IJM Corporation Berhadv.M/s Lakshmi Sai Constructions Company & Anr

Supreme Court Holds Counterclaim Cannot Be Revived After Trial Concludes

Case Snapshot

Case Name: IJM Corporation Berhad v. M/s Lakshmi Sai Constructions Company & Anr.

Citation: 2026 INSC 777

Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran

Date of Judgment: July 28, 2026

Area of Law: Civil Procedure, Court Fees, Counterclaims

The Judgment in One Line

A counterclaim omitted for four years and not on record cannot be revived after trial concludes, even under Section 149 CPC.

Why This Judgment Matters

This judgment clarifies the limits of Section 149 of the Civil Procedure Code. While Section 149 allows courts to permit payment of court fees at any stage, it does not allow a party to belatedly bring a counterclaim on record after trial has concluded. The Court distinguished A. Nawab John v. VN Subramaniam, holding that Section 149 applies to curing court fee defects on documents already on record, not to adding new claims after the evidentiary stage. The decision reinforces that defendants cannot spring a counterclaim on plaintiffs after the trial is over, and that Order VI Rule 17's strict proviso applies.

Background

The defendant filed a written statement on October 13, 2015, and raised a counterclaim. However, the Court returned the document on November 2, 2015, with a direction to separately show the counterclaim. The defendant resubmitted the written statement on March 29, 2016, but requested the Court to accept only the written statement since they were unable to pay the court fees. The Court took the written statement on record but did not take the counterclaim on record.

Four years later, on March 5, 2020—after the plaintiff's evidence was closed on July 24, 2019—the defendant filed an application seeking permission to deposit court fees for the counterclaim. The Trial Court allowed the application on the same day without affording the plaintiff an opportunity to file a counter. The High Court affirmed the order. The plaintiff appealed to the Supreme Court.

Issues Before the Court

1. Whether Section 149 of the CPC permits a defendant to pay court fees on a counterclaim after the trial has concluded.

2. Whether the Trial Court erred in allowing the application without giving the plaintiff an opportunity to file a counter.

3. Whether the defendant could be permitted to revive a counterclaim that was never taken on record for four years.

What Did the Supreme Court Hold?

The Supreme Court allowed the appeal and set aside the orders of the courts below. The Court's reasoning was clear and anchored in procedural principles:

No Counterclaim Was on Record: The Court held that when the defendant resubmitted the written statement on March 29, 2016, they expressly requested the Court to take only the written statement on record since they could not pay the court fees. The Court's order explicitly accepted only the written statement. The counterclaim, therefore, never existed on record.

Section 149 Does Not Cure This Defect: While Section 149 allows courts to permit payment of court fees at any stage, it applies to documents that are already on record but have deficient court fees. Here, the counterclaim was never on record. Section 149 cannot be used to bring a non-existent claim into the record at a belated stage.

A. Nawab John Distinguished: The Court distinguished A. Nawab John, which dealt with a case where a plaintiff was called upon to pay court fees on a plaint already on record. That case does not permit a defendant to belatedly bring a counterclaim on record after the trial has concluded.

Trial Had Concluded: The plaintiff's evidence was closed on July 24, 2019, and PW1's evidence was closed on January 29, 2020. The application seeking permission to pay court fees was filed on March 5, 2020—after the trial was virtually concluded. The plaintiff would not have adduced evidence to controvert a counterclaim that was not on record.

Order VI Rule 17 Restriction Applies: An amendment to incorporate a counterclaim after trial commenced would be restricted by the proviso to Order VI Rule 17, which permits amendments after trial only where the party, despite due diligence, was prevented from raising the plea earlier. No such diligence was shown.

No Opportunity to File Counter: The Trial Court disposed of the application on the same day without giving the plaintiff a reasonable opportunity to file a counter. This was procedurally unfair.

Key Legal Principles

1. Counterclaim must be on record — merely mentioning it in the written statement is insufficient; it must be formally taken on record with court fees.

2. Section 149 has limits — it permits curing court fee defects on documents already on record, not adding new claims after trial.

3. Trial stage amendments are restricted — after trial commences, amendments are allowed only where due diligence is shown under Order VI Rule 17 proviso.

4. Plaintiff must have opportunity to respond — a counterclaim cannot be introduced after the plaintiff's evidence is closed without prejudicing the plaintiff.

5. Delay of four years is inexcusable — the defendant gave no explanation for the four-year delay in seeking to pay court fees.

6. Courts cannot spring surprise orders — disposing of applications without hearing the other side is procedurally infirm.

Important Precedents

A. Nawab John v. VN Subramaniam, (2012) 7 SCC 738

• Distinguished: Section 149 allows curing court fee defects on documents already on record; does not permit belated introduction of a non-existent counterclaim.

Practical Impact

For advocates: This judgment is crucial when advising defendants on counterclaims. A counterclaim must be properly pleaded and court fees paid when the written statement is filed. Merely mentioning a counterclaim and seeking time to pay court fees is insufficient. Defendants cannot wait until after the trial concludes to bring a counterclaim on record.

For future litigation: Courts will now be stricter in permitting belated counterclaims. The proviso to Order VI Rule 17 will be applied strictly, and Section 149 will not be used as a backdoor to introduce new claims after the evidentiary stage.

May be cited: In any case where a defendant seeks to belatedly pay court fees on a counterclaim, particularly where the trial has concluded or where the counterclaim was never on record.

Lawcurb Quick Insight

The Court's distinction between "curing a defect" and "bringing a claim into existence" is crucial. Section 149 allows the former; it cannot be invoked for the latter. The defendant's request for time to pay court fees effectively meant the counterclaim was abandoned—it cannot be revived years later.

Lawcurb Practice Note

When filing a written statement with a counterclaim, ensure court fees are paid simultaneously. If unable to pay immediately, file a formal application seeking time to pay court fees and ensure the counterclaim is taken on record, not merely deferred indefinitely.

Remember This Ratio

A counterclaim not on record cannot be revived after trial concludes; Section 149 cannot bring non-existent claims into existence.

Exam Lens

Q: What is the scope of Section 149 of the CPC, and what are its limitations? A: Section 149 allows courts to permit payment of court fees at any stage for documents on which court fees are required. However, it applies only to documents already on record with deficient fees. It cannot be used to belatedly bring a new claim on record after trial has concluded.

Q: What are the restrictions on amendments after trial commences under Order VI Rule 17? A: The proviso permits amendments after trial only where the party, despite due diligence, was prevented from raising the plea earlier. Mere inability to pay court fees does not constitute due diligence.

Q: Can a defendant be permitted to pay court fees on a counterclaim four years after filing the written statement? A: No, particularly where the counterclaim was never taken on record and the trial has concluded. The defendant should have sought permission to pay court fees promptly or ensured the counterclaim was on record.

Final Outcome

• Appeal allowed — the Supreme Court set aside the Trial Court's order and the High Court's affirmation.

• Counterclaim rejected — the defendant is not permitted to belatedly pay court fees on the counterclaim.

• Suit to proceed — the suit shall be adjudicated without the counterclaim.

• No costs — pending applications disposed of.

Lawcurb Verdict

This judgment reinforces procedural discipline in civil litigation. By refusing to permit a counterclaim to be revived after four years of inaction and after the trial had concluded, the Court has protected plaintiffs from being ambushed by belated claims. The distinction between curing a court fee defect and introducing a new claim is crucial. A timely reminder that procedural rules exist to ensure fairness and cannot be circumvented by invoking Section 149 as a magic wand.

This report is prepared by Lawcurb for educational and informational purposes only. It is a concise summary of the judgment and should not be construed as legal advice. Readers are encouraged to refer to the original judgment before relying on any legal proposition.