Application made at the appellate stage to withdraw the suit cannot be allowed by the court if granting such permission would have the effect of depriving or destroying or nullifying or annulling any right which has come to be vested with the defendant under the decree

Kerala High Court on 05.10.2020 in the matter of Sabu Issac Vs. Antony Chacko in OP (C). No. 123/2020 and OP (C). No. 173/2020 held that “an application made at the appellate stage to withdraw the suit cannot be allowed by the court if granting such permission would have the effect of depriving or destroying or nullifying or annulling any right which has come to be vested with the defendant under the decree.”
Facts of the case-
The Petitioner herein is the Defendant No. 1 in O.S. No. 266/2011 and the sole defendant in O.S No. 9/2015 before the Sub Court, Alappuzha. The Respondent herein is the plaintiff in these two suits. The plaintiff had instituted O.S. No. 266/2011 for granting a decree for cancellation of sale deed No. 2930/2008 which was executed by the Defendant No. 2 in favour of Defendant No. 1. The plaintiff is not a party to the sale deed however, the suit was instituted on the basis that the plaintiff entertained an apprehension that the defendants may, in future, raise claim over the property of the plaintiff which lies adjacent to the property in survey No.60/1. The other suit was filed by the father of the plaintiff against the defendant for granting a decree of prohibitory injunction restraining the defendant from trespassing into the property shown in the plaint schedule and committing any waste therein. After the death of plaintiff’s father, he was impleaded in this suit.
The trial court conducted joint trial of both the suits and held that since plaintiff was not a party to the said sale deed, he had no right to seek the cancellation of that document and dismissed O.S. No. 266/2011. The other suit also got dismissed on the ground that the plaintiff failed to prove possession over the property mentioned in that suit.
The Plaintiff thereafter filed two Appeals challenging the decree and judgment passed against him in the said suits. He also filed two applications in the respective appeals under Order XXIII Rule 1(3) of the Code of Civil Procedure, 1908 praying that he may be permitted to withdraw from the two suits with liberty to sue the defendant/defendants afresh on the same subject matter. These applications were filed by the plaintiff on the plea that his counsel opined that there was so many defects in the framing of the suits and that the proper remedy ought to have been to file a suit for declaration of title of the disputed property and recovery of possession. The First Appellate Court allowed both the applications.
The defendant (Petitioner herein) has challenged the legality and propriety of the aforesaid orders in these original petitions filed under Article 227 of the Constitution of India. Ld. Counsel for the defendant contends that granting permission to withdraw a suit at the appellate stage with liberty to file fresh suit on the same subject matter would deprive the defendant of the rights and advantages obtained by him under the decree passed in the suit and therefore, the appellate court should not have allowed the applications filed by the plaintiff (Respondent herein).
Observations of the Hon’ble Court-
Order XXIII Rule 1(1) of the Code provides that, at any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim.
Order XXIII Rule 1(3) of the Code states that, where the Court is satisfied, — (a) that a suit must fail by reason of some formal defect, or (b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of the claim.
The plaintiff can abandon a suit or a part of his claim as a matter of right without the permission of the court. The plaintiff need not obtain any permission from the Court to abandon the suit. He has right to file an application to abandon his suit or part thereof at any time after its filing. In such a case, he will be precluded from suing again on the same cause of action. A defendant cannot compel the plaintiff to proceed with the suit. When the plaintiff files an application under sub-rule (1) of Rule 1 of Order XXIII of the Code and prays for permission to withdraw the suit, whether in full or part, he is always at liberty to do so and in such case, the defendant has no right to raise any objection to such prayer being made by the plaintiff except to ask for payment of costs. The reason is that while making a prayer to withdraw the suit under sub-rule (1) of Rule 1 of Order XXIII of the Code, the plaintiff does not ask for any leave to file a fresh suit on the same subject matter. A mere withdrawal of the suit, without asking anything more, can always be permitted. But, if the plaintiff wants to withdraw from the suit and institute a fresh suit on the same subject matter, he has to seek and obtain permission from the court (Anil Kumar Singh v. Vijay Pal Singh : AIR 2017 SC 5587). The plaintiff cannot, while abandoning a suit or abandoning a part of his claim, reserve to himself the right to bring a fresh suit on the same cause of action (Rathinavel Chettiar v. Sivaraman : (1999) 4 SCC 89).
