Late counter-claims in debt recovery proceedings may be rejected when they would reopen evidence and delay adjudication.

A counter-claim under section 19(8) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 is to be raised at the earliest stage, as it is treated as a cross-suit under a scheme comparable to Order VIII Rule 6A CPC. Late introduction of a counter-claim after evidence has substantially closed may be refused where it would reopen the trial, delay recovery proceedings, and prejudice the claimant. Relief under Article 226 remains discretionary, and interference is not warranted where no sufficient ground for writ intervention is shown.

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Issues: Whether the petitioners could be permitted to raise counter-claims at the stage when the recovery proceedings had substantially progressed and whether the writ court should interfere with the rejection of those counter-claims.

Analysis: The statutory scheme under section 19(8) and section 19(9) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 treats a counter-claim as a cross-suit and contemplates that it should be raised at the earliest so that the original claim and the counter-claim can be tried together. The provision is pari materia with Order VIII Rule 6A of the Code of Civil Procedure, 1908, and the object is to avoid delay and prevent prejudice to the claimant by a belated introduction of a fresh controversy after evidence has substantially closed. On the facts, the petitioners sought to raise the counter-claims after the bank's evidence had been completed and after their own evidence had been closed, which would have reopened the trial and defeated the purpose of expeditious adjudication. The Court also held that relief under Article 226 of the Constitution of India is discretionary and that the petitioners had not made out any ground for interference.

Conclusion: The petitioners were not entitled to have the counter-claims entertained at that stage, and no interference under Article 226 was warranted.

Ratio Decidendi: A counter-claim under section 19(8) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 must be raised at an early stage and may be refused when its late introduction would reopen concluded evidence, delay the proceeding, and prejudice the opposite party; writ relief is discretionary in such circumstances.

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