Holding

A decree passed by the trial court and under appeal cannot be destroyed by withdrawal of the suit; the plaintiff may not withdraw at the appellate stage unless it can be shown that no vested rights will be prejudiced.

Summary

V. Sivaraman sued Shakunthala for a declaration of title and possession of a property. The trial court decreed in his favour, after which he sold the property to R.R. Chettriar and another purchaser, who were impleaded as respondents in the appeal filed by Shakunthala. While the appeal was pending, Sivaraman applied to the Madras High Court to have the suit dismissed as not pressed, claiming a compromise with Shakunthala; the High Court allowed the application. The purchasers appealed to the Supreme Court, arguing that the decree had vested rights in them and could not be destroyed by a unilateral withdrawal of the suit at the appellate stage. The Supreme Court held that a decree already passed and under appeal cannot be nullified by withdrawal of the suit unless very strong reasons show no prejudice to vested rights, and that the purchasers, as transferees, had a right to be heard. Consequently, the High Court's order dismissing the suit was set aside, the application for withdrawal was rejected, and the matter was remanded to the High Court for a merits determination.

Issues considered

Whether a plaintiff may withdraw a suit or have it dismissed as not pressed after a decree has been passed and is under appeal, thereby destroying the decree and affecting vested rights of third parties.

Legislation cited

Code of Civil Procedure, 1908s. Order 22 Rule 10, s. Order 23 Rule 1, s. Order 23 Rule 1-A (Amendment Act 1976), s. Order 33 Rule 1, s. Section 2(2)

Subjects

withdrawal of suitdecreeappellate stagevested rightsCode of Civil ProcedureOrder 23property disputecompromisedismissal as not pressed

Judgment

R. RA THINA VEL CHETTIAR AND ANOTHER A
v.
V. SIVARAMAN AND OTHERS

MARCH 31, 1999

[S. SAGHIR AHMAD AND D.P. WADHWA, JJ.] B

Code of Civil Procedure 1908, Order XXlll Rule 1, I-A-Suit by plaintiff
for declaration of title to property and possession decreed-Plaintiff selling
property to appellants soon thereafter-During pendency of appeal by
defendant, plaintiff_ applying for dismissal of suit as not pressed stating he C
had compromised the dispute with defendant-High Court allowing
application-Held, Plaintiff cannot be allowed to withdraw decreed suit at
the stage of appeal so as to take away rights vested in parties.
VS, plaintiff-respondent No. 1, filed a suit against S, widow of his
brother, inter alia, for declaration of title to and possession of the suit D
property. The suit was decreed by the trial court. S filed an appeal in the
High Court. The appellants, who purchased the suit property from VS three
days after the suit was decreed, got themselves impleaded in the appeal as
respondents.
VS filed an application in the High Court for dismissing the suit as E
not pressed as he had compromised the dispute with S. This application was
allowed by the High Court. Aggrieved, the appellants approached this court.
Allowing the appeal, this Court

HELD : i. t. 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 F
so as to destroy that decree. The rights which have come to be vested in
parties to the suit under the decree cannot be taken away by withdrawal of
suit at that stage unless very strong reasons are shown that the withdrawal
would not affect or prejudke anybody's vested rights. The judgment of the
High Court in which a contrary view has been expressed cannot be sustained. G
[321-A-B)

1.2. Having purchased the property from the plaintiff after a declaration
was given in his favour, a valuable right came to be vested in the appellants
which could not be taken away by the plaintiff by withdrawal of the suit
unconditionally as the withdrawal was positively to have the effect of destroying H
313
314 SUPREME COURT REPORTS [1999] 2 S.C.R.

A the decree already passed in favour of the plaintiff. (321-F-G]

1.3. The appellants having already been impleaded as respondents in
the appeal, had a right to be heard in the matter of withdrawal of suit. The
appeal would now be remanded and decided on merits by the High Court.
(322-A-B]
B _.:~ . i

Hulas Rai Baij Nath v. K.P. Bass & Co., [1967) 3 SCR 886; Tukaram
Mahadu Tande! v. Ramchandra Mahadu Tande/, AIR (1925) Born 425; Dharma
Raja v. K.M Pethur Raja, AIR (1924) Mad 79; Kedar Nath v. Chandra Kiran
AIR (1962) All 263; Vidhyadhar Dube v. Har Charan, AIR (1971) All 41;
Kanhaiya v. Mst. Dhaneshwari, AIR (1973) All 212; Thakur Balaram Singh
C v. K. Achuta Rao, (1977) 2 A.P.L.J. 111; Ram Dhan v. Jagat Prasad Sethi, AIR
(1982) Raj 235; Sh. Guru Maharaj Anahdpur Ashram Trust Guna v. Chander
Prakash, (1986) 1 89 Punjab Law Reporter 319 and Jutha Ram v. Purni Devi )

/LR, (1970) 1 Allahabad 472, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1821-22
D of 1999.

