Rule 6A to 6G of Order 8 deals with counter-claim. It is a claim made by the defendant in a suit against the plaintiff. It is a claim independent of and separable from the plaintiff’s claim which can be enforced by a cross-section. Counter-claim can be set up in respect of action accruing to the defendant either before or after the filing of the suit but before the defendant has delivered his defense or before the time fixed for the delivery of his defense has expired.

Such a claim should not exceed the pecuniary limits of the jurisdiction of the concerned court. The counterclaim is to be treated as a plain and the plaintiff can file a written statement in answer to it. Counter-claim can be filed after the filing of a written statement.

Who may file a counterclaim?

Normally, it is the defendant who may file a counterclaim against the plaintiff. But incidentally and along with the plaintiff, the defendant may also claim relief against the co-defendants in the suit. 

When counterclaim may be set up?

A counterclaim may be set up by a defendant against a plaintiff in respect of the cause of action accruing either before or after filing of the suit, provided such claim is not barred by limitation.

Effect of counterclaim: Such counterclaim has the effect of a cross-suit and the court can pronounce a final judgment both on the original claim and the counterclaim. The counterclaim of the defendant will be treated as a plaint and the plaintiff has a right to file a written statement in answer to the counterclaim of the defendant.

The effect of the counterclaim is that even if the suit of the plaintiff is stayed, discontinued, dismissed, or withdrawn, the counterclaim will be decided on merits and the defendant will have a right to get a decree for a counterclaim as claimed in the written statement. If the plaintiff does not file any reply to the counterclaim made by the defendant, the court may pronounce the judgment against the plaintiff in relation to the counterclaim made against him or make such order in relation to the counterclaim as it thinks fit.268 The counterclaim shall be treated as a plaint and will be governed by the rules applicable to plaints. Similarly, a reply filed in answer to a counterclaim shall be treated as a written statement and governed by rules applicable to written statements.

Set Off & Counter Claim

The distinction between set-off and counter-claim.

• Set-off is a statutory defense to a plaintiff’s action, whereas a counterclaim is substantially a cross-action.
   
• Set-off must be for an ascertained sum or must arise out of the same transaction as the plaintiff’s claim. A counterclaim need not arise out of the same transaction.
   
• Set-off is a statutory ground of defense and has to be pleaded in the written statement. It can be used as a shield and not as a sword. Counterclaim, on the other hand, does not afford any defense to the plaintiff’s claim. It is a weapon of offense that enables the defendant to enforce his claim against the plaintiff as effectively as in an independent action. It is a sort of cross-action.
   
• If the statute of limitation is pleaded to a defense of set-off, the plaintiff in order to establish his plea has to prove that set-off was barred when the plaintiff commenced the action. It is not enough to prove that it was barred at the time when it was pleaded. In the case of a counterclaim, it is enough for the plaintiff to prove that the counterclaim was barred when it was pleaded.
   
• An equitable set-off is a claim by the defendant in defense, which generally cannot exceed the plaintiff’s claim. A counter-claim the defendant may, however, exceed the plaintiff’s claim, being in the nature of the cross action. Under the provision rule 6-F of Order 6, if in any suit a set-off or counterclaim is established as a defense against the plaintiff’s claim and any balance is found due to the defendant as the case may be the court may give judgment to the party entitled to such balance.