Ajay Dabra vs Ominder Singh

Tarlok Singh Chauhan, J.—This order will dispose of the preliminary issue framed by this court on 6.9.2012 to the following effect:

Whether the suit is barred by Order 23 Rule 1(4) of the CPC and the plaint is liable to be rejected?

The plaintiff has filed this suit for specific performance of the agreement to sell dated 11.10.2006 and for decree of permanent prohibitory injunction restraining the defendant from selling, transferring, alienating, encumbering or creating any charge over the suit land and also from interfering in the possession of the plaintiff over the same.

2.1. It has been pleaded that defendant is the owner of the land comprised in khata khatauni No. 137/214 and Khasra No. 1520 to 1522, Kita-3, measuring 0-18-60 hectares (0-46 biaswa) situated in Mahal and Phati Palchan Kothi, Tehsil Manali, District Kullu, H.P. as per Jamabandi with respect to the land.

2.2. The M/s. Himalayan Ski Village Private Limited Company is a body corporate under the Indian Companies Act. After a detailed study of the various aspects relating to the Tourism decided to set up an Eco-Friendly Tourism Infrastructure Project known as M/s. Himalayan Ski Village Private Limited and for the said purpose wanted to purchase immovable property by way of land in Tehsil Manali, District Kullu, Himachal Pradesh. The said Company, as such approached M/s. Kaka and Associates through its partners Shri Dharamjeet Singh and Sartaj Singh for identification and securing various parcel and plots of land situated in Manali, District Kullu, Himachal Pradesh. Accordingly, on 15th May, 2006 an Agency agreement was executed between the above mentioned company on the one hand and M/s. Kaka & Associates through its partners S/Shri Dharamjeet Singh and Sartag Singh on the other hand as their agents for purchasing the land in Tehsil Manali with a nomination clause. The said agents also by means of the aforesaid agreement of agency were also authorize to enter into agreements with the intending sellers to purchase the property eventually in favour of the aforesaid company or its nominees or assignees etc. etc. In order to enter into the agreement or purchase of land, it was agreed that the aforesaid company was to advance to the agents money and accordingly did advance to them various sums of money in order to enable him to pay earnest money/sale consideration to the intending sellers. Needless to add here that it was understood and agreed that on execution of the agreement to sell between the agents on the one hand and on various intending sellers on the other hand, the Firm M/s. Kaka & Associates was to be entitled to claim commission 20% as amount on the complete sale consideration of each intended sale/purchase from the Company which was to be paid to the Firm as agreed.

2.3. The aforesaid agents of the Company on 11th of August, 2006, entered into an agreement to sell that defendant with respect to the land comprised in Khata Khatauni No. 137/214, bearing khasra Nos. 1520 to 1522, Kitas-3 measuring 0-18-60 hectares being approximately 46 biswas, situated in Muhal and Phati Palchan Kothi, Tehsil Manali, District Kullu, H.P. for a consideration of Rs. 90.00 lacs with a nomination clause. Formal agreement was executed between the defendant and M/s. Kaka & Associates as agents of M/s. Himalayan Ski Village Private Limited and an amount of Rs. 10.00 lacs was paid as earnest money by means of cheque No. 125071, drawn on Punjab National Bank, which was paid by M/s. Kaka & Associates in favour of defendant. Another amount of Rs. 25.00 lacs was received by defendant on 26th December, 2006 through cheque No. 125091 drawn on Punjab National Bank, Delhi in addition to an amount of Rs. 45.00 lacs by way of cheque No. 881882 dated 30th March, 2007. As such, the entire sale consideration was paid by M/s. Kaka & Associates on behalf of the Company.

2.4. That both M/s. Kaka & Associates as well as M/s. Himalayan Ski Village Private Limited were non-agriculturist and, as such it was agreed that the sale deed would be executed after the purchaser get permission from the Government as required under the provisions of Section 118 of the H.P. Tenancy and Land Reforms Act. In case, the permission was not obtained by 31st March, 2007, the purchaser was liable to pay the balance sale consideration which was accordingly paid by the Company through its agents and as per the terms and conditions of the agreement dated 11th October, 2006, M/s. Kaka & Associates nominated M/s. Himalayan Ski Village Private Limited as its nominees in terms of agreement, the commission as agreed was paid to the agents. After the receipt of the entire sale consideration from the agents of the aforesaid Company, the defendant also executed and delivered to the agents an affidavit and Special Power of Attorney in favour of Shri Sartej Singh to execute the sale deed.