From the Judgment and Order dated 28.10.87 of the Madras High
Court in A. No. 149/84 and C.M.P. No. 15941of1987.
K. Parasaran, V. Balaji and A.T.M. Sampath for the Appellants.
E S. Balakrishnan, Vipin, P.B. Suresh and Subramanium Prasad for
the Respondents.

The Judgment of the Court was delivered by

S. SAGHIR AHMAD, J. V. Sivaraman (plaintiff-respondent No.1) filed
F a suit against Shakunthala, widow of his brother, for declaration of title to the
suit property and for a direction to the defendants, namely, Shakunthala and
Vinayagam, to put him in possession of that property and to pay the arrears
of rent amounting to Rs. 18,000 together with further mesne profits. The suit
was decreed by the trial court on 5th September, 1983 against which Shakunthala
G filed an appeal in the High Court and during the pendency of the appeal in
that Court, the present appellants were impleaded as respondents by order
dated 20.3.1985 passed in C.M.P. No. 5008 of 1984. It was indicated in that
application that three days after the decree was passed by the trial court,
plaintiff (respondent No. l) sold the suit properties to the appellants and since
the properties in suit had been assigned to them, they had to be impleaded
H a:; respondents as required by Order 22 Rule 10 C.P.C.
R.R.CHETTIARv.V. SIVARAMAN[S.SAGHIRAHMAD,J.] 315
Respondent No.I, it appears, filed an application (C.M.P. No. I 5941 of A,
1987) in the High Court for dismissing the suit as not pressed as he had
compromised the dispute with Shakunthala and wanted the compromise to be
recorded. This application was allowed by the High Court by its judgment
dated October 28, 1987 and it is against this judgment that the present appeals
have been filed.
B
Mr. K. Parasaran, learned Senior Counsel appearing for the appellants,
has contended that the suit which was decreed by the trial court should not
have been dismissed as not pressed at the instance of respondent No. I as
he had already transferred the suit properties in favour of the appellants who,
being tranferees-pendente-Iite were vitally interested in the decree remaining C
intact. It was further contended that respondent No. I had been held to be the
owner of the property in suit by the trial court and it was after a declaration
was granted in his favour that the property was purchased by the appellants.
The dismissal of the suit as not pressed at the appellate stage, had the effect
of destroying the decree passed in favour of respondent No. I and since the
property in question, which was the subject matter of the suit, had already D
been transferred in favour of the appellants, the suit could not have been
dismissed as not pressed at the instance of respondent No. I who had ceased
to be the owner of the property and in whose place the present appellants
had become the owners and were, in that capacity, impleaded as respondents
in the appeal.
E
Learned counsel for respondent Nos. I and 2, on the contrary, contended
that the plaintiff (respondent No. I) had an unfettered right to have his suit
. dismissed as not pressed. He, it is contended, cannot be forced by any of
the parties to the suit, to continue to prosecute the suit. It is also contended
that under Order 23 Rule I of the Code of Civil Procedure, respondent No. F
1 had the right to compromise the suit with Shakunthala (respondent No. 2)
against whom he had filed the suit and since the dispute between respondent
Nos. I and 2 had been amicably settled by a compromise, it was open to
respondent No. I to apply to the Court to dismiss the suit as not pressed.

The relevant portion of Order 23 Rule I. provides as under:- G
"l. Withdrawal of suit or abandonment of part of claim.- (1) At any
time after the institution of a suit, the plaintiff may as against all
or any of the defendants abandon his suit or abandon a part of
his claim:

H"
316 SUPREME COURT REPORTS [1999) 2 S.C.R.

A (2) ................................. .
(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
B institute a fresh suit for the subject-matter 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 subject-matter of such suit or
c such part of the claim.

