IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD MONDAY, THE TWENTY FIFTH DAY OF APRIL TWO THOUSAND AND ELEVEN Present HON’BLE SRI JUSTICE G. BHAVANI PRASAD C.C.C.A. No.29 of 1993 Between: M/s. Bharat Sanchar Nigam Limited .. Appellant AND M/s. Donepudi Nageswara Rao Contractors Company .. Respondent The Court made the following: HON’BLE SRI JUSTICE G. BHAVANI PRASAD C.C.C.A. No.29 of 1993 JUDGMENT: This appeal is directed against the judgment and decree in O.S.No.403 of 1987, on the file of the V Additional Judge, City Civil Court, Hyderabad, dated 13.07.1992. 2. The respondent herein filed the suit for recovery of Rs.1,42,000/- with interest thereon at 12% per annum from 13.08.1983 to 11.02.1987 with future interest and costs. The respondent herein claimed that the Contractor’s Company submitted tenders in pursuance of the advertisement by the Tele Communications Department of the Government of India for the transport work of Tele Communication material on all India basis for the year 1981-82. The tender of the respondent herein was stated to have been accepted and an agreement was stated to have been entered into on 19.06.1981 under which the respondent herein furnished security of Rs.1,00,000/- on 19.05.1981. The contract work was claimed to have been satisfactorily carried out and the bills were stated to have been paid. Further work was stated to have been given to the respondent herein for the year 1982-83 also with the same deposit of Rs.1,00,000/- made on 19.05.1981 being available for that year. The respondent herein worked to the satisfaction of the department and the bills were regularly paid during that period also. The deposited amount has to be released from the pledge and returned, but the department served copy of a letter, date 28.10.1983, referring to the pendency of a recovery case about which there was no notice. The department did not give the particulars of the recovery case in spite of request and, hence, the suit for recovery of deposited amount. 3. The defendant department contested the claim admitting the contract and the payment of bills and stated that the respondent herein has to be paid on the basis of dead weight of the material and the shortest distance of travel on existing motorable road, but the respondent herein claimed bills on the lorry load basis contrary to the terms of the contract which were unfortunately paid. An excess payment of Rs.3,38,890.61 Ps. appeared to have been made as per Internal Check Report and a notice was issued to the respondent herein on 10.02.1984 demanding repayment of the excess amount and it was informed that the security deposit of Rs.1,00,000/- will be refunded on clearing the excess payments. The respondent herein filed the suit without waiting for the result of the recovery case and without taking recourse to arbitration as per Clause-9 of the Agreement. Hence, the department/appellant herein desired the suit to be dismissed. The department also made a counter claim for Rs.3,38,890.61 Ps. paying court fee and the department requested for a decree for the amount of counter claim with future interest at 18% per annum and costs. 4. The trial Court framed the following issues for trial. “1. Whether the plaintiff is entitled for a mandatory direction to the defendant as prayed for? 2. Whether the plaintiff is entitled for a decree for past interest of Rs.42,000/- and future interest at 12% P.A. on Rs.1,42,000/- as prayed for? 3. Whether the 1st defendant is entitled for a counter-claim of Rs.3,38,890.61 Ps. with future interest thereon at 18% P.A. as prayed for? 4. Whether the suit is liable to be dismissed, as the defendant did not take recourse to the arbitration as provided under Clause-9 of the contract agreement? 5. To what relief?” 5. During trial, P.W.1 and D.W.1 were examined and Exs.A-1 to A-8 and B-1 to B-4 were marked. 6. The trial Court rendered the impugned judgment firstly holding that though the respondent herein resorted to the suit without taking recourse to the arbitration clause under Clause-9 of the Agreement between the parties, as the department was silent till the written statement and as the department itself put forth its counter claim in the suit, it has to be inferred that both parties did not invoke the arbitration clause. The trial Court also found that the contract work and payment of bills to the respondent herein were not disputed and the alleged excess payment is alone in dispute. The trial Court referred to Ex.A-4-Letter, dated 10.02.1983, and Ex.A-8-Amendments to the Agreement, dated 29.04.1982, due to which the respondent herein can claim full lorry load charges irrespective of the weight of the stocks actually carried. The trial Court referred to Clause-17 of the Agreement which was amended on 29.04.1982 through Ex.A-8-Amendments in Ex.B-1-Agreement, dated 19.05.1981, and rejected the claim of the Department about payment of excess amount. Consequently, the trial Court decreed the suit with costs and dismissed the counter claim without costs. 7. The Tele Communications Department/the defendant preferred the present appeal contending that over payment was made to the respondent herein by mistake which came to light through the Audit Check Report and the trial Court went wrong in giving effect to Ex.A-8-Amendments to the Agreement, dated 29.04.1982 towards the period of dispute. The amendment was not relatable to the period of 1981-82 for which period, the counter claim was made and the trial Court did not go into the relevant bills during that contract period. The plaintiff/respondent herein did not even file a rejoinder to the counter claim and the suit ought to have been dismissed in limini due to violation of the arbitration clause. Therefore, the appellant desired the impugned judgment and decree to be reversed. 8. As per orders in C.C.C.A.M.P.No.108 of 2011, in the place of the Tele Communications Department of the Government of India, Bharat Sanchar Nigam Limited has been substituted as the appellant being the successor in interest to the department. 9. Sri K. Mohan, learned standing counsel for the appellant and Sri J. Suresh Babu, learned counsel for the respondent herein are heard at length. 10. The points that arise for consideration are: 1. Whether the counter claim is within limitation? 2. Whether a composite appeal in respect of the suit claim and counter claim is tenable? 3. Whether the merits of the suit claim and the counter claim need to be reassessed herein or by the trial Court? 4. To what relief? 10. POINT NO.1: The appellant/defendant was the Government of India Tele Communications Department succeeded by the Bharat Sanchar Nigam Limited which is an undertaking of the Government of India. Article 112 of the Limitation Act, 1963, was relied on by Sri K. Mohan, learned standing counsel for the appellant, wherein any suit by or on behalf of the Central Government or any State Government including the Government of the State of Jammu and Kashmir was stated to be having a period of limitation of 30 years since the commencement of running of the period of limitation. The learned standing counsel also relied on PARAS RAM VISHINDAS RUPANI VS. BHARAT SANCHAR NIGAM LTD. (BSNL), HYDERABAD[1], wherein a learned Judge of this Court has held that Bharat Sanchar Nigam Limited, being a Central Government Company, is entitled to the benefit of Article 112 of the Limitation Act, 1963. The said precedent from this Court is not shown to be not in any manner holding the field and if so, any question of limitation against the appellant/defendant in respect of the counter claim does not even remotely arise as the counter claim relating to the period 1981-82 was made during the pendency of the suit filed in 1987. 11. POINT NO.2: Sri J. Suresh Babu, learned counsel for the respondent/plaintiff firstly referred to T. K. V. S. VIDYAPOORNACHARY SONS AND OTHERS VS. M. R. KRISHNAMACHARY[2], wherein the counter claim made by the defendants was dismissed for default and their attempt to have the counter claim restored did not succeed. It was held that in whatever manner the Court disposes of a counter claim whether on merits or ex parte, it cannot be separated from the disposal of the main claim, but must be considered as being one with it. By implication, Order VIII Rule 6C of the Code of Civil Procedure, 1908 (for short, ‘CPC’), recorded the suit claim and counter claim to be constituting a unified proceeding and it is only when the exceptional power to refer the defendant to a separate suit was exercised, the homogeneity of the suit claim and the counter claim is disturbed. 12. I n NHERAPOYIL N. P. MOIDEEN VS. K. NARAYANAN NAIR[3], no separate appeal against the finding against the counter claim was filed and no court fee was paid on the amount of counter claim. It was held that if there was non- payment of court fee on the counter claim in the appeal, the Appellate Court is not in a position to consider the question of counter claim and the rejection of the counter claim by the trial Court has to be considered as final. The decisions holding that in such a situation, the principle of res judicata applies are referred to. 13. Sri J. Suresh Babu, learned counsel for the respondent also relied on UNION OF INDIA VS. LALTHANMAWIA[4] in which it was opined that discretion has been given to the Court either to pronounce the judgment immediately for non-submission of reply to the counter claim or to pass an appropriate order in view of the non-submission of the reply concerning the facts pleaded, etc. The trial Court was found therein to have found the counter claim to be not fit to be upheld against the plaintiff therein even without the submission of a reply. However, the Court made it clear that it is a matter of Court satisfaction and only on being satisfied that there is no fact which need to be proved on account of deemed admission, the Court can conveniently pass a judgment against the defendant who has not filed the written statement. The same rule is applicable as in the case of the suit in respect of the counter claim also. 14. The learned counsel also relied on BANARSI AND OTHERS VS. RAM PHAL[5], wherein the scope and object of Order XLI Rules 33 and 34 CPC was dealt with by the Apex Court. The Supreme Court noted that in a case where there are two reliefs prayed for and one is refused while the other one is granted, and the former is not inseparably connected with or necessarily depending on the other, in an appeal against the latter, the former relief cannot be granted in favour of the respondent by the Appellate Court in exercise of the power under Order XLI Rule 33 CPC. Referring to the precedents on the aspect, the Apex Court concluded that a distinction between the respondent’s right to challenge an adverse finding without filing any appeal or cross-objection and the respondent seeking to challenge a part of the decree itself without filing the cross objection has to be noted and the latter is not permissible. 15. As against these precedents, Sri K. Mohan, learned standing counsel for the appellant referred to RAVI KUMAR VS. JULMIDEVI[6], wherein the object of Order XLI Rule 33 CPC was dealt with by the Apex Court and it was stated that the said rule confers wide powers on the Appellate Court to do complete justice between the parties and the first Appellate Court can come to a finding different from the one which has been arrived at by the trial Court especially in a case where appreciation of evidence by the trial Court is not proper. 16. In this case also, as against the suit claim of Rs.1,42,000/- with future interest and costs, there was the counter claim of the appellant for Rs.3,38,890.61 Ps. The appeal was valued by the appellant on the total of the amount due under the decree granted in favour of the plaintiff and the amount of counter claim rejected by the trial Court and on the total value of both the amounts, the court fee was paid. Though technically no two separate appeals have been filed in respect of the suit claim and the counter claim, irrespective of any technicalities, the appellant approached this Court challenging both the reliefs in respect of the suit claim and counter claim and paying the necessary court fee on the same. As held in VIDYAPOORNACHARY SONS’ case (supra 2), it would be an unnecessary refinement to split the decree into two and in whatever manner a counter claim is disposed of, it must be considered as one with the suit claim. If it were so, any technicalities need not stand in the way of considering the impugned judgment and decree both in respect of the suit claim and the counter claim in this appeal. The present case is not one like the case in NHERAPOYIL N. P. MOIDEEN (supra 3), wherein court fee was not paid on the counter claim in the appeal and as pointed out in UNION OF INDIA’s case (supra 4), it is in the judicial discretion of the Court depending on the facts and circumstances of each case as to the manner in which the suit claim and counter claim have to be dealt with and disposed of even in the absence of any reply to the counter claim. In the present case, it is admitted that the respondent herein/the plaintiff did not file any reply to the counter claim. The restrictions on exercise of the power under Order XLI Rule 33 CPC in situations like those referred to BANARSI AND OTHER’s case (supra 5) do not arise herein as the reliefs herein in respect of the suit claim and the counter claim are inseparably connected and necessarily depending on each other and the present case is one where to do complete justice between the parties, the powers under Order XLI Rule 33 CPC should be taken recourse to as held in RAVI KUMAR’s case (supra 6). 17. While once again, it should be reiterated that the appellant paid the court fee in the appeal on the entire amount due under the decree to the respondent herein as well as the entire value of the counter claim, thus, invoking adjudication of the entire controversy in this appeal, the specific contention of the appellant is that the excess payments towards which the counter claim was made related to the period 1981-82 under a different Agreement whereas Ex.A-8-Amendments to the Agreement, dated 29.04.1982, between the parties was in respect of the period 1982-83. Any Amendment to the Agreement for the subsequent year could not have been related back to the Agreement for the earlier year, the two being independent, distinct and separate Agreements and periods. While this is the case of the appellant herein, there was no reply to the counter claim by the respondent herein in the suit and the impugned judgment does not even show that the respondent herein was called upon to file any response to the counter claim which it failed to do. The provisions of Order VIII Rules 6A to 6G CPC can be usefully referred to, which make any counter claim to have the same effect as a cross suit and obligate the plaintiff to file a written statement in answer to the counter claim within the period to be fixed by the Court. The counter claim shall be treated as a plaint and the defence of the plaintiff shall be treated as a written statement and even if the suit were to be discontinued or dismissed for any other reason, the counter claim may have to be proceeded with. Order VIII Rule 6E CPC in particular states that if the plaintiff makes default in putting any reply to the counter claim made by the defendant, the Court may pronounce judgment against the plaintiff in relation to the counter claim made against him or make such order in relation to the counter claim as it deems fit. 18. The impugned judgment, referring to the rival contentions and evidence, straight away relied on Ex.A-8-Amendments to Ex.B-1-Agreement, dated 19.05.1981, without going into these details raised by the appellant and while the security deposit of Rs.1,00,000/- being with the appellant is not in dispute, the liability of the appellant to refund or return the same will depend on adjudication of the counter claim made by the appellant. 19. As the impugned judgment and decree show that the trial Court did not take any steps on the counter claim made by the defendant in accordance with Order VIII Rules 6A to 6G CPC and as there was no adjudication on the questions raised by the counter claim, more so, about the applicability or otherwise of Ex.A-8-Amendments to Ex.B-1-Agreement, dated 19.05.1981, the quantum and period of the counter claim, the impugned judgment and decree have to be set aside and the matter has to be remitted back to the trial Court for a decision on merits on the counter claim, while noting that the entire judgment and decree have to be set aside for the purpose as it is the decision on the counter claim that will determine the right of the appellant herein to adjust the security deposit towards any counter claim or the right of the respondent herein for refund of the security deposit with appropriate interest and costs. This point is answered accordingly. 20. POINT NO.3: As there was no written statement filed by the respondent herein in answer to the counter claim, it will be in the interest of justice for the trial Court to receive such a written statement, frame appropriate issues on the counter claim and give an opportunity to both parties to adduce any further oral or documentary evidence they may desire to produce on the issue before a decision on merits. 21. POINT NO.4: In the result, the judgment and decree in O.S.No.403 of 1987, on the file of the V Additional Judge, City Civil Court, Hyderabad, dated 13.07.1992, are set aside and the said O.S.No.403 of 1987 is remanded to the trial Court for a fresh determination on merits in accordance with law on all the questions in controversy between the parties to the suit after giving a reasonable opportunity to the plaintiff therein to file a written statement against the counter claim and after giving a further reasonable opportunity to both parties to adduce any further oral or documentary evidence which they may desire to produce after the filing of such written statement in answer to the counter claim and after framing appropriate issues for determination of the counter claim. The trial Court shall make every endeavour to dispose of the suit, accordingly, as expeditiously as possible, preferably within a period of six (6) months. 22. The Appeal is ordered, accordingly, without costs. _____________________ G. BHAVANI PRASAD, J Date: 25th April, 2011 KL HON’BLE SRI JUSTICE G. BHAVANI PRASAD C.C.C.A. No.29 of 1993 Date: 25th April, 2011 KL [1] 2006 (3) ALD 250 [2] AIR 1983 MADRAS 291 [3] AIR 1997 KERALA 318 [4] 2008 GAULT SUPP 612 [5] (2003) 9 Supreme Court Cases 606 [6] (2010) 4 Supreme Court Cases 476