The withdrawal and compromise of a civil suit is provided by Order 23 of the Code of Civil Procedure, 1908.[1] There are two types of withdrawal provide by it. Those are:

1. Absolute withdrawal: In this form of withdrawal, the leave of the Court is not needed; and
2. Qualified withdrawal: In this the leave of the Court is needed.

1. Withdrawal without the leave of the court

After the institution of a suit, the Plaintiff may at any point of time withdraw his claim or suit against any one or all the defendants without the need of taking a leave from the court. This is provide by Rule 1 (1) of Order 23 of the Code of Civil Procedure, 1908.[2] This right to withdraw a suit against one or all the defendants is an Absolute right and not a Qualified Right. If the plaintiff does not want to proceed with its suit, the Court cannot compel the Plaintiff to continue.[3]

This is based upon the principle of Invito beneficium non datur it means that the law cannot confer a benefit to a man which he does not desire.[4] It would go against the wishes of the Plaintiff and would eventually lead to wastage of the Court’s time. However if for once the Plaintiff withdraws its case then he or she would never be able to file a new suit in respect of the same cause of action against the same party or parties.[5] Also while withdrawing the suit, if the Court awards any cost to the defendant, then the Plaintiff would have to bear it.

2. Withdrawal with leave of court

Rule 1(3) of Order 23 of the Code of Civil Procedure, 1908 allows withdrawal of suit with the leave of the court. If the court feels that the suit is having some formal defects and it must fails or if the court gets sufficient grounds to allow the plaintiff to institute a new fresh suit for the whole suit or any one subject matter of the suit.

The word, formal defect has not been defined under the Code but it connotes any procedural defect which does not affect the merits of the case.[6] The formal defect may include mis – joinder of parties, not providing proper statutory notice, non – payment of proper court fees, etc.[7] Errors such as non – joinder of necessary parties, not including all the cause of actions, non – examination of material witnesses, etc. does not fall under the category of formal defects as they constitutes a material defect which affects the merits of the case.[8] The error should not cause any material defect.

The term sufficient grounds should not be construed same as the term formal defect. If there is an issue where the decree passed by the court cannot be executed because of no one’s fault, if two suits had been filed for the same cause of action and due to a fault, both the suits were withdrawn, omission to file the Power of Attorney, etc are some of the examples which falls under the category of sufficient grounds.[9]

The Court also has the power to grant leave. The grant of leave is done when the parties ask for it or if the court finds sufficient grounds the court may grant leave sue moto.

3. Suits by minor

If in any suit, the plaintiff is a minor, then, neither the suit, nor any part of the claim can be withdrawn without the permission of the Court. This has been provided by the Amendment Act of 1976. According to Sub Rule 2 of Rule 1 of Order 23 of the Code of Civil Procedure, 1908, if the plaintiff asks for a leave from the Court where the plaintiff is a minor, then the application must be attached with an affidavit of the next best friend of the minor. If a pleader is representing the minor in the Court, then the pleader also must submit a certificate certifying that the need of leave is for the benefit of the minor.[10]

4. Limitation

If the plaintiff withdraws his suit with his own free will, to file a fresh suit, then the plaintiff needs to file the fresh suit within the limitation period. This is provided under Rule 2 of Order 23 of the Code of Civil Procedure, 1908.

Adjustment or Compromise of Suit

Even though a suit has been instituted, the parties are free to settle in a compromise.[11] Rule 3 of Order 23 of the Code of Civil Procedure, 1908 states that wherever the parties to a suit agrees and comes to a compromise, then the Court should record such an agreement and also pass a decree for the same.[12] However for a compromise the following conditions must be met. The conditions are as follows:

1. An agreement between the parties or a compromise must be there between the parties.
2. The compromise must be in written and signed by the parties.
3. The agreement must be lawful.
4. The agreement must be recorded by the concerned court; &
5. A consent decree must be passed.

If after the passing of the consent decree by the concerned court, a dispute regarding the genuineness of the compromise comes into question, then the court which had recorded the compromise and passed the consent decree would have the jurisdiction to hear the matter. The parties may file an appeal against the decree.[13] However no fresh suit can be filed concerning the same matter.[14] The Court should see that the compromise in which the parties had agreed to is lawful and in accordance to the Indian Contract Act, 1872.

Rules 6 and 7 of Order 32 of the Code of Civil Procedure, 1908 tries to safeguard the rights of minors by not allowing any best friend or guardian of the minor to come to a compromise without taking the leave of the Court.[15]

The pleaders or the advocate appearing behalf of the parties has an implied authority where if the advocate finds that by coming to a compromise, their parties would be benefitted, then the advocates need not obtain permission to come in a compromise.

When the parties comes to a compromise and the Court also passes a decree for the same, then the decree is not treated to be a decision of the Court. The Court just provides a seal to the agreement in which both the parties have entered. However the Court looks into whether the agreement is legal and has been abided by the Indian Contract Act, 1872. So a compromise agreement is not treated as res judicata.[16] However many times a compromise agreement has also been treated as res judicata.[17]

The execution of a consent decree is same as the execution of an ordinary decree. Before the Amendment Act of 1976, a consent decree was not used to be passed however after the amendment, consent decree is passed by the concerned court. The passing of the consent decree does not depend upon whether the subject matter of the compromise is the similar to the suit.[18]

End-Notes:

1. Code of Civil Procedure, 1908, Order 23
2. Code of Civil Procedure, 1908, Order 23, Rule 1(1)
3. Bijayananda Patnaik v. Satrughna Sabu, AIR 1963 SC 1566
4. Sarguja Transport Services v. STAT, AIR 1987 SC 88
5. Ibid
6. Ramrao Bhagwantrao v. Bapu Appanna, AIR 1940 Bom 121
7. Certificate Officer v. Kasturi Chand, AIR 1970 Ori 239
8. Ramrao Bhagwantrao v. Babu Appanna, AIR 1940 Bom 121
9. Beniram v. Gaind, AIR 1982 SC 789
10. Code of Civil Procedure, 1908, Order 23, Rule 2
11. Moti Lal Banker v. Maharaj Kumar Mahmood Hasan Khan, AIR 1968 SC 1087
12. Gurpreet Singh v. Chatur Bhuj, AIR 1998 SC 400
13. Y. Sleebachan v. State of T.N, (2015) 5 SCC 747
14. Horil v. Keshav, AIR 2012 SC 1262
15. Code of Civil Procedure, 1908, Order 32, Rules 6 and 7
16. Pulavarthi Venkata v. Valluri Jagannada, AIR 1967 SC 591
17. Sailendra Narayan Bhanja Deo v. State of Orissa, AIR 1956 SC 346
18. S.G. Thimmappa v. T. Anantha, AIR 1986 Kant 1

Written by: Abhik Saha, Student of Symbiosis Law School, Pune, 2nd Year, B.B.A LL.B (Hons)