(4) .................................. .

(5) Nothing in this rule shall be deemed to authorise the Court to
permit one of several plaintiffs to abandon a suit or part of a claim
under sub-rule (1), or to withdraw, under sub-rule (3), any suit or part
D of a claim, without the consent of the other plaintiffs.

Order 23 Rule I, 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.
E 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
F 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 v. K.P.
Bass & Co., AIR 1968 SC 111 = (1967) 3 SCR 886.

The question in the present case is, however, a little different. If the
suit has already been decreed or, for that matter, dismissed and a decree has
G been passed determining the rights of the parties to the suit, which is under
challenge in an appeal, can the decree be destroyed by making an application
for dismissing the suit as not pressed or unconditionally withdrawing the suit
at the appellate stage. It is this question which is to be decided in this appeal. --
Every suit, if it is not withdrawn or abandoned, ultimately results in a
H decree as defined in Section 2(2) of the Code of Civil Procedure. This definition,
R.R. CHETTIAR v. V. SIVARAMAN [S. SAGHIR AHMAD, J.] 317
so far as it is relevant, is reproduced below:- A
"2(2). "decree" means the formal expre.ssion of an adjudication which,
so far as regards the Court expressing it, conclusively determines the
rights of the parties with regard to all or any of the matters in
controversy in the suit and may be either preliminary or final. It shall
be deemed to include the rejection of a plaint and the determination B
of any question within Section 144, but shall not include;

(a) any adjudication from which an appeal lies as an appeal from an
order, or

(b) any order of dismissal for default. c
Explanation.- A decree is preliminary when further proceedings have
to be -taken before the suit can be completely disposed of. It is final
when such adjudication completely disposes of the suit. It may be
partly preliminary and partly final."

Thus a "decree" has to have the following essential elements, namely,
D
(i) There: must have been an adjudication in a suit.
(ii) The adjudication must have determined the rights of the parties
in respect of, or any of the matters in controversy.
1

(iii) Such determination must be a conclusive determination resulting E
in a formal expression of the adjudication.
Once the matter in controversy has received judicial determination, the
suit results in a decree either in favour of the plaintiff or in favour of the
defendant.
F
What is essential is that the matter must have been finally decided so
that it becomes conclusive as between the parties to the suit in respect of
the subject matter of the suit with reference to which relief is sought. It is at
this stage that the rights of the parties are crystallised and unless the decree
is reversed, recalled, modified or set aside, the parties cannot be divested of G
their rights under the decree. Now, the decree can be recalled, reversed o~ set
aside either by the Court which had passed it as in review, or by the Appellate
or Revisional Court. 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 H
318 SUPREME COURT REPORTS [1999] 2 S.C.R.

A case is made out. It is for this reason that the proceedings either in appeal
or in revision have to be allowed to have a full. trial on merits.

There is a .consensus of judicial opinion amongst the High Courts on
the question before us. We may begin by referring to an old decision of the
Bombay.High Court in Tuka~am Mahaau TarJdel v. Ramchandra Mahadu
B Tande/ & Ors., AIR (l 925) Bombay 425 in which tlie Division Bench of that
Court observed that though as a general proposition, a· plaintiff can, at any
time, withdraw a suit but where the parties have entered into a compromise
and the defendant has acquired a right under the compromise, it would not
be open to the plaintiff who had consented to the compromise, afterwards to
C annul its effect by withdrawing the suit under Order 23 Rule I read with Rule
3 thereof.

From Bombay, we may travel to Madras and refer to the decision of that
High Court in Dharma Raja v. K.M Pethur Raja and others, AIR (1924)
Madras 79. In this case, the plaintiff had ·obtained a decree against the
D defendants against which only one of the defendants had filed an appeal
while the rest of them did not challenge that decree. At the appellate stage,
the plaintiff-respondent wanted to withdraw the suit against the appealing
defendant so that the decree which had already been passed against other
defendants who had not appealed, may be enjoyed by him. The High Court
E while rejecting the application of the plaintiff for withdrawal under Order 23
Rule I C.P.C. observed as under :-

