When a defense or counterclaim is interposed, it is not barred if it arose out of the same transaction or occurrence.

• A. It is never barred
• B. It is barred if time-barred
• C. It is not barred if arises out of same transaction or occurrence
• D. It must be pleaded separately

Answer: (C)

Counterclaims that arise from the same transaction or occurrence as the plaintiff’s claim are compulsory. Because they involve the same facts, the law requires you to include them in your answer; if you fail to do so, you’re barred from raising them later in a separate action. So when a defense or counterclaim stems from the same transaction or occurrence, it isn’t barred—it must be pleaded now. This rule helps ensure all related issues are resolved in one suit and prevents piecemeal litigation. If the claim arises from a different transaction or occurrence, it would be treated as a permissive counterclaim and may be asserted separately, subject to other procedural limits.