06 October 2020

plaintiff has no absolute right, at the appellate stage, to withdraw from the 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. In Bhoopathy v. Kokila : AIR 2000 SC 2132, the Supreme Court has held as follows:
"No doubt, the grant of leave envisaged in sub-rule (3) of Rule 1 is at the discretion of the court but such discretion is to be exercised by the court with caution and circumspection. ...... The court is to discharge the duty mandated under the provision of the Code on taking into consideration all relevant aspects of the matter including the desirability of permitting the party to start a fresh round of litigation on the same cause of action. This becomes all the more important in a case where the application under Order 23 Rule 1 is filed by the plaintiff at the stage of appeal. Grant of leave in such a case would result in the unsuccessful plaintiff to avoid the decree or decrees against him and seek a fresh adjudication of the controversy on a clean slate. It may also result in the contesting defendant losing the advantage of adjudication of the dispute by the court or courts below. Grant of permission for withdrawal of a suit with leave to file a fresh suit may also result in annulment of a right vested in the defendant or even a third party. The appellate/second appellate court should apply its mind to the case with a view to ensure strict compliance with the conditions prescribed in Order 23 Rule 1(3) C.P.C for exercise of the discretionary power in permitting the withdrawal of the suit with leave to file a fresh suit on the same cause of action.

    Yet another reason in support of this view is that withdrawal of a suit at the appellate/second appellate stage results in wastage of public time of courts which is of considerable importance in present time in view of large accumulation of cases in lower courts and inordinate delay in disposal of the cases. ........ It is the duty of the court to feel satisfied that there exist proper grounds/reasons for granting permission for withdrawal of the suit with leave to file fresh suit by the plaintiffs and in such a matter the statutory mandate is not complied with by merely stating that grant of permission will not prejudice the defendants. In case such permission is granted at the appellate or second appellate stage prejudice to the defendant is writ large as he loses the benefit of the decision in his favour in the lower court". (emphasis supplied).[Para No.29]

    In Rathinavel Chettiar (supra), the Supreme Court has held as follows:

plaintiff has no absolute right, at the appellate stage, to withdraw from the suit
"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. ..... Where a decree passed by the Trial Court is challenged in appeal, it would not be open to the plaintiff, at that stage, to withdraw the suit as to destroy that decree. 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".[Para No.30]

    In Vidhydhar Dube v. Har Charan : AIR 1971 All 41, it has been held as follows:
"A plaintiff has a right to continue or withdraw a suit till a decree comes into existence. Once the court makes a final adjudication and passes a decree, certain rights become vested in the party in whose favour the decree is made. Where the suit is dismissed, certain rights become vested in the defendants inasmuch as the findings given in the judgment become binding on the parties and operate as res judicata in subsequent litigation between the parties. The right of a plaintiff to withdraw the suit at the appellate stage thus becomes subject to the rights acquired by the defendants under the decree and ceases to be an absolute right. ........ The appellate court may permit the plaintiff to withdraw the suit when by such withdrawal no vested or substantive right of the defendant is to be adversely affected but the plaintiff may not be permitted to withdraw the suit at the appellate stage if it results in depriving the defendant of some vested or substantive right".[Para No.31]

    The principles stated above in the decision in Vidhydhar Dube (supra) stand approved by the Apex Court in Rathinavel Chettiar (supra).[Para No.32]

    In Sneh Gupta v. Devi Sarup : (2009) 6 SCC 194, it is stated as follows:
"A permission to withdraw the suit could have been given only with notice to the respondents who had become entitled to some interest in the property by reason of a judgment and decree passed in the suit. The Court for the purpose of allowing withdrawal of a suit after passing the decree, viz., at the appellate stage, is required to consider this aspect of the matter".[Para No.33]

    Therefore, 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.[Para No.34]

Kerala High Court

Sabu Issac
Antony Chacko

Decided on 05/10/2020

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