2.5. That M/s. Himalayan Ski Village Private Limited being an non-agriculturist and not competent to execute the sale deed in terms of agreement dated 11th of October, 2006, vide agreement dated 12th April, 2009, further assigned its rights to execute the sale deed in favour of the plaintiff regarding which the defendant was also intimated. The defendant there upon vide e-mail dated 11th August, 2011 wanted an undertaking-cum-identification from M/s. Himalayan Ski Village Private Limited regarding nomination of the plaintiff to get the sale deed executed with respect to the land mentioned hereinabove from the defendant and get the transfer of the ownership in his name. The said undertaking was supplied to the defendant by Johan Sim Managing Director of M/s. Himalayan Ski Village Private Limited, which was accepted by the defendant. The plaintiff, as such, became entitled to get the sale deed executed in terms of agreement dated 11th October 2006 which was executed between M/s. Himalayan Ski Village Private Limited and the plaintiff. True photocopy of the e-mail, undertaking furnished by the Managing Director of the Company nominating the plaintiff are attached with the plaint. The plaintiff after the execution of the agreement dated 12th April, 2009 in his favour assigning the rights to get the sale deed executed in his favour in pursuance to the agreement dated 11th October, 2006, approached the defendant number of times and also issued a notice dated 27th January, 2012 to the defendant for executing the sale deed in his favour, however of no avail, hence the plaintiff is left with no other alternate except to file the present suit for specific performance of the agreement dated 11th October, 2006 and for directing the defendant to execute the sale deed of the land agreed to be sold in favour of M/s. Kaka Associates. The plaintiff after 12th April, 2009 and prior to that M/s. Himalayan Ski Village Private Limited has always been ready and willing to perform their part of agreement and in fact the defendant having already received the full amount of sale consideration, there is nothing left for the plaintiff or his predecessor-in-interest to perform The plaintiff as nominee of M/s. Himalayan Ski Village Private Limited is still willing and ready to get the sale deed executed in his favour.

2.6. The plaintiff has further pleaded that M/s. Himalayan Ski Village Private Limited had filed Civil Suit No. 52/2010 against the defendant M/s. Kaka Associates and its partners were also made parties. However, the same was got withdrawn with liberty to file a fresh suit as the Company was not in a position to get permission u/s 118 of the H.P. Tenancy and Land Reforms Act, the plaintiff as Director of the Company was impleaded as plaintiff in the said suit.

The defendant was put to notice and filed his written statement wherein preliminary objection was taken regarding the maintainability of the suit being gross abuse of process of law, especially in view of the fact that plaintiff had earlier filed a Civil Suit No. 52 of 2010 before this court against the defendant and others in respect of the same subject matter and the same cause of action, in which suit the defendants had been duly served. It was claimed that earlier suit was withdrawn by the plaintiff without seeking liberty from this court to institute a fresh suit in respect of the same subject matter as in this suit or in respect of the claim in the suit. It was claimed that when Civil Suit No. 52 of 2010 had been withdrawn vide order dated 22.10.2010, no liberty had been granted by the court to file the suit on the same cause of action and, therefore, plaintiff was precluded from instituting the present suit as the same was specifically barred under Order 23 Rule 1(4) of the Code of Civil Procedure, since the subject matter and the claim of previously instituted Civil Suit No. 52 of 2010 and the present suit are the same. It was alleged that after the withdrawal of the suit, the plaintiff moved OMP No. 599 of 2010 in Civil Suit No. 52 of 2010, wherein he prayed that ex-parte ad-interim order dated 22.7.2010 be recalled and even at this stage the plaintiff did not seek permission of the court as envisaged under Order 23 Rule 3(b) of the Code of Civil Procedure. The defendant further claimed that plaint be rejected under Order 7 Rule 11(d) of the Code of Civil Procedure. The rest of the contents of the written statement are not relevant for the purpose of adjudication of preliminary issue.

On 6.9.2012, this court framed the preliminary issue (supra).

At the out-set, Sh. G.C. Gupta, learned Senior counsel for the respondent-plaintiff has argued that this is not a case where present issue can be treated and tried as a preliminary issue. He contents that for deciding an application under order 7 R 11 CPC one has to look at the plaint and decide whether the same deserves to be rejected on the grounds taken therein. The plaint without addition or subtraction must show that it is barred by any law to attract application of order 7 Rule 11 which is not the fact situation obtaining in this case. In support of such submission, he relied upon Surjit Kaur Gill and Another Vs. Adarsh Kaur Gill and Another, , wherein the Hon''ble Supreme Court has held as under:-

(4) There is no dispute that after the suit was filed issues have been framed and at a later stage the plaintiff had tendered his affidavit in lieu of the examination-in-chief. It is at that stage that the application made under Order VII Rule 11 (though made earlier), came to be pressed into service and decided by the learned Single Judge. The contention on behalf of the respondent-defendant was that as can be seen from the statements in the plaint, the suit was barred by law, and therefore it ought to be rejected under Order 7 Rule 11 sub-clause (d). The learned Single Judge went into the issues and came to the conclusion that all the prayers were inter-connected, and they were related essentially to the principal prayer (a) for partition of the property of deceased Smt. Abnash Kaur on the basis of the Will which she had executed. The learned Single Judge relied upon the dicta of this Court in Popat and Kotecha Property Vs. State Bank of India Staff Association, which held that the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. The language of various paragraphs in the plaint and the pleadings have to be seen in their entirety to ascertain its terms. The application was, therefore, dismissed by the learned Judge by his judgment and order dated 7.4.2008.

