Sunday, 1 January 2017

Whether court can permit withdrawal of suit during pendency of appeal?

 In the present case, the suit was filed by the
respondent   on   behalf   of   a   registered   trust   namely
Pandurang   Vitthal   Firm   Private   Limited.     He   ought   to
have been authorised by the said trust to institute a

suit on its behalf.  No such authorisation was produced
by him with the plaint.  Therefore, it was held that the
respondent was not competent to file and prosecute the
suit.   In my view, this is clearly a formal defect in
the suit.  The valuable rights of the parties cannot be
allowed   to   be   defeated   on   account   of   such   formal
defects.   Consequently, in view of the judgments cited
by   the   learned   counsel   for   the   respondent,   which   are
fully applicable to the facts of the present case, I am
of the opinion that the learned Ad­hoc District Judge­1,
Latur   rightly   allowed   the   application   (Exh­15)   and
rightly   permitted   the   respondent   to   withdraw   the   suit
and file a fresh suit in respect of the same subjectmatter.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CIVIL REVISION APPLICATION NO. 185 OF 2014
 Sow. Saroj w/o Ramesh Jadhav,

V
Kongaree Veera Reddy,

­­­­
CORAM : SANGITRAO S. PATIL, J.

Dated : 8th SEPTEMBER, 2016
Citation: 2016 (5) ALLMR 903


The original  defendants in Regular  Civil  Suit
No.   22   of   2004   have   preferred   this   application,
challenging   the   legality   and   correctness   of   the   order

dated 1st  January, 2014, passed in Regular Civil Appeal
No. 32 of 2010 by the learned Ad­hoc District Judge­1,
Latur   whereby   the   respondent   (original   plaintiff)   has
been permitted to withdraw the said suit with liberty to
institute a fresh suit in respect of the same subject
matter.
2. The   respondent   instituted   the   above   numbered
Regular Civil Suit in the Court of Civil Judge, Junior
Division, Ausa, seeking declaration of his title to the
suit   property,   admeasuring   11   gunthas   out   of   the   land
block   No.   19/B/1,   situate   at   village   Budhoda,   Taluka
Ausa and further sought perpetual injunction restraining
the applicants  from disturbing  his  possession  thereon.
The   suit   came   to   be   dismissed   by   the   learned   Civil
Judge,   Junior   Division,   Ausa   vide   judgment   and   decree
dated 9th September, 2009, mainly on the ground that the
suit property, in fact, was belonging to a firm namely
Pandurang Vitthal Firm Pvt. Ltd., which was registered
under the Bombay Public Trusts Act.   However, the said
Firm   had   not   passed   any   resolution,   authorising   the
respondent to institute the said suit and prosecute it.
The respondent preferred Regular Civil Appeal No. 32 of

2010 in the District Court at Latur against the judgment
and decree passed by the Trial Court.   During pendency
of   that   appeal,   the   respondent   filed   an   application
(Exh­15)   under   Order   XXIII   Rule   3   (a)   and   (b)   of   the
Code of Civil Procedure (“the Code”, for short), seeking
permission   to   withdraw   the   suit   with   liberty   to
institute a fresh suit in respect of the same subjectmatter
  by   setting   aside   the   impugned   judgment   and
decree.   The   learned   Ad­hoc   District   Judge­1,   Latur
allowed that application as per the impugned order.
3. The learned counsel for the applicants submits
that   once   the   suit   was   dismissed   by   the   Trial   Court,
certain rights were created in favour of the applicants.
Consequently,   the   first   appellate   court   was   not
justified   in   setting   aside   the   judgment   and   decree
passed by the Trial Court and allowing the respondent to
withdraw the suit with liberty to file a fresh suit in
respect   of   the   same   subject­matter.   In   support   of   his
contention,   he   relied   on   the   judgment   in  M.B.
Development   Corporation   V.   Manilal   Patel   &   Co.   2001
(Supp.) Bom. C.R. 801.  He, therefore, submits that the
impugned order may be set aside and the order passed by

the Trial Court may be restored.
4. As   against   this,   the   learned   counsel   for   the
respondent submits that the appeal being in continuation
of the suit, the judgment and decree passed by the Trial
Court had not become final due to pendency of R.C.A. No.
32/2010.   It was, therefore, open to the respondent to
withdraw the suit with liberty to file a fresh suit on
the   ground   that   because   of   the   technical   defect   in
drafting the plaint, it was liable to be dismissed.  He
submits that the first appellate court has rightly set
aside the judgment and decree passed by the Trial Court
and   allowed   the   application   filed   by   the   respondent
under   Order   XXIII   Rule   3   (a)   and   (b)   of   the   Code   by
granting   him   permission   to   withdraw   the   suit   with
liberty   to   file   a   fresh   suit   in   respect   of   the   same
subject­matter.  In support of his contention, he cited
the judgments in the cases of  (i) Ratan   Lal   and
another   V.   Mohammad   Hamidulla   Khan   AIR   1921   Allahabad
65, (ii) Suraj Pal Singh V. Gharam Singh and others AIR
1973 Allahabad 466 and (iii) Mahendra Uttamrao Kadam and
others V. Kacchi Properties 2011 (7) ALL M.R. 386.

