Withdrawal without liberty - Can a withdrawn suit be revived?

Introduction

In civil cases, the filing of a suit invoking the civil jurisdiction of the court for adjudication of disputed rights, marks the beginning of litigation. The filing of a suit is not a mere procedural formality but the formalization of the Plaintiff’s intent to avail a remedy through court. However, the lifecycle of any civil litigation is seldomly linear. Often, Plaintiffs decide to step back from litigation for various commercial, financial or strategic reasons. The Code of Civil Procedure, 1908 (“CPC”), recognizes this right of the Plaintiff to withdraw the suit. However, in cases where liberty to file a fresh suit is not granted by the court while granting withdrawal, the consequences are stringent. This article explores the remedies available to a plaintiff in such a situation.

The right to halt litigation: Order 23 of the CPC

The Plaintiff is dominus litis i.e., the master of his own suit. Order 23Rule 1 of the CPC acknowledges this and provides the Plaintiff with the discretion to either abandon the suit as a whole or in part. However, the problem arises if the Plaintiff, for a future change in circumstances, wants tore-litigate his/her abandoned claims. In order to be able to do so, it is quintessential to retain the liberty from the court (at the time of withdrawal).Such liberty (to institute a fresh suit) may be granted under Order 23 Rule 3of the CPC in case the suit is likely to fail because of a formal defect or the plaintiff convinces the court that other sufficient grounds exist. If the court refuses to grant such liberty, then a fresh suit is barred under Order 23 Rule4 of the CPC.

Non-applicability of Res Judicata

The doctrine of res judicata states that issues which have already been adjudicated upon by a court of competent jurisdiction, cannot be re-litigated upon. However, strictly speaking this doctrine applies only in cases where a matter has been adjudicated by a court after hearing both sides and on merits. In other cases where a decision is not per se rendered on merits, and the matter is dismissed for other reasons such as default, non-compliance or non-prosecution, this principle does not strictly apply. The law to this extent is well settled by the Supreme Court in State of Uttar Pradesh vs Jagdish Sharan Agrawal^[1] wherein it has been conclusively held that dismissal for non-prosecution (being a decision not given on merits) does not attract the operative bar of res judicata.

Statutory Embargo: Order 23 Rule 1(4) and the bar on fresh litigation

In a case where a suit is withdrawn by the plaintiff prior to its adjudication on merits, the maintainability of a fresh suit isn’t strictly barred on the grounds of res judicata as held in Jagdish Sharan Agrawal (supra). However, anew suit on the same “subject matter” is statutorily barred under Order 23 Rule1(4) of the CPC in case liberty to file a fresh suit wasn’t obtained at the time of withdrawal. This statutory principle is founded on broader principles of public policy. The legal maxim “invito beneficium non datur” which translates to “law confers upon a man no rights or benefits which he does not desire” is the cornerstone of this statutory embargo. The legislative intent is to prevent unscrupulous litigants from abusing the process of court and wasting precious judicial time.

Elaborating on this, the Supreme Court in Sarguja Transport Services vs State Transport Appellate Tribunal, MP Gwalior^[2] held that even though a new suit (where the earlier suit was withdrawn without seeking liberty) is not barred by the principles of res judicata, the same is statutorily barred on the grounds of public policy and abuse of judicial process. The principle was also reiterated recently in the case of HPCL Bio-Fuels Ltd vs Shahaji Bhanudas Bhad^[3].

When mistake leads to withdrawal: Is the Plaintiff remediless?

Let’s take an illustration. Person A had instituted a civil suit for recovery of money from Person B. Issues were framed in the case and the matter was posted for trial. At this stage, Person B assured (orally) that a compromise would be reached, and the money would be repaid to Person A. Based on this assurance, Person A withdrew the civil suit without seeking liberty to file afresh. Later, Person B failed to repay the money. On the face of the CPC, there appears to be no remedy available to Person A to file a fresh suit since liberty was not sought at the time of withdrawing the previous suit. In this case, will Person A be remediless?

Inherent powers – Section 151 of CPC

Under Section 151 of CPC, civil courts have inherent power to make any such order as may be necessary (in the facts and circumstances of each case) to meet the ends of justice and prevent the abuse of judicial process. In Rameswar Sarkarvs State of West Bengal^[4], the court was faced with a similar situation wherein the previous litigation was withdrawn due to a mistake and without seeking liberty to file afresh.

In such a circumstance, the Calcutta High Court held that although there lies no provision in the CPC for setting aside an order of withdrawal (or for withdrawing an application for withdrawal), the court cannot consider itself powerless. This is premised on the fact that the CPC is not an exhaustive dictionary of all possible situations in civil litigation. In cases where justifiable grounds exist, the court has the power to recall and set aside the order of withdrawal of the suit in exercise of its inherent powers under Section 151 of CPC. The decision of the Calcutta High Court also finds approval from the Supreme Court in Jet Ply Wood Private Ltd vs Madhukar Nowlakha^[5].

Conclusion –Calibrating strategy around withdrawal and restoration

For Plaintiff’s (and counsel), several practical consequences are borne out from the above jurisprudence.

1.        The act of withdrawal is not neutral. If the court (while allowing withdrawal) does not grant liberty under Order 23 Rule1(3) of CPC, then a fresh suit on the same subject matter is statutorily barred.

2.        Where the withdrawal is prior to the case being adjudicated on merits, the principle of res judicata will not apply and the bar to a fresh suit is grounded in statute and public policy.

3.        In cases where withdrawal is on account of mistake, the only remedy lies in seeking a recall of the withdrawal order by invoking the inherent powers of the court under Section 151 of CPC. A new suit does not lie.

4.        The court’s intervention under Section 151 of CPC would be fact-sensitive and discretionary and the same will depend on the overall interest of justice, promptness and bona fides of the litigant.

The law insists on discipline in how a plaintiff uses withdrawal as a procedural tool. However, at the same time, it also preserves a narrow (but crucial) safety valve through inherent powers. Although the risk of finality looms large in cases where a suit is withdrawn without liberty, the Plaintiff is not entirely remediless.

References

[1] 2008 SCC OnLine SC 1749

[2] 1986 SCC OnLine SC 233

[3] 2024 SCC OnLine SC 3190

[4] 1985 SCC OnLine Cal 139

[5] 2006 SCC OnLine SC 247

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