Explaining the term “formal defect”, the Court noted that “Formal defect” is a defect of form prescribed by the rules of procedure such as, want of notice under Section 80 of the Code, improper valuation of the suit, insufficient court–fee, confusion regarding identification of the suit property, mis-joinder of parties, failure to disclose a cause of action etc. In order to constitute a ground for making an application for withdrawing from the suit with liberty to file fresh suit on the same subject matter, it is not sufficient to show that there is some formal defect in the suit but it is also necessary to show that the suit would fail on account of such formal defect.
The Court further noted that, “the expression “sufficient grounds” occurring in clause (b) of Rule 1(3) of Order XXIII of the Code is not to be read ejusdem generis with the expression “formal defect” occurring in clause (a). There is no requirement that “sufficient ground” pleaded by the plaintiff for seeking permission to withdraw the suit with liberty to institute fresh suit shall be analogous to a formal defect. There can be no reason as to why the import and amplitude of the expression “sufficient grounds” in clause (b) of Rule 1(3) of Order XXIII of the Code should suffer any unwarranted confinement.”
In the present matter, the applications for withdrawal of the suits were filed by the plaintiff at the appellate stage. The Hon’ble Court pointed out that “An appeal is a continuation of the suit and the power under Order XXIII Rule 1(3) of the Code can be exercised by the appellate court to grant permission to withdraw the suit with liberty to file a fresh suit, however, when an application for withdrawal of suit is filed at the appellate stage, the court has to take into consideration some other matters also.”
The Court referred to various judgments of Hon’ble Apex Court such as Bhoopathy v. Kokila : AIR 2000 SC 2132, Sneh Gupta v. Devi Sarup : (2009) 6 SCC 194 and Rathinavel Chettiar v. Sivaraman : (1999) 4 SCC 89 wherein in Rathinavel Chettiar, the Apex Court has held that-
“Since withdrawal of suit at the appellate stage, if allowed, would have the effect of destroying or nullifying the decree affecting thereby rights of the parties which came to be vested under the decree, it cannot be allowed as a matter of course but has to be allowed rarely only when a strong case is made out…The rights which have come to be vested in the parties to the suit under the decree cannot be taken away by withdrawal of the suit at that stage unless very strong reasons are shown that the withdrawal would not affect or prejudice anybody’s vested rights”.
Concluding from the ratio reached in the above-mentioned judgments, the Hon’ble Court observed that “it is now well-settled that there is restriction on the right to withdraw from the suit at the appellate stage. The plaintiff has no absolute right, at the appellate stage, to withdraw from the suit. An application made at the appellate stage to withdraw the suit cannot be allowed by the court if granting such permission would have the effect of depriving or destroying or nullifying or annulling any right which has come to be vested with the defendant under the decree. The court shall keep in mind the fact that, when permission is granted to withdraw from the suit with liberty to file a fresh suit, the parties are placed in the same position as they would have been, had the suit not been instituted at all.”
At last, the Hon’ble Court held that “in the instant case, while granting permission to the plaintiff to withdraw from the suits, the appellate court has not considered whether any right had accrued in favour of the defendant by the dismissal of the suits by the trial court and by granting permission to withdraw from the suits, whether the defendant would be deprived of any such right. Even a decree dismissing the suit may create right in favour of the defendant. The appellate court has considered the applications filed by the plaintiff as if they were filed at the trial stage.
There is also no clarity in the impugned orders passed by the appellate court as to whether it was on any ground under clause (a) or clause (b) of Rule 1(3) of Order XXIII the permission to withdraw from the suit was granted. In such circumstances, it has become necessary to remand the matter to the appellate court for fresh consideration of the applications filed by the plaintiff.”
.