Commercial recovery suits rarely arrive in a vacuum. The buyer sued for an unpaid invoice usually has its own grievances — short supply, defective goods, delayed delivery, debit notes. The Code of Civil Procedure gives the defendant two instruments to bring those grievances into the same courtroom: set-off under Order VIII Rule 6 and the counterclaim under Order VIII Rules 6A to 6G. Used well, they convert a defence into an offensive; used carelessly, they are struck down on court fees, limitation or timing.
Two instruments, two characters
Order VIII Rule 6 permits a defendant in a suit for recovery of money to claim a set-off: an ascertained sum of money, legally recoverable from the plaintiff, where both parties fill the same character as they fill in the suit, and within the pecuniary limits of the court. The written statement pleading set-off has the effect of a plaint in a cross-suit, but the set-off itself works as a defence — it extinguishes or reduces the plaintiff’s claim.
Alongside the codified “legal” set-off, courts recognise an equitable set-off for claims that are not ascertained sums but arise out of the same transaction or a connected series of transactions — the classic example being a claim for damages for defective supply raised against a claim for the price of that very supply. Equitable set-off is discretionary, not demandable as of right, and the connection between the cross-demands is its foundation.
The counterclaim under Rule 6A is a different creature altogether: a cross-suit prosecuted inside the plaintiff’s suit. It need not be limited to money, need not arise from the same transaction, and can exceed the plaintiff’s claim — subject to the pecuniary jurisdiction of the court.
Ascertained sum; same character; a shield that reduces or extinguishes the claim; falls with the suit.
Any cause of action against the plaintiff; a sword that can end in an independent decree; survives withdrawal or dismissal of the suit.
The timing discipline
Rule 6A fixes the window: the cause of action for the counterclaim may accrue before or after the filing of the suit, but it must accrue before the defendant has delivered the defence or before the time limited for delivering it has expired. In commercial suits this dovetails with the strict written-statement regime — the defence must come within thirty days, with any extension capped at one hundred and twenty days from service of summons, after which the right to file stands forfeited. A defendant who sits on its cross-claims through that window will struggle to introduce them later, and courts scrutinise belated counterclaims for prejudice to the plaintiff and for attempts to derail a trial already framed.
The commercial-court overlay
In a suit governed by the Commercial Courts Act, 2015, the counterclaim lives under the same discipline as the plaint it answers. Pleadings must carry the Statement of Truth; admission and denial of documents must be specific; costs follow conduct; and the counterclaim, like the claim, is exposed to summary judgment — either side may contend that the other’s claim has no real prospect of success. A counterclaim inserted only to complicate a clean invoice claim can therefore be disposed of summarily, with costs; equally, a genuine counterclaim can defeat the plaintiff’s own summary-judgment application by showing the dispute is triable.
Counterclaim or separate suit?
A drafting checklist for the defendant
Plead the counterclaim specifically and separately from the defence, with its own cause-of-action paragraphs, valuation and relief clause.
Pay ad valorem court fees on the counterclaim as on a plaint; annex the documents relied on and disclose them as the commercial-court rules require.
Verify with a Statement of Truth; an evasive or false verification carries consequences in costs and credibility.
Where the cross-demand is an ascertained sum from the same dealings, plead set-off in the alternative, so the shield remains even if the sword fails.
Diarise limitation for the cross-claim independently of the suit — and move early, within the written-statement window.
Frequently Asked Questions
What is the difference between set-off and a counterclaim?
Set-off under Order VIII Rule 6 is a defence: an ascertained, legally recoverable sum claimed against the plaintiff's demand, operating as a shield up to the value of the claim. A counterclaim under Rule 6A is a cross-suit: an independent claim for any relief, which survives even if the plaintiff's suit is dismissed or withdrawn, and can result in a decree in the defendant's favour.
Does a counterclaim need court fees?
Yes. The counterclaim is treated as a plaint and governed by the rules applicable to plaints, so ad valorem court fees must be paid on the amount or value claimed. A counterclaim filed without proper fees invites objections and delay, and in a commercial suit the valuation also matters for the specified-value threshold.
Can a counterclaim be filed at any stage?
The cause of action for a counterclaim may arise before or after the suit is filed, but it must accrue before the defendant has delivered the defence or before the time for delivering it has expired. Courts are reluctant to entertain counterclaims introduced late, particularly in commercial suits where the written-statement timelines are strictly enforced.
Does a counterclaim require pre-institution mediation under Section 12A?
Section 12A of the Commercial Courts Act applies to the institution of suits that do not contemplate urgent interim relief. A counterclaim is raised within a pending suit, so the defendant does not go through the pre-institution mediation process that a fresh suit on the same claim would ordinarily require — one practical reason parties sometimes prefer the counterclaim route.