"The provision of law relied on by the plaintiffs-respondents in 0 23,
R. l of the Code of Civil Procedure, which provides for th_e withdrawal
of a suit by a plaintiff and abandonment of part of his daim. Thus the
F rule gives as a matter of right and it is not disf)uted that a similar
privilege is inherent in an appellant as regards his appeal: but we have
/
not been referred to any ruling or provision of law which would extend
this privilege to a plaintiff-·respondent, nor can we see any reason
why,· when the litigation has reached the' stage of an appeal, the
respondent should be allowed the right to defeat the app!!al and
G prevent its being h·eard by the simple process of withdrawing his suit
as against the appellant. It may of course be argued that, although
-...
I

this is not a right of the appellant, nevertheless it is in the discretion
of the Co~rt to allow him to do so but that will depen(l on
, considerations which, we think, have not been appreciated by the
H lower appellate Court."
- '~

R.R. CHETTIAR v. V. SIVARAMAN [S. SAGHIR AHMAb, J.] 319
In Kedar Nath.and others v. Chandra Kiron and others, AIR (1962) A
Allahabad 263, permission to withdraw the suit at the stage of second appeal
· was refused. The Court observed that where the case is at the stage of
se~ond appeal and the trial court has given a finding of fact which is binding
in second appeal, the Court should not deprive the party of the plea of res
judicata by allowing the plaintiff to withdraw the suit at that stage.
B
This decision was considered by the Division Bench of the same High
Court in Vidhyadhar Dube and others v. Har Charan and others, AIR (1971)
Allahabad 41 and was approved. It was held that the right of the plaintiff to
withdraw the suit at the appellate stage is not an absolute right but is subject
'to rights acquired by defendant under the decree. It was, also observed that C
withdrawal may be permitted if no vested or substantive right of any party
to the litigation is adversely affected. The decision of this Court in Hulas Rai
Baij Nath v. K.P. Bass & Co., AIR (1968) SC 111, was also considered and
distinguished by observing as under :-

"In that case the Court had to consider the right of a plaintiff to D
withdraw the suit before a decree came into existence and not after
the decree had come into being. It was observed: "It is unnecessary
for us to express any opinion as to whether a Court is bound to allow
withdrawal of the suit of a plaintiff after some vested right may have
accrued in the suit in favour of the defendant. On the facts of this
case, it is c~ear that the right of the plaintiff to withdraw the suit was E
not at all 'affected by any vested right existing in favour of the
appellant and, consequently, the order passed by the trial court was
perfectly justified." In the present case, however, a right has become
vested in the defendant after the decree in the suit had been passed."
-'
Kedar Nath 's case (supr~) was f~llowed in Kanhaiya and others v. Mst. F
Dhaneshwari and another, AIR (1913) Allahabad 212, in which it was again
laid down that the plaintiff does not have an unqualified or unfettered right
under Order 23 Rule l(l) C.P.C. to withdraw the suit at the appellate stage
when rights have accrued to the respondents under the 4ecree.

Both these decisions, namely, the decision of the A1lahabad High Court G
in Kedar Nath 's case anti Kanhaiya 's case were fdJlowed by the Andhra
Pradesh High Court in Thakur Ba/aram Singh v. K. Achuta Rao and others,
{l 977) 2 A.P.L.J. 111, and it was held that though the plaintiff has an absolute
right to withdraw his suit before the passing of a decree under Order 23 Rule
I (l) C.P.C. but permission to withdraw the suit at the appellate stage would H
-'
-
320 SUPREME COURT REPORTS (1999] 2 S.C.R.

A be refused if it would have the effect of prejudicing or depriving any right
which became vested in the respondents or had accrued to them by reason
of the findings recorded by the trial court.

The Allahabad decisions, referred to above, were followed by th~
Rajasthan High Court in Ram Dhan v. Jagat Prasad Sethi and other;,', AIR
B (1982) Rajasthan 235, and Kasliwal, J. (as he then was) held that if the
withdrawal of the suit at the appellate stage would have the effect of destroying
the rights which had come to be vested in the defendant-respondents, the
suit would not be permitted to be withdrawn. It was also held that though
the plaintiff has an unqualified right to withdraw the suit under Order 23 Rule
C l (l) C.P.C., he cannot be allowed to do so at the appellate stage. It was
observed that though it is right that the plaintiff would be precluded from
bringing a fresh suit on the same subject matter, it could not be denied that
the defendant would not be entitled to use the findings given in such a suit
as res judicata in subsequent proceedings.