(9) With respect to these submission, Mr. Diwan pointed out that in fact there is a clear writing of the respondent No. 1 herein executed on 12.2.91 which clearly states, amongst others, in paragraph (d) that she will not claim any tenancy right or charge on the above referred property. In paragraph (b) of that writing she agreed to render the accounts with respect to the rental income received from 1.1.80 to 30.11.90. In paragraph (c) of that writing she states that with respect to the two mortgages redeemed in her name, she will not claim any charge as the amounts paid for redeeming the said mortgages were paid from the estate of Smt. Abnash Kaur. Mr. Diwan states that after executing this writing, the disputes between the parties were supposed to get settled, but then unfortunately it did not happen. The respondent No. 1 started construction on the particular property in her own right. This having happened in 1992, the original plaintiff was constrained to file the suit for the partition of the property belonging to Smt. Abnash Kaur. Smt. Abnash Kaur having made a Will about her property, the original plaintiff had to see to it as the administrator of the will that the property is distributed in accordance therewith. This being the position, in his submission it is Article 58 which is the relevant Article for all these prayers, which provides for a period of 3 years when the right to sue first accrues. In the present case, it will be when the dispute arose because of the conduct of the respondent No. 1 herein. The issue of limitation is always a mixed question of facts and law, and therefore, it could not be held that no case was made out for proceeding for a trial. Mr. C.A. Sundaram submitted that the respondent No. 1 disputed the writing dated 12.2.1991, and it had to be forensically tested. This submission all the more justifies that the trial had to proceed. For deciding an application under Order 7 rule 11, one has to look at the plaint and decide whether it deserved to be rejected for the ground raised. In our view, the view taken by the Division Bench is clearly erroneous. The appeal is therefore allowed and the judgment and order of the Division Bench is set aside. The application made under Order 7 Rule 11 moved by the respondent No. 1 herein will stand rejected. We may however clarify that all the observations herein are only for the purpose of deciding this appeal.

In response to this argument, learned counsel for the applicant-defendant has argued that question of maintainability of the suit in the factual background is required to be determined as preliminary issue more particularly when he has raised the question of the very maintainability of the suit itself which essentially according to the learned counsel has to be tried as a preliminary issue. In support of his submission, reliance was placed on Abdul Rahman Vs. Prasony Bai and Another, , wherein it has been held as under:-

For the purpose of disposal of the suit on the admitted facts, particularly when the suit can be disposed of on preliminary issues, no particular procedure was required to be followed by the High Court. In terms of Order XIV Rule 1 of the Code of Civil Procedure, a Civil Court can dispose of a suit on preliminary issues. It is neither in doubt nor in dispute that the issues of re judicata and/constructive res judicata as also the maintainability of the suit can be adjudicated upon as preliminary issues. Such issues, in fact, when facts are admitted, ordinarily should be decided as preliminary issues.

This contention of the plaintiff is without substance.

It is settled law that if the court is of the opinion that the case or any part thereof can be disposed of on an issue of jurisdiction of the court or bar to filing the suit, it may try such issue first as preliminary issue by postponing settlement of other issues until the issue of law has been decided. That apart, this court is not sitting in appeal over the framing of preliminary issue and, therefore, it is not open to either of the parties to question the framing of this issue before this court in these proceedings.

After framing of the aforesaid preliminary issue on 6.9.2012, the defendant led evidence and examined two witnesses. Defendant himself appeared as DW 1 and placed on record the copy of the plaint of Civil Suit No. 52 of 2010 as Ex. DW 1/A, the certified copy of order dated 22.10.2010 as Ex. DW 1/B and the order passed by this court on 7.1.2011 in OMP No. 599 of 2010 as Ex. DW 1/C. DW 1 in his cross examination admitted that no notice of previous suit had been served upon him nor did he appear in that suit. He also stated that previous suit had been filed by the company and the present plaintiff and claimed ignorance with respect to the plaintiff having sued in the previous suit in the capacity of Director of the company. He also claimed ignorance regarding the previous suit having been withdrawn after filing an application to this effect wherein the plaintiff has sought liberty to file a fresh suit on the same cause of action. He further claimed ignorance regarding the application filed by the plaintiff after withdrawal of the suit, on which order Ex. Ex. DW 1/C had been passed.

DW 2 Puran Chand is the Senior Assistant of the court, who had brought the summoned record of Civil Suit No. 52 of 2010 alongwith Ex. DW 1/A, Ex. DW 1/B and Ex. DW 1/C. In cross-examination, he placed on record the certified copy of OMP No. 438 of 2010 as Ex. PW 1/A and the certified copy of the affidavit in support of this OMP as Ex. PW 1/B. Vide order dated 18.10.2013, the defendant closed his evidence in the affirmative.

The plaintiff on the other hand examined himself as PW 1 and stated that M/s. Himalayan Ski Village Private Limited was a company registered under the Companies Act 1956, of which he was the Director. He stated that company had entered into an agreement with the defendant for purchase of land situated at Manali, but no sale deed was executed by the defendant, which resulted in filing of the Civil Suit No. 52 of 2010. He further stated that he was one of the plaintiffs in the suit in the capacity of the Director of the Company. He has specifically stated that defendant herein had not been served in the said suit. According to him, the suit was compromised between the parties and an application Ex. PW 1/A was filed by the plaintiff for withdrawal of the suit with liberty to file afresh. The said application was allowed by the court and the suit was dismissed as withdrawn with liberty to file a fresh suit. The present suit, according to the plaintiff, had been filed in his personal capacity. It was further stated that he had memorandum of understanding (MOU) with the company and on the basis of that MOU, he had filed the present suit.

