Are separate appeals required where suit and counterclaim are disposed of by a common judgment? Supreme Court Answers

Supreme Court: In an appeal challenging the High Court’s finding that 2 separate appeals ought to have been filed against a common judgment adjudicating a suit and counterclaim, the Division Bench of J.B. Pardiwala and K. Vinod Chandran*, JJ., held that a composite appeal can be filed against the suit and counterclaim, irrespective of whether 1 or 2 decrees are drawn up, provided separate grounds are raised against the decree in the suit and the decree in the counterclaim, and the appeal is valued as 2 separate appeals with court fees paid accordingly.

The Court further directed restoration of the first appeal in the present case and permitted the appellant to file a fresh memorandum with separate grounds and pay court fees for the additional appeal.

Also Read: Madras HC: Single appeal maintainable against common judgment | SCC Times

Background

The plaintiffs instituted a suit claiming half share in the property and seeking an injunction against interference. The defendants, in response, raised a counterclaim asserting ownership over the entire property.

The trial court decreed the suit claim and dismissed the counterclaim. The defendants thereafter filed a single appeal challenging the decision.

In the first appeal, the appellate court dismissed the suit and allowed the counterclaim. The matter then reached the High Court in a second appeal. The High Court held that the defendants’ single appeal was incompetent, relying on the Division Bench decision in Ramesh Chand v. Om Raj, 2022 SCC OnLine HP 2094. According to the High Court, since the trial court had decreed the suit and rejected the counterclaim, 2 separate appeals ought to have been filed. The High Court further held that, in view of the principles of waiver and estoppel, the single appeal was liable to be rejected.

Contentions

The defendants-appellants contended that only 1 decree had been drawn up by the trial court and, therefore, their appeal could not have been rejected for not filing separate appeals. Reliance was placed on Narhari v. Shanker, 1950 SCC 668, and Charan Singh v. Ram Saroop¹.

The plaintiffs-respondents, relying on Ramesh Chand and Premier Tyres Ltd. v. Kerala SRTC, 1993 Supp (2) SCC 146, contended that although there was only one decree, 2 separate appeals were required because both the suit and the counterclaim had been decided.

Issues

1. Whether there should be 2 appeals filed from the 2 decrees drawn up when a suit with a counterclaim is disposed of by a single judgment.

2. Whether in every such situation 2 decrees should be drawn up.

Analysis and Findings

At the outset, the Court examined the decisions relied upon by both sides on the question whether a single appeal could challenge the decree in the suit as well as the decree on the counterclaim.

The Court referred to Narhari, where, in a suit involving separate claims by 2 sets of defendants, 2 appeals had been filed. The Court noted that it had treated the 2 decrees as, in substance, one, since they arose from the same suit and from the judgment deciding the entire suit.

In Charan Singh, the trial court had dismissed the suit and allowed the counterclaim, against which only 1 appeal was filed. The Supreme Court held that 2 appeals were required but permitted the appellant to file a separate memorandum of appeal without another certified copy of the judgment, having regard to Order 41 Rule 1, Civil Procedure Code, 1908 (CPC) and the interests of justice.

The Court next referred to Girija v. Rajan, 2015 SCC OnLine Ker 3799, where the Kerala High Court considered whether a single appeal concerning dismissal of a counterclaim, without an appeal against the decree in the suit, was barred by res judicata. The Court noted the reliance placed there on Premier Tyres.

The Court further noted that the power under Order 41 Rule 33 CPC could not be invoked contrary to Section 11 CPC. It also referred to the finding that, under Order 8 Rule 6-A CPC, a counterclaim has the characteristics of a cross-suit and may be subject to the bar of res judicata if not properly challenged.

The Court then considered Shankar Masu Dokare v. Shobha Subhash Dokare, 2014 SCC OnLine Bom 1859, where the Bombay High Court, relying on Narhari, held that a suit and counterclaim constituted one proceeding and that a single appeal was sufficient. The Court also referred to the provisions of Order 41 Rule 1 and Order 20 Rule 19 CPC considered in that decision.

