In an important development, the Supreme Court has given a quietus to the issue regarding the maintainability of a composite appeal under the Code of Civil Procedure against a single common judgment containing a decision both on the original claim and a counterclaim.

A bench of Justice JB Pardiwala and Justice K. Vinod Chandran held that there's no bar against the maintainability of a composite appeal against a common judgment, which adjudicated both the original claim and counterclaim.

“Finding no contrary or restrictive provisions in the CPC, we hold and declare that a suit and a counterclaim, if adjudicated by a single common judgment; both on the original claim and on the counterclaim, it can be challenged in a composite appeal.”, the Court observed.

The Court clarified that mere drawing of two decrees i.e., original suit decree and counterclaim decree, arising out of a common judgment, would not warrant filing of a separate appeal against each decree, rather a composite appeal can be filed subject to fulfilment of certain conditions, i.e.,

i. if the Appellant separately challenges the findings and decrees passed in the suit and the counterclaim,

ii. clearly set out distinct grounds against each decree; and

iii. pay court fees corresponding to both decrees.

“The composite appeal, however, should show the grounds raised against the decree in the suit and the decree in the counterclaim separately; whether there are two decrees or one drawn up. The composite appeal should also be valued as two separate appeals and the court fees paid accordingly. This would enable the appeal to be considered on merits, without the grounds of estoppel and res judicata raised only for reason of two appeals not being filed. Though an implied mandate could be drawn from the various provisions, we are of the opinion that this would ensure avoidance of procedural rigmarole as also multiplicity of litigations.”, the Court observed.

In a nutshell, the Court said that although a single memorandum of appeal, i.e., a composite appeal is permissible, the substantive challenge to each decree must remain distinct and properly valued.

Background

A property dispute arose in which the plaintiffs claimed a half share in the suit property and sought an injunction against interference with their possession. The defendants, in response, filed a counterclaim asserting ownership over the entire property.

The trial court decreed the suit in favour of the plaintiffs and dismissed the counterclaim. Aggrieved, the defendants filed a single first appeal challenging both findings. The first appellate court reversed the trial court's judgment, dismissed the suit and allowed the counterclaim.

The matter eventually reached the High Court, which held that the appeal itself was not maintainable because only one appeal had been filed against what were considered two separate decrees. Relying on earlier decisions requiring separate appeals against an original suit decree and a counterclaim decree, the High Court treated the appellate proceedings as incompetent.

Aggrieved, the defendant moved to the Supreme Court.

The issue before the Court was “whether there should be two appeals filed from the two decrees drawn up when a suit with a counterclaim is disposed of by a single judgment.”

In other words, the Court examined the issue of whether a defendant aggrieved by the decree in an original suit and counterclaim needs to file separate appeals against each decree, or a composite appeal can be filed, since both the decrees arose from the same common judgment.

Setting aside the High Court's judgment, and due to a divergence of opinion in High Courts decision, and no authoritative pronouncement from the Supreme Court, the judgment authored by Justice Chandran extensively dealt with the scheme of the CPC, particularly the provisions governing the counterclaim, appeals from decrees, etc. to reach to a conclusion that the Code prohibits multiplicity of the proceedings via introduction of provisions related to the counterclaim.

“…the very scheme of a counterclaim is to avoid multiplicity, and the court is required to pronounce a final judgment in the suit, both on the original claim and on the counterclaim; the seminal purpose being to avoid piecemeal adjudication.”, the Court said.

The Court found the various High Courts' approach to be misplaced to have relied on Rajni Rani v. Khairati Lal, (2015) 2 SCC 682 to permit a separate appeal against a counterclaim decree. The Court clarified that Rajni Rani (supra) dealt with a different question altogether i.e., whether rejection of a counterclaim could be challenged through a revision petition or required an appeal.

The issue of maintainability of a composite appeal against a common judgment deciding both a suit and a counterclaim never arose in that case, the Court said, therefore holding that Rajni Rani (supra) was incorrectly interpreted as laying down a rule requiring two separate appeals.

As a result, the Court directed that the appellants be permitted to file a fresh memorandum incorporating separate grounds against the suit decree and the counterclaim decree while paying the requisite additional court fees.

The Court further directed that the appeal be heard on the merits expeditiously, considering the delay already occasioned by the procedural dispute.

Recognising the recurring nature of the issue, the Court also directed that copies of the judgment be forwarded to all High Courts to ensure uniformity in practice.

Cause Title: Basudev & Ors. Versus Sanjay Kumar & Ors.

Citation : 2026 LiveLaw (SC) 792

Click here to download judgment

Appearance:

For Petitioner(s) : Mr. Jayant Bhushan, Sr. Adv. Mr. Vishal Mahajan, Adv. Mr. Anil Kumar, Adv. Amartya Bhushan, Adv. Yojit Mehra, Adv. Swantika Rajvansi, Adv. Mrs. Divya Kumari Sharma, Adv. Mr. Vinod Sharma, AOR Ms. Anu Priya, Adv.

For Respondent(s) :Mr. Sanjay R Hegde, Sr. Adv. Mr. Ankit Tiwari, Adv. Mr. Ashish Kumar, Adv. Mr. Tanay Hegde, Adv. Mr. Dinesh Jotwani, Adv. Ms. Shivalika Midha, Adv. Mr. Bhargav Baisoya, Adv. Mr. Rajat Sharma, Adv. Mr. Dhawesh Pahuja, AOR