In his cross-examination, the plaintiff admitted the plaint in CS No. 52/2010, Ex. DW 1/A and the order of withdrawal Ex. DW 1/B dated 22.10.2010 and stated that after the withdrawal of the suit he had filed another application in the court, which was disposed of on 7.1.2011 vide Ex. DW 1/C. He denied the suggestion that CS No. 52/2010 had been filed by him in his personal capacity and further denied the suggestion that no liberty had been granted by the court to file a fresh suit.

This is the entire evidence led by the parties in support of their respective claims qua the preliminary issue.

Sh. Vinay Kuthiala, learned Senior counsel for the defendant on the strength of the pleadings and evidence led in support thereof has argued that contesting parties in both the suits are admittedly the same as the plaintiff in this suit was the plaintiff No. 2 in Civil Suit No. 52/2010, while the defendant No. 1 herein was the defendant No. 1 in the earlier suit though there were also certain other co-defendants therein. It is further argued that the substantive claims in both the suits are the same and the relief (a) in the present suit is exactly the same as had been claimed by the plaintiff in the earlier suit.

These submissions of the learned counsel for the defendants are not disputed by Sh. G.C. Gupta, learned Senior Advocate for the defendant. However, he states that specific claim of the plaintiff is that earlier suit filed by him, he had sued in the capacity of Director, while the present suit has been filed by him in individual capacity and therefore his capacity as a plaintiff in both the suits was different and consequently it cannot be said that the parties in both the suits are the same. Thus according to the learned counsel for the plaintiff the bar of Order 23 Rule 1 CPC is not attracted or applicable to the facts of the present case.

At this stage it would be apt to quote in extenso the contents of the application under Order 23 Rule 1 read with section 151 CPC being OMP No. 438 of 2010 in the previously instituted CS No. 52/2010 Ex. PW 1/A, contents whereof alongwith affidavit read as follows:-

Application under Order 23 Rule 1 read with Section 151.

May it please your Lordship

That in the present matter, the parties to the suit have affected a compromise involving the subject matter of the suit as also several other larger issues relating to cases filed by the defendants 2 to 4 against the plaintiffs. Resultantly the respective cases filed by the parties to this lis are being withdrawn.

It is therefore respectfully prayed that this application may kindly be allowed and this Hon''ble Court may kindly be pleased to:-

(a) Permit the plaintiffs/applicants to withdraw the present suit at this stage with liberty reserved to approach this Hon''ble Court, again should the need so arise, subject to just exceptions.

(b) Order the refund of the Court fees in accordance with the Rules and Law applicable in the present case.

(c) These orders may kindly be passed in the interest of law and justice.

Affidavit of Ajay Dabra s/o Sh. Inder Pal Dabra, aged 45 years, by occupation Company Director, r/o Sohan, Village Shuru, Tehsil Manali, Distt. Kullu, H.P. in support of Application under Order 23 Rule 1 read with Section 151

I, Ajay Dabra, the above named deponent do hereby take oath and solemnly affirm and declare that the accompanying application has been drafted by our counsel, on the instructions of the Plaintiff Company, as conveyed through me to the counsel. I have read the same. The contents of para 1 as stated to be true and correct.

The contents of this affidavit are true to my personal knowledge, no part of the same is false and nothing relevant to the present query has been concealed therefrom.

Signed and verified on this the 19th Day of September, 2010 at Shimla.

On the basis of this application, the order dated 22.10.2010 came to be passed vide Ex. DW 1/B, which reads as follows:

CS No. 52 of 2010

OMP No. 438 of 2010 and CS No. 52 of 2010.

This is an application for withdrawal of the suit. The applicants/plaintiffs are permitted to withdraw the suit. The suit is dismissed as withdrawn. The court fee be refunded to the plaintiffs within two months in accordance with law.

On the strength of this order dated 22.10.2010 Ex. DW 1/B, the learned counsel for the defendant would contend that suit is not maintainable as being hit by the provisions of Order 23 Rule 1(4) of the Code of Civil Procedure, because apparently no liberty has been reserved in this order to permit filing of a fresh suit on the same cause of action and, therefore, the plaint essentially has to be rejected under Order 7, Rule 11(4) of the CPC and this question is required to be determined as a preliminary issue.