In Abdul Nazer v. Lakshmana Das, 2016 SCC OnLine Ker 41103, the Court noted that the Kerala High Court considered the counterclaim to have the same effect as a cross-suit and, referring to Orders 8 and 20 CPC, held that a single appeal was maintainable against the decrees passed in the suit and counterclaim. The decision in Girija was reversed by the Division Bench in Abdul Nazer.

The Court also referred to T.K.V.S. Vidyapoornachary v. M.R. Krishnamahary, 1982 SCC OnLine Mad 97, where the Madras High Court held that the Court was required to pronounce a single judgment on the original claim and counterclaim and treated them as a unified proceeding.

The Court then considered Ghanshyam Singh v. Narendra Singh², which had relied on Rajni Rani v. Khairati Lal, (2015) 2 SCC 682, to hold that a composite appeal against the suit and counterclaim was not maintainable. The Court expressly disagreed that Rajni Rani had laid down such a proposition.

Examining Rajni Rani, the Court noted that the Supreme Court had considered whether a revision could be entertained against dismissal of a counterclaim or whether the order was required to be challenged by appeal. It held that the counterclaim remains available for adjudication even if the suit is dismissed and emphasised that the scheme of a counterclaim is intended to avoid multiplicity and piecemeal adjudication.

The Court thereafter noted the divergent views in Gumai Singh v. Baburam³ and K. Kandasamy v. P. Natarajan, 2026 SCC OnLine Mad 14. While the former held that separate appeals were required against the suit and counterclaim, the latter held that a single appeal was maintainable against a common judgment in the suit and counterclaim.

Finally, the Court considered Ramesh Chand, which had been relied upon in the impugned judgment. The decision held that where the suit and counterclaim are disposed of by a common judgment, 2 appeals are required irrespective of whether separate decrees have been prepared. The appellants contended that this position was inconsistent with the same decision’s treatment of appeals arising from consolidated suits and separate suits decided by a common judgment.

Whether 2 appeals are required for a suit and counterclaim

The Court noted that the authorities disclosed a cleavage of opinion on whether separate appeals are required where a suit and counterclaim are disposed of by a common judgment. It also noted that the practice of drawing up decrees from such judgments differs across States.

The Court agreed with the interpretation of Order 8 Rules 6-A to 6-D CPC in Rajni Rani. It noted that Rule 6-A permits a defendant to raise a counterclaim, treats the counterclaim as a cross-suit and enables a common judgment on the suit claim and counterclaim. The plaintiff is also entitled to file a written statement in answer to the counterclaim.

The Court further agreed that Rule 6-C indicates that a counterclaim should be sufficiently connected with the suit claim to facilitate adjudication at the same trial. At the same time, Rule 6-D permits the counterclaim to proceed even if the suit is stayed, discontinued or dismissed. The Court observed that the latter aspect of Rajni Rani had been misinterpreted by two High Courts as requiring 2 appeals from a common judgment disposing of a suit and counterclaim.

Scope of the decision in Rajni Rani

The Court clarified that Rajni Rani was concerned with whether rejection of a counterclaim on the ground of being barred by Order 2 Rule 2 CPC was amenable to an appeal or a revision under Article 227 of the Constitution. The question whether 2 appeals were required from decrees concerning the suit and counterclaim did not arise in that case.

The Court nevertheless recognised that situations may arise where 2 decrees are drawn up. In such a situation, if an appeal against the decree relating to the counterclaim is pending and the suit is subsequently dismissed or allowed, another decree would arise which would also have to be subjected to an appeal.

Effect of Order 20 Rule 19 CPC

The Court considered Order 20 Rule 19 CPC, particularly sub-rule (2), which provides that a decree passed in a suit involving a set-off or counterclaim is subject to the same provisions as a decree in a suit where there is no counterclaim. The Court held that this provision makes the appellate provisions applicable to such a decree, but does not require 2 appeals or, by implication, prohibit a single appeal.

Counterclaim as a cross-suit and procedural rules

The Court then referred to Laxmidas Dayabhai Kabrawala v. Nanabhai Chunilal Kabrawala, 1963 SCC OnLine SC 128, where, even under the unamended CPC which did not contain an enabling provision for counterclaims, a counterclaim could be treated as a cross-suit so that the claim raised could be adjudicated. The Court noted that the same scheme was subsequently incorporated into the CPC through the 1976 Amendment permitting counterclaims.