5. The provisions of Order XXIII Rule (3) of the
Code read as under :­
(3) 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 subject­matter 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   subject­matter   of   such   suit   or   such
part of the claim.”
6. There is no dispute about the proposition that
the appeal is continuation of the suit and the decree
passed by the Trial Court would not become final until
the   appeal   is   decided.     As   such,   the   application   for
withdrawal   of   the   suit   can   very   well   be   filed   during
pendency of the appeal.  In the case of Suraj Pal Singh
(supra), the suit was dismissed and during the pendency
of   the   appeal,   the   learned   counsel   for   the
plaintiff/appellant   made   an   application   for   withdrawal
of   the   suit.     It   was   observed   by   the   Allahabad   High

Court that the decree of dismissal of the suit by itself
does not confer any right on any party to the suit.  In
view   of   these   observations,   the   contention   of   the
learned counsel for the applicants herein that because
of the dismissal of the suit by the Trial Court, certain
rights   have   been   accrued   in   favour   of   the   applicants,
cannot be accepted.
7. Relying   on   the   judgment   in   case   of  M.B.
Development Corporation (supra), the learned counsel for
the applicants submits that the respondent filed a suit
on behalf of a Firm which is not registered.   As such,
the   defect   in   the   suit   was   not   formal   but   was
substantive.     Therefore,   the   suit   ought   to   have   been
dismissed and accordingly has rightly been dismissed by
the   Trial   Court.     He   submits   that   the   suit   cannot   be
allowed   to   be   withdrawn   with   liberty   to   file   a   fresh
suit when there is substantive defect therein.
8. As   against   this,   the   learned   counsel   for   the
respondent   relied   on   the   judgment   of   the   Bombay   High
Court in the case of  Mahendra uttamrao Kadam    (supra),
wherein the suit presented by the plaintiff, which was

an unregistered firm, being not maintainable in view of
Section 69 of the Partnership Act, considering the said
defect as a formal defect, the plaintiff was permitted
to withdraw the suit with liberty to file fresh suit on
the   same   cause   of   action.     In   the   said   judgment,   in
paragraph 9, there is reference of the judgment in the
case  of  M/s  Haldiram  Bhujiawala  V.  Anand  Kumar  Deepak
Kumar   2000   (3)   SCC   250,   wherein   in   the   similar
circumstances,   it   was   held   that   if   the   firm   is   not
registered   on   the   date   of   suit   and   the   suit   is   to
enforce a right arising out of a contract with the third
party­defendant in the course of its business, then it
will be open to the plaintiff to seek withdrawal of the
plaint   with   leave   and   file   a   fresh   suit   after
registration of the firm, subject of course to the law
of limitation.   It is further observed that this is so
even if the suit is dismissed for a formal defect.
9. In the present case, the suit was filed by the
respondent   on   behalf   of   a   registered   trust   namely
Pandurang   Vitthal   Firm   Private   Limited.     He   ought   to
have been authorised by the said trust to institute a

suit on its behalf.  No such authorisation was produced
by him with the plaint.  Therefore, it was held that the
respondent was not competent to file and prosecute the
suit.   In my view, this is clearly a formal defect in
the suit.  The valuable rights of the parties cannot be
allowed   to   be   defeated   on   account   of   such   formal
defects.   Consequently, in view of the judgments cited
by   the   learned   counsel   for   the   respondent,   which   are
fully applicable to the facts of the present case, I am
of the opinion that the learned Ad­hoc District Judge­1,
Latur   rightly   allowed   the   application   (Exh­15)   and
rightly   permitted   the   respondent   to   withdraw   the   suit
and file a fresh suit in respect of the same subjectmatter.
  The   judgment   in   the   case   of  M.B.   Development
Corporation  (supra), cited on behalf of the applicants,
in circumstances of the case,  cannot be made applicable
to the facts of the present case.
10. In   the   above   circumstances,   I   hold   that   the
Civil   Revision   Application,   being   sans   substance,   is
liable to be dismissed.  Hence, the order :­

O R D E R
The Civil Revision Application is dismissed. No
costs. 
       
    Sd/­
[SANGITRAO S. PATIL]
   JUDGE

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