It is argued by the learned Senior Counsel for the defendant that if no terms are inserted in the order, the effect of withdrawing the suit is that the plaintiff is precluded from instituting a fresh suit in respect of the same subject matter. In support of his such contention he relied upon AIR 1939 110 (Privy Council) , wherein the Court after reproducing the provisions of Order 23 Rule 1 CPC as also sections 2(g) and (j) and sections 134 and 139 of Indian Contract Act, 1872 held as follows:-

By reason of these provisions the debtor, as the respondent contended, was absolutely released. The appellant indeed contended that he had not proceeded under Order XXIII, Rule 1, in applying to substitute the new trustees for the old, but that his application was made under Order 1, Rule 10, alone. Their Lordships cannot accept this view. The last named rule no doubt authorizes the Court to order the name of a party improperly joined to be struck out and that the names of any person who ought to have been joined be added. But such an order is expressly directed to be made on such terms as may appear to the Court to be just. If no terms are inserted in the order, then, in their Lordships'' view, the effect of withdrawing the suit against some of the defendants is to be ascertained from Order XXIII, Rule 1. That Order is not very happily worded, but its meaning is reasonably clear. Under its provisions the Court may give liberty to the applicant to institute a fresh suit after a withdrawal, but, if it does not do so, the plaintiff is precluded from instituting a fresh suit in respect of the same subject-matter....

It is further contended that language of Order 23, Rule 1, sub-rule (1) CPC gives an unqualified right to a plaintiff to withdraw from a suit and if no permission to file a fresh suit is sought under sub-rule(2) of that rule, the plaintiff becomes liable for such costs as the court may award and becomes precluded from instituting any fresh suit in respect of that subject matter under sub-rule (3) of that rule. It is further contended that there is no provision in the CPC which requires the court to refuse permission to withdraw the suit in such circumstances and to compel the plaintiff to proceed with it. However, in case such permission is not expressly granted, the plaintiff is precluded from instituting a fresh suit in respect of that very subject matter and has relied upon Hulas Rai Baij Nath Vs. Firm K.B. Bass and Co., , wherein it has been held as follows:-

The short question that, in those circumstances, falls for decision is whether the respondent was entitled to withdraw from the suit and have it dismissed by the application dated 5th May, 1953 at the stage when issues had been framed and some evidence had been recorded, but no preliminary decree for rendition of accounts had yet been passed. The language of Order 23, Rule 1, sub-Rule (1), C.P.C., gives an unqualified right to a plaintiff to withdraw from a suit and if no permission to file a fresh suit is sought under sub-rule (2) of that Rule, the plaintiff becomes liable for such costs as the Court may award and becomes precluded from instituting any fresh suit in respect of that subject-matter under sub-Rule (3) of that Rule There is no provision in the CPC which requires the Court to refuse permission to withdraw the suit in such circumstances and to compel the plaintiff to proceed with it. It is, of course, possible that different considerations may arise where a set-off may have been claimed under Order 8, C.P.C. or a counter-claim may have been filed, if permissible by the procedural law applicable to the proceedings governing the suit.....

It is thereafter contended that Order 23 Rule 1 CPC provides that a plaintiff can withdraw a suit or abandon a part of his claim unconditionally. This right is available to the plaintiff, however, once the suit is withdrawn or any part of the suit is abandoned unconditionally, the plaintiff cannot bring a fresh suit on the same cause of action unless leave of the court is obtained as provided by Order 23 rule 1(3)(b) CPC and has relied upon R. Rathinavel Chettiar and Another Vs. V. Sivaraman and Others, , wherein it has been held as under:-

Order 23 Rule 1, quoted above, provides that a plaintiff can withdraw a suit or abandon a part of his claim unconditionally. It creates a right in favour of the plaintiff to withdraw the suit, at any time, after its institution. Once the suit is withdrawn or any part of the suit is abandoned against all or any of the defendants, unconditionally, the plaintiff cannot bring a fresh suit on the same cause of action unless leave of the court is obtained as provided by Order 23 Rule 1(3)(b).

In other words, a plaintiff cannot while unconditionally 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. (See: Hulas Rai Baij Nath Vs. Firm K.B. Bass and Co., .

Lastly, it is contended that in terms of clause (b) of sub-rule (3), there is a mandate to the court that it must be satisfied about the sufficiency of the grounds for allowing the plaintiff to institute a fresh suit for the same claim or part of the claim on the same cause of action. 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. In support of this contention, he has placed reliance upon K.S. Bhoopathy and Others Vs. Kokila and Others, , wherein the Hon''ble Supreme Court has held as follows:

The present Rule which was introduced in place of the old Rule 1 by the Amendment Act of 1976 makes a distinction between absolute withdrawal which is termed as ''abandonment'' and withdrawal with the permission of the Court. This clear distinction is maintained throughout in the substituted Rule by making appropriate changes in the wording of various sub-rules of Rule 1.

The provision in Order XXIII, Rule 1, C.P.C. is an exception to the common law principle of non-suit. Therefore on principle an application by a plaintiff under sub-rule (3) cannot be treated on par with an application by him in exercise of the absolute liberty given to him under sub-rule (1). In the former it is actually a prayer for concession from the Court after satisfying the Court regarding existence of the circumstances justifying the grant of such concession. 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 legislative policy in the matter of exercise of discretion is clear from the provisions of sub-rule (3) in which two alternatives are provided, (1) where the Court is satisfied that a suit must fail by reason of some formal defect, and the other where the Court is satisfied 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. Clause (b) of sub-rule (3) contains the mandate to the Court that it must be satisfied about the sufficiency of the grounds for allowing the plaintiff to institute a fresh suit for the same claim or part of the claim on the same cause of action. 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 XXIII 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 XXIII, Rule 1(3), C.P.C. for exercise of the discretionary power in permitting 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 the present time in view of large accumulation of cases in lower Courts and inordinate delay in disposal of the cases.

