IJM Corporation Berhad, was aggrieved by the order affirming the trial court's decision permitting the defendant to pay court fees on the counter claim after a delay of four years and after the entire evidence in the suit had been closed.

Why did the timing of the counter claim matter?

The Bench noted that the plaintiff's evidence was closed on July 24, 2019, while the evidence of PW1 was closed on January 29, 2020. The application seeking permission to pay the court fees was filed on March 5, 2020.

"When the counter claim was not on record, the plaintiff necessarily would not have adduced evidence to controvert the same," the Bench said.

Court further observed that once the trial had concluded, amending the written statement to incorporate a counter claim would have been difficult.

Can a counter claim be added after the trial has started?

The Supreme Court said such an amendment would be restricted by Order VI Rule 17 of the CPC.

While the provision allows amendment of pleadings at any stage of the proceedings with the court's permission, its proviso restricts amendments after commencement of trial.

Such an amendment can be allowed only when the court is satisfied that, despite exercising due diligence, the party could not have raised the matter before the trial commenced.

"Order VI Rule 17 of the CPC would have restricted such amendment, since though Rule 17 provides for amendment of pleadings at any stage of the proceedings with leave of the court, the proviso permits such amendments after the trial has commenced, only in circumstances where the court comes to the conclusion that despite due diligence the party was prevented from raising the matter before commencement of the trial," the Bench said.

Court noted that the defendant had not pleaded any such ground. Its only explanation was a lack of financial capacity, which, the bench said, would in any event have to be pleaded and proved when an amendment is sought.

Since the trial itself had concluded, the Supreme Court found no reason to sustain the high court's order affirming the trial court's decision.

Allowing the appeal, the Bench directed that the suit would be adjudicated without the counter claim.

Case Title: IJM Corporation Berhad Vs M/s Lakshmi Sai Constructions Company and Anr

Bench: Justices J B Pardiwala and K Vinod Chandran

Date of Judgment: July 28, 2026

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