D The same view was also expressed by the Punjab and Haryana High
Court in Sn. Guru Maharaj Anahdpur Ashram Trust Guna v. Chander Parkash
and others, (1986) I 89 Punjab Law Reporter 319. The Court observed:-

"Once the decree is passed by the trial court, certain rights are vested
in the party in whose favour the suit is decided. Thus, the plaintiff
E is not entitled to withdraw the suit as a matter of course at any time
after the decree is passed by the trial court. In these circumstances,
the lower appellate court has acted illegally by allowing the plaintiffs
to withdraw the suit after setting aside the judgment and decree of the
trial court dismissing the suit."

F In another Allahabad_ decision in Jutha Ram v. Purni Devi and others,
ILR (l 970) I Allahabad 472, the plaintiff compromised the suit with certain
defendants at the appellate stage and gave an application to_ withdraw the suit
against those defendant-respondents. The Court refused permission to
withdraw the suit as the withdrawal would have the effect of depriving the
G other respondents of the benefit of the lower courts' adjudication in their
favour. This decision, incidentally, applies squarely to the facts of the present
case as in this case also the plaintiff compromised with one of the respondents
and gave an application for withdrawal of suit. Obviously, the intention was
to deprive the appellants of the benefit which had accrued to them on account
of a declaratory decree having been passed in favour of the plaintiff who
H incidentally was their predecessor-in-interest.
R.R. CHETTIAR v. V. SIVARAMAN [S. SAGHIR AHMAD, J.] 321
In view of the above discussion, it comes out that where a decree A
passed by the trial court is challenged in appeal, it would not be open to the
plaintiff, at that stage, to withdraw the suit so as to destroy that decree. The
rights which have come to be vested in parties to the suit under the decree
cannot be taken away by withdrawal of suit at that stage unless very strong
reasons are shown that the withdrawal would not affect or prejudice anybody's B
vested rights. The impugned judgment of the High Court in which a contrary
view has been expressed cannot be sustained.

The High Court also committed an error in not considering the impact
of Rule 1-A which was inserted in Order 23 by the Code of Civil Procedure
(Amendment) Act, 1976 (104of1976). This Rule provides as under:- C
"1-A. When transposition of defendants as plaintiffs may be permitted.-
Where a suit is withdrawn or abandoned by a plaintiff under Rule I,
and a defendant applies to be transposed as a plaintiff under Rule l 0
of Order I, the Court shall, in considering such application, have due
regard to the question whether the applicant has a substantial question D
to be decided as against any of the other defendants."

The appellants before us, no doubt, had not applied before the High
Court for being transposed as plaintiffs in place of the original plaintiff who
had made an application for withdrawal of suit, but it cannot be overlooked
that the plaintiff had transferred the property in suit in favour of the appellants, E
and, that too, after a declaration was given in his favour by the trial court that
he was the owner of that property. It was thereafter that the appellants were
impleaded as respondents in the appeal under Order 22 Rule 10 C.P.C. Once
the property was transferred to the appellants and the appellants were also
impleaded as respondents in the appeal before the High Court, they were
virtually in the position of the plaintiffs. Since they had purchased the F
property from the plaintiff after a declaration was given in his favour that he
was the owner, a valuable right came to be vested in the appell~.nts which
could not be taken away by the plaintiff by withdrawal of the suit
unconditionally as the withdrawal was positively to have the effect of
destroying the decree already passed in favour of the plaintiff. G
As a desperate bid to save the lost battle, learned counsel for plaintiff-
respondent No. I contended that since the appellants had obtained the sale-
deed by fraud, which would not have the effect of conveying any title to
them, they cannot, in the matter of withdrawal of suit, intervene nor can they
be heard to oppose withdrawal. We are not entering into the legality of the H
322 SUPREME COURT REPORTS [1999) 2 S.C.R.

A sale-dee,d as it is not the subject matter of the suit under appeal. Since
appellants had already been impleaded as respondents in the appeal on the
basis of that s~le-deed, they have a right to be heard in the matter of
withdrawal of suit;

For the reasons stated above, the appeals are allowed. The impugned
B judgment passed by the High Court is set as.ide, the application for withdrawal
of suit is rejected and the appeals are remanded to the High Court for deciding
it on merit in accor~ance with. Jaw. The parties shall. be.ar their own cost.

S.M. Appeal allowed.

\J

..
'.