On the other hand, Sh. G.C. Gupta, learned Senior counsel for the plaintiff has contended that the court cannot split up the prayer by allowing the withdrawal of the suit and at the same time refuse liberty to file a fresh suit and in support of his contention has relied upon a judgment of this court in Hans Raj Akrot Vs. State of Himachal Pradesh, , wherein this court has held as under:

It is settled that where a plaintiff makes a prayer for withdrawal of the with suit liberty to file a fresh suit in respect of the subject-matter of the suit, the court can permit the withdrawal of the suit coupled with the liberty to file a fresh suit. It cannot refuse that liberty to the plaintiff on its own. If the court feels that, in the circumstances, brought before it, permission to withdraw the suit should not be granted, it can refuse the prayer by rejecting the application-It is not open to the court to split up the prayer made by the plaintiff by allowing the withdrawal of the suit and refusing the liberty to institute a fresh suit in respect of the same subject-matter. (See Wazir Singh Chhela Blaka Baba Mulangah Shah Vs. Hidayat Shah Shrida, ; Devidas Tulsiram Brijwani Vs. The Commissioner, Poona Municipal Corporation, , and Radha Krishna and Another Vs. The State of Rajasthan and Others, .

To the same effect is the judgment rendered by the learned Division Bench of Allahabad High Court in Bharat and Others Vs. Ram Pratap and Others, , wherein it has been held as under:-

In this view of the matter it appears to us to be well settled that where an application is moved by the plaintiff to withdraw the suit with liberty to bring a fresh suit under Order 23 Rule 1(2) of the Code, the Court may either allow the application as a whole or dismiss it as a whole. It has no jurisdiction to consign the suit as withdrawn while refusing to grant permission to the plaintiff to bring fresh suit in respect of the same subject matter and on the same cause of action. If liberty to bring fresh suit is not to be granted by the court, it has to dismiss the application requiring the plaintiff to prosecute the suit on merits as it stands. The court while refusing to grant permission to institute fresh suit cannot treat the application to be one under Order 23 Rule 1(1) of the Code (old) for withdrawal of the suit simpliciter. Thus, if the application moved by the plaintiff under Order 23 Rule 1(2) of the Code (old) for withdrawal of the suit with liberty to file a fresh suit is allowed by the court even without expressly passing an order granting permission to file fresh suit, the order would be construed to be one granting withdrawal of the suit with liberty to institute fresh suit. The order allowing the application moved under Order 23 Rule 1(2) of the Code (old) cannot be construed to be one passed under Sub-clause (1) of Rule 1 of Order 23 because the prayer in the application could not be split up by the Court. The order passed by the court, unless otherwise expressly expressed, would be construed to be one which it could validly pass in exercise of jurisdiction so vested in it and with reference to the provision under which such an order could be passed Thus, there is no escape from the conclusion that the order dated 28-9-1967 passed in earlier suit on the application of withdrawal of suit with liberty to file fresh suit cannot be construed to have been passed under Sub-clause (1) of Rule 1 of Order 23 of the Code when the application was in fact not moved under said provision, but it was moved under Sub-clause (2) of Rule 1 of Order 23 of the Code and, therefore, the same could not be treated by the Court under Sub-clause (1) of Rule 1 of Order 23 of the Code by splitting up the prayer or rejecting the prayer seeking liberty to file fresh suit. The court in that event would have no option but to reject the application in toto.

An application under Order 23, Rule 1(2) of the Code for permission to withdraw the suit with liberty to institute a fresh suit on the same subject matter has got to be treated as an indivisible whole and the court cannot split up the prayer while refusing permission to institute a fresh suit and that it could not treat the application to be one under Order 23 Rule 1(1) of the Code (old) for withdrawal of the suit simpliciter and, as such, the order allowing the application without expressly granting or refusing permission to institute a fresh suit is to be taken to have been passed granting the composite prayer made in the application under Order 23 Rule 1(2) of the Code, under which an order either allowing the application in toto or rejecting it in toto, could alone be legally passed by the Court. Therefore, when an application moved under Order 23 Rule 1(2) is allowed there is no escape from the conclusion that the prayer made in the application has been allowed in toto although no specific order is passed granting permission to institute fresh suit in respect of same subject matter and on the same cause of action.