The Court also referred to the principle, noticed in Abdul Nazer, that procedural rules are intended to facilitate the administration of justice and should not be construed rigidly where such construction would obstruct justice.

Appeal is against the decree

The Court then considered Section 96 and Order 41 Rule 1 CPC. It noted that an appeal lies from a decree and that the amendment to Order 41 Rule 1 permitting an appeal to be accompanied by the judgment was intended, among other things, to ensure that delay in drawing up a decree does not frustrate the appellate remedy and to avoid multiplicity of proceedings.

The Court further examined Order 20 Rule 6-A CPC, noting that a judgment may be used for purposes of appeal where the decree has not yet been drawn up. It observed that, following the amendment to Order 41 Rule 1, the relevant provision in Order 20 Rule 6-A has significance principally in relation to execution.

The Court also referred to the amendment of Order 20 Rule 6-A and the decision in Faqruddin v. Didde Mahadevappa, 2004 SCC OnLine AP 605, concerning a decree that did not reflect part of the relief granted in the judgment. The discussion emphasised the need for the decree to correspond with the judgment and noted the effect of the amendments facilitating appeals on the basis of the judgment.

Finally, in Lakshmi Ram Bhuyan v. Hari Prasad Bhuyan, (2003) 1 SCC 197, the Court noted the requirement that the decree should agree with the judgment and clearly specify the relief granted or other determination in the suit.

The Court noted that different States follow different practices regarding the drawing up of decrees following a common judgment in a suit and counterclaim. While some States draw up two decrees, others draw up a single decree. The Court held that this distinction is not significant for an appeal, particularly since Order 41 Rule 1 CPC requires only a judgment to accompany the memorandum of appeal.

The Court further noted that, since the suit claim and counterclaim are treated as cross-suits, court fees are payable on both the suit claim and the counterclaim. Accordingly, whether 1 decree or 2 decrees are drawn up, a composite appeal must be valued with reference to both claims and the applicable court fees must be paid.

Composite appeal against suit and counterclaim

The Court held that where a suit and counterclaim are adjudicated by a single common judgment, both can be challenged through a composite appeal. The appellant must, however, set out separate grounds challenging the decree in the suit and the decree in the counterclaim, irrespective of whether 1 decree or 2 decrees have been drawn up.

The composite appeal must also be valued as 2 separate appeals, with court fees paid accordingly. The Court held that this would enable the appeal to be considered on merits without rejecting it on grounds of estoppel or res judicata merely because 2 separate appeals had not been filed. The Court considered this approach appropriate to avoid procedural complications and multiplicity of litigation.

Relief

Considering the uncertainty in the law regarding whether 2 separate appeals or a composite appeal were required, the Court restored the first appeal. The Court set aside the orders of the High Court and the First Appellate Court and permitted the appellant to file a fresh memorandum of appeal containing separate grounds and to pay court fees for the additional appeal.

The fresh appeal was directed to be considered by the First Appellate Court along with the appeal already filed, on merits and as expeditiously as possible.

The Court clarified that it directed filing of another appeal only because one appeal had already been filed in the present case. Henceforth, a challenge to a common judgment adjudicating a suit and counterclaim may be made through a composite appeal, subject to the requirements stated above.

Accordingly, the appeal was allowed with the above directions. Pending applications, if any, were disposed of, and the Registry was directed to forward a copy of the judgment to all High Courts.

[Basudev v. Sanjay Kumar, 2026 SCC OnLine SC 1534, decided on 11.08.2026]

Advocates who appeared in this case:

For the appellants: Senior Advocate Jayant Bhushan, AOR Vinod Sharma, Vishal Mahajan, Anil Kumar, Divya Kumari Sharma, Anu Priya, Advocates

For the respondents: Senior Advocate Sanjay R Hegde, AOR Dhawesh Pahuja, Ankit Tiwari, Ashish Kumar, Tanay Hegde, Dinesh Jotwani, Shivalika Midha, Bhargav Baisoya, Rajat Sharma, Advocates