Recently, an issue which initially seems to be narrow gained significance during arguments before the Hon’ble High Court of Delhi in a commercial suit titled M/s Hanuman Rice Traders v. M/s R. J. Chatha Rice Mill Amritsar & Ors, wherein the Court was called to examine whether a Defendant, while preferring a counter claim under Order VIII Rule 6A of the Code of Civil Procedure, 1908 (“CPC”), can implead parties, other than original parties/plaintiff in the suit. The question arose in a Chamber Appeal filed by the Plaintiffs, challenging an order passed by the Learned Joint Registrar, whereby summons had been issued to certain third parties in a counter claim initiated by the Defendants. The issue, being a very untouched proposition, raised important concerns regarding the scope and maintainability of counter claims when directed against persons who were not a party in the original Suit/ proceedings.

The fact of the matter was that the plaintiff had instituted a suit for recovery of money, to which defendants 1 to 3 responded by filing a counterclaim. However, in addition to the plaintiff, they sought to implead defendants 4 to 8, who were not parties to the original suit. The justification offered for this impleadment was a prior settlement agreement, under which the defendants argued that parties 4 to 8 were necessary for the effective adjudication of the counter claim.

In support of their position, the defendants placed reliance on the judgment of the Kerala High Court in Punnakkal Suresh v. Saraswathi 2018 SCC OnLine Ker 3494, wherein it was held that there is no procedural bar preventing a defendant from impleading additional parties in a counter claim. The Kerala High Court observed that just as the plaintiff, being the master of the suit, may add or delete parties from the plaint, the defendant, when asserting a counter claim, assumes a similar position of control over the structure and scope of the counterclaim.

Per Contra, we on behalf of the plaintiff contended that a counter claim is inherently a counter to the plaintiff’s claim and must be confined to the parties to the original suit. A counterclaim directed against both the plaintiff and non-parties, it was argued, amounts in substance to an independent suit. In support of this contention, the plaintiff relied on the decisions in Satyender v. Saroj (2022) 17 SCC 154, Gastech Process Engineering (India) Pvt. Ltd. v. Saipem (2009) SCC OnLine Del 1476., and Nina Khanna & Ors. v. Narayan Parwal (2015) SCC OnLine Del 6413 where it was held that though a counter claim seeks to avoid the multiplicity of proceedings, it is not without constraints and can be made only against the plaintiff and not against persons who are strangers to the original action.

On a plain reading of Order VIII Rule 6 and Rule 6A of the Code of Civil Procedure, 1908, it is evident that both set-off and counter-claim are defensive mechanisms available exclusively against the Plaintiff’s claim and not against any other person who is not a party to the suit. Under Rule 6, a Defendant may claim set-off in respect of an ascertained sum of money legally recoverable from the Plaintiff, and both parties must fill the same character in the transaction. The provision is clear that the debt sought to be set-off must arise directly between the Plaintiff and the Defendant. In the same vein, Rule 6A allows the Defendant to set up a counter-claim, in addition to the right of set-off, for any right or claim in respect of a cause of action accruing against the Plaintiff, either before or after the institution of the suit, but before the filing of the written statement. The express language of sub-rule (1) of Rule 6A, which states “against the claim of the Plaintiff,” reinforces the statutory intent that such counter claim is not a tool to litigate against third parties or persons not arrayed in the suit. Further, the rule is intended to avoid multiplicity of proceedings by enabling the Court to adjudicate both claims within the same suit, but only as between the existing parties. Therefore, just as a set-off cannot be claimed against a person who is not the Plaintiff in the suit, a counter-claim, too, being in the nature of a cross-suit, must necessarily be confined to disputes between the Defendant and the Plaintiff only, and cannot be used to implead or claim relief against outsiders.

The Court placed significant reliance on Gastec (supra) to interpret the scope and nature of a counterclaim under Order VIII Rule 6A of the CPC. It underscored that sub-rule (1) of Rule 6A expressly refers to a cause of action “against the plaintiff,” thereby indicating a restricted scope for the assertion of counterclaims. Further, under sub-rule (3) of the said Rule 6A, the statutory right to respond to a counterclaim is conferred exclusively upon the plaintiff, reinforcing that a counterclaim must be solely against the plaintiff. On this basis, the Court concluded that any claim directed at persons who are not parties to the original suit cannot be entertained within the framework of a counterclaim. The Court also warned that permitting counterclaims against non-parties could lead to procedural abuse, enabling defendants to misuse the mechanism to delay adjudication and derail the efficient disposal of suits. Further, while reaffirming the said position in Satyender (supra), the Hon’ble Supreme Court held that the counter claim can be set up only against the claim of the Plaintiffs.

Hence, the Hon’ble High Court of Delhi while reaffirming the settled principle of law that a counter claim under Order VIII Rule 6A CPC is maintainable only against the plaintiff(s) in the suit, and not against persons who are not party to the suit, emphasized that allowing counter claims against non-parties would not only dilute the legislative intent behind Rule 6A, but this would have the potential of becoming a tool in the hands of the Defendants to delay the disposal of the Suit indefinitely. However, it is also understood that the defendant always has the liberty to maintain an independent suit against the other parties including the plaintiff.

This decision also marks a significant reaffirmation of procedural discipline in civil and commercial litigation which maintains the balance of rights between plaintiffs and defendants. It reinforces the principle that counter claims are not meant to substitute independent causes of action against non-parties and ensures that procedural safeguards are not diluted in the name of comprehensive adjudication.