The learned Division Bench of Allahabad High Court overruled the earlier view taken by the learned Single Judge of that court in Lallu Vs. The Board of Revenue, U.P., Allahabad and Others, whereby the learned Single Judge had held that where the order permitting withdrawal of the suit was silent about granting permission to institute fresh suit, it must be taken that the court in earlier suit refused to grant permission to file fresh suit. This view was overruled in the following manner:-

In Lallu Vs. The Board of Revenue, U.P., Allahabad and Others, , the learned single Judge has not considered the aforesaid aspect of the matter and we are unable to subscribe to the view taken in the said decision. Although we have no hesitation in accepting the view expressed by the learned single Judge in said decision to the effect that: "The court is empowered to grant liberty to institute a fresh suit only after finding that the suit must fail by reason of some formal defect or that there are other sufficient grounds for granting liberty," but we find it difficult to hold that the Court must pass specific order granting liberty to institute fresh suit and that if no specific order is passed granting liberty to institute fresh suit, it would not be permissible to infer from such an order by constructive interpretation that permission to institute fresh suit has been granted. In our opinion if the Court passed an order allowing the application containing the composite prayer to the effect that the plaintiff be permitted to withdraw the suit with liberty to file fresh suit, then no other inference can be drawn than the one that the composite prayer as it stands has been granted in toto because the court could not split up the prayers and accept only one of the prayers and reject the other. Since the Court would have no jurisdiction to pass an order by splitting up the prayers contained in an application moved under Order 23 Rule 1(2) of the Code, and, as such, no such inference can be drawn that the second prayer was refused, although not said so expressly in the order. Thus, in this view of the matter, we find it difficult to persuade ourselves to take the view expressed in Lallu Vs. The Board of Revenue, U.P., Allahabad and Others, to the effect that where the order permitting withdrawal of the suit was silent about granting permission to institute fresh suit, it must be taken that the court in earlier suit refused to grant permission to file fresh suit. With due respect to the learned Judge we are unable to subscribe to said view taken in Lallu''s case (supra).

I have meticulously examined the records and the rival contentions of the learned counsel for the parties.

More than a century back, the learned Calcutta High Court in Sheikh Golam Mahomed and others Vs. Sivendra Pada Banerjee , had held that the order giving permission to withdraw cannot be read in isolation and has to be read alongwith the application on which it was passed:-

We have already observed that on the 30th January, 1903 an application was made by the plaintiff to withdraw from his suit, with liberty to institute a fresh suit, on which an order was passed on the same day giving permission to withdraw from the suit. Although nothing was said in that order as to the plaintiff''s liberty to institute a fresh suit on the same cause of action, that order ought to be read alongwith the application, on which it was passed. In that application we find a distinct prayer to be allowed to withdraw from the suit with liberty to institute a fresh suit on the same cause of action, and the Deputy Collector appears to have taken particular care in noting that the application for withdrawal was filed before delivery of judgment, that is to say, before the order of dismissal was passed.

A Division Bench of Orissa High Court in Hari Basudev Vs. State of Orissa and Others, , has held that once there is an application, wherein it has been mentioned that plaintiff may be permitted to withdraw the suit with liberty to sue a fresh on the same cause of action and the suit is permitted to be withdrawn simpliciter, then in such circumstances the permission to institute a fresh case was impliedly granted, as would be clear from the following:-

Order 23, Rule 1, C.P.C. confers absolute right on a party to withdraw or abandon his suit. Sub-rule (3) of Rule 1 of Order 23 provides that the plaintiff may in the circumstances mentioned therein be permitted by the Court to withdraw from a suit with liberty to sue afresh on the same cause of action. Sub-rule (4) thereof interdicts by stating inter alia that where the plaintiff withdraws from a suit or part of a claim without permission shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim.

As already indicated, the cause of action accrued to opposite party No. 4 to file the election dispute u/s 30 of the Act only after publication of the result of the election. Opposite party No. 4 in his petition made out a case for grant of permission to withdraw M.J.C. No. 14 of 1997. He had also stated in the petition that he reserved his right to file a fresh case, if necessary. The learned Civil Judge having permitted him to withdraw the said case, we are inclined to hold that permission to institute a fresh case in the circumstances was impliedly granted. Therefore, M.J.C. No. 29 of 1997 is not hit by Sub-rule (4)(b) of Rule 1 of Order 23, C.P.C. and is clearly maintainable. For the foregoing reasons, the impugned order dated 30-6-1999 passed by the learned Civil Judge at Annexure-1 does not call for interference.

The permission as contemplated in Order 23 need not be expressed. It is sufficient if it can be implied from the order read with the application on which the order was made. In the celebrated work of Mulla CPC 18th Edition at page 2893, it is stated as under:-

(g) Permission need not be express:- The permission mentioned in this section need not be given in express terms. It is sufficient if it can be implied from the order read with the application on which the order was made. No formal order is necessary for withdrawal of a suit. But the proceedings must show that the plaintiff has withdrawn the suit or part of the claim. However, if either from the application of the plaintiff or from the order permitting withdrawal, it transpires that while permitting withdrawal, the Court had also granted liberty to institute fresh suit, the subsequent suit would be barred. Thus, in a case, the Delhi High Court held that the words ''without prejudice to the right of the plaintiff'' endorsed on the application for withdrawal would only mean that the suit was sought to be withdrawn as compromised and not on merits.

An application for withdrawal of suit was made, seeking liberty to file a fresh suit. The order passed by the Court was that ''The application is, therefore, allowed while permitting the plaintiff to withdraw the suit''. It was held that this should be construed as an order also granting liberty, as prayed. The Court cannot split the prayer made by the applicant.

In a suit for specific performance of contract, objection was taken by the defendant, regarding payment of Court and owing to such objection, the plaintiff filed another suit on the same cause of action but later filed application to withdraw the same. The withdrawal was objected to by the defendant only on ground of payment of legal cost. When the Court awarded cost, the defendant accepted the same. It was held by the Supreme Court that in the circumstances inference of grant of permission can be drawn from conduct of parties as also the order passed by the Court because even a presumption of implied grant can be drawn.

The bar of sub-rule (4), rule 1 of Order 23 CPC will apply only if the second suit is between the same parties as in the first suit. If the second suit is against a different person or by a different person, the bar would not operate. The plaintiff though by name appears to be the same person, however a perusal of the record shows that Civil Suit No. 52 of 2010 had been instituted by him in the capacity of Director, which is borne out not only from the memo of parties, the copy of plaint, but also from the affidavit filed by him in support thereof. While admittedly the present suit has been filed by him in his individual capacity, therefore, once it is concluded that the parties to the suit are not same, the bar of sub-rule(4) of Rule 1 CPC is not attracted.

Another fact which cannot be lost sight of is that the defendant could have a grouse or a cause if any vested right had accrued in his favour because of the withdrawal of the earlier suit which was now being sought to be snatched or taken away. This is not the fact situation obtaining in the present case, because admittedly the defendant had not even been served in the previous suit by the time the plaintiff withdrew the same. Therefore, also there is no occasion for the defendant to be aggrieved in such circumstances.

The consistent view of various High Courts including this court has been that it is not open to the court to split up the prayer made by the plaintiff by allowing the withdrawal of the suit and refusing the liberty to institute a fresh suit in respect of the same subject matter. Not only this, it can be taken to be a settled law that permission as mentioned in Order 23 CPC to file a fresh suit on the same cause of action need not be express and it is sufficient if it can be implied from the order read with the application on which the order is made. Similar view has been adopted and followed in the various pronouncements of different high Courts including our own High Court in the case of Hans Raj Akrot (supra), which view is binding on this court.

Undisputedly, in the application, under Order 23 Rule 1 read with section 151 CPC (supra) a specific prayer was made to permit the plaintiff to withdraw the suit at that stage with liberty reserved to approach this court again should need for the same arise. Now, not only this prayer is required to be taken into consideration, but the attending circumstance that the defendant was not even served and therefore, no prejudice has been caused to him is another factor, which clearly goes to show that in the peculiar facts and circumstances of this case, the plaintiff definitely had the right to approach this court by way of the present suit as the permission of the Court can be held to have been impliedly granted.

In so far as the contention of the defendant that plaintiff despite opportunity has not prayed for recalling of the order dated 22.10.2010 and permitted the same to continue, I find force in the submission of the learned counsel for the plaintiff that in case such an application had been preferred, then it would amount to conceding to the fact that in fact no liberty had been granted by this court to file the present suit when the earlier suit was withdrawn.

Lastly it may be observed that none of the judgments cited and relied upon by the learned counsel for the defendant have dealt with the question of splitting up of the claim in the application for withdrawal of the suit and therefore, the ratio therein is not attracted and applicable to the facts of the present case.

In the ultimate analysis and from what has been observed above, it is clear that when the plaintiff prays for withdrawal of the suit with liberty to file a fresh suit, it is not open to the court to split the prayer in two parts (i) withdrawal of the suit and (ii) permission to file fresh suit and to grant the former and reject the latter. The prayer has to be granted or rejected as a whole. While making such observation, this court is not oblivious to the that it is not sitting in appeal over order dated 22.10.2010, but then this court cannot be unmindful of the fact that procedural rigour should not be allowed to come in the way of substantial justice. That apart, the defendant in fact cannot be said to be an aggrieved party in the background that admittedly he was not even served in Civil Suit No. 52 of 2010 by the time the order dated 22.10.2010 came to be passed. Thus no prejudice whatsoever has been caused to him so as to enable him to file and maintain the present application.

It has to be remembered that underlying object and purpose of rule 1(3) of Order 23 CPC is to prevent the defeat of justice on technical ground and also not to allow the plaintiff to have second innings after he has failed to conduct his case with due care and diligence and seeks to avoid un-favourable findings against him by denovo trial and fresh adjudication causing serious prejudice to the opposite party and consequence of such withdrawal as provided under sub-rule (3) having spelt out in rule-4. Having said so, it is clear that none of the aforesaid eventualities exist in the present case. There was neither any defect in nature or form or procedure in filing of the suit nor was the suit ever put to trial. Moreover, the suit had not yet been put to trial and above all even the defendant had not been served at the time of the withdrawal of the suit and therefore, it is not a case where the plaintiff wanted to have second innings after having failed to conduct his case with due care and diligence or seek avoidance of un-favourable findings against him by denovo trial or fresh adjudication. Since the defendant was not even served, therefore, there is no question of any prejudice much-less serious prejudice having been caused to him.

In view of aforesaid, the suit cannot be held to be barred under Order 23 Rule 1(4) of the CPC and therefore, the plaint cannot be rejected. Accordingly, the preliminary issue is answered by holding that suit is not barred by the provisions of Order 23, Rule 1(4) CPC and thus the plaint is